One51 rebels still elephant in room

IT’S BARELY three weeks since the fractious annual general meeting of investment group One51, but Bloxham Stockbrokers yesterday produced its verdict on the company, placing a sum-of-the-parts valuation of €3.13-€4.23 on the shares, which are traded on a grey market here.

The research had actually been in the pipeline for some time before the outbreak of hostilities between chief executive Philip Lynch and the Gerry Killen-led One51 shareholder rebels, but Bloxham chose to wait until after the meeting before producing the 10-page note.

Bloxham’s valuation is lower than the €4.30-a-share Davy recently put on the stock, but it still looks optimistic given the shares last traded at €1.90 and are highly illiquid.

In addition, the recent, very public spat between the company and the rebel shareholders is unlikely to have added to its appeal to outside investors.

According to Bloxham, the bull points for One51 are its strong market positions in environmental services (that’s waste management and recycling to you and me), its exposure to high-growth renewable energy, and the potential for it to benefit from regulatory change.

The bear points are that the structure is still evolving, its profits are exposed to commodity pricing, and liquidity in share trading remains an issue.

So how does Bloxham justify the premium it has placed on the share price?

“Progress towards realising this valuation will be achieved through the continued development of ClearCircle and the realisation of investments and non-core assets over the medium term,” the broker said.

“Allied with One51’s stated objectives of increasing transparency and strengthening corporate governance, these measures will serve to remove any perceived ambiguity as to future strategy and route to value realisation at One51.”

The elephant in the room is the rebel group of shareholders. They are no more content now than before the agm. In the end, value will only be restored if the board and the rebels start pulling in the same direction.