Kelso Group Holdings Plc · LSE:KLSO
Kelso — Investor Presentation (June 2023)
22 slides from Kelso's investor presentation, June 2023
Slide 1: Unlocking trapped value in UK listed companies
Unlocking trapped value in UK listed companies
Slide 2: KELSO will…
KELSO will… Actively engage and align with other stakeholders, taking stakes directly. Kelso aims to effect change where existing shareholders are often unable or unwilling to do so themselves Identify Engage Unlock target actively value 2
Slide 3: KELSO team
KELSO team John Goold Mark Kirkland Jamie Brooke Sir Nigel Knowles David Charters CEO CFO CIO Non-Executive Chairman Non-Executive Director Chartered Chartered Chartered CEO of DWF, Director of SG Accountant with Accountant with Accountant with previously having Warburg securities 25+ years PwC, cor
Slide 4: Why is there a lack of activism in the UK
Why is there a lack of activism in the UK Internal compliance UK institutions often work in Traditional funds do not have departments and isolation and are not the time and resources to bureaucracy make active able/prepared to act resolve individual issues within engagement difficult at collectively
Slide 5: Market opportunity to unlock value is currently high
Market opportunity to unlock value is currently high Recent market and economic pressure globally and in Perfect storm: leaves significant value in UK small UK cap market Many portfolios down significantly from peak Good time to be in market Fund outflows and low liquidity driving High quality compa
Slide 6: Market – Valuations at all time lows
Market – Valuations at all time lows Key Chart: Blended valuations: UK, RoW: Post 1989 average=100 UK equities are trading around <30% than RoW blended valuations (almost 50% down vs US market) Equity Valuations (1989-2023 av=100) UK small caps trade at [c.XX%] discount to rest of UK market Divergen
Slide 7: Why KELSO?
Why KELSO? A permanent capital listed vehicle Managed by an experienced senior team No salaries, board or management fees, directors own 20% Focus on activism to set companies up for success Not a fund, 3-5 focused positions Amalgamate and drive change for all shareholders Holds high conviction inve
Slide 8: Investment criteria
Investment criteria Focus on UK SMID <£1bn mkt Sector agnostic cap Deep and clearly underappreciated Value bias with growth, through intrinsic value cashflow return analysis Frustrated institutional shareholder Annual 20% absolute return per base project BUT target return 2x Each project must have c
Slide 9: Investment process
Investment process Unlock Engage Strong market & industry network Do what it takes to Identify, research & Invest in the unlock value plan business, often Use of sector illiquid so requires Drive changes to specialists market knowledge strategy, capital Using proprietary screening tools and allocati
Slide 10: The KELSO approach to active engagement
The KELSO approach to active engagement Engagement with board Engagement with shareholders Combining the interests of smaller Right team correctly incentivised shareholders gives them a voice (more effective than airing issues on chat rooms) Board Shareholders Alignment with larger shareholders allo
Slide 11: THG share price from IPO
THG share price from IPO 10-May-21, 04-Aug-21, 15-Jun-21, acquisition 9.00 $1bn raise acquisition of Cult of Bentley 16-Sept-21, Beauty LTD Laboratories interim 8.00 results 17-Jan-23, trading statement 7.00 20-Oct-21, 31-Jan-2023, share initial Kelso 6.00 pledge investment release of £2.75m in 5m s
Slide 12: WHY THG?
WHY THG? • Deep underlying value based on SOTP • Trading headwinds turning to tailwinds in 2023 - Historic investment will start to reap rewards • 90% fall in share price following highly feted IPO - Partially environment, partially perception • Board has ability to unlock value through corporate ac
Slide 13: THG's share price since Kelso's initial investment
WHY THG? THG’s share price since Kelso’s initial investment 17-Apr, 21-Apr, further 12-May, response 18-Apr, FY22 Kelso 1.40 end of talks to results investment of with Apollo speculation 0.5m shares 31-Jan-2023, and Rule 30-Mar, additional of Apollo via CFD initial Kelso 2.8 1.20 Kelso investment of
Slide 14: Initial investment in THG – January 2023
INITIAL INVESTMENT IN THG – 31 JANUARY 2023 “First investment meeting Kelso’s investment criteria with the purchase of £5.0m shares in THG at an average price of 54.5p, representing 0.4% of THG.” Current value does not reflect underlying value of the SOTP “On January 2023, THG announced record reven
Slide 15: Kelso recommendations RNS – March 2023
KELSO RECOMMENDATIONS RNS – 30 MARCH 2023 “The transition of THG from the Standard List to the Premium List of the London Stock Exchange would be significantly accretive to shareholder value” “We urge THG to continue to review strategic options, alongside focussing on cash generation to ensure under
Slide 16: RNS with 'Nutrition valuation points' – April 2023
RNS WITH ‘NUTRITION VALUATION POINTS’ – 21 APRIL 2023 “Investors are engaging with the worlds largest food manufacturers too promote changes in their strategy from over-reliance on sales of less healthy products” “12 global food and beverage companies that it believes could be deemed overlay focusse
Slide 17: Summary
Summary • Kelso is a new vehicle for activist investing - Highly experienced, well-connected team / shareholders - Amalgamates the power of retail investors - Works alongside institutional investors • Ultra-focused with significant opportunities • THG is the first of a number of targets • As track r
Slide 18: Unlocking trapped value in UK listed companies
Unlocking trapped value in UK listed companies
Slide 19: The KELSO armoury of tools to create change
The KELSO armoury of tools to create change • Public announcements: • Use the RNS to highlight issues by virtue of being a public company • Use social media to get points to retail shareholders • Use the Companies Act 2006 provisions to help make change - Section 303 CA 2006 – ability to appoint or
Slide 20: KELSO timeline
KELSO TIMELINE John Goold, Mark Kirkland and Jamie Sir Nigel Knowles is David Charters £3.0m placing at 2.5p Brooke appointed appointed Non- appointed Non- per share CEO, CFO and CIO, Executive Chairman Executive Director respectively Nov-22 Listed in 2021 as Name change to Jan-23 Mar-23 Apr-23 IBSU
Slide 21: DISCLAIMER (1/2)
DISCLAIMER (1/2) IMPORTANT NOTICE you fall within the definition of Relevant Person), you should consult an The securities of the Company have not been, and will not be, registered authorised person specialising in advising on investments of the kind under the United States Securities Act of 1933, a
Slide 22: DISCLAIMER (2/2)
DISCLAIMER (2/2) The information contained in this document is provided as at the date of its To the fullest extent permitted by applicable law or regulation, no publication and is subject to updating, completion, revision, amendment undertaking, representation or warranty or other assurance, expres
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