SIPP PROGRESS

Current Value (As at 25th September 2017) = £147,679 including cash
Target for 31st December 2017 = £170,000 (was £153,000)
Value at commencement of this blog on 1st August 2012 = £51,684.02.
Monthly contributions since commencement of blog = 36mths @ £300 plus 25 months @ £750 = £29,550
Capital Growth = £147,679 less (£51,684.02 + £29,550) = £66,445+

Tuesday, 28 July 2015

Mid-year update

The SIPP has undergone a fair bit of turmoil over the past few months. 
When my last blog was posted (25th March 2015) the value of the SIPP was approx £89,170. At that time, my 10,000 shares in OPAY were worth over £32,000 and they are now worth £26,600.  Unfortunately, some of my other shareholdings have also taken a bit of a hit, and my overall SIPP value now stands at just over £81,100. This is disconcerting seeing as my target for 31st December 2014 was £86,000 with my target for 31st December 2015 set at £107,000.
That said, if things pan-out well with OPAY, the December '15 target could be achievable.

Back in March, my SIPP consisted of 17 shareholdings and to take advantage of the OPAY rights issue there had to be some reduction in the number of holdings.  The shareholdings sold were:-
Premier Foods (PFD): 5100 shares recouping £2,275.21
Lavendon Group (LVD): 1400 shares recouping £2,417.78
Telit Communications (TCM): 400 shares recouping £920.05

Selling Telit (TCM) wasn’t a good move as the shares increased in value significantly on good results and have traded at over 340 (equivalent to £1,360) since March.  Similarly, Lavendon Group (LVD) has also climbed above 200 from the sale price of 173, but has now retreated back to under 180; whereas selling Premier Foods (PFD) when I did was a good move.

In May, Meggitt (MGGT) was another disposal at 514 per share (recouping £2,302.63) and that company has slumped to 450 despite rumours of a merger in the news with Cobham (COB). Both of these companies are now looking like decent dividend/recovery plays, and require further investigation.

Looking back now, the disposals to finance the OPAY rights issue were good decisions on the whole. The gamble now is will OPAY perform this year? Personally, I think 320 is within reach very soon after the company enters the FTSE250, and we could see 400+ before the end of the year. If we do see 400 then the SIPP will be worth approx £95,000+.  This will be short of my target, but not far short.

A recent strategic decision regarding my SIPP (to ease the burden of management) is to dispose of shares in companies with a market value of under £1 billion and, instead, put up to 10% of the value of the SIPP into an Investment Trust that effectively specialises in companies of this size.  After some investigation of performance and make-up of suitable investment trusts, I selected BlackRock Smaller Companies Trust (BRSC).  Since 1st March, the following purchases have been made in BRSC:-
24-March:  202 shares costing £1,645.46 (including commission & fees)
11-May:  199 shares costing £1,758.39
27-May:  175 shares costing £1,599.07
13-July:  178 shares costing £1,688.50
 Total shares purchased = 754 costing £6,691.42 or 888 per share (approx), with BRSC currently trading at 925-930.

These purchases were almost entirely financed by the sale of my shareholding in the JPMorgan Emerging Markets IT of 860 shares, recouping £5,174.02.

I have also consolidated my holdings in both Segro (SGR) and GVC Holdings (GVC).
On 2nd-July, a further 400 shares in Segro (SGRO) was made at a cost of £1,649.70 (ave. 413) and this was a good move with the shares currently valued at 430+.
On the same day, a further 500 shares in GVC Holdings were purchased at a cost of £2,250.58 (ave. 450) as a potential successful bid for BWin was in the offing.  That hasn’t proven fruitful (yet) and the shares have slumped to 420; but there is renewed activity over the bid, and it could yet prove successful.

The shareholdings in International Personal Finance (IPF) and XChanging (XCR) have proved most disappointing. Due to changes in financial policy in Poland, where IPF obtain 60% of their profits, the share-price in IPF has dropped 25% to 380 (from approx 500).  As such, I’ve trimmed my shareholding by 360 to 1440 which are worth about £5,500. Xchanging is even worse.  There appears to be very little liquidity in XChanging, and this is something I didn’t take account of before making my purchase. I bought XChanging at an average price of 170, and they are now at 116, down over 30%. Why did I buy at 170?  Because I thought they had the capability to move above 200, but right now I’d just like to reduce my loss to something more bearable.

My latest purchase is 430 shares at 570 in the Intermediate Capital Group (ICP), and this financial company (which pays a healthy dividend) should benefit from increased confidence in Europe post the Greek economic settlement, and tick along quite nicely even if the European economy doesn't roar in 2016.

Target at 31st December 2014 = £86,000
Actual Value on 28th July 2015 = £75,780 (under by £10,220)
Current Value (29th July 2015) = £81,100 (approx), including cash of £1,193
Target for 31st December 2015 = £107,160

Value at commencement of blog (1st August 2012) = £51,684.02
Monthly contributions since commencement of blog = 36mths @ £300 = £10,800

Capital Growth = £81,100 less (£51,684.02 + £10,800) = £18,616 or 36%