DIY Investor Magazine
/
2015 Issue
29
Tessenderlo Chemie is the first, a Brussels-based
chemicals manufacturer operating in markets from
agriculture, construction, food to health & hygiene.
We have been invested in the company for
some time although its share price returns have
been lacklustre over the years. The reason for
our continued investment has been a subsidiary
business known as Kerley, a manufacturer of
agricultural sulphur-based liquid fertilisers. In
North America it is the leading supplier in this
area, aided by cheap raw materials from a highly
integrated upstream business model. It places the
company in a powerful competitive position due
to the difficulty in replicating this model, leading to
high growth, high margins and high returns.
Successive management teams have been
somewhat underwhelming, however in 2013
a successful Belgium entrepreneur, Luc Tack,
bought into the company and started to enact
promising change. Following decisive cost cutting
the company recently came to shareholders
for a €200m rights issue, gladly partaken by
ourselves. We believe it is now well positioned
for growth. Veidekke is the second, the largest
building and construction firm in Norway. With
over 6000 employees and footholds in Denmark
and Sweden, it builds new homes, commercial
property, public buildings, roads and railways.
It has never lost money since its founding
in 1936. During the financial downturn their
margins came under pressure, but with the
subsequent clear-out of lower-margin business
the recovery has lent to improving profitability.
We find particularly attractive the high level of
employee ownership, a clear home-markets
leading position and an extremely strong
balance sheet.
Indeed as we perpetually nag management
to distribute more of the cash from its balance
sheet, we have confidence in a continuing high
and rising dividend.
Nothing in this document is intended to or should be construed as advice. This document is not a recommendation to sell or purchase any investment. It does not form part of any
contract for the sale or purchase of any investment. The value of an investment and the income from it can fall as well as rise and you may not get back the amount originally invested.
Before investing in an investment trust referred to in this document, you should satisfy yourself as to its suitability and the risks involved, you may wish to consult a financial adviser.
This document is not a recommendation to sell or purchase any investment. It does not form part of any contract for the sale or purchase of any investment. Issued in the UK by
Henderson Global Investors. Henderson Global Investors is the name under which Henderson Global Investors Limited (reg. no. 906355), Henderson Fund Management Limited (reg.
no. 2607112), Henderson Investment Funds Limited (reg. no. 2678531), Henderson Investment Management Limited (reg. no. 1795354), Henderson Alternative Investment Advisor
Limited (reg. no. 962757), Henderson Equity Partners Limited (reg. no.2606646), Gartmore Investment Limited (reg. no. 1508030), (each incorporated and registered in England and
Wales with registered office at 201 Bishopsgate, London EC2M 3AE) are authorised and regulated by the Financial Conduct Authority to provide investment products and services.
