I’ve been looking at SRH’s top 20 shareholder lists from 2014 to...

I’ve been looking at SRH’s top 20 shareholder lists from 2014 to 2017 (inclusive) based on the company’s annual reports.

The first point I noted is that ownership of the company has become considerably more concentrated over the 2014-2017 period. The share held by top 20 shareholders has increased from 61% in 2014 to 71% in 2017.

The second point I noted is that of the top 13 shareholders in 2017 (representing 64.8% of the company), eight have increased their % holdings over the 2014-2017 period, four have held their % steady, and the other one only entered the top 20 in 2017. The top 13 includes our chairman, David Ashmore, at no. 6, with a 3.6% stake (up from 1.2% in 2014).

Looking at these developments from the other end, ie. starting at 2014, all of the top 5 shareholders in 2014 remain top 20 shareholders today. Three of these have increased their % holdings, one has held steady, and only one has decreased their % holdings.

The top 5 shareholder who has held steady since 2014 is the no. 1 shareholder, Darren Hotchkin, our CEO, at 20.55%. But even he has substantially increased his holding over the period - from 5.3 million to 7.5 million shares, by fully participating in the December 2014 2:5 rights issue – thus maintaining his % holding.

Conclusion:

Despite the difficult times the company has been through in recent years, a number of big shareholders have kept the faith by maintaining or, more commonly, increasing their % holding of the company. As a result, ownership of the company has become considerably more concentrated in the top 20.

To me this indicates that shares have been steadily moving from weak hands to strong hands. Accordingly, acquiring a decent-sized stake in the company will probably be considerably more difficult now than at any point in recent years. You’d probably have to bid up the price.