LDG — Logistics Development Group plc

Executive summary

LDG is an AIM-listed closed-end investing company managed by DBAY Advisors, holding minority stakes in four principal private portfolio companies (Finsbury Food, Alliance Pharma, SQLI, WS Holdco) through its Jersey subsidiary Fixtaia. Over the five-year period the Company has transitioned from a logistics operating business (Eddie Stobart, successfully exited in 2021 at a c.3x money multiple) to a diversified PE-style investment vehicle, with reported NAV per share rising from c.14p in 2020 to 28.0p at 30 June 2026 2026-09-29 interim. The single most important point for valuation today is the persistent ~32% discount between the 19p share price and the 28p NAV, with the key question being whether the NAV mark (7.5x EV/EBITDA portfolio-average vs manager-asserted comparables at 10–15x) is realistic.

Fair value estimate

Methodology: NAV-based, with a discount applied for private-equity-style holding structure, Level-3 valuation uncertainty, and realisation timing risk.

• Reported NAV per share (30 June 2026): 28.0p 2026-09-29 interim
• Applied discount: 15–25% (typical for closed-end PE/holding vehicles with illiquid underlying assets and persistent LDG trading discount history)
• Fair value range per share: 21p – 24p
• Mid-point implied market cap: c.£93m (vs current £83.8m)
• Fair-value sanity check: The manager asserts the portfolio is held at 7.5x EV/EBITDA while comparable transactions clear at 10–15x 2025-05-15 FY25; if correct, there is further embedded upside not captured by applying only a holding-company discount.

Upside to mid-point: c.+21% (from 19p to 23p).

Sector context

Although ICB-classified as Industrial Goods & Services, LDG functionally behaves as a listed private-equity / investment company. Peer universe is better framed as: closed-end PE/investment vehicles (3i Group, HgCapital Trust, Oakley Capital Investments). Within that peer set LDG is sub-scale, has concentrated holdings, no dividend, and a wider-than-average discount to NAV. Quality and portfolio diversification are below listed PE peers; discount is typical-to-wide.

Investment thesis

• Material NAV discount with a track record of realisation. Shares trade at 68% of the 28.0p NAV. DBAY delivered the Eddie Stobart exit at c.3x money 2022-04-06 FY21 letter, took Alliance private at a 42% premium to the prior December mark 2025-05-15 FY25, and recently refinanced Finsbury returning £11.4m of the original £14.2m cost to Fixtaia 2026-09-29 interim. Realisation cadence suggests NAV is not permanently academic.
• Capital returns are a stated policy. The Board distributed £21m via tender in April 2025 at 19p and has formalised a policy to distribute 50% of net cash profits on future realisations 2025-05-22 FY24. The valuation gap can be partially closed via buybacks/tenders rather than relying on share-price re-rating.
• Portfolio is cash-generative and reasonably defensive. Finsbury (bakery) and Alliance (consumer healthcare, now pure-play post disposal of prescription portfolio) are structurally stable end-markets, while WS Holdco is building scale in UK outsourced logistics via buy-and-build (run-rate >£400m revenue after Walkers/Madex) 2026-05-15 acquisition RNS.

Key risks

• Level-3 NAV is manager-marked. The 28.0p NAV is based on net assets of Fixtaia, with four of the five material holdings valued using DBAY's internal process (12-month hold-at-cost rule post take-private, then multiple-based). Marks mirror DBAY's own fund NAVs — a related-party-interested valuation 2026-09-29 interim, note 1.
• Related-party transaction density and fee leakage. DBAY is the investment manager, lead investor in every underlying holding, and the counterparty to new money allocations (WS Holdco Investment made on same terms as DBAY). Fixtaia accrued £475k performance fees and paid £1.5m monitoring fees in 2025 2025-05-15 FY25. These flow through NAV rather than LDG's P&L and are easy to miss.
• Concentrated single-sponsor risk and liquidity. 100% of invested capital sits with DBAY; the entire investment programme can be derailed by one sponsor underperforming. Underlying assets have 12-month+ estimated liquidation periods 2026-09-29 interim, note 8. Pre-emption disapply resolutions have failed at two consecutive AGMs 2026-06-18 Result of AGM; src: 2025-06-25 Result of AGM, hinting at shareholder-base tension.

Operating leverage

LDG itself is a holding-company shell with only four employees and £0.5m H1 2026 admin costs — virtually all P&L leverage is simply a direct pass-through of NAV movements in Fixtaia. At the look-through portfolio level, operating leverage is modest-to-low: Finsbury is a competitive bakery with margin recovery from input deflation and the "Operating Brilliance" programme 2025-05-15 FY25; Alliance is asset-light consumer healthcare with FY26 budget guiding modest growth; SQLI is IT services with 10% margins and only ~140bps budgeted expansion; WS Holdco is capital-intensive logistics with low incremental margins. A 10–20% revenue surprise across the portfolio would not produce the multiple-of-profit outcome the user is seeking. There is no high-fixed-cost software platform or capacity-constrained-pricing business within the portfolio.

Value-trap signals

• Persistent discount to NAV despite tender/buyback programmes.
• No dividend; capital returns dependent on realisations.
• Related-party-heavy structure (manager = fund co-investor = valuer).
• Pre-emption disapply resolutions failing at consecutive AGMs — a sign of significant shareholder-manager friction.
• Admin and audit fees are modest in absolute terms but material relative to the standalone-company P&L.

Earnings vs expectations

Not meaningfully applicable. LDG does not issue earnings guidance or consensus-tracked numbers. Reported numbers are driven by fair-value movements in Fixtaia (£5.9m H1 2026, £15.9m H1 2025, £15.9m FY25). The relevant performance signal is quarterly NAV: NAV/share progression was 22.3p (Dec-24), 24.6p (Mar-25), 26.7p (Jun-25), 26.7p (Sep-25), 26.7p (Dec-25), 26.4p (Mar-26), 28.0p (Jun-26) — a steady upward drift driven primarily by the Alliance uplift from cost after the 12-month hold expired.

Conviction

Conviction: 3 (moderate).

• Anchors (support confidence): NAV is clearly disclosed and refreshed quarterly; LDG's own balance sheet is simple and clean (net cash); recent realisations (Eddie Stobart, Alliance take-private, Finsbury refinancing) demonstrate that marks are broadly achievable; the Alliance uplift post-12-month hold was validated by actual take-private at a 42% premium.
• Limits (constrain confidence): The 28.0p NAV is Level-3, manager-marked, and mirrors DBAY's own fund NAVs; realisation timing is uncertain; the sustainable discount to NAV could remain 25–35% rather than close; related-party transaction density means minority LDG holders bear fee leakage not visible on the LDG P&L.