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Morning Bond
I have a feeling there could be a big move over next few weeks
Morning Laura. Yes, looks like someone's buying up shares. Hopefully we've bottomed.
Difficult to buy much below 0.25p but can sell 1.5mln at 0.233p
I concur
Company has received irrevocable undertakings from Harwood Capital and Bayford Group Shareholders holding in aggregate 228,416,332 Ordinary Shares (representing approximately 57.20 per cent. of the existing issued ordinary share capital of the Company) to vote in favour or the Resolutions. These Shareholders wish to continue to support the Company's growth strategy as ongoing Shareholders and therefore do not wish to sell their current shareholdings
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Laura2022
Posts: 1,162
Price: 0.25
No Opinion
RE: Mgmt telling the truth ?25 Aug 2023 13:35
Bayford & Co. Ltd.
29.10 %
Harwood Capital LLP
3.569 %
Jarvis Investment Management Ltd.
3.395 %
Janus Henderson Investors UK Ltd.
2.670 %
BlackRock Investment Management (UK) Ltd.
2.323 %
West Yorkshire Pension Fund
2.010 %
James Sharp & Co. LLP
1.746 %
WH Ireland Ltd.
1.587 %
Wayne Jonathan Hayes
1.223 %
Hargreaves Lansdown Asset Management Ltd.
1.222
Here's the paragraph I'm referring to:
'At or around the point of Conversion, the Company's shareholders will be entitled to participate in an open offer or similar arrangement, at the same price as the Conversion Price;'
If I were a rival of Harwood and Bayford, I would start buying around this price now and then make an offer, say 1.25p for the whole company. That's £5m and would still leave them with £15m profit if they sold off the assets. I can't see this just drifting in a straight line to 0.10p before the vote. The free float is tiny and as with all companies with such few shares in circulation, the price can spike and spike hard! 📈
GLA DYOR
Kabaa,
Why do you think they haven't converted their loan notes yet? Also, what do you think about the fact that other shareholders would get an open offer at the same price as the conversion?
Laura: You posted this.... "The Group's network of utility assets, valued over £31 million as at 31 March 2023, generate recurring income and provide attractive and predictable long-term returns. We continued to adopt additional utility assets in the year, adding them to our income generating portfolio".
Absolutely right. There is a reliable and lucrative income stream over and above the day to day business of designing, building and commissioning utility infrastructure. And yet, it's all for naught because the business lost £25m this year. So in context of your post they actually lost much more and used the income to pull it back to -£25m. 5 years ago the company was run at a profit and the additional income stream paid shareholders a dividend.
The situation now is that the company is running at a loss. It has been loaded up with £11m of debt and it is paying 20% interest to those that loaned the money, none other than Harwood and Bayford. I suggest to you that the income stream is making a good contribution to the interest and administration charges on the loan and in actual fact are being diverted to Harwood and Bayford pockets?
Also right the network of utility assets have a asset high value(£31m), however the liabilities have pretty much gobbled them up because the reported assets of the whole company is just over £20m.
Its like living in a big expensive house that on the face of it makes you look rich but in the background there is a mortgage you can't pay and the mortgage company are slowly and steadily taking ownership of the house around you. You are asset rich on paper but the liabilities are slowly eating it away! Worse though is that the income stream has dried up and you owe more today than you did before. That's FCRM in a nutshell.
Pip56,
The 2 main holders have a convertible loan note of upto £11m which can be converted at the lower of either the previous 5 day vwap or 0.5p.
At this price, it would be approximately 1100% dilution.
I believe as it's delisting, there is a fair chance the vwap gets even lower, e.g. 0.1p, which would equal nearly 3000% dilution.
I have no holding here either but have also been watching the train wreck unfold over the years.
Do you think the 57% holders will get this out of the eyes of the public and strip the remaining assets then put it in to administration over the next fewnyears or will they convert their debt to equity?
The directors have a total shareholding of 400,000 shares which equates to around 800 quids worth. So they clearly have no skin in the game.
Either way, it looks to me like a terrible investment at any price. Enormous dilution at a very low price or administration.
Thanks Pip
You clearly known the company very well, and even at these desperate times ita still day light robbery which is presumably what they planned years ago according to your posts ?
Even with the liabilities they still have £20mln assets V £800k market cap
Your words :
company has assets of £71.97m but liabilities of £51.27m so its net worth is a bare £20.71m. Year on year it has never been lower and it is less than half of last years
Laura: The Story you want to believe: "Believe that the opportunities for the Group and its Fulcrum, Dunamis and Maintech Power businesses are significant and reinforced by strong market fundamentals".
The reality in Facts:
Operating Profit: £6.13m (2019); -£2.1m (2020); -£11.17m (2021); -£13.69m (2022); -£24.59m (2023)
Profit after Tax: £4.92m (2019); £1.56m (2020; -£10.28m (2021); -£13.42m (2022); -£25.14m (2023)
Earnings/share: 2.25p (2019); 0.68p (2020); -4.49p (2021); -5.20p (2022); -6.30p (2023)
The company has assets of £71.97m but liabilities of £51.27m so its net worth is a bare £20.71m. Year on year it has never been lower and it is less than half of last years (£45.88m in 2022).
Conclusion: I have no doubt the opportunities for FCRM are significant and the CEO speaks in good faith. The reality is that FCRM's owners seems to be incapable of accessing them and making a profit. The reason is that Harwood and Bayford used the company for their own ends by diverting assets elsewhere (installing domestic meters at a massive discount and loss for example). Cumulative losses, sale of assets and acceptance of debt (with strings) have pushed the company over the edge. Delisting is most likely going to happen, but if it doesn't then voluntary administration is the next logical step.
My last words. As said before I have no skin in the game as I sold at 45p and higher when dividends stopped. I was always attracted to the company for what it was, not what it has become and I continue to watch the saga slowly unfold - a slow mo train crash.
Surely this is criminal or negligence towards holders at best withbtheir motives to go private,they are steallong the "golden goose "
The Group's network of utility assets, valued over £31 million as at 31 March 2023, generate recurring income and provide attractive and predictable long-term returns. We continued to adopt additional utility assets in the year, adding them to our income generating portfolio. The Group will continue to selectively adopt utility assets. All tranches of the asset sale to ESP were also successfully delivered during the year.
Thankyou Bond and others for their insights
*for his shareholders, not hisCEOs lol
People can post what they like here, but the fact is that nobody knows what's going to happen next. I was invested in ITS from May. It was pretty deflating for a while. Some days, there were no trades at all. The Friday before the big rise, someone posted a really long message about why ITS was a terrible stock which nobody should buy. I don't know why anybody would go to such great lengths to demoralise holders. What's in it for them? The following Tueday, the stock flew 2600% (I made a nice 1100% myself) Nobody could've forseen the fact that the petition would be withdrawn. My point is, you can be as well researched as you like, but the unknown will always determine the fate of a stock.
There are still 4 weeks left. Another company could easily come forward with an offer and spoil the fun for Harwood and Bayford. Most delisting stocks do seem to spike, some more than others. The only one that didn't in recent times was DeepMatter, where a discounted placing was done at the same time as the delisting RNS. That CEO's contempt for his CEO's was certainly palpable! Nothing goes up or down in a straight line so I think a small gamble here is worth it. Don't put in what you can't afford to lose. Good luck all and please DYOR!
Believe that the opportunities for the Group and its Fulcrum, Dunamis and Maintech Power businesses are significant and reinforced by strong market fundamentals.
We are confident in the Group's potential and its return to success.
If I was a rival pr competitor I would swoop while it's at £800k market capitalisation
If a company delists voluntarily, its share price can increase depending on the reasons for the privatisation. In this case, a trader can open a position to 'buy' (go long) if they think the share price will increase
Yes, it's all explained in the cancellation RNS alibulrt
This is a puplic company, even delisted from Lse, still we have a rights of benefits from company earnings and assets. Am I right?
This information is in the public domain:
Harwood have 28.8% of the equity
Bayford have 29.1% of the equity.
Together they have a majority shareholding of 57.9%. The BoD holdings and those previously on the board are less than 5%. The balance needed to get over the line to 75% will come from institutions who have been selling down anyway. The BoD support the decision to delist and generally that holds credibility in the market because what they are really saying between the lines is: "We recommend you take your equity at what we offer in October because if you don't you will get nothing"
Both parties are holding just under the 30% shareholding because of an agreement they signed when they failed to take the company private 2 years ago. So to get around that they have loaned the company £11m with an agreement it can be converted into equity. As stated in previous posts both Harwood and Bayford have an iron grip over the company and they can pretty much do as they wish. They have also changed the rules (Articles of Association) so they can both go over the 30% holding without having to make a formal offer.
Whatever you think is happening the reality is that this company will be delisted in October. Shareholders will be offered the then going rate. This process has been well flagged by the actions of Harwood and Bayford.
The BOD are claiming 57% when in fact its just them.and 29% debt holders !
See 1.35pm post
Even if wveryone on the list voted it would only be 49%
Kabaa, but don't they need shareholder approval for the conversion? Also, they're supposed to offer shareholders the same deal in a placing. That's what it looks like to me in the loan facility amendment. Also, why would they convert at this price when they could've done it at a much higher price quite recently. Seems very odd. And one last thing; the company is still owed £13m from ESP, which could be anounced at anytime, I would guess. I think a decent rise here is possible but of course, it may drop further first. No idea but definitely worth a small gamble if you're prepared to lose it, which I am.
No unfortunately they do own 57%. Of course the company would not make a mistake on this. Anyone can look for themselves on the website or in the previous rns's.
Also they can dilute the shares to own way above that and get the 75% they need to delist. They have con notes for around £11m with a 20% interest rate. If they just converted £1m of this into equity at the current 5 day vwap, they would have a lot more than 75% of the shares to pass the delisting. This seems very unfair to minority shareholders but the company has had a disastrous time in previous years and would likely find it impossible to raise money from anyone else.
There would not be convertible notes to the tune of 11x the current market cap if the assets were solid or were able to easily sell or liquidate for that price, especially with an interest rate of 20%.
As per my previous post, I believe this will be very high risk and low reward investment and it has been since the convertible loan notes were there.
People noting the NAV at 5p per share are not taking into account the inevitable dilution by the creditors or the risk the company would not get anything remotely close to that if it were wound up.
Kabaa
Laura2022 seems to have double checked the tally. Is it possible that lot more is going on here in the background!
By the way I found another post by MickR titled "Net Assets" (21 Aug 2023 09:48) quite interesting. I quote entire post:
"From today's results:
Net assets per share at 31 March 2023 were 5.2p per share.
Current SP is 0.25p.
The net assets would be after the net debt is taken into account. The proposed de-listing is to get rid of minorities in my view so that only the big fish stay on and eat the cake. The company is not insolvent so the proposed de-listing is not the same as administration. I expect at least the SP to run up to over 0.6p to 1p -there is plenty of time to the meeting next month.
DYOR"
Any thoughts?