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RNS mentions new presentation on company website - just flicked through it - Looks like they've made an effort - multi year financials and "employee per subsidiary" breakdowns - good to see. --- NTBR year end is on 31 March
Sold 70k @62p each - holding 200k
I found JB (former NTBR chairman) on LinkedIn and spoke to him. He's in "no rush to sell" his remaining shares which are now a "small part" of his portfolio and he is "happy to hold them". According to Hybridan, the stock is trading at 4x next year's earnings.
According to Hybridan in their latest research report, “Northern Bear is currently trading at 4.2x P/E multiple based on our forecasted earnings share of 14.5p for FY25, the first full fiscal year following the share buyback” and at 2.6x EV/EBITDA compared to 5.0x EV/EBITDA for the two cited comparable companies, Epwin and Kinovo.
“In summary, we think that the investment case for Northern Bear’s shares is attractive given the limited risks, attractive valuation, and high dividend yield. The majority of Northern Bear’s revenues come from the public-sector including the NHS, councils, and schools. We note that 10-15% of revenues come from new build housing, albeit in the North East and Yorkshire markets which have historically been less volatile than the South East. Most importantly, we think the buyback of up to £3.1m speaks of the management and the Board’s confidence and commitment to the growth of the Group.”
I was also pleasantly surprised to see that the cost of the buyback is £200k rather than the £400k previously reported.
A previous rns said the tender results would be made on 22 nov.
i think it very usual to miss a regulatory driven deadline... i wonder if something more happening behind the scenes - hopefully positive
all imho, dyor and bol
ntbr is in my top5 hldgs
"The math isn’t complicated: When the share count goes down, your interest in our many businesses goes up. Every small bit helps if repurchases are made at value-accretive prices. Just as surely, when a company overpays for repurchases, the continuing shareholders lose. At such times, gains flow only to the selling shareholders and to the friendly, but expensive, investment banker who recommended the foolish purchases."
I'm finding this a fascinating situation!
disc: i hold.
i've concluded that the current price is low because the directors are happy to hold their shares and to increase the indebtedness of the company.
they were keen to stress that investors would have info before tendering. i can only assume they have more good news to tell and that they don't want ordinary shareholders tendering as this means the Chair can sell out more of his stake i.e. why leave the over hang.
anyway there is a buyer in the market which i think is interesting as why would one buy now at 60p and 62p when there is likely to be an overhang next month and could prob buy mid to high 50's.
then i wondered if there is any chance of a bid. there is a willing seller of 29% at 62p so an offer of 65p could be sufficient. a larger group would be buying on a very low p/e and that is before the removal of listing costs c.0.5m p.a....
anyways interesting to see where we are in 12mths
Apologies, total cost rather than the cost of administrative expenses alone! Yes, and I agree they could have undertaken this offer years ago or continued to pay the dividend without pause. I disagree about any concern regarding gearing since net debt would increase to £2-3m, whilst twice the half-year operating income just announced is £3.4m to £3.6m, so future gearing is under 1 time operating income.
I think it’s important to include the 5million or so shares that will be bought at 62p each as a relevant cost of the tender offer - not just the arrangement/ admin fee of £400k - which I find a tad eye watering tbh
The below math is not correct. The buyback offer will cost 2.1p per share (not 18.5p per share) since the £400,000 maximum cost (which seems characteristically over-conservative on the part of the Company) divided by 18,725,276 shares in issue equals 2.1p which seems like a reasonable cost compared to 33% EPS accretion forecast by Hybridan.
The offer will cost approximately 18.5p a share - more than 3 years worth of dividends - interesting!
1:- it might prove that the company could have paid those scrapped dividends as it claimed at the time, thus enhancing the dividend paying track record considerably!
2:- It might restrict the company's ability to pay dividends for a while or risk distressing the balance sheet!
Per the Hybridan research report (one assumes, based upon guidance from management): "We also assume a dividend payout of 5p per share (including a 1p special dividend) declared for FY23 to be made in FY24." 8.8% dividend yield at today's midmarket share price.
Hybridan released its research report following yesterday’s tender offer announcement. Their EPS estimate for next year “increases from 10.9p to 14.5p or +33% EPS accretion” assuming the full buyback whilst the P/E ratio declines to 3.9x at today’s midmarket share price. Assuming the full buyback “yields a valuation of 117.8p” or “an upside of 108%” based on their DCF analysis.
* Clearly things are not great at home.
Clearly this are not great at home. This is far from an ideal use of capital at this point in time but if there needs to be a split, better to resolve it in an orderly manner. Good news and a small unexpected windfall for short termers. I expect shares will be below tender price after the transaction whether or not it goes ahead.
Bought 10k @ 58.6 p ish each - holding 270k - currently thinking 62p tender offer is probably worth subscribing to - at least to some degree
I have just started looking at them from having no knowledge prior to last couple of weeks. I don't know why they are running with a lot of small companies rather than consolidating these into a singular customer/investor facing brand. Could do with investing in some marketing and design expertise to promote the group a lot better perhaps. They look like a solid outfit but not presented as slick or as professionally as they could be. But what do I know. Invested yesterday as I think underlying looks positive.
Surprised that there has been no trades or market reaction to the good trading update - somehow I think the reaction would have been different for a profits warning!!
Cracking little bottom drawer share!
Reasons not to love this share at its current price...... anyone?
Hybridan further assumes "a dividend of 5.5p for FY24 and 6p for FY25".
Hybridan released another research report today following the results, increasing their DCF valuation to 101.4 (up 2.3p from their 99.1p prior DCF valuation). One of the comparable companies used in their valuation for both reports, Sureserve Group (SUR), was acquired by private equity on 11th July.
Results look ok - in line with previous guidance - half yearly dividends on track to start being paid from mid September
Muted response to what to me, Looks like a solid set of results.
Surely, given a bit of time, the SP will creep up to closer to £1
Thanks for adding the research note - I am hoping for a good market reaction when the results are issued on Monday