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Phrontist Any irriot could see that the QPP inherited WIP would suck in cash before it spat it out again. It is the same in any business which increases its work in progress. (an extreme example- Imagine building a dam - all it does is suck in cash until it begins to generate cash ) Key here is that SGH has arranged funding to see it through ( and we assume QPP had been inept and had not) . If SGh's plan is to scale back a bit ( 10%? = £30 M cash need reduction) volume throughput, it can assume a contribution to profits of around £150M, less finance costs, over the next 2 years from QP's WIP. Remember SGH has its original profitable trade. Eddison is predicting an Earnings per share ( ie after all costs and tax) increase of just short of 90% in 2017. I am a dutchman if SP does not treble sometime in 2017. My point all along is that QPP could have scaled back by shedding some of its WIP - arranged expensive short trem mezzanine finance /bank or bond funding .......and worked through the WIP to profit and cash generation. Even if the plan had been to shed PSD in time, it would have been a far stronger negotiating position if the sale had been delayed by a year. So then .....ah but it was in trouble and mincing towards liquidation I hear y'all say. Trust me - as debt clearance post sale was only £35M ( although a bank might have played awkward) there must have been options for financing a couple of cash flow. If QPP had had £100M debt the bad bit might have happened. It didnt and financing QPP through the lumpy WIP would have had a much quantum of finance than SGH had to find. Mel
Phrontist I thought rob Terry had sold out below the threshold at which he would have to declare his holding as such just before he left quindell. I can't remember what the threshold was exactly but my memory is telling me it's 3% for some reason, but like you say if he's back up to 10% he must have used quob as a vehicle to increase his holding. It tickles me that anyone would look at him twice after innovation group and then quindell. He must carry a pendulum around in his pocket to hypnotise people into investing their hard earned dosh with him. I don't know enough about the new board individually or as a team to comment on how well they handle things, Im hoping for the best there:)
Borders, our Posts crossed in the Ether. I somehow knew you would appear. I truly believe that SGH is a good share to buy NOW, clever in hindsight. But clearly it wasn't a good share to buy four months ago, when somel thought that they had 'such a good deal on PSD from Quindell'. They will be a great share to own in two years time, if you buy a few shares now. But share owners will not be so happy if they owned their shares prior to Q2/2015. It would have taken over two years to go from A$6.5 to (guess) A$10 ish. Quindell isn't the only company that screws up. ATB, P
Borders I was going to buy some SGH but found to my surprise that HSBC Invest Direct do not support dealing on ASX. Now a few months on I quietly whisper to myself 'thank you HSBC for being so restrictive'. Current press releases on SGH and their Financial Staff situation clearly indicate that they are heamoraging cash, big time. 2015 Quindell style, even. Which goes to prove (conclusively IMHO) that David Currie, past Quindell Acting Chairman, current Quindell Non-Exec Director, made a correct move in managing the sale of our Legal Services Division. And saved this company from a certain SP=£0 situation. ATB, P
Phrontist. Perhaps you should review the Edison research on SGh which points to 89% PAT uplift in 2017. That uplift as it works through the WIP and the cash generation should enable debt reduction...which in turn should eliminate the perceived weakness of high gearing. shorts dont like weakness elimination. If Eddison is right that should lead to higher PE . From where I sit , it appears that SGH's PSD purchase will prove to be materially accretive ( although I hate that word) over 2 years. They would be mad not to scale back throughput by 10%. Not difficult. The accretive bit, reduction of WIP coming point to a 200-300% sp rise possibility ( Probability) over 2 years. SGh is doing nothing that QPp could not have done. Pity. Mel
jadwales I am confident that our new BoD is strong and suitable to handle any and all outstanding issues on Quindell. It just takes time, with many issues not being directly resolvable by them (eg SFO). This is the stuff that ambitious Dirtectors make their reputations on. They will succeed. ATB, P
How much are they charging?
But it's no win no fee, right?
Mullins58, a complete waste of time and money at least until conclusion on the SFO investigation. ATB, P
Glad to help, tidies the place up a treat, doesn't it? Give 'em enough rope..... I notice even more trolls here today all anxious to buy in but trying, it would seem to drop the price first in their abject greed.. Beginning to look rather orchestrated. Although of course, Rocal would throw up his hands at such a suggestion in (mock) horror!
I gave them a ring to discuss the possible action and costs involved. Did not inspire me with any confidence of success and very costly.
There is a possible further reason for SP reluctance to rise. On this very LSE Site it says Rob Terry still owns 46,900,000 shares in Quindell. Almost 47 million shares!!! That is over 10% of the company. Obviously he won't do anything to damage the business on purpose but he has shown the capacity to damage a business by selfish actions. II's will not like this. I watch IMTK and DAN every day, as well as Quindell. The founder of IMTK says he has never had a (proper?) converstaion with RT even though RT has moved in on a substantial amount of his business. Has RT moved his shares around so that his 47mil dosen't show? It is a dead cert that when he started issuing his Reports and the like on Quindell a few months ago, that he had plans on getting back in, even a funded takeover using Quob. A dominant dodgy shareholder always holds the SP down. ATB, P
Thank you for your reply phrontrist. There's a lot of hurdles to jump over and whilst possible there's a rather steep mountain to climb after that. I've been here a long while and I've looked at the share price both with joy and despair in that time. I find it hard to see the light at the end of the tunnel. No news is not good news at the moment and like you I sit and wait. Meanwhile too many people on here say so many barmy blind things like there's nothing at all wrong. It's nice to have a balanced poster here like yourself that looks at the entire picture and not just the pretty bits. Thanks dude:)
jadwales, I think the five reasons I have just given. Put yourself in the shoes of an employee fund manager. The top requirement is to invest a clients funds safely. All other requirements are subsidiary to this eg capital growth, good dividends, global ambitions, whatever. Safety comes first. You don't get fired for a 5% or even 10% drop in a year, but £2.50 down to £1.00 over the last year or so will get you fired, or at least moved to Head of Tea Making. Owning Quindell shares is likely to have got a lot of people fired, to be blunt. Quindell has succeeded in overcoming a near certain collapse, not unusual on AIM. That is good for us PI's but not good enough for Prodessional II's. The company has to resolve all five issues I listed below to clear the road for growing II take up. Full Stop. Once this has been achieved it is likely the SP will rocket, since the management have not been standing still for the last four months. I am hoping for a spectacular revival, but it does depend (in the end) on a substantial Sales Order Book, and we have no information on this or the respective Sales Directors actual potential client names for new business over the next year. It would not be normal for a company to issue such information (except Rob Terry) and so we have to wait. There will be a moment when owners of Quindell shares will get up one morning, look at the SP on-line and scream with joy. When will that day be? I wish I knew. ATB, P
One area politicians really annoy me is that at every election all parties are bleating 'oh we love business and will reduce red tape blah blah blah'. But red tape get worse as time passes. More government department incompetence, poor decisions, long timescales, no progress reports, etc. What has been done about the detrimental effects of shorting? Nothing. Not even a Report or White Paper. I won't even start on the shoddy Cons way of supporting the steel industry. ATB, P
Phrontrist you seem to think logically and your posts are nicely balanced so I'm sure that you are open to debate in a normal "sitting on the fence" perspective, so I'd be interested in your opinion of this: Im sure we can agree that the market cap of quindell is pretty much the same as the capital repayment yet the market will not or cannot for some reason take into consideration the apparent value of quindells assets, work in progress and future nihl income etc... But why? We know himex and Ingenie are currently loss making and also that they are the bulk of what we have left after the disposal of the professional services division. I can't help that think we only have a pile of cash and not much else. What do you think?
Apologies addicknt, I believe you are correct SFO - Serious Fraud Office. It is a shame they cannot carry out their business in a more timely fashion. Or provide reasons as to why delays are occurring. ATB, P
An article in Motley Fool yesterday says: 'Shares of Slater & Gordon Limited (ASX: SGH) are trading lower today after the legal firm announced that its current chief financial officer (CFO), Mr. Wayne Brown, would leave the business. Brown has been with the group for 12 years and Slater & Gordon recognised the “significant contribution” he has made in that time. However, his departure also follows a tumultuous period for the group in which its shares have shed more than 65% of their market value. Indeed, Slater & Gordon has been the subject of enormous controversy over the last four months or so. It has been the subject of a major investigation by the Australian Securities and Investments Commission (ACCC) – while many have also questioned its growth tactics and accounting methods. Although the group’s update didn’t specifically reference these issues, it’s possible that investors are tying all the concerns together and once again questioning the viability in holding the group’s shares. Personally, I think it’s a risky investment proposition even today and won’t be tempted to buy shares just yet.' Plus an article in: http://www.lawyersweekly.com.au/appointments/17402-slater-and-gordon-cfo-departs gives further information on a reorganisation at the top. ATB, P
Phronist, one point of fact: the FSA (sic) have ceased their investigation. The SFO took up the baton.
It is easy to be positive about Quindell these days with a strong position in telematics, a substantial sum of money in the bank and more cash coming in over 18 months for NIHL from a credible source. That should put the SP anywhere between £1.20 and £1.50. But potential investors that don't yet own Quindell shares will look at these points as hurdles to jump, with the posibility of at least one fall: 1) No NIHL cash has yet been paid and until the first payment comes through this can be regarded as a risk. Also, 'unbeleivers' can point at SGH and say why is their share price still hovering at half its value four months ago? 2) The Capital Refund issue is becoming a thorn in the side of Quindell partly because the BoD have not given real evidence about timescale and amount. If they said a £1/share and by end 2015 that would be something but any wording provided has a degree of ambiguity about it. 3) Nothing has yet been provided about our estimed subsidiaries performance forecast. If sales and profits were reasonable then something could be said to steady the waters of speculation, but saying nothing is causing the dark side of speculation to keep popping up its ugly head. 4) If and when the Capital Refund occurs then many possible investors may then say Quindell is underfinanced and not financially equipped to handle the subsidiaries into growth and profitability. Back to Square One, a fire sale. 5) The continued FSA investigation comes up in EVERY publication article out there. Whilst many (incl me) are confident the result will not harm Quindell, many possible investors will say it is a big unquantified risk. On balance, this is why the SP hovers around a £1. Someone suggested a Court Hearing on (2) will occur on 2nd Dec, but I have not heard anything official on this. It may result in a decision on the day, or it may result in a deferred decision until an SFO conclusion, due its unknown financial implications. Only time will tell as each of these issues are resolved. Meanwhile, I am sure that are excellent BoD are quietly getting on with, at least, resolving (3) which is where the companies future lies. Quindell has to PROVE that it is moving into becoming a well run business and to achieve that ALL of the above has to be resolved. My bet is that it will all be resolved favourably but it will take time. Anyone arguing against this sentiment is probably a shorter in waiting. ATB, P