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The company has stated -
“The Group has the installed capacity to grow organically to an estimated GBP45-50 million in revenue with limited requirements for further large-scale capital investment”
This would indicate that the company is working toward being self sufficient and ultimately moving away from fund raises
Over last 3.5 years, recall 6p, 6p, 5p, 4.7p, 3.55p, 3p and now 2p !!!? What price next cash raise ĺ?
I've been watching for a while. I think the placing has put me off. They sold thier buildings to rent back, now a big placing. Clearly burning through the cash at a high rate.
I'm concerned RDC are looking at steel, their strength in in iron. Its seems like an unnecessary distraction that's going to take up a lot of time to develop and make a market. They say there is not much competition and margins are better, I'm skeptical about that. From what I can tell steel Foundries are struggling in the uk with many shutting over the last 10 years. Those that remain like Goodwin, cooks and forgemasters already have the expertise, why try to compete with them. All that will happen is margins will get eroded.
All imo.
I'll still monitor as they do appear to be very cheap considering the size of the group. Someone setting up a group of Foundries like this now would need many times the current market cap to do it.
I too couldn't resist topping up around the placing price. Given the trading outlook disclosed further down the RNS which some may have missed it's hopefully a chance to get in at the very bottom (though of course this has been said before....!).
Bit if a rant from me but I'm entitled since I've been in this from about 9p.
Kevin Price looks like a cat in the headlights. Seriously if they can't make a profit on £20million revenues they might aswell shut the door and turn the lights off.
It's always next year, next quarter but just before that another placing.
They have just trashed all the positivity that was going on here. I'm guessing also that the hidden AGM announcement deep in the results and not via RNS was to hide from investors because this placing was going to happen.
Rant over!
Trevor Brown holds 35,421,915 Ordinary Shares representing 25.70 per cent. of the Company's issued share capital. Trevor Brown has agreed to subscribe for 3,550,000 Subscription Shares pursuant to the Subscription at the Placing Price. Following Admission, Trevor Brown will have an interest in 45,571,915 Ordinary Shares representing 25.41 per cent. of the Enlarged Share Capital.
So this has cost him £71k to retain the (almost) same stake in the company. I think unless you increase your stake in a placing you have not averaged down. I plan to try to calculate the cost of his holding. I would hazard a guess that it is at least 5p/share. He has also seen the value of his 25% crash today just like the rest of us. He must be about 50% under water at least. I know how it feels Trev! I was also here at 5p.
I’ve also added a few at 1.98
Hi Darton.
Agree with a lot of what you said, but TB is taking part in the share subscription from what I’ve read?
Yeah, I did the maths. For the mcap to remain the same, the placing should have been 2.3p.
However, that isnt usually how placings work. In the good times, this would have been a much smaller discount. The argument being that the EV has increased due to the cash achieved from the raise.
I still think Trevor will exit this with a profit or a MBO. So for me, having been here over 2 years the only option is to follow him. I have managed to increase my stake (he remained the same). I bought a few times today, and one of my buys was the 1.994. Im pretty fed up with this saga though I have to say. I think the price was low, and it is concerning that 830k might not be enough cash again - although the previous placing was for only £330k and it lasted nearly a year . A higher price could of achieved a little more cash. I am surprised that TB did not increase his stake, in that case he has not really averaged down. Should we be wary or excited about this? I always thought if we had a placing here it would be for TB to reduce his average and go to 29%, but in actual fact the cost of his 25% has now increased again by £71k.
I will be interested to see who bought the shares, or rather who is likely to keep them. Recall Miton sold around 2.5p, was this insightful trading from Gervaise? Does he get them back at a 20% discount.
My last point is that I would like to see the board really commit to RDC. To do this they should sell Petrel, and use the cash to erase all debts and deficits, and invest in capacity etc. One day when this is taken out, its going to get broken up anyway. It might even achieve a better multiple as a single focus company in the mean time.
Looks like tricky trev may have fallen victim to the sunk-cost fallacy here
Scrap that. I'm talking nonsense.
Im not doing aim anymore, this year im building a dividend portfolio instead
At first glance I thought 2p was outrageous. However thinking about it a 30% discount to current share price when the new shares will be worth about 25% less due to the dilution is not so bad.
Agree with all the comments this morning.
2p is low and pretty disappointing. Also, I wasn’t aware of the £1.7 PAYE arrears with HMRC. Must have missed that.
I don’t mind placings as long as they’re being used for the right reasons. From what I’ve read this morning this placing falls into that category.
Taking everything into account I still remain positive.
Particularly this statement -
“The Board is anticipating a further increase in revenue of between 15% and 20% and profit after tax of between GBP0.8 million and GBP1.0 million in FY24. The Group has the installed capacity to grow organically to an estimated GBP45-50 million in revenue with limited requirements for further large-scale capital investment.”
If you remember, last month, I posted a very basic 5/6 year history of performance. In the last 5/6 years the highest revenue figure occurred in 2018 -
2018 - Turnover £37.7m - Profit before tax £0.4m - Share price £0.815.
So, if we can grow revenue to the figures quoted today, then we’ll be outperforming 2018. The sp back then was 81p. Now obviously the landscape has changed since then. For instance, a lot more shares are in issue. Also, decent revenue is all well and good but we need strong profit. Taking everything into account I’m still optimistic that this will come good. I don’t think we’ll hit 81p any time soon, but as I’ve said before I feel 20/30p in the medium to medium/long term is certainly achievable
GLA
Not needed at all IMO. Sale and leaseback of both properties completed with only some of the proceeds used to pay off the pension deficit.
Cheap shares for TB and others, averaging themselves down and diluting the rest of us.
HarryCaul,
Good point.
Agree.
Yes
TB was never going to pay up for stock.
This is on the recovery path now, and he's averaged down.
Gutted of course as we've been diluted yet again.
Disappointed 2p is low
Yes, money goes to money! Testing our patience: "This time next year, Rodney..."
Such a steep discount does feel like a kick in the nuts for regular shareholders :(
Great to see the trading news in today's RNS, which indicates a PAT of £0.8m-£1m for this year to Nov'24, and revenues up by 15%-20%.
Which makes the price of the new £0.83m placing particularly hard to swallow. With Trevor Brown investing a further £70k and First Equity a further £220k, taking their holdings to over 41% of the company between them, there's obviously distinct optimism about the direction of the company. And makes this placing simply "shares for the boys/insiders".
It's always best to have spare cash in hand, and with all the contract wins and working capital requirements I don't blame CMH for topping up their reserves. But surely a 2.5p-2.7p price should have been achievable.
That's the markets for you.
Yeah bad price. On well to the bottom of the drawer this goes
Ouch, big discount
Looks like a nice 350k buy has gone through from earlier today.