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Seems to me that INCE knows that them cutting costs was key to profitability (in a video). Buying Arden gives them the opportunity, or sould I say 'excuse', to get rid of people on mass - plus a reduction in office space, in which case there is a good chance that profits in both co's will rise when CV melts away. That's the hope. 500k bonus with no clawback was a poor show - too easy to pump out RNS's to get the bonus? At least the CEO has a large chunk of shares, so has som eskin in the game.
Hi @ADP708 thanks. I built my ISA stake in Ince in several tranches in September/early October thinking the divi is going to happen soon. Average was probably 57p. Still hold Ince in my SIPP (long-term bet) so hopefully this ship will turn around in time. When I saw the Arden news I hit the panic sell button as got the worst timing (sold at 43.75p) that morning. Don't worry my holding in Ince was relatively small (only 2000 shares I think). If this drops to 40p I may buy some back. That's when they resume trading of course!
Hi @wcbham, so sorry to hear about your loss, it is very sad to see genuine investors losing money, what was your average? when did you buy? Just wondering whether your circumstances allowed you to hold the shares for longer so at least you were even?
Ince is not a speculative investment like many others on AIM so we really need positive RNS and progress from Ince to see more retail/institutional investors buying Ince.
Main aspect for me is Biles was given 500k for lifting the SP from lows due to Covid and now languishing at placing price. It’s a total joke
Hmm, I see two contradictory bits here:
"The global pandemic placed constraints on the business, and we used government job retention schemes to protect jobs and support colleagues throughout that difficult period"
Further down the page:
"Ince's annual statement also revealed that cutting 47 staff roles resulted in a saving of £1.2 million."
So they say one thing to get the money and then cut the staff anyway...don't you love lawyers!
https://www.rollonfriday.com/news-content/ince-snaffled-massive-ps15-million-uk-furlough-payments
There were a few articles on it, see above
"Meanwhile Biles recently received 500k for getting the SP to above 80p"
Are you joking? Please tell me that it isn't true?
Meanwhile Biles recently received 500k for getting the SP to above 80p.. surely there should be a clawback on that? Anyone know the contact details for investor relations or how we can make our feelings known about this transaction for Biles or am I wasting my time?
wcbham; sorry you had to bale out with a loss. I recall that in mid September you asked “why are we seeing lots of selling?” At the time nobody who actually knew was saying. Now we all know; no dividend and a new acquisition involving significant dilution. I know it’s no real consolation but you might like to take a look at Ince’s biggest institutional investor, Ruffer. On their website they say “ Our preoccupation is with not losing money” . By my calculation, from the highs of mid- April, they’ve lost £3m! Good luck with your other investments!
I sold out my ISA holdings in Ince yesterday with a heavy loss. This acquisition is yet another unwelcomed distraction, or 'skeleton in the cupboard' we shareholders have just seen too many times before.
retired banker; i agree with every iota of your post. I found it interesting there wasn't a single post on the Arden BB!
As a INCE holder, i actually bought Arden today, having done the sums and seeing it as a (cheaper) way to add to INCE.
My view on Ince has changed on this deal, today; i am a contrarian investor, and will hold for the long term; but on top of my previous concerns partners seeing profit and not shareholders, with this acquisition, its looking more like an Enron, buying growth to deflect the lack of it, whilst syphoning 'awards' out the side.
Consequentialy, i've gone from a long term hold viewpoint to a trading sell out of it. To answer your question, and if you are not a nervous type, i'd hold your Arden into Ince, as it gyrates wildly, and not withstanding it's questionable 'progress', you WILL get an out higher than if you sold your Arden now - and you'll get it before Christmas. Ho, ho, ho.
Interesting to read the posts on this BB after the acquisition announcement
I'm an Arden shareholder and I see things differently to most of you - in my opinion INCE has got the better of this deal
If you folks look at the Arden interims you will see that we made 0.9m net profit on 5m sales ... so FY '21 is likely to show £10m revenue and £2m profit giving you a company with a p/e of 5 ... you've got a bargain.
Question is whether I accept my profits (which are far less than they would have been if we had remained independent) or do I hope that this will revive a mediocre Accounting outfit that was already reeling pre covid. I need to research why your sp halved in Dec '19 ... but if for the moment I assume you can get back to generating a 5% net profit then the combined entity looks like (100m + 10m =) 110m Revenue & (5m + 2m = ) 7m profit with 86mm shares in issue. Put it on a p/e of 8-10 and maybe the Ince sp can get back towards 75p. Somebody below commented revenue is vanity ; profit is sanity - I agree !
I need to determine if I think Ince can generate profits or whether it just pays its partners and to hell with the shareholders
The important point here, unless I am mistaken, is that Biles said that they'd fund future acquisitions out of free cashflow, but he's almost immediately gone and issued new shares to buy a new company. Investors in INCE are now forced to invest in a company that has been *unprofitable* for 5 out of the past 6 years. It makes it difficult (impossible?) to compare INCE to any other listed law firm, because they do so many things; *none* very profitably. It strikes me that he has no concern at all about share holders. He's on a personal mission to create a menagerie.
Don't forget it's £10m less £3.1m of net cash - as at April. I have no idea, but it could be higher now given this has been a good year for corporate transactions? So in reality it's £6.9m paid in shares.
I personally have no issue with them acquiring Arden as i have seen other companies with a similar business models do very well but looking through Arden's fundamentals leaves me with no doubt that Ince overpaid........I can't see how on earth they valued it at £10m when Arden only made the revenue once in 2017 and their performance over the past 3 years has seen a downwards trend in revenues. Loses posted in 4 out of the last 5 years and Total Assets have dropped from £15m to £7m.
Even so I still believe Ince is heavily undervalued and see this an an opportunity to top-up on the cheap.
canetoad; yes, nor have i. I think most of us are here because, as you say, it is cheap comparatively to its competitors and we are awaiting the rerate, which would give considerable upside from current SP. The conundrum is why, this isnt comparative to peers? its illogical, but barring **** news, the patient will see this rerate.
revenue of £100 million sounds great. But revenue isn't profit, and my concerns on 'partner' renummeration shennagins remains.
Totally agree its an odd purchase. I do think its been purchased for the cash at hand, rather than INCE believing it, and if they do believe in it, it concerns me as losing focus, not believing in their existing model. That said, with my contrarian investing style, i would have actually invested in Arden prior to the RNS, not for the research ****e, but for the commissions on trades, and CRUCIALLY, in my opinion, being similarly overlooked/underrated as INCE.
So much so, i actually bought some Arden shares today, feeling that with both Arden and Inces drop today their was a pricing mismatch.
Don't understand INCE's drop today (Arden is just related to such), but that IS telling us, me, that INCE shareholders are thinking, what/why?
@damofarl: I'm definitely not giving up on INCE. Just the legal business itself is exceptionally cheap compared to competitors and the revenue last year topped £100m for the first time. It's just an odd purchase at this time, in my opinion.
canetoad - haha just noticed they already pump out on behalf of INCE.....i said it many many posts back, but this is look more and more like a gentleman's club, not an investor/shareholder focused company.
Canetoad; correct alas; for instance they have written 'research' notes on 2 holdings i have (GKP and Genel), which, frankly, i could have written in my bedroom. Nothing wrong with them, just didn't really give any insight not already freely available, ergo, i dont see that as a revenue source of note. To pay £9 million to get a flattering 'research' note pumped out seems an awfully expensive way to go about it.......
Companies use brokerages like that to write flattering articles in order to sell more shares. He'd have been better off hiring them to promote INCE rather than buy the darn firm...
Arden lost money for 5 out of the past 7 years. It doesn't fill me with confidence. Doe she think that they can force accounting and legal services onto all of their brokerage clients?
I wonder if Billes will offer to give his 500k bonus back now he’s destroyed the SP… absolute shocker
I'm hovering over the sell button myself at the moment. In the AGM last month Adrian Biles specifically stated that future acquisitions would be funded through internally generated cash flows and there are no plans to raise further shares. Why mislead your shareholder base?
It looks like the market agrees with the sentiment here, that this is a silly purchase at this time. The market **wanted** to see solid profitability and a divi return, to support the recovery of the share price after the catastrophic drops of the past 2-years; not more random acquisitions.
I hope there aren't any publicly traded circuses. He might be tempted to buy one.