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Thanks Hawfinch...I will take a look at that ..
Edwina...yes I have spoken about the trading aspect of this share.
I do understand what you say when you talk about there being one or two distressed sellers suppressing the price and this providing opportunities to manipulate the share price downwards ..and that this will only come to an end when the distressed sellers have finally relinquished all of their holdings (I have previously observed and commented on Norge Bank seeking to liquidate their holdings .).
My ignorance is on the market mechanics underpinning this, and the trading evidence that this is being manipulated downwards .. I tried to understand your explanation but fell at the first hurdle when you spoke of level 2 ..what is level 2 ? I am inclined to just read your conclusions on what is happening on the trading side and not worrying too much about how you arrived at them. My attention is focused on the fundamental aspects of the company which is something that I understand a little more about.
Two further things of note... 20 million shares changed hands on Friday ...does this imply the reset button has now been pressed and things can return back to normal? .... The recent build up of the shorting position by Millenium was liquidated completely on Friday ...they clearly made a rapid stealth move in and out in just 7 days and presumably think that the sustained decline in share price is now over..
We shall see...how do you see it ?
Alwayswrong, you have talked about the trading aspect of this share. Since i bought in on the last drop, circa 52p ish, i mentioned the share suppression being the main factor in where this is just now. Clearly, if one or two holders werent so desperate to sell this would be higher, as they would allow it to bounce around, up and down, rather than just down.
One huge factor to note is the trades going through on the mid price. Anyone watching level 2 will any larger trades executed above the current Offer price, often then soon after go through again at the midprice. This is clearly a market maker selling say 50k shares at 45p, then, since they know there is an institutional seller, they simply instantly rebuy the shares at say 44.25p (if the spread is 44-44.5. This is affectively a get out of jail free card. But also cause for shorters to manipulate the spread down, knowing that the distressed seller will follow them down, and always allow purchases at the midprice, hence no upward momentum on large buys. I have watched this share for 4 months now, and this "mid price" action is still ongoing.
When it stops, i.e. large buys are not instantly rebought at mid, that is when we can start to see a rerate. GL
Not sure you can simply take the cash figure at 31st March add the sales then say look total is lower they must be cash flow negative from operations.
Whether cash is in the bank from sales is one point, other would be the purpose of the sales is to reduce debt. They withdrew 50mill from the revolving credit facility before year end. Wouldn't shock me given they can access CBILLs if really required cash from asset sales has gone to pay that off.
Think insurance claim is a red herring BTW. Despite the positive press, hiscox and Co share price rocketed as any claims are small in scope. Would be very lucky to be one of them
I dont disagree with those bullish on here and there are some good points made. Unfortunately the share price is currently falling 3 to 5 percent per day on a down day and about 12 percent per week. This could be a real bargain of course. It will get to a price where I have to start to add ...this has been a disaster for long term holders from £3.50. But then look at HMSO today. ....
The property portfolio will be revalued as at 30 Sep for covenant testing purposes.We will find out the result in Nov, maybe earlier. Down another 10%+? .Nrr only added £5m to cash pile at last trading update, despite assets sales agreed/ signed totalling £52m.This suggests to me that Nrr has negative operational cash flow because of unpaid rents.Continuing negative cash flow will add strain to 65% bond LTV.To return to sensible gearing, assets sales need to be nearer £200m or offset by share placing,which would now be highly dilutive at a market cap of under £150m.
Don't panic Mr Mannering !!
The problems NRR is experiencing can be summarised in one word... COVID.. None of the temporary problems (because that is what they are) can be laid at the door of management which is so important ..
NRR won't go bust because of Asset write-downs no matter how large based on likely scenarios in play...it will only go bust if it runs out of cash and lending facilities.. period..
£87 million cash currently in bank, £45 million in undrawn roll over debt facilities, £80-£100 million in assets sales and also £50 million in a special government Covid government lending facility. I make that over £250 million.. i.e. three years with no income .. that ignores that they could sell even more assets and just swallow any losses on them ..naturally covenants come into play ...but these are likely to be temporarily waived based on the extraordinary events taking pkace...besides, I think that it's highly unlikely that with current cash and planned disposals, that any more lending beyond what we have at the moment will be required.
COVID vaccine could be available in March ..let's say September .. once news of a roll out programme is announced the share price will rocket and optimism will return to asset value...remember that assets can be revalued higher as well as lower ...this in my view is what will happen within about 18 months..
One thing to remember is that the whole world is working on a solution which is conducive to NRR getting through this. Compare this to a company such as Amigo which is disliked even detested by anyone who knows what they do and especially the FCA ,who incidentally, are also on our side with the pubs sector and business interruption insurance.. my only regret is that I jumped in too soon ..
Don't panic..just batten down the hatches for now...
Everything CV19 related has been smashed this morning. Look at the airlines, cineworld etc etc.
Bet seems to be we will have lockdowns etc till March 2021. How that translates into balance sheet value for this is key. They have the liquidity to get through but not much room on the LTV. Which if for example retail refused to pay arrears without a significant discount on rent going forward could be nasty...
Did not even pause at 45p......low of 42.7p. So far. No idea where this is going. The pubs being shut or restricted during the Winter maybe? If this is the start of the pullback then maybe 30p? 25p? The curse of Intu hangs over this stock. Can or will they go broke? Will landlords stop paying en masse? The mkt is very nervy .....seems to have no interest in the reality. I guess we have not seen this situation before. The directors are not buying; so down we go
The situation isn't critical yet but certain actions are in my view necessary ...more maybe necessary later, depending on the length and severity of the disruption caused by the Corona virus .
What I think they should do to begin with is :
1...announce an intention to buy back 10% of the companies shares (30 million but hold them in treasury) alongside a statement declaring an intention to buy back more at a later date if deemed appropriate . The impact of this will be to prop up the share price by reducing the number of shares in circulation and at today's share price will only cost around £15-20 million to do ..it should also flush out the 'shorters' and sooner rather than later ...this action is also a way to increase shareholder value in lieu of not paying a dividend..
2..Continue with the plan to dispose of £100 million of assets and use the remaining approx £80-85 million to reduce debt...and LTV
If bad times remain then further actions and asset sales will become necessary , conversely if good times return then they can reissue the 30 million shares, at hopefully a much higher price, and invest the proceeds to resume growing the business but in a capital light way , which is what they were aiming to do anyway ...
Now what to do with the pubs ?? Think I need to pour myself a drink before I answer that one...
With regard to the likely losses in net revenue caused by the Corona virus , I think they will just have to take it on the chin for now, in the knowledge that they have £83 million in cash.. I have calculated though that even if they lose 50% of net revenue they will still manage to break even on a UFFO basis although no dividend will be paid..
Typically when a company does a buyback the shares are cancelled rather than held in treasury. So there is no income for them, which would just be a weird accounting entry of cash to cash.
They could hold div per share at that point which would retain cash as less shares to pay a divi to but then there are the reit rules.
Think we are a long way off that though. Interesting it seems residential can now be evicted? No extension? We really need that to come into play for commercial in December. Some national chains won't pay any rent before then and will use total arrears as a negotiation point to get cheaper rent as they are trying now.
Was thinking last night, always dangerous, would imagine this talk of a two week lockdown "circuit breaker* could come into play over half term.??? Then at least for one week schools which is this hours priority of the tabloid press would have been shut anyway so reduced impact on them.
Once things normalise, and LTV's stabilise, would there be much stopping them selling an asset or two and doing a share buyback? The income from the shares could even be used to pay down debt? SREI recently started a buyback. Maybe market will take the management more seriously this way, more active approach. Certainly no asset purchases, as, as soon as they hit there books they'd be worth 40% less than they bought them.
21 million shares ( 7% ) of entire share capital including 13 million shares ( 4.3% ) of share capital in 2 separate sell transactions registered after closing time at 46.05 pence. Unbelievably I couldn't get instant dealing quotes to buy just 15,000 shares...I reduced down to 5000 an still couldn't buy.. In the end I put an order in which did go through..earlier, I put in a fake sell instant quote for 15,000 and got a price straight away.. i.wish I knew enough about trading to understand what was going on
Trading on this scale in this share hasnt been seen since the height of the pandemic..
Norges Bank only hold 2.5%. So could be either
JP Morgan ...who hold 6.2%
M&G who hold 5.8%
Integra who hold 3.0%
Norges Bank who hold 2.6%
Or maybe it was a huge short, but conversely who was the buyer. ? Interesting to note that all major brewers closed the day in surplus ..(Marston's by over 6%) ..yet all breweries were in deep negative territory up until midday..
Could these huge share transactions signal a watershed moment for NRR ?? I have no idea but I took advantage of the steep falls and added to my position ..
46.25p. Now that is low. will add myself at 45p and below. will we see high 30's in time?