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"58% of the equity which cost them £19.45m at the time." which is now worth 58% of 11m, but they can claw some value back by taking all the equity....as the loans in default...even you said it the other day remember! LOL
after expenses the SGI profit on the India auction is not going to make a dent in their debt pile, breaking loan covenants TWICE is not a good look. 4 trades today, 3 of them sells, looks like investors are leaving the sinking ship with just Pearls left behind arranging the deckchairs and then occasionally running off to the ARB board to have somebody to talk at. Perhaps she should buy a couple of arm floats from Mothercare, they need the business.
Devon, that's a fair enough comment about the impact Phoenix could have on the equity. But you equally have to marry it up with the fact they are the main equity holder as well - 58% of the equity which cost them £19.45m at the time. Why do they need to swap the debt for any more equity? They are already the main shareholder so there's no more control required, and they are the banker as well to the company which gives them further control. That banking facility has not increased, but I cannot see why they should want to swap it for more equity. It provides a useful tax deduction for them.
When Phoenix came in a few years ago, their involvement was with a debt for equity swap, and part of the deal involved the cancellation of the old RBS banking facility [under which SG had then owed over £17m] to be replaced with one from Phoenix at £10m - i.e. SG's debt fell by £7m overnight.
As with Hornby, Phoenix have reiterated publicly a number of times in recent years that their intention is to be a long term supporter of the company providing the solidity and backing it requires in difficult times. Trading is now stabilised and the legacy issues are at last well behind, so this year from April onwards should be transformational. Admittedly no analyst has picked up on it yet, nor do I imagine that they are following the auction results, but if they did, it would reveal the improved trading already starting to come through.
Do we need to remind you again? What they said a matter of weeks ago?
"The benefit of their achievements are however not just felt in the present."
"Despite increasing our spending on those initiatives which will help propel the business forward in future years, we are yet to do so."
"we cannot afford to take our foot off the pedal"
"We are hopeful that the relaxation of restrictions, combined with greater participation in the hobbies we serve and our hard work bodes well for our prospects. However we are under no illusion that this is guaranteed"
"We are hopeful that a vaccine led relaxing of restrictions is not only permanent but encourages activity levels to return at pace, however, this is hard to predict and we have plans in place if this is not how things develop."
"this is hard to predict"...they should have just asked Pearls. No problems providing a prediction there.....
You have to be very aware that in a company that's so heavily controlled by one entity of the "we have plans in place if this is not how things develop". That's not always shareholder friendly. It can also be a raft of not so friendly corporate actions, like conversion of debt into equity for instance, that would be a debilitation for anyone buying today...as you don't know what impact it would have on the share price or what price they could convert at. It could wipe 50% off at the blink of an eye.
"Devon, you don't watch the auction and you don't read the RNSs."
I quoted all the key points form the last RNS earlier this week, you chose to ignore it as it didn't
support your position. Are you sure you are reading them properly? LOL
I don't like to correct your calculations, but 87,000 lots of £150....isn't £87,000. Not surprising you struggle with balance sheet questions hahaha
Devon, you don't watch the auction and you don't read the RNSs. Not a great summary is it, yet you give daily views on the company?
Now you are trying to make out the turnover is just £87,000 per day in this two day auction. I don't know the average starting price of any lot, but having watched the auction at regular points yesterday afternoon, it was pretty clear that hardly any lots went under estimate, generally all went over estimate, and when I say over, in many cases this was multiples of the estimate. There are 921 lots being offered over two days, I would actually say the average price was nearer £500 per lot but there were quite a number sold for over £1000.
At the end of the auction, SG list the realisations, and it is a simple matter to add them up and see what total has been achieved. I am pretty sure it will be close to £1m from just yesterday's lots as hardly any were unsold. If today is similar, that will be £2m towards our previous annual turnover of £11m [last year], and we are only in May. There was approximately £800,000 sales from the earlier auction in April meaning just from auctions the turnover is perhaps £3m by mid May. Hence my £20m annual estimate.
Factor in some trade shows later on this year after June reopening for the wider economy and I am sure turnover will erupt. Talking about £11m annual turnover is misrepresentative for this year, it only sank that low in 2020 due to the pandemic.
Surely even you, Devon, have to admit that if the turnover goes up to £20m, the chances of SG operating at a profit grow measurably….
Another day of small change? If we take an average lot as £150, then 87,000 lots might help... ;)
Again, bidding starts at noon. Should be another strong day.