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There are arguments to suggest the SP will rise and arguments that suggest it may not get over 30p. However, there is no doubt that the SP cannot remain too low for too long as it is a takeover target. Like I keep saying It will be an opportunilty to increase a stake in SIG at depressed levels.
source
Frankly, whatever is said on Thursday, today may prove to be a storm in a teacup arising from one uninformed tweet.
I think its the mindset of a recession and construction usually is the last to recover.
Granted this downturn is indeed unusual .
I suppose the questions : will there be another dip ,
Trade wars with USA/ China all are weighing things down.
It will probably just be a slow burn but it will definitely get there .
I’m in for the long haul .
Agree it would make no sense to dilute shareholders via an equity raise when there are existing bank facilities and access to government loans.
SIG are in an enviable position with very low debt. I’m sure the banks would be their first port of call if necessary.
SIG do not need any more cash. They have about 140m in the bank, minimal debt to service, they had profit in 2019 and they're opening up for business.
If they need money they can get an extra 200 million from here, on excellent terms.
https://www.gov.uk/government/news/larger-businesses-to-benefit-from-loans-of-up-to-200-million
If a new CEO purposefully reduces the equity value of shareholders, he'll be voted out of his post soon (and he knows that well). If a company needs more cash, they're looking to borrow commercially as a priority, not issue more shares or anything radical like that. This is why companies almost always have debt from banks -- they borrow from there first.
In April they were in dialogue with their lender group for additional capital as and when needed - taking on some debt. That seems likely their first port of call, in preference to and before any equity raise.
March trading update RNS: The Group received c.£187m in cash (including repayment of intercompany debt) from the sale of its Air Handling division to France Air Management SA on 31 January 2020.
Raise would be seen as a positive shore up balance sheet. Net debt at 31 December 2019 c.£162m. Air Handling sale net proceeds £152m exclusive of debt owed to SIG by Air Handling of £34m. So a raise could make sense? Regardless the business has minimal debt a luxury at this time!
NMC Health was a FTSE 100 company
This is not AIM it’s Ftse share
Cash in the bank £142m, market cap £141m.
This is AIM, PI's are always the last to find out what's going on,
by then it's usually too late.
Nevertheless, in a sense we were put on notice in April, but I tend to agree with Colebrooke - if it occurs it would not be an unusual development to protect the balance sheet in these times. Sig customers, returning to work, rely on their broad supplier base to have the right products available at appropriate times. It will likely take a while before supplier chains are once again in sync with requirements, from manufacture through to end product, with temporary knock-on effects.
That article uses the words could and may. That indicates they know nothing. That article could have been written that way about a large number of shares at this moment in time especially for companies in a negative cash position which this wasn’t at the last update. The update put out to announce the reopening of branches in Ireland stated they had fully stocked up and suppliers were supporting them to keep on top of stocks. If there was a significant issue those suppliers wouldn’t have been paid and they would be protecting their own backs at this moment and not supplying.
Our biggest risk comes at the moment from bad debts from our own customers which is again a position all companies are currently in.
We will only find out the true position when the horse speaks...
Cash raise could be seen as a positive by the market. Strengthen the balance sheet. There have been numerous raises these past few weeks which have been seen as positive. Although £140M cash as per last update I don’t get it.
From 30th April RNS,. As a result of strengthened cash control measures, the Group has been able to preserve its liquidity position and, at the close of business on Friday 24 April 2020, it held cash of £142m. The Group remains in dialogue with its lending group in order to release additional liquidity as required.
Why would they need more liquidity if they have £142m cash?
Not wanting to deramp but wasn't Tullow a bargain at 38p where did that go after its little burst back to 69p. Nmc healthcare was cheap at 8.00 where did that go. Aml just to cheap @ 20p forecast. Yes all have different outcomes from fraud to debt but all have one thing in common can just take your money on whatever bull s*** news they can find on the internet.
His article doesn’t make sense - according to him the SP has been “hammered” due to Corona and “largely” In respect of investors “fretting” over the company’s liquidity - that was partially addressed in the April RNS - remains liquid with £142m cash and support from lenders should it be required. If his article was recently written, then it seems like dump attempt.
I think most brokers when reading articles just dont have faith in SIG.. but that's mainly down to loss jan and feb.. business numbers in slight decline vs competitors
CEO CFO being sacked..
Because we dont know anything about what's going on behind the scene.. speculation is rife..
Key here is hardly any debt ..
Has cash in the bank..
New ceo is highly regarded at turning around flagging business.
Market cap currently 137mill..
It's worth more..
Lifts a risk.. and my opinion. It's worth a punt.
Yep, Pure speculation. Sure that they could take on debt if they really need - it is available. No need for an equity raise..
David Burton is probably a paid pumper / dumper. He was promoting AML at 50 A few weeks back and it tanked below 30 about 1-2 weeks later.
Calling a “top journo” a Mail on Sunday rumour monger (Remember the claim that Amazon was in talks to buy the owner of Odeon cinemas?!) is another example that he has no credibility.
yeah not sure why they'd need to raise cash right at this moment, but then again that surely hasn't been written for no reason... there might be something in that, we will find out on thursday
I hope not for all PI's mbingo but it will attract the damn trolls to talk it down , just giving a heads up , will keep any eye on it and wait a little longer.
They have £142m cash. No need to raise funds.
Personally think the share price is a bargain at these levels. Having sold some at 31.5p from original buys 18-20.5p, re-bought all in the 23-26 region. Market is forward looking. Most of Europe is out of lockdown, the UK is being more cautious, but I think this changes. Couple of institutions have continued selling otherwise this would be back in the 40s. I fully expect this to recover and look forward to the financials.