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QC,
As if by magic !!!!
"You are very defensive NewKOTB.... " Not so much defensive, more alert to BB shenanigans. Call it co-incidence, no doubt you will, but the first mention of Viaro and you appear ... just saying !
BTW, you could always try expressing your opinion over on the other board .... A..D.V.F..N too.
PS Glad you have made your point, as there is no need to discuss it further, as explained previously, please re-read historic posts for BB thoughts on your matter.
atb
You are very defensive NewKOTB.
Re: the balance sheet I merely suggested that management’s ‘no debt’ message was lost on people who only looked at the balance sheet figures. Management also is exceedingly conservative in how they account for future profit sharing payments and I am not sure this is in the best interest of shareholders of which I am one. BTW, I was an SQZ investor years before I discovered this board.
As you are a frequent poster on here and deem yourself to be a gatekeeper of sorts, if you want to foster a community that encourages the participation of ‘articulate and astute’ people then it’s probably best not to respond to them with hostility and suspicion when they are attempting to engage the board on meaningful topics that they did not see fully covered previously. Those ‘articulate and astute’ people will find better things to do with their time.
LOL ... > QC
QQ,
You classed yourself as a "Long-time lurker, first-time poster..." so why bring up topics of 'discussion' that have been covered, in great detail many, many times previously, just re-read the old posts. You are clearly an articulate and astute person yet wait, having been a shareholder for over 2 years to start questioning our balance sheet on a public forum ... !!
FYI, I do expect transformational corporate activity with SQZ this summer having explained my rationale many times on this forum. Maybe not with Viaro, but then again, why not.
Muckle, You may be correct, lets see how much QQ pushes this topic and others.
atb
Tom - The point is a simple one. If all someone does is look at the balance sheet of the company (or rely on information providers that pull that information) they are likely to miss the fact that the company has no borrowings. All they see is the fact that the company has 280 mln of liabilities of which 110 mln are non-current financial liabilities (as of FY19). Some potential investors never investigate further. Accordingly they never learn that a significant portion of these liabilities are profit sharing payments made on assumed future cash flows and they never take the various next steps that you outline because Serica is off their radar to start with. Anyway just my thoughts.
NewKOTB - Thanks for the warm welcome. I decided to start posting because I was under the (mistaken?) impression that this forum was about exchanging ideas, learning, challenging assumptions and getting at the truth which is what a dialogue amongst well-informed investors and people should be about. Nevertheless if suspicion is the name of the game then we ought to be more concerned about someone pushing the view that there is an imminent take out by Viaro looming (sub communication: 'you better act fast or you'll miss out') than someone who has the view that the SQZ story needs more time to develop as there are some hinderances ; )
I am probably naive to the shenanigans that undoubtedly go on on boards and markets of small/mid caps. Did Franklin always say...Wealth should be won fairly and spent wisely :-).....Anyway, lets hope for some positive news in H2. Hopefully management can focus on their job at hand and the rest take cares of itself....optimising BKR and allocating the >£100m of capital in best possible way for shareholders.....acquiring better prospects and sensible prices, dividends or buybacks.
Tom,
Should you be cautious about the hidden intent of a new poster who has held for years but never posted, now decides to post with no doubt increasing regularity. Me, for sure, I'm watching this poster like an eagle. This, at a time when we have just witnessed the 'goings on' over on RRE.
imo
*sorry that was suppose to say "cant deduct" not can
Quintus. I am not sure I understand your point. The apples vs apples comparsion should show. On one side of the equation is Serica's free cash flow or earning power attributable to us as shareholders. This equates to operating cash flow is ey i.e. £136m in 2019 less the cash flow share to BP £57m less other capex of £5m. So call it £74m of FCF to shareholders net of the BP payment. You can then use Serica's EV as your capital base which is much lower on the MCAP per Bloomberg and CapIQ because of the £100m in cash (last reported). If you wanted to add the cash flow sharing liability into EV then thats fine but you can then deduct the £57m from the earning power side. I think it should show as a highly free cash flow generating company at a low price on any screen.
Gareth - Have not reached out to investor relations as this looks like a management decision to account for revenues from the BKR profit sharing agreement in this way. The problem is that management’s message of ‘no debt’ which is clear in their presentations is totally missed by anyone screening on Bloomie and in fact they conclude the opposite. From our perspective as investors this is really a shame but it is an opportunity for those who dig a little deeper and discover this.
An interesting observation. Have you considered contacting shareholder relations about this for an explanation?
When you do a stock screen on Bloomie for companies with high free cash flow yields and low debt SQZ does not stand out because of the way in which they account for the future cash flows under the terms of the BKR agreement. As per the 2019 annual results conference call, SQZ's definition of liabilities includes future payments made to counterparties under the BKR profit sharing agreement. I would not consider this a 'liability' in the classical sense as these are payments that are contingent on future cash flows i.e. no revenues, no payment. This means that SQZ is getting missed by many asset managers who rely on Bloomie stock screens to form their 'short-lists' for in-depth analysis.