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Buy recommendation from simon thompson. https://www.investorschronicle.co.uk/ideas/2023/11/22/sigmaroc-enters-the-big-time-with-1bn-acquisition/
I think this is a good deal. We gain size and reach the £1bn turnover "target". I trust the management to improve EBITDA and become an attractive target for the yanks.
However from a short term sp point of view we are headed for low 40's IMHO. After all, many of the reasons given for the poor valuation this year are caused by anticipations re falling demand, inflation and high debt costs and this deal will magnify such fears.
I doubt the short term johnies who bought previous placings care as they will have sold out as soon as they could get their greedy little hands on cash.
So the retail offer wasn't open for very long.secure message from HL shortly after 12.00 to say it had closed.pretty much par for the course in these situations,as everything is by and large pre-ordained and orchestrated. nothing to be read into it imo.
Out of interest one of my favourite apocalyptic movies from the 80's starred Mel Gibson. It was called Mad Max (MM). Deal 1 looks like we are paying a multiple of 8 for the businesses involved (745m euro to purchase a business looking to make c.90m euro ebitda 2023). SRC trades on a multiple of just over 3. The scale of debt being raised at near 15 year interest rates is significant (c.7% all in) which will be added to existing overall debt. Still 52m new share options being issued to the management team post completion will ease the pain for some. Shareholders at the end of a long line to see any return here - and from the looks of it there is more to come.....MM2 and MM3 much like the movies. Buy to build. Invest to lose. SB
Lets not forget the raise for Nordkalk which was at 85p. Share price almost 50% underwater since then
Bigboy, Ideally the share price should have increased with each acquisition. Those who took part in the 54p placing must be feeling like it wasn't worth it*, now the next placing is 20% cheaper. Perhaps that is why it has been such a laggard.
Remember that there is no dividend here, so you capital has just reduced, regardless of what you now own. I also hold breedon at a loss, and that looks like it will get taken out cheap by the Ned who has bought near to 29%.
Anyone looking to take part in the retail offer needs to act quickly. I've just had an email saying it will close no later than 11am today.
I understand where you're coming from Dartron and nomlunga, but remember the objective of the company right from the start was to 'buy and build' and that is exactly what they have done and are continuing to do. I suppose there comes a time with this approach when you reach a maximum or optimum size and it's a question of when that time is reached. This deal will make SRC a £1bn company, comparable to Breedon for example. Clearly it is an investment for the long term though.
Last placing in February this year was at 54p, now one at 47.5p. Well done BOD of SigmaRock. Maybe the next one can be at 35p? If you look at the chart, this was obviously common knowledge around the 31st of October, when it made the low of 47p. Is this company ever going to reward shareholders?
" SigmaRoc will pay EUR745 million for the first set of assets and draw upon a new bank facility. It will also raise GBP200 million from the issue of 421.1 million shares at 47.5p."
Reverse takeover, due purchase CRH lime business. Look at CRH page
Seems OK discount but it makes you wonder if the BOD wants to build shareholder value or an empire for them to be rewarded for managing?
So looks like M+G have been in serious offload mode in last few weeks - north of 30m shares sold into market which would go some way to explaining the recent declines here. Why they are selling shares in a business which is trading at an ebitda multiple of 3 is known only to them - and is perhaps more reflective of funds moving into cash positions to take advantage of current macro opportunities (interest rates, bonds, gilts etc). It does continue to remind the business that shareholders need a reason to remain invested here - and they cannot overlook the disconnect from SRC's peer group - where Breedon is trading on a PE multiple almost 2 times SRC. I also wonder if some PE teams are not having a look here - the upside would seem considerable if all is as we are being told. SB
Thanks for sharing that vig - perhaps max and his team will get closer to this issue when their share options kick in big time next year - although I suspect any awards based on share price performances will be difficult to achieve irrespective of wider industry contagion so it’s the 8p earnings which will matter most. Also agree on the pain for PIs - but in reality all investors are taking a beating here despite a growing business with a 20% ebitda - and it’s those major investors who need to put pressure on the board to align interests - or they will vote with their sell buttons. SB
I asked Max if he would include shareholder returns in the next major update which will be FY. He has agreed to do that. Better discussed openly than ignoring the obvious distress this is causing private investors.
Makes you wonder how the market would react to a poor update…..although looks like polar are reducing holdings which just continues downward pressure on the price. At least an acknowledgement that debt needs addressing was included - I would hope full year results in March 24 sets out a path to address shareholder returns. SB
Sigmaroc plc issued a trading update for the 9 months ended 30th September this morning. Like-for-like revenue growth was 7%, underlying EBITDA margin in the Period was 20% ahead of both the prior year and management's expectations, resulting in underlying EBITDA for the Period up 11% LFL to £87.1m. FY23 guidance was reiterated for revenue of £596.9m and underlying EBITDA of £110.2m, the latter would constitute a massive step on in profit. Valuation looks very attractive with forward PE ratio at 6.4x, PS ratio at 0.59x, the balance sheet remains in decent shape. Share price lacks positive momentum and is drifting back lower again at the moment suggesting that there is no rush to buy. But SRC is well worth monitoring for the longer run...
...from WealthOracle
wealthoracle.co.uk/detailed-result-full/SRC/821
Happy with that.pleased to see reference to focus on de-gearing.
Update is a little bit later than last year. I hope it’s not because there is some other news on further acquisitions - the business needs to focus on shareholder returns imo in an effort to create some meaningful interest in its valuation which is abysmal - accepting AIM is a full scale horror show. SB
20th october last year,so perhaps soon.
They’re going to make a fortune at that price! But when?
£265k trade @53p earlier today.from s/p movement im guessing it was a buy. "o"trade.
Macro economic turbulence is impacting the UK markets and AIM in particular.
There have been enormous outflows in uk equity managers in the UK (£7bn since Jan 23 ). This means most do not have sufficient assets in their funds to buy more stock.
This is going to get more volatile leading up to the US election next year.
Seems to me that private and institutional Investors see risks in equities that is hampering long term investment.
The AIM market in particular has taken a hammering, not surprisingly as generally those companies come with significant risk. This is for sure a drag on SRC.
I can't see anything changing until after the US election and even that may not be a positive outcome.
It's the worst climate I can remember for investing for many years.
Preserving capital is always high on my agenda, but more so than ever now.