Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
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Also you are right about the guarantors , because if they were a solid guarantor then there would be no defaults , rather than the 30% current run rate..
I still think there is an optimum APR which would be lower than 49% but still high enough to maximise profits, by significantly reducing impairments and therefore also by definition , lowering collection and admin cost , due to the repayments being moderately lower...it would also escape the clutches of the regulator..
I like to call it , 'extracting the maximum amount of feather from the least amount of clucking' .
Thanks MikeH...you are so right about us all thinking the minority relates to the majority...people are ten times more likely to report a complaint than they are to make a complinent which skews opinion.....
If you look at customer reviews, most are positive..likewise the reviews from employees are mostly positive especially regarding their amazing restaurant where they can get cooked meals for £1.. however there are bad reviews too and I can't help thinking that bad reviews are valid and justified, whereas good reviews are somehow contrived..
Also, we can relate it to ourselves...if we are not feeling well and have a few symptoms , we can Google them and convince ourselves that they are life threatening..
The one huge advantage that Amigo has over non finance companies such as for example building contractors, is that it only takes one contract to incur a huge loss with a building contractor and the shareholders can be wiped out completely.. but with companies like Amigo , they have hundreds of thousands of different customers and whereas some will default , most of them won't and at 49% APR they are well protected against those that don't...of course though as always, nothing that is good and lucrative lasts forever.. things change and Amigo will be no different...the aim is to sneak in and out again before that happens...ATB...
I read a Guardian article which was critical of payday loans really , but guarantor loans too, and referred to a 100 % cap limit max or 0.8% interest a day, being brought in on payday loans some time last year.
Stella Creasey, a labour MP is equally critical of Amigo and others and wants it to apply to guarantor loans also due to lots of letters of complaints she receives from guarantors..
I don't know how to link articles but if you Google it you will find the article last year...these aims take time to enact but may well come from the regulatory review.
I have also read with regard to IPF and their european business, that some East European countries are intending to limit interest amounts to 75% of the principal although I am not sure if this relates only to payday loans but read their regulatory notices and they cover it..
I think by any measure that 49% is high where a guarantor is involved and it's only a matter of time in my view before regulation is enacted...I am just hoping to move stealthily in and out of Amigo with a 50% profit on my original investment before that happens, but I am down 20% ATM and today was yet another day of ending with a lower share price..despite earlier gains...I am bemused...
I am bound to ask...would you borrow money from a lender called Amigo ??
Beev....sorry, what was it I wrote.?
Mike H...You make lots of good points ..my concern relates to Amigo no longer being a growth share...flat revenue and declining margins...the Irish business isnt significant enough to change this..maintaining the dividend would mean paying out more than 50% of earnings , which I am not sure is sustainable even with a low capital business, due to the need to constantly invest to attract new borrowers...the bulk of the interest (and therefore the revenue) is earned in the early years of repayment of the loan..
The regulatory pressures relate to the desired regulatory doctrine that the total interest charged out on a loan shouldn't exceed the principal amount borrowed which it does with amigo within 4 years...
Right now though I would settle for a day where the share price rises, which it hasn't since last week..
for new markets might one suggest the brand name would do well in Spain...lol
don't worry AW i won't sue you for making me buy 20k's worth @ 79p! LOL
Armada...On LSE website I calculated that of the last 60 trades, 70% of them were shown as buys, but in the respective statistic showing the values of buys and sells then more value was sold than bought , but as has been proved on here those statistics are unreliable..
I agree Bee, I think the dividend will revert back to what it was, i.e. 35% of adjusted EPS..which I am forecasting to be around 17p for the year giving a revised dividend of around 6 pence...which is still reasonable and would attract an SP of around £1.00 ... I think this is a fair fundamental value given the diminished margins , resulting from substantially increased impairment levels, admin and collection costs and forthcoming regulatory pressures to reduce APR's on loans backed by guarantors..
I hasten to add that this is MY fundamental value and is based on my estimates.. of course the market price will disagree with that , either way, as it is at the moment. .
This opinion is expressed in good faith and in absence of the interim results due for publication on the 28th..
As always though DYOR...
Something wrong with the reporting of sells and buys today. Mostly they are reported twice.
to be fair i think someone like Richmond would have view of the results before the board LOL
They might well not be positive, in fact by the guidance i would expect to see significant reductions in new loads approved etc. We have accepted that ongoing this will be much less profitable and the dividend ultimately reduced but even half the current levels of profitability and dividend spell a good picture at these prices!?
Bee...Well if they did buy, they would have got a 20% discount on the distressed sale plus build up their stake for a subsequent engulfment of the reduced remainder...
How tight is the secrecy surrounding the half year results ?..do you think the II's involved in these transactions did so in full knowledge of what will be reported two weeks tomorrow..?
My view is that leaks happen, either intentional or otherwise, given the wide swings that happen, usually in a favourable direction , in the run up to the results and I wish they didn't..
MikeH.. I agree, a sale of 25% of the stock doesn't make sense unless there is some form of double counting somewhere...maybe where Richmond acts as an intermediary in some way and buys only to sell on again or similar elsewhere...can't see buys and sells both being recorded as separate transactions otherwise buys would equal sells which they don't .. more importantly though is what happens from here .
I am hoping other I.I's have entered the fray to demonstrate their faith in the future..
I'm not sure it would be in Richmond's interest to buy given the issue with the free float. Granted if you wanted to take it private or take advantage of the current SP you would but the fact we've dropped makes me think otherwise?
Thanks Yuri...you are right, there is no evidence as yet of their involvement but surely it must come...Invesco and Woodford together amount to 15% of the sale (presumably) so that's another 10% to account for and the other 8 II's together only held 5% leaving a 5% apparent shortfall assuming they were all involved..
MikeH...yes that does explain a motive for Invesco's transaction.. yes more stability today which is promising at least...of course none of this affects the fundamentals and the Quarter 1 results were only published one month before the half year and we are now into the middle of the 3rd quarter so we should get a firmer indication of the outlook for the whole year on the 28th..
Once Woodford and his mates stop dumping
Amigo will bounce IMHO
idk, so far there's no evidence of their involvement, that's the fact against our assumption, although theoretically I think there's no legal restriction on buying via several different legal entities (below reporting threshold, to keep it quiet) and then consolidating into single holding in one go.
Yuri...how come we are not seeing any RNS from Richmond Group as they must have been involved..
That's a huge dump by invesco and woodford, and firstly - there are multiple buyers (because we don't have receiver RNS, neither by existing big holders nor new crossing 5% threshold) and secondly despite this dumping price went down only by 10p.
MartyPoppins: why, are you preparing an offer for us?
I think it's 30% but I'm not sure.
Does anyone know if there is a percentage level for ownership by a major shareholder at which compulsory purchase of remaining shareholdings is allowed? Apart from the provision increase and continued regulatory issues ("protecting the consumer"....), Q1 results were OK and the cash position nearly doubled. Might be attractive to take private.
Just like Woodford, Invesco's fund has been massively under performing. This could be distress sell by them.
Invesco reduced their holding from 9.93% to 0.40%. There could be a new investor.
One RNS has come through and as suspected Invesco have pulled out...
Don't the Richmond Group have to submit RNS's too ?