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If you know this stock that is a very, very low multiple for it historically.
Brutal day for shorters :)
17% up
Good result. Only accounting issues are non-cash impairments to the balance sheet, mainly relating to Amberen (which to be fair has not gone to plan and was a poor acquisition for which they overpaid, however it seems 2023 will be low the point). God knows why it took Deliotte so long... Importantly, these are historic issues, non-cash, and forward looking forecasts for the year are maintained. Should generate a lot of cash from here, I think their guidance on net debt looks pretty conservative, expect it to be around the low £70m range, which means net debt / EBITDA should fall to 1.6x by year end. At which point I think divis will be back on the table.
Good to see the market taking it positively. Think it probably trades around the mid 40s until some visibility on next year. Be interesting to hear what the new CEO has to say once he's had a chance to get his feet under the desk.
10% up :)
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Exactly as I wrote the issues are in the balance sheet numbers.
"Non-cash impairments of £79.3m due to lowered future cash flow expectations and higher cost of capital, of which £46.4m relates to Amberen, £10.3m to Nizoral, and £22.6m to twenty smaller assets in aggregate."
But even worst:
"The correction of valuation errors for the prior year has yielded a £28.3m increase to non-cash impairment charges reported in 2022, of which £20.0m relates to Amberen and £8.3m to other intangibles"
So they are lying since2022, and I am sure this is only what the auditor found, but more things hidden
As in the past 2 months someone buying in small batches and then supplying in one day to one buyer. someone making safe money
Gotta love this stock for the movements. I expect they need to close their short before this gets suspended.
Another possible way to play this (without the inherent risk of buying directly), is to look at listed Logistics Development Group which DBAY is a subsidiary of.
This is all highly speculative of course, but if Alliance release okay results, DBAY make a move then exposure can be had by investing in the parent .
Haven't looked at their business in detail but something to bear in mind perhaps.
Its the strength of the underlying business that is difficult to assess with no material updates.
From Mark Slaters AR,
'Through 2023 we continued our collaborative engagement regarding Alliance Pharma Plc.
The company has been facing a number of challenges; a long running Competition and Markets Authority investigation (and subsequent appeal) into the company, issues with their most successful product being counterfeited in China and the loss of a significant discount store account for another of their main products.'
https://slaterinvestments.com/key-documents/
I'm not convinced it will get bought in near term. I think BoD will hold out for price well in excess of what DBay would want to pay. Rumour was they turned down APAX at 70p or something early last year. Also DBay would not be allowed to buy shares in the market if they were in active discussions with the company currently.
https://news.sky.com/story/apax-steps-away-from-400m-takeover-of-london-listed-alliance-pharma-12861074
FWIW, my base case is annual report gets published with little fanfare in the next week or so with no real reason given as to why it took so long (ie assume Deloitte were / are useless). There might be some write downs of intangibles on the balance sheet but that's a non-cash charge and don't think that would change anything about the company going forward. Shares probably back to 40-45p or something, and will track sideways until there is visibility on forwards earning growth next year. And should generate cash and restart divi at some point in next 12m I would have thought also. More a long term hold for me I think.
If they don't get the annual report out before the deadline surely they will have to give a better reason for why it is taking so long, which means we should get some more info one way or another in the next week or so. GLA.
Yes I think that is how it will play out. I expect that is why Kempen sold, though personally I have bought and am happy to hold when suspended as I am expecting a TO here. I have also read that the takeover can happen when the company is suspended so this might never come back. That just leaves Blackrock who have about 0.86 short to close before the end of the month, I would have thought Kempen selling has facilitated this.
IIRC AIM requires companies post annual reports within 6 months of year end; so if the accounts aren't released before the end of June the shares will be suspended until they are published. Might see the shares weaken over the next couple of weeks as a result unless / until they publish them as many will not want to be locked in and unable to trade.
It really is incredible that we are in this situation for a company of this sort and size. Someone is going to end up with egg on their face if they miss the deadline... Deloitte if there are no material issues with the accounts (ie delay is simply because they are useless / slow); the brokers (Numis, Investec) if they have not forced the company to fess up earlier to known issues eg with trading of the balance sheet; the company / board if there are material issues that have not been identified historically...
I am glad that Butterworth has left. Id like to think he would have been the first sacking once Dbay were in charge.
Peter will remain at Alliance until 30 June 2024 to facilitate a thorough handover. There's your clue to when things might improve. (Utter P take that a thorough handover could be done in less than 1 month, perhaps demonstrates how dispensable he is). Expect audit / final results to be ready after he is gone, then they can kitchen sink everything.
Dbay are in a good position to make an offer, but like a hunter chasing a wounded animal, there is no rush to go in for the kill IMO.
Sent a general enquiry couple of weeks ago, no reply thus far.
Its unusual for Slater investments to hold stocks such with so much turmoil.
JDbomb74 you may have dropped a bomshell there! 😰
If they wanted / could buy Alliance why wait more than a year?
I think they are locked into the deal and are trying to prop up the stock. Why buy on May 10th when the stock was at 34+ and not on May 8th when it was at 25+?
Also would you buy a company that has not released FY2023 on June 13?
Dbay can’t buy many more shares without being forced to make a bid for the company. Surely that’s what there’s planning to do like most other companies they invest in !!!
In every announcement of the audit extension they stated: Alliance reiterates that the details provided in the full year trading update on 29 January 2024 remain accurate.
But in the trading update of 29 January 2024, they only reported the P&L numbers, so maybe the issues are in the balance sheet numbers (assets devaluation, credit .....).
Alliance continue to move the time line perhaps in the hope that 2024 will improve expectations but they are famous for shifting attention to future numbers, I think we must always understand what they don't say and not what they promise. Let's not forget that KPMG resign in April 2022 declaring “The reason connected with our ceasing to hold office relate to concerns expressed to the Board with regard to the aspects of company’s approach to corporate governance relating to the preparation of the financial statements, which has ultimately resulted in a breakdown in our relationship,”
Old investor Van Lanschot Kempen Investment Management selling, not a good sign. Good Dbay is buying as otherwise stock would collapse
Alliancepharma@buchanan.uk.com
Try them, you may get some sort of a response.
Cora and Investor Relations are completely mute it seems. Absurd. They should be ashamed and embarrassed.
DBay meanwhile continue to add. Now at 28% stake.
And while I’m at it (having a moan), why is Butterfield's boat race still on the Alliance Pharma website's share price page? https://www.alliancepharmaceuticals.com/investors/share-price-centre/share-price/ I have nothing against him, but it seems a bit tardy and lazy not to have tidied this up, don't you think?
Frustrated by their ignorance, I just messaged: Cora McCallum, Head of Investor Relations and Corporate Communications just now via LinkedIn, with: I'm resorting to tracking you down here on LinkedIn because my inquiry via the investor form on Alliance's website has gone unanswered. What is happening? Where are the preliminary results? I have invested a significant amount of my hard-earned money, and like all other investors, I deserve to be updated!
I did so 3 weeks ago and received no response…
Have any of you spoken to Cora at Investor Relations or emailed these idiots?