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At some stage we will hear about a distribution which might act as a catalyst for a rerating.
Shareholders funds at completion of disposals per pro-forma balance sheet at 31/10/20 were £13.6m.
Freehold property was in at £2.5m, but is to be revalued upwards, to say £3m.
Earnings of the sold companies in the 4 months from 31/10/20 to completion, based on annual revenue of £18m, would be at least £0.3m. The retained companies will similarly have earned maybe £0.2m.
There is still £1.5m of goodwill, but I’m assuming that properly reflects the additional value of all the other assets were they to be sold as part of a going concern (as was the case for the sold companies, where the associated goodwill was in effect sold at a profit).
The upshot is an estimated asset backing of £14.6m, or with 86m shares now in issue, c17pps.
With the SP stuck at 11.5p, it looks like the only way is up, but only when the market is good and ready…which might not be till the next RNS (prelims in July?), unless in the meantime the new NOMAD puts out a bullish broker note.
Shares probably issued to conserve precious cash & motivate the vendors,assuming they are remaining for a while , to have a vested interest in the continued success of their business & as we see from todays RNS, large amounts of cash can be applied wisely very quickly.I am sure it wasnt difficult to present the case to the vendor that CRU will be a debt free, profitable company paying a better dividend than any bank & with prospects of , realistically, modest capital growth.
Ah, yes - I should have read the RNS properly! So the shares - or a maximum of 3.3M of the 4.9m total in the RNS - weren't bought on the market, they were consideration shares issued as part of the acquisition. Maybe they bought at least 1.6m in the market therefore? If so, not much effect on the SP!
I wonder why CRU issued shares, rather than paying from its now plentiful cash resources? To finesse the vendors' tax position, I suppose. But it also means the vendors' are well-incentivised, through both the earn-out and their ownership of CRU shares.
He is a Director of Customised Packaging , who we acquired last week
New 5%+ holder disclosed. They must have bought at least 619k shares to take them above 5%, but as usual the relevant buys do not appear to be amongst the trade data listed on this site.
The market must be waiting to learn of the result of their "review to determine the most advantageous route to deliver shareholder value and apply the net proceeds from the Disposal".
I don't think the market expected that either. However, good to get part of the cash pile working, and shouldn't stop them throwing us a bone or two.
I didnt expect that & interesting to see whether JG had a series of small acquisitions lined up & that this will be the first of several- or a one off & with a decent capital distribution to be made
There is a pro forma balance sheet in the 19 January RNS
Looking to buy here.
One question... does it not still have £7 mil of bank debt though?
Disposal completed today. Group now has £8m net cash, or 9.6p per share.
Net asset value following the disposal will be about 16.5p ( including cash of about 10.5p) & if our Haydock Freehold is sold for , or revalued at ,say £2.5mil,that would increase to around 19p.The value of our remaining ( & profitable ) subsidiaries , if sold could add a further 5/6p , increasing our prospective asset value to around 25p.
As I have said previously , I reckon JG , in his 70s, is looking for a decent exit for his shareholding & he will either dispose of the remaining assets, make a capital distribution & reduction of capital, leaving a clean shell for a company to reverse into , or he will have identified a larger private company in a similar sector to reverse in once all capital movements have been resolved.
Either way , provides an opportunity for a gracious exit for all long term very stale bulls & a very decent exit for those buying around 5p late last year .Most of us, including JG , will be glad of an exit
but can only be speculative until we get detail tomorrow. Took a small position as perhaps the new entity will be a leaner , meaner company after what I presume will entail a return of capital to shareholders.
In no hurry to inform the market, it seems.
But, assuming it did complete on Friday, I can't blame them for taking the weekend off!
Expect they were burning the midnight oil. So it looks like Monday for the RNS (though it's not unheard of for RNSs to be issued over the weekend).
RNS tomorrow re completion? Including details of how value will be returned to shareholders?
this morning before the disposal. I will wait and see what that brings. Hopefully not too much downside compared to potential upside. Will add again when I have clarity on the proposals as I am sure investors haven't fully grasped what is going on. A binary play.
All resolutions passed, so it's full steam ahead for disposal to complete on 26 Feb.
General Meeting about to begin at 12 noon.
You should see a return of at least 50% within a matter of weeks, maybe even doubling your money later in the year. Seems to be off most investors' radar, so well spotted.
and will add again next month. Hard to work out the outcome but paid 10.74p which I hope to recoup as much as possible and be left with some value in the new entity.
Interesting fact: the projected £9m of cash following disposal is equivalent to 10.5p per share, coincidentally the current SP!
...following a General Meeting on 11 Feb.
This will leave the group with nearly £9m cash.
"The Board will conduct a review to determine the most advantageous route to deliver shareholder value".
I'd expect a fair chunk of the cash to be returned to shareholders. I wonder if that could happen before the end of the tax year even.
Share has come alive again today. This site has it closing at 9.5p, but with bid 10p and ask 11p, shouldn't that be 10.5p? ie 10% up on yesterday. This is getting interesting...