Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
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I agree that SM might, and hopefully will, be worth something after this debacle but what value is there in listing that as a PLC? It's already a trading llp, has some funding in place now and presumably a reasonable book of business to generate income from. Why burden it with the overheads of a PLC - would you invest again? Once bitten and all that...
Must be circa £4m rent and bus.rates liability dodged by early lease exit. That can only be a good thing for the business as a whole, but at the cost of those staff in the Debt part of the operation.
AUNBoy, Of course the £5M is for Simpson Millar, why the hell would a law firm capital provider give millions to support a business they are shutting down and has no future, makes no sense whatsoever. The reason Simpson Millar requires a lot of funding is because part of the restructuring plan was they were also trying to reduce the number of legal staff by as much as 300 people which would certainly be a drain on cash due to redundancy payments and also shows the legal side of the company is not performing well either. The debt at the end of 2016 was only a couple million higher than anticipated mainly due to the restructuring. Debt started building long before the end of 2016 through the purchase of Colemans, Simpson Millar, merging the two and the regulatory impact on the debt business and big fat earn out payment to the legal top brass. If investors were surprised by the year end debt position they should've done a bit more in the dyor department because the debt position could be seen from a mile away with a little dyor..lol The share price nosedived due to the trading "materially below market expectations" and "significantly lower revenues" statements from the company. This is an illiquid share which can cause massive swings either up or down. Our largest shareholder has continued to hold (even added a bit) their position so the drop is mostly down to small private investors selling an illiquid share which caused the sharp drop. "Because the finance deal only relates to Simpson Millar my guess is they are winding down other parts of the business that are unprofitable." You don't have to "guess" on the winding down part. I have already stated they were winding down the non core debt business. This was also stated by the company. Their plan is to continue a legal services provider. As for the capital injection: They had several £M left under the current credit facility and now they have received £5M of fresh cash. Add to that the £5M in cost saving which according to them should be fully visible in H2 2017. If this isn't enough to see them through to profitablity AUNBoy, it not only means they have been/still are burning millions at an alarming rate but also that the turnaround plan is a complete failure and that there is no viable business here. I doubt that Doorway would have provided the extra millions if that were the case. Their return to profitablity should be in sight otherwise the business is doomed and Doorway are just throwing good money after bad and somehow i seriously doubt those guys are that stupid.
The entire line of credit has been transferred and they have received a new £5M injection of capital. The debt problem has been with this company for many years and they should not require a fresh capital injection after the new £5M funding, the only thing they have to do is turn profitable and start paying down debt, that's it. The reason for a credit facility like this is to prevent share dilution. They don't need a new backer as they are currently fully backed by Doorway Capital. DYOR
Given that they have already found a new backer, why did you post that article?
I think Doorway Capital will make sure they pull their fingers out of their @rses. ;) As far as the restructuring plan goes, i would like to think that Dooway presented them with a clear strategy they would need to implement in exchange for the line of credit so we should see some postive news on that front imo. I doubt they would have agreed to fund the business if the company was going nowhere. As for dilution, i would only support a small placing if it was done at around 30/40p. Given the 52 week high of 121p and 52 week low at current levels a placing at today's price would be a kick in the nuts for long term holders. Also don't want to see a dividend with this company ever again, they should use any future profit to pay down debt or expand the business. Given the extra 5M funding they shouldn't require any extra funds at all before turning profitable again!
AUNBoy, this is very good news. The loan has been transferred to a specialist provider of capital to law firms which seems like the perfect fit. The old business only represents a very small portion of our overall revenue stream and Doorway Capital clearly sees potential in Simpson Millar. They should be able to publish 2016 results very soon and the best part is that there will be no share dilution. :)
He started as CFO in July 2016. AIB seems to be having a problem with our 2017 results, most likely our cash burn, so i would say that's pretty much all on Broadbent, both in his role as CFO and CEO. He was there during the entire restructuring plan as CFO so it seems he 's quite the clown. As i have said before, sheer incompetence. Just hope he's also the kind of clown that can put a smile on our faces at some point. :)
Hilarious, from Broadbent's Linkedin page: Current: "Fairpoint Group PLC, I am looking for a Non-Executive role in a PE or PLC business, which presents significant challenge." Perhaps he should consider a role as a stand-up comedian. lol
Broadbent was made CEO in March, prior to that he was Fairpoint's CFO. Maybe they should just look for someone else entirely. ;) Debt was not a big issue because our cashflow was high enough but apparently this has changed, they should have released a statement on current debt and trading to see what has happened since the end of March.
Agreed ; )
Revenue projections on core business for 2017 is only -15%. Not that shocking and they were already rapidly closing down the non core business. I think the real problem why AIB pulled their support is because the whole 5M cost savings program failed, why else would they still require further funding? Management screwed up on the whole restructuring plan (costing many millions more imo) and i think they are nowhere near profitability, otherwise AIB would have given them the extra bit of time. Revenue is not the issue here, it's their way of spending (or wasting) millions and it's also another clear sign that it's better to use profit to reduce debt instead of paying a dividend.
AUNBoy, my below comment was directed at Arsenewenger where i quoted him to get a response to which sector he was talking about. As far as being quietly optimistic, i also think capital will be available but share dilution would have to be minimal because if they are still nowhere near profitability this will just turn into a massive dilution death spiral. They used a banking facility to prevent share dilution so the best outcome would be to find another bank that would be willing to provide a full line of credit although i'm pretty sure those odds are quite slim.
"No surprise at all. Told you to get out last December. This sector has had its day. Sorry for those who have lost." Which sector would that be?
No surprise at all. Told you to get out last December. This sector has had its day. Sorry for those who have lost.
If costs are still not under control even after the restructuring then management have really screwed things up here. Seems more like sheer incompetence from both the previous and current management. There was still a couple of million left under the current credit facility, add to that the restructuring plan and it looks even more staggering how they managed to f this up. Maybe they should ask some financing from the Simpson Millar top who received millions in performance related earn out payments just months before the business suddenly took a turn for the worse.
Noticed fair point still advertising jobs they are recruiting for, that's encouraging
It's strange why AIB are refusing support. The current debt position was pretty much already known when these were trading at well over 100p. Also the 5M cost cutting program which should be fully visible in H2 makes it even stranger. There is an underlying profitable business here and combined with the 5M cost cutting it's strange why they would even require further financing. Maybe that's why AIB are refusing support....
No-ones talking about this share but I see potential in this. I have to be a day trader to earn a living but I fancy this as a longer hold, am I wrong? Will dip my toe in in the morning if it's at 10
Startling how something that has dropped 90% can drop another 40 in a month, and it could drop another 80% from today's closing, Hope the company turns itself around for the sake of the employees and majority investors Time can heal. Last year I saw aal come back from the dead, must have been a 300% rise from the bottom
That this could go bankrupt, why so hated i wonder, looks like a bit of a value play to me perhaps,
Anybody got any input about why this is romping at the moment? Trading update tomorrow but just as likely to hit a wall and collapse. I don't suppose there is any conceivable way they will pay the divi yield stated on Hargreaves Lansdown, just a mere 34%. Nice if they did to recoup some of my losses.
There's only ever a real pittance of total stock qty on show at either side of the bid/ask on Level 2, but the actual trades are often much greater than the whole of what's on show at any one time. gl
I am, and very happy about it, but its hard to access the situation, have they got rid of all the bad news, and if so, is it time for a slow trickle upwards
No one here following the uptick at FRP?