Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
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So, I guess, sit tight and see how this plays out.....? Anyone have any thoughts on what Melrose might have to pay to nail the t/o?
I completely missed this earlier. Thank you Melrose.
Im just enjoying the rise. Hope it lasts.
Rejected t/o, planned restructure and no comments here ? Bold move by MRO though !
Conkersdeep, you misunderstood my opening remark. The FT agrees with you. Not sure about your 2nd point. I'd have thought that the GKN CFO (and team) would examine all sets of accounts for consistancy of accounting. But I'll be delighted in the issues in the US aerospace accounts do not translate to the rest of the group - whatever the reason. Best, Londoner7
Hi Londoner I am right FT is wrong, Hans was initially to take over from Kevin when he became CEO of GKN. This has been brought forward due to Kevins leaving, your speculation regarding the accounts is incorrect as Fokker accounts and GKN aerospace accounts have been seperate and cannot really be compared since they are different products.
Conkersdeep, you might be right - that is how it's reported in FT. But up until about 5 minutes ago, when the page was taken down, KC'c bio listed him as CEO of US aerospace. Hans Butheker was listed as CEO of GKN Focker. He has now been promoted to CEO of GKN aerospace. I don't mean to be petty, but their relative sphere of responsibilty may be an important factor if KC's removal is linked to a failure in US aerospace's accounting. Pure speculation on my part, but perhaps the issues in the working capital accounting in the US accounts were revealed in a comparison with Focker accounts. If there is a 3rd shoe to drop I guess it will come with the finals, although GKN have been quick to report on their findings. To another posters point, I'm more relaxed about the possibility of any upheaval while the leadership role is resolved. In the short to medium term I believe the day to day business of industrial production will contine unabated. But of course the stock market may see it differently. Londoner7
No, he was in charge of the whole aerospace organisation not just the US
No problem Al75 I can solve that third problem for you. " my back was sore this morning when I got up" I think your probably right though more bad stuff to come! Not quite in the CLLN league mind you, well I cerainly hope not. D.
Problem one came a month ago Problem two came today Things come in threes...
Pearls, I agree these issues can take time to come out. I took a modest profit on my opening stake. Looking at this morning's update I agree with gurney on the board shakeup. The CEO designate was in charge of US aerospace so is taking the can for the latest accounting issues that were uncovered. Seems a sensible move. I would like to think that all parts of the business has now undergone a similar review - I repeat, I'd like to think so! I also find it encouraging that they haven't amended their trading guidance one month on from the last update. So based on that I've decided to reinvest my returns for a 2nd leg. Can I be fortunate again? I hope so because another trade of mine isn't doing so well. Londoner7
As I pointed out before, it was signposted in glowing lights previously. These things take time to come out of the woodwork, and they do not make good press.
Good morning, I think the culprit has been replaced, but it is time the "Old school tie" was looked at closely. No doubt the person concerned will leave with all the shares accumulated paid all dues etc. and go on to some other Board of another company, (like politicians do) The amount in cash lost against the Market Cap is small but the shake in confidence and the time ie should take to replace this muppet will cause a lot of "disquiet" to the Board.
So much for investing in a nice steady company. Were they not only expecting a 40 mil write off the ither week, which dopey fool got it so wrong.
There has been talk of a split for years usually fuelled by investment bankers looking for a cut. I don't think the recent trading update is a game changer so I�m not invested on that basis. Is supplying parts to the likes of Airbus or Volkswagen really so different? Londoner7
bottoming out atm.?
http://www.stockmarketwire.com/article/5713127/GKN-sees-organic-sales-growth-in-Q3.html
Londoner 7 - good comment. I think there has been a material knock to shareholders confidence here, and purely from a chartist view, can see this stock heading back to the �2.70 level perhaps that it traded at for a while in 2016. This is a large ponderous company and it will take them time to deal with the issues. As commented before, there is no need yet to buy more stock as the share price is likely to dip below �3 for some period of time.
I believe the aerospace supply chain is coming through an unusual transition period with significant upgrades to the workhorses of the sky supplied by Boeing and Airbus. The aerospace market generally has a level of growth going out more years than almost any market I can think of with few disruptors on the horizon. Perhaps hyperIoop and spacecraft will impact in decades to come but not in my investment time horizon. I returned to this market earlier in the year with an investment in Senior, because I know it well from the previous cycle, but I�ve also followed GKN over many years for additional insight into the market. The recent trading update from GKN prompted me to consider an investment in GKN. Listening to the Q&A audio call it seems to me that the nature of the claims is not unusual for the industry, but the scale clearly warranted an RNS. While management assured the claims are not systemic of a wider problem it must be a worry that two similar scale claims arise at the same time. As an investor in Senior I was pleased to hear that the claims and Q3 margin pressures are company specific. However, it seems to me that these pressures only represent a delay in achieving margin targets. The affirmation that profits will still be ahead of last year indicate a current and prospective PE below 10. Alongside a dividend yield of 3% this looks like a tempting entry point. While I don�t expect 300p to be a floor at the current time I�ve decided it�s a suitable level to open a stake, while building my knowledge of the company. Unless the latest reported problems are systemic I expect to be adding to my stake on further updates. I think this talk of insurance is overblown. We have a �40m claim on a �5.2B company. Many facets of the business require insurance, but I�d hate to think that any significant management time is taken weighing the merits of insurance on the minutiae of the business. Modern business already supports too many parasites - no doubt a factor in the lack of productivity growth we hear so much about. Londoner7
My point simply is that of course they will have the mandatory insurance, but probably due to budgetary short term cutbacks, little more than this. As a result, they seem to have been badly prepared and let's face it, their latest update hardly instilled confidence in management did it? Management need to understand that whilst certain things may need to be kept commercially secret, it is not acceptable for shareholders to be kept so poorly informed and for management to remain in place regardless. Whoever is responsible for this mess should leave GKN. As I pointed out before, this is a great British company - it is a shame it is not being run now in the manner it was run in more glorious days........
They will;have Insurance in place believe me, they will be Statutory liable for certain types of Liability particularly in the Aerospace Industry and they will have to have arranged Insurance to operate and have licences to operate in certain Countries and States in the World where the Laws are very stringent. I feel that the reason for non disclosure is that the terms of their Insurance Policies are such that they will need to allow Insurers control of the negotiation. Insurers are very experienced in such matters and will have access to the best and most qualified for the claims in question. The fact on the non disclosure gives me a greater comfort that there are Insurances in place.
I do not think one has to be shorting this stock to comment that GKN should have had the correct insurance in place to deal with these claims. The inference from the press / the RNS is that they do not, and that there is some degree of behind the scenes 'negotiation' taking place. However, it is not exactly clear what the real problems are nor why such amounts of secrecy etc are involved. Things need to be a lot clearer for shareholders - they are owners of the business after all. Perhaps GKN has forgotten this? and no, I am not shorting this stock........
Great shame that such a great British company is having such problems. It is concerning about these two claims. I agree with you Supercharger - why aren't GKN properly insured? For cost saving reasons presumably. How pointless and short-sighted. That smacks of management errors and a mentality that is not in shareholders interests. I expect the price to continue falling whilst this unravels and we slowly find out what exactly has gone wrong here.
I do not feel the CEO statement is open and complete and may be protecting negotiationsf, i.e. They should have Products Liability Insurance for any faulty products, Fidelity Insurance for dishonest employees (if any), and Director and Officers Liability for any senior employees wrong doing. I therefore do not understand why the claims will be an impact without extra info. but perhaps that is why we cannot be told much about the issue as the Insurers negotiate. The future may not be as bad as everyone expects so this stock is now looking good value and a strong buy!
Don't have insurance??