Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
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Just for the record - I'm in at 34p.....so I'm desperate to see the share price rise.....but I try to write from an objective point of view. I take no pleasure in seeing the share price at 20p.
On the landbank STXX; there's a whole host of reasons why valuing it is difficult and why selling it is too. There's alot of cost associated with selling (you don't just call Knight Frank or Savills and they call all their developer mates, there are upfront charges, there's a price to be agreed to transact at (and quite alot of negotiating between owner and agent on that front - bearing in mind that the bulk of an agent's fees are only paid on completion - and the agent is carrying it's own costs of staff, offices, overheads......etc etc.....and they aren't going to waste their time on trying to sell a site that they feel is incorrectly priced......but that price that the agent wants will be, usually, too low , for the vendor to agree at). Information has to be collated, the secure data room created and filled with all the necessary documents - an utter ball ache and time-consuming and then they've got to go and market it, garner offers and then, usually, ask for best and finals after the initial round of offers. Then the winning purchaser has to be vetted before heads of terms are agreed and the actual legals start.
INL may not have enough money (and personnel) to sell even half their land. And that's assuming that land has planning.
It's a long, drawn-out process - not 3 weeks and you've got your money......(as you no doubt know).
So it's back to time. Do they have enough of it to survive til they can start monetising the land bank?
I don't know is the answer to that question.
And that's assuming that the staff aren't leaving.....sorry to be negative but I've been through this (2007-2010) already; I know from actual current experience how difficult and drawn out it is to actually sell sites in this market.
Yes, it would be technically insolvent if it cannot service the debt on the due dates and reliant on their banks to keep operating.
I wonder if we will see any RNS today as anybody who has built a 3% stake I believe has 48 hours to notify
Stxx I felt a while ago they should have been biting the bullet, and whilst not what you would really want to do, unloading their best assets to get that debt down. They were hoping to get by, and ultimately didn't as the cost over runs smashed the cash flow. Others on here and elsewhere have criticised the share buyback, and it ultimately does seem to have wasted precious cash that they needed. Again today a lot of buying, so some are confident of making money here. I do hope that any large stake building is not designed to get the company and assets on the cheap, leading to small shareholders getting a further kicking in. With Wicks and Nish large holders there is probably less likelihood of that happening, but who knows when the deals are being struck.
tesa I bought on the drop Monday and should have posted to give some support. They have real assets to sell unlike many company's who own nothing, land for building rarely goes down in price even in recessions.
Where are those negative posters as the share price is rising?
Shall we kick them where it hurst? >>>>> Bar-stewards
Nearly all buys this morning so far
Exactly that Sain. The banks will not give them time, if, as I suspect, the main-contracting business is bleeding money. And as I said before......time is anathema to getting the best price for your land.
I've no idea what Tesa is banging on about - your commentary and opinions have always been on point in my opinion.
The banks will not give time if they smell blood Tesa. I'm sorry to write that........ but there's alot of macro stuff going on in the world.....that Inland suddenly find themselves at the mercy of, because the banks are risk averse where there's obvious material risk. I don't think the banks will be sympathetic at all if the visibility they are seeing (that the shareholders are quite clearly not) shows bad news incoming or continued bad news.
....report over here but negativity, the RNS was bad enough did not need your comment to add to misery to the poor shareholders.
The banks will do what they have to do support companies, specially if they are in problems
sain@vision
I suspect your "vision" is from the point of NON holder, so nothing positive to
Tesa
Bless -Always refreshing to see someone come in with a personal quip to make a point . I made no comment on the trajectory of the share price .In fact I made a positive comment on that when I said the landbank would be coveted
Notwithstanding history has shown us in circumstances like these when financial covenants are breached all the banks are concerned with is getting their money back not upholding shareholder value
The problems with construction cost management have been ongoing and clearly they have not been addressed If you can draw any comfort from that -fair enough !
There is plenty of cash sloshing around and the banks will want to grab that before it melts.Ignore that at your peril
Oi Oi will tell you in a market on the turn the first casualty is the value of development land
The banks will want to strike whilst the iron is hot
10p
I started reading the RNS and I thought this has been a massive overreaction, fortune favours the brave.
Then I read the financials and outlook summary:
Gross development value £2.7bn - Great, but down £300m and if costs are rising, does this even matter?
Net debt is down but still at £100m
£75m of revenue delayed and under review.
Delays and further £4.7m expected credit loss provisions
Loss of £37.1m with the caveat that completion of land sale could improve this to £12.1m
NAV massively down but still at 65p.
Breaching of financial covenants.
Market cap £41m
It looks cheap, but for good reasons.
2 questions:
How much cash do they have?
How cheap is too cheap in terms of the share price?
sain@vision
One would say your "vision" is distorted, Spec savers, maybe will restore it.
Easy to punch someone when is down, today buyers are not with you, tough a MM have stock from someone like YOU
40-50p?
Great trading update. Lots of carrots dangled, plenty of blame an finger pointing and not a shed of accountability.
If the board knew what it was doing it wouldn't need Lazard to tell them how to run its business! Love to be a fly on the wall when Inland tries to re-gear its loans at ever increasing interest rates.
i know its unreliable but
loads of big ,round figure buys
50k
70k
75k
The banks will have their fingers up Inland's nose and hands around the irneck to cash in some chips quickly before the market for devlopment land turns.As Oi Oi has said development land usually comes with all sorts of caveats. Its value quickly diminishes in a poor market the banks will want to get it sold very quickly ,not achieve the best price with an uncertain future ahead.Bargain basement time
Although share buys and sells do get misreported, there does seem to have been more buying than selling. If that is correct (a big if) then someone sees value at 20 pence
Exactly. The one thing that kills price is time. And by that I mean running out of it. (usually it's to do with Option lengths and planning taking too long and running up against the long-stop date on your contract). But in this case it'll be the banks' timeframes. I'm surprised the share price has only gone to 20p. Thought it would go lower.
I wonder if the delay in the £75 million sale was because the buyer started to play hard ball on the price. If it gets to a fire sale what would the landbank go for?
They'll have to - it's the only way to give buyers the confidence that there's value to whatever is left. Land values always have a diversion of values between seller and acquirer - they can't say to a buyer....'we've got a billion of worth in the land bank'....the buyer will naturally discount that value and then look at the very real debt......and.....it won't be pretty. So yes, better to sell and pay the debt down (to a manageable level?) and then sell. Hopefully....Perhaps. If we're lucky....
Yes the debt will be wagging the dog I guess they will be getting busy offloading a few sites
It's the debt, the breach of covenant (and the costs associated with the agreement), and what's left in the land bank once land sales have got that debt down. And importantly - are the people staying or being poached as we speak?
They would have been ideal for Telford Homes under JDS. Stretching out geographically from their core area mixed with their construction mangement skills in getting to grips with thir construction nightmares
The defensive move to BTR has cost Inland dear
Wicks should have just stuck to his strengths
The question is what price wins the day?
I could see an RSL coming in for it. They've got alot of money, tend to be not very good at single site acquisition (imo) and sometimes they also lack planning expertise. Buying INL, from that perspective makes sense....but the debt......
It's a truly shocking state of affairs.