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IMO, sooner or later it will be sell-off time with IPEL, and likely at a premium to the current share price.
What's your thoughts on what will happen to IPEL if your thoughts are correct?
Cutting costs at IPEL: http://www.mirror.co.uk/news/top-stories/2011/10/21/lord-ashcroft-slated-as-west-coast-main-line-cleaners-vote-to-strike-over-poverty-pay-115875-23503380/
I have a feeling that the restructuring at IPEL is pretty much over and IPEL could be subject to a sell-off soon. I think this because Cheryl Jones (chairman of IPEL) is being appointed to be chairman of BCB next week, which would indicate that her work at IPEL is done and she is moving onto new pastures.
Ashcroft now has 57.51% of IPEL.
Another share buy back - this time about £320k. The plot thickens. http://moneyextra.uk-wire.com/Article.aspx?id=201110101413518957P
See news today about further acquisitions across at RST.
Many thanks for your input, you always seem very well informed
CSG had debts in the region of £60m and these look to have been wiped out in the space of 2-3 years - an impressive performance. I met some of the management team at the AGM a couple of years ago and they looked relaxed enough, though doubtless intent on turning the company around. CSG was moving sideways for many years and in fact Lord A had a go at a takeover in around July 1999, but the price wasn't right. I remember reading of a journalist having lunch with a CSG manager before the merger with two lobsters being ordered and put on expenses. I expect such extravagance has now been knocked on the head.
It was interesting that the management team was primarily CSG after the merger, but only for 6 months or so. Not sure what the state of CSG was before - I know they had debts and Carlisle was debt free. Who will he sell off to - a Hays or similar?
p.s. As you doubtless know, Lord A's 57% holding is in a trust for his family, but I think this move was just to get round the tax laws. As a guess, some if not all of his family are down as offshore residents.
Yes, streamlining is the name of the game and restructuring is Lord A's specialist area. Carlisle Group was ticking along quite nicely as a company that made a tidy profit before the merger with CSG, but somehow having a company that makes a tidy profit is too "boring" for Lord A and he needs the challenge of a restructuring to get his teeth into - hence the Carlisle/CSG merger. Once the restructuring is complete, it will be sell-off time. I don't think Lord A needs to hold onto the company in particular, as a kind of nest egg for his heirs, as he'll be leaving them a few hundred million anyway. I think CSG was probably a pile of junk before Lord A came along, correct me if I'm wrong.
I bought at a while ago at 37p (woohoo!) to get started in the share-game - I guessed there was some value, but didn't realise how much. I see your sell theory and agree that seems more likely, especially with the 80% donation to charity. There have been massive changes in the businesses - the merger of CSG and Carlisle was a huge operation. Since then the activities have all been around streamlining the back-office especially finance and IT and that is still progressing - getting leaner and leaner!
I subscribe to the "Sell on" theory rather than "pass on to heirs theory". If you study the course of Lord A's career, the business plan throughout has been to buy an ailing company on the cheap (e.g. for £1 including liabilities), turn it round, sell it off, take the cash and move onto the next one. You can read up on the history of his career in Chapter 2 of his book "Dirty Politics, Dirty Times" available in pdf at www.lordashcroft.com. It's true that one of his three offspring, Andrew Ashcroft, works for him as an non-executive director at BCB Holdings. However, Lord A has pledged to give most (80% ?) of his money to charity when he dies, which would point towards a total sell-off by the end. I think IPEL will be sold off in the next year or two, and BCB will be his final "hurrah". Also, often the shares of Lord A's companies are undervalued at time of sell-off so a "rocket" effect is created when the share price suddenly shoots up, which I think Lord A gets a kick out of. See the case of OneSource in 2007: http://ftalphaville.ft.com/blog/2007/10/08/7903/michael-ashcroft-master-magician/ Presumably you have seen a lot of changes at IPEL over the last 3 years which prompted you to buy the shares in anticipation of.
I have no insider knowledge as to the direction it will take, but I have noticed that Hays are focusing on foreign markets for revenue, and that might be a possibility - there are arms of the business in SA and Aus. Also, there are always UK acquisitions, or expansion by brand into areas of weakness. Lord A has been with Carlisle/Impellam for some time - do you not think he would retain/grow his interest and pass it on to his heirs to continue with rather than sell on?
Point taken, re differences in outlook. Interesting that you work at HO - I wonder if you have any views about the future of the company. My opinion is that Ashcroft will sell off when things are ship-shape, as this is the way he does things...
IPEL is a collection of Stafffing based companies, either traditional temp/perm supply or staff as a service - contract cleaning, security etc, there are a couple of odd-balls (merchandising and reverse logistics), but the vast majority of the activity is staffing (I work for them at the HO), and the pay/bill structure is based around supplying and paying staff. Restore seems to be document storage and office relocation business, not quite sure how they would meld together and where the economies of scale would be won as they are so diverse? Again, I might not be 'big-picture' enough!
It's just a theory - I know Ashcroft and his like have an aptitude for merging companies together. After all, IPEL already consists of a number of different divisions, so RST could be one more division. The scope of both IPEL and RST is broadly-speaking support services.
I cannot see the tie in with RST - completely different companies - can't see where the big back office savings would be for a merger? Or am I not thinking 'big-picture' enough?
Any thoughts from the loyal?
The share buy back has also cost the company £600k. Shows that the company has got cash to burn !
p.s. The 425K buy referred to by poppdog below must refer to the purchase by the company of 135,000 shares on the open market. I wonder if this is a step in the direction of my theory that IPEL and RST will merge. The buyback increases the holding of Ashcroft in IPEL from 57.2% to 57.3% which is in the direction of 57.7% Ashcroft holds in RST. If he can get the holdings exactly the same as each other, maybe it will make a merger more convenient. Just a theory, of course!
Notice how the company has bought back 194,500 shares in two transactions in September: http://moneyextra.uk-wire.com/cgi-bin/articles/201109281617421293P.html http://moneyextra.uk-wire.com/cgi-bin/articles/201109131145441429O.html I wonder what's going on. On the face of it, it must be good for us shareholders as our shares form a larger proportion of the total shares issued.
I'm still of the opinion that "the end" will be when Ashcroft sells the company and takes the cash - in the meantime, we just need to hunker down and wait.
Nice to hear from you, I'm in for the long haul too, a lot of ground to make up, still it was encouraging to see that £425K buy last week Here's looking to good times ahead