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Monthly update due end of week
Spoke to IR last week. The monthly update for September is to be rolled into the Q3 trading update at the end of the October. So no scheduled update news at the end of October hence thinking we get something else. Given that collections were 96% efficiency in August, there's no reason to doubt the trend will not continue till then.
Do you think it might be news reg. refinancing ? Or may be they managed to change covenants with banks?
Share price has held up pretty well despite the realisation that trading update at end of October and general market skittishness.
The half yearly report said the following
"Our covenants are tested on a 12-month look-back basis. Although we passed all our covenants at the 30 June 2020 test date, the full effect of Covid-19 is likely to temporarily affect our covenant tests in the short term. Therefore we have commenced discussions with our banks on appropriate covenant amendments and will also take appropriate measures in relation to our outstanding bonds in due course."
...However separately it said that "they are actively preparing for the refinancing of this [April] bond in 2020."
So make it of what you will. Cash and headroom on undrawn debt facilities at 31 August 2020 was £326 million from £213 million in June.
Last 3 weeks have been pretty tough for shareholders to say the least and so I had asked confirmation last week given that the SP had fallen nearly 50% since the Half Year results whether they were still planning to provide monthly trading updates to reassure the market. They said they didn't see a need and that this would be provided at the end of October. Just the way that it was said seemed pretty confident but then I'm now all in so perhaps skewed.
Up over 13% in a day...! Have I missed an announcement? Don’t get me wrong, I’m not complaining, just surprised!
It is very surprising given there is no scheduled announcement for a few weeks. That said there was a suggestion via wheeliedealer and conkers3 (the latter is a holder) on twitter that there may potentially be an announcement next week. That said I doubt that would be the reason for tick up in just one day. With shorts closed and bond prices stable I have been adding sub-50.
Those 2 huge buys is the reason for the rise. Someone is confident
Someone knows something about the bond refinancing hopefully? Decent rise today too
What do peeps think is this is the potential for the SP if the bond is successfully refinanced or simply if the covenants are amended? Would it necessitate a revision to Peel Hunts and Shore Capital's broker rating?
Should head back towards NAV - 150p? - if it coincides with a general market rotation to cyclicals/financials should be a strong few months (all fingers crossed)
I think SP has been battered so if an October RNS contains positive update on refinancing/hopefully announcing it’s been done. And as long as collections are still high could see a short term spike back to 73-77p? Long term I feel it’s a slow recovery to the £1 mark. Pray no more ‘going concern’ statements too haha. Also hard to stay objective as obviously hoping it recovers like this for my own investment. Everyone else’s thoughts?
Strange thing for the sp to rise then nearly 10p in advance of a trading statement only scheduled to come at end of month?
Dunno I read that rise as a belief that something re bond was afoot. Again probably stretching the evidence to fit my own wishful thinking. I read the company RNS again over the weekend and thought it’s in a strong position considering pandemic effects on collections and feel it’s crash was more due to the cities dislike of the financial model as a whole and its longevity due to legislative changes but it’s markets particularly Mexico should continue to be profitable/grow.
Looks like a little bit of a shake today but there's resistance at 52 level. There's been some speculation elsewhere of a potential update before th1 15th October which hasn't been commented either way by IR.
I saw the rise back up as just a partial correction of the over-reaction we’ve seen to the going concern risk.
Little over a month ago we were at over 70p, so a rise from the mid 40s to mid 50s doesn’t strike me as very meaningful in its own right. What we need is for confirmation they’ve sorted the bond refinance and then we should see a large recovery and hopefully return of momentum back towards £1 again. Fingers crossed.
Arch- well put. In addition to the financing update, think shareholders keen to see collection ratios still good and understand levels being loaned. If this is positive would expect to see a significant rise above 100p as even at those levels would be very undervalued.
Problem is that IR have confirmed no trading update till the 29th Oct with Q3 update though this may change. Even as a holder with no expected new, very bleak national news affecting sentiment and low trading volumes I can see this being walked down, perhaps even as low to an intraday low of 48p, in the next week to generate volume before the rise towards the end of the month.