focusIR May 2024 Investor Webinar: Blue Whale, Kavango, Taseko Mines & CQS Natural Resources. Catch up with the webinar here.
London South East prides itself on its community spirit, and in order to keep the chat section problem free, we ask all members to follow these simple rules. In these rules, we refer to ourselves as "we", "us", "our". The user of the website is referred to as "you" and "your".
By posting on our share chat boards you are agreeing to the following:
The IP address of all posts is recorded to aid in enforcing these conditions. As a user you agree to any information you have entered being stored in a database. You agree that we have the right to remove, edit, move or close any topic or board at any time should we see fit. You agree that we have the right to remove any post without notice. You agree that we have the right to suspend your account without notice.
Please note some users may not behave properly and may post content that is misleading, untrue or offensive.
It is not possible for us to fully monitor all content all of the time but where we have actually received notice of any content that is potentially misleading, untrue, offensive, unlawful, infringes third party rights or is potentially in breach of these terms and conditions, then we will review such content, decide whether to remove it from this website and act accordingly.
Premium Members are members that have a premium subscription with London South East. You can subscribe here.
London South East does not endorse such members, and posts should not be construed as advice and represent the opinions of the authors, not those of London South East Ltd, or its affiliates.
All of the above...?
Bloody frustrating.
Hi Leedsman.
Not a clue!. Seems odd, the SP was creeping upwards, bid price had gone from 13.20 to 13.50 in recent days, now back to 12.70? Market sentiment maybe? Apathy for this share, possibly? Inflation eroding the cash pot?
Maybe a lack of confidence in the possible offer for Caretech, maybe that won't happen?
Hmm.......
Thoughts anyone....?
Any news this morning
CareTech extended the deadline to 30th May so not long to wait, meanwhile the CTH SP has dropped back to around 703p; both DBay and Sheikh Holdings offering 750p but with differing conditions so who knows?
I'm not sure even if DBay beat Sheikh to the prize it will do anything for the LDG share price short-term, assuming they use LDG's cash pot to fund the deal, but will certainly affect the CTH SP on the run up to 30th May.
Although as recently discussed CTH announced an increased debt but then they appear to be asset-rich - a prime target for DBay to re-structure, turn around and sell on in a few years for a lot more than 750p a share, IMO.
That could be where the long-term growth for the LDG SP could come from maybe?
I'm no expert though, just thinking aloud.
Looks like we are getting close to Caretech judgement day.
Only thoughts being I have no idea if successful in bid or coming 2nd will do anything too favorable to share price.
Classic wait and see. All we can say as holders is "In Dbay we trust"!
Could be something brewing today, a fair bit of trading activity this morning, for this share at least, quite a few sizeable buys but also 2 x 900,000+ unknown trades - should be 'sells' judging by the price but who knows, could be 'buys' made off-market or something unusual? Not an expert so not sure.
Does anyone know anything at all?
Hi Bergcarls,
Same as you, I sold out a while back but still intrigued to see what might happen here. As you say and we already worked out, the asset value is about 20p so 13p SP is a bargain, but only if DBay/LDG do something truly impressive with the money.
See next post......
Hi Pat
I sold out a while back , but still intrigued with the share and its 20p per share value.
To be honest I haven't kept up to date and was only skimming over the Caretech RNS.
I think there will be profit here from 13p but not as much as there should be. Business is business for these guys. Will definitely keep my eye on what's happening though.
Good luck
Hi Bergcarls.
I'm guessing that increased net debt is a bad thing? Am I right in thinking that if either Sheikh Holdings or DBay make a formal offer for CTH @ 750p a share they would also inherit the net debt as part of the deal?
That doesn't sound like a good investment to me.
Just read Caretech rns of 3rd of May
Trading Update
This bit stood out
'"As at 31 March 2022, unaudited net debt was £278.3m compared with £258.7m at 30 September 2021. The increase in net debt is due to the deployment of strong operating cash flow of the business by investing in new organic developments and bolt-on acquisitions."
I'm not so sure. Why did DBay dump a chunk of their holding before? 48M shares as I recall. Seems odd. Maybe they were de-risking their investment or just needed operating funds?
I think we worked out a while ago that LDG should now be worth about 20p a share but as we see now trading just over 13p. Assuming they went ahead with another buyback of say 64M shares at let's say an average of 15p, that's about another £10M eroded from the remaining cash pot that we estimated was about £99M plus the CTH investment of £13.1M. The remaining value of LDG would then be around £102M all in, with around 498M shares in issue = 20.48p/share. Not a massive difference to where it is now.
I still think DBay would dump another chunk to take profit from their investment and all the time the remaining cash is doing nothing it is being eroded by inflation like all of our savings. Unless LDG invest the pot this will become worthless eventually IMO.
It will be interesting to see what unfolds.
If DBAY wanted to extract full value they would wind use their influence on the Board and their vote to get an open offer at a price near P/TNAV of about 20p or force a wind up. I’m frankly confused why it was in their best interest to dump a portion of their holding at about 16p. If they buyback at current prices that will increase the cash per share which is good for shareholders not looking to get out. At some stage value will out here one way or the other. Those chasing a quick buck might be better off gambling elsewhere
@ zoolook
To be honest I hadn't read what the Resolutions were (special or otherwise) just assumed it was a box ticking exercise, apologies.
Another buyback? Interesting. What makes you think it would be more successful than the last one, when they bought back 140M shares? Could just be another effort to raise the SP to enable DBay to unload another lot of their holding at top price. Beware is all I would say.
If they go ahead I would get out as soon as the SP peaks. I missed out nearly 2p a share on the last buyback, could have had nearly 16p, sold at almost 14p when it fell back.
They passed the authority to buyback up to 62,544,552 shares. That’s exciting enough for me.
RNS posted at 2:08, all resolutions passed.
Nothing more exciting than that.
Anyone heard anything from the AGM no RNS yet?
Hi eviking, yep, still here.
No longer invested here but keeping an eye. Not posted here for a while as so little happening I slipped into a coma!
Much like the SP, seems to be slowly sleep-walking back towards 13p.
It seems such a shame after all the early hope when they offloaded Stobart then had the buyback to close the discounted SP to NAV and had £134M in the bank. Sad.
My guess is they (DBay and LDG) are still mulling over the potential buyout of CareTech - if that happens it will do wonders for CTH holders but probably not a lot for LDG holders. Only time will tell.
Mind you, wishing I was still invested here as my other holdings are having a terrible time, I'd still be in profit with LDG!!
Strange times.
pat still tjhere?
Hi Patshare
Sorry - I misunderstood your sums. Yes about 20p per share (before running costs) up from last declared 19p in November so 5% improvement in 5 months.
Thanks Patshare,
Not following your workings. If the CTH holding is worth £14.8m at a 750p takeout price and you subtract the 340k fee that’s £14.46m to LDG.
I’m also not sure what you mean by the share price being worse. Surely it’s better if you are a buyer :-) Where else can you buy £1 for 70p?
@zoolook - sorry, looks like I got my £23M from typing in the wrong price! Bl**dy novice!!
Without analysing every buyback RNS my best guess would be they paid around 15p on average, so total approx £21M, does that sound right?
Also, I quoted the CTH investment as the figure they have paid and not what it's worth currently, thought best not to include a paper gain.
Making those adjustments with Dbay taking 20% of the CTH gain actually makes the current SP even worse: £132M -£13.1M - £21M +13.1M + £1.7M - £340K (20% to Dbay) = £112.36M / 562M shares = 20p per share.
I still think the (revised) £21M could have been put to better use but guess we will never know, hindsight always being right etc. and what the markets do is anyone's guess, could have turned out even worse without the buyback.
On the plus side I made some money and didn't lose any here so not all bad eh?
I think the buying back shares well below the cash-per-share price was a good decision as it was an effective way to increase the cash per share price and it was the LDG Board’s ultimate decision, not DBAYs.
There is a limit to how much the Board can be held accountable for the share price. The market does what the market does and sometimes what it does is irrational leading to mispricing (long May that continue!)
Where I think the Board should be accountable is failing to proactively communicate the new investment case to the market and why investors should be interested above and beyond the asset backing and allay concerns about the relationship with DBay.
An inscrutable majority shareholder using their own decision of a buyback to buy their own shares using the cash reserves ultimately leaving us at the same SP as before, DBAY have a lot to answer for.
I think the more fundamental existential
question posed by the persistent low market price per share vs the price per share value is whether it should be listed at all. The appetite for a vehicle which has an inscrutable majority shareholder which is also making all the investment decisions is very low otherwise the share price would be close to the NAV.
I’m very tempted to go to the AGM
Patshare - where did you get your £23m from? That would mean they paid an average of 16.4p per share - which they haven’t.
Also the Caretech investment of £13.1m is likely to be worth £14.8m (with DBay taking 20% of the £1.7m uplift)