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Is it possible if they only receive derisory offer for NA, 300-400m as it's a fire sale/desperation not very profitable, interest rates higher for longer, funding for the aquirer more expensive, there might be some sort of fund raising if they can't sell NA or in combination with to shore up the balance sheet.
IMO fund raise unlikely as debt not due although it would help cash flow ie less in finance costs.
If you look back over the years Cosmens tried to block fund raise but couldn’t get to the magic 25% shareholding in time so it went through
See 2 large buys yesterday which equate to 1% of the company. Will be interest to see who bought them in next 2-3 days. Hopefully Cosmens upping stake again
They had £800m in cash & RCF last time around. Should be no need for any capital raise. With £3bn revenues coming in a fund raise would be another display of incompetence. To go from divi payer to fund raiser in space of a year!
John, as Paddy rightly said theres no need for immediate cash raise. If you refer to 'Fitch' Ratings they also state the same.
NA School is worth much more than £300m. They wouldn't sell. Much more likely to turn their attention to selling off UK and Germany to raise £300m (which would be a better bet in my view)
I think we are seeing the outcome of a longer term plan to rebrand the operating units, prepare them for sale and break up the group. Ive said this many times - Cosmens only want ALSA and they are in control. The group is being readied to sell off all the pieces, which is probably the right thing to do.
The annual cost of servicing their debt is forecast @c.£80m. They have only recently refinanced their bond & they have cash in bank. Short term financing all seems reasonably okay to me. Some peeps get a bit carried away with comparators such as Cineworld which had something like £8bn debt & no revenues coming in. Different gravy altogether. If this shower can maintain & grow revenues the future potential is there IMO. The work needed here is on improving ROCE in order to get the earnings back into a profitable state. New blood is needed here. With the right management in place this company can get back on track!
My scrap book valuation:
UK/Germany = £300m
We-Drive- U = £400m
US School Bus = £800m - £1.2b
ALSA = £1b - £1.2b
= Conservative £2.5b to £3b
- debt of £1.5b (inc Hybrid)
= Value £1b - £1.5b
£2.00 to £3.00 per share
Other analysts have suggested more (£3+) if a successful US School Bus sale materialises around its upper end valuation
Paddy - as we've discussed here before: that £80m finance costs are now partially offset with newly found cost savings of c. £50m p.a. So the net impact of the increased finance cost is lower than historic finance costs
On a scale from 1-10…how reckless would it be to add to a sizeable position ahead of the earnings announcement…
HV - feels like a coin toss. My position feels pretty reckless at this stage, which is the opposite of what was intended:
For me and happy to hold for 12 months then I'd go with a '3' on the reckless scale
if you're hoping to get a fast profit then an '8'
Good Luck :)
HV, prudent to wait until the RNS. That is what i'm doing anyway. Will probably add a good chunk either way but adding before results is usually a bad move
I dont see selling US Bus as a fire sale .... ..anyone buying will see it as a long term purchase and would be acquiring a lot of infrastructure with a large part of the revenue being on contract....
I think there would be a number of parties interested in such a business ...... and I dont see a fire sale situation, myself
HV
The results are pretty much old hat ....what matters most...IMO.... is the year ahead ...and how things are shaping up here and now ... I think 2024 like many other businesses still has a feeling of uncertainty and difficult to predict guidance .... but ..many of the issues of 2023 have progressed considerably ....
The market is almost trading on external issues like geo-politics, state of the economy, war .... and it is these things that any BOD is having to grapple with ...
I am not as negative about the BOD as many here .... it has been a difficult period and no one really knows what goes on in the background .... a lot of challenges and stakeholders to contend with , and a world that is becoming veru unpredictable and uncertain by the day ...
Tx everyone…my view is that there is currently a decent amount of risk premium priced in due to the earnings delay…once an earnings date is confirmed I expect this to jump 5-10%…however, this will likely continue to sell off if earning are delayed again and or some nasty surprises…
Hopeless
I've added 30k in one pot in mid 60s and again yesterday at 58 to bring that pots average down to 78 (70k shares)
But on my ISA pot I'm umming and ahhing whether to use my allowance now to bring that average down to 83 from 96 or just wait and use it elsewhere.
If there is further bad news might be able to pick up 40k for the ISA allowance.
But this is giving me sleepless nights right now, mainly the uncertainty of what they might say next!!