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This company is not a charity. They need to ditch any loss making contracts & focus on those with decent ROCE. That is what good, well run businesses do!
We would be well shot of WMT. Not really adding much commercially to this business!
Haha, yes i know. In the end day to day this company is running just fine as i see it. Just not turning the income into profit. Talk of the large debt i understand of course but this company can run day to day without really having to touch any of the cash & facilities. A slow burner but i'm planning to add more on further drops as my longer term view on this company hasn't really altered much from when i was buying at 150
Lots of ifs buts and maybes here
If the shorts reduce their position over the next 1-2 months as interest rates rise and the Cosmens build ever closer to 30% then a foregone conclusion that shorts were in it for a short term gain on poor sentiment but Cosmens looking to take over
If the shorts stick around and grow their positions then I suspect they are betttinf against a breach of covenants, then it gets ugly
I used to head the pricing dept for a ftse 250 company who had similar pricing power. Why the hell don’t they just tweak their prices upwards again where they can. I wonder how much we are tied into fixed contracts
The other thing I saw was the labour MP from West Midlands hoping to get in and take public/refresh contracts. Could that be the fear?
Paddyboy
When you're holding large amounts like us, sometimes these little seeds get planted and get you questioning everything.
JG just usual scaremongering nonsense. IAG/RR etc etc were all going bust too according to these bbs at some stage! The SP is just a number that is all & it will change over the next few years in multiples if the management do their job!
When talking of why cosmens are adding, is there any validity in this post from advfn.
wouldn't occur to the thickest of the thick that they would want to command the strongest hand in administration in order to have the credibility and gain the confidence of the creditors when this shower falls into prepack.
I have taken off the majority of my earnings punt but am still holding a large core long.
As long as we can avoid a capital raise and taking on even more debt this should eventually come out ahead…
Key risks are
Increased interest payments
Removal of remaining covid support
50mio higher reinvestment compared to last year as mentioned in the earnings call
Renegotiation of the existing hybrid
Fuel costs
The shorts are annoying. I've heard people hollering on so many bb's they should be banned etc. I disagree. I think the shorts actually assist in sending a rocket message up the rear to badly managed businesses. If the shorts are wrong you have a golden opportunity to buy shares at once in a lifetime prices. If they are right it forces the company to change or drives them bust. It's a free market. The shorts are taking a big risk too!
How do we know the shares for shorts are not being lend by Cosmen.
Think about it....they lend 1% after which the price is dragged down and they buy up 3%.
I bet all the shorts will be closed well before any takeover takes place same as Hotel Chocolat.
It has fallen really badly. With the right conditions & stimuli no reason why it can't recover strongly a'la Rolls Royce. That is the hope anyway!
That’s the way I see it and will continue to add when receive each pay check. In a fortunate position that I don’t need to selll so if it takes an extra year to recover so be it, but you never know. Everytime I think it can’t drop, it does!
NT, yes i agree time & management competence are key. The debt is high yes but it always has been without too much problem. Now you have interest rate rises & earnings reduced which causes the problem. An NA sale at a decent price would be good. Interest rate cuts, inflationary pressure easing; price increases filtering through. all of these things will take time & those catalysts should see the SP worm turn. A question of when not if as i see it!
Yes, i think loads of people bought a lot in the 120s. I bought my first lot @152. Logic says to me to buy a lot more at these prices & i have the funds to do so. You start questioning your investment when it gets this low though!
Good memory - and yes been in and held since Covid days. New to investing so never trimmed when was up and now well down with an average of about 1.20, but I can still see how this can turnaround in the next few years. Been painful watching as bought in at times when I thought was a bargain during the drop (1.70 and 1.20). Agree that removing both at the same time would not be wise so now time for Garat to deliver on the financials!
I'm sure Garat is on borrowed time. They couldn't get rid of both at the same time. Need a succession in place!
Ballantyne, i remember you were in on this during Covid. Have you held since then? How much of a bargain would this price have looked then? That is what really baffles me here. When the whole business was stagnant the SP was 250. Fully operational; finance in place; investment graded credit rating etc etc but at 50p. Can't make it up really!
CFO James Stamp rightly had to go, but next in line is Garat. He is also culpable & accountable for the recent & present business performance. Garat & Stamp were singing from the same hymn sheet & the market saw right through their BS. Further guidance misses will not be tolerated & Garat is running out of road. Will give credit when & where it is due but atm Garat has lost my confidence & I would certainly vote for a replacement. I sincerely hope the new CFO can turn things around as I too am also underwater here.
Well a poor CFO was a big part of this - and now we’ve had a change, I can see a brighter future as long as she delivers.
Few thoughts on Garat - yes, share price has tanked during this tenure. However, they have consistently been winning more contracts and those contracts have been implemented well (exception of German rail but that’s a different reason), they continue to win awards for being a great employer, put in a lot of cost reduction initiatives that are now coming to fruitition and have continued on various acquisitions…and most importantly, he has made changes to underperforming leadership in US and UK (along with CFO).
I still think we have a good future as contracts are renegotiated, new contracts won and we see the benefits of price increases filter through! Time will tell and I’m well underwater too so would like some upward movement to make me feel more comfortable!
“WHY IS THE SHARE PRICE COLLAPSING?”
An excellent & pertinent question that should be put directly to the current CEO.
My own view is that borrowings are very high, which you would expect for a company in this line of business. Clearly interest payments go up and this makes borrowing money more expensive. Covid had a serious effect and this takes time to resolve, assuming of course a company does not go bust. The short sellers have worked this out sometime ago, warning investors that problems exist. Only time and good management will conclude these problems. I am interested in the thoughts of other investors in this matter?