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So there it is, alk the institutions/ bank/ directors get their money, the business is sold for a song and the poor shareholders......
"final completion of the Business Outsourcing Sale, it should be noted that it is highly unlikely that there will be a substantial, or any, amount available to Shareholders following payment of all creditors and costs".
Probably, almost certainly zilch
Looks like this is the answer, snippet from Investors Week.
"The vast majority of the proceeds from the deal will go towards repaying £33.7m owed to Santander UK, with the firm stating that it was "highly unlikely" shareholders would receive payouts once costs were settled".
Nice to know Santander Bank will get it's money back, rather than the thousands of shareholders that were taken in by the Primary Bid fundraise.
MJ Hudson to delist from London stock market Aim
London has lost another listing as asset management consultant MJ Hudson said it was planning to quit the Aim junior stock market.
data and analytics arms and its business outsourcing division.
The proceeds of the transaction will go towards paying MJ Hudson’s £33.7m debt owed to its senior lender, Santander UK. The company expects that further funding will be required to complete the sale of its business outsourcing division, which includes multiple regulated entities.
Think it says bids for Divisions of the company not the company as a whole .
'...and it’s obvious to see this company is run solely for the benefit of the directors.'
And less than 24 hours later trading is suspended. Post recommended.
Fwiw the vesting date for the LTIP is tomorrow. The LTIP is based on the audited figures and given those aren’t yet available they may have to issue some sort of statement.
I don’t trust the management to do the right thing here. They awarded themselves a ridiculous amount of money for achieving average performance and then possibly manipulated the figures to ensure they hit it. Throw in the extension to the TSR element which they missed (surely it should just lapse) and it’s obvious to see this company is run solely for the benefit of the directors.
The continued delay to providing an audit update is beginning to look more than embarrassing! The board are showing their total incompetence.
The only saving grace is that the board invested in the recent capital raise at 30p so they are down 60%.
However, they are about to make themselves whole through the LTIP - so we can see why they are not worried, all at the expense of the current shareholders.
The institutional holders must be livid and hopefully they are providing direct feedback to the board.
MJH need to provide an update soon or they will be cut off from future capital markets.
Excellent summary, DevonLad, I concur with all your sentiments.
Six weeks since the accounting bombshell, the equivalent prior year accounts publication date (25 Nov) is also disappearing in the rear-view mirror.
2021/22's audited offering is needed pronto to help us understand the extent of management's accounting shenanigans and assess whether there is remaining potential for a profitable (and honest!) enterprise in the year's ahead.
Is it a case of the longer it takes to conclude the audit, the uglier things may be? Here's (naively?) hoping not...!
SBC
Hi All,
I can’t say I really like this company at all - but I have built a decent position as I do believe it is probably undervalued at the current share price.
I’m now invested in more than I should be and a sizeable % hoping that we see better days ahead.
The management should be ashamed of themselves at the very least and possibly corrupt in the worst scenario.
- Badly managed
- Always pushing better EBITDA guidance
- Conflicted with their LTIP
- Not profitable
- Greedy and only appear to be working for their own benefit
I am hoping for a turnaround story here, starting with
- New management
- Clear path to net profit
- LTIP aligned with shareholders
It’s not a bad business, it just looks like badly managed and clear conflicts of interest which have been unearthed during the audit. The last fund raising should probably be investigated by the FCA.
Saying that I am just hopeful that the worst is priced in and some better days ahead. It’s trading at NAV so it’s up to the company to prove it is worth more than the intangible goodwill it is based on. Profits and net cash required for a rebuild of confidence here.
If there isn’t a RNS soon to conclude the audit then MJH should be ashamed even more.
Not compelling but I’m invested in the hope they do what is right and start to run this like a proper company and not a family business.
The silence from the company is loud as hell.
Hi Tank!
The investor presentation feels a while ago, at the time I don't think they were intending to materially change the LTIP from that explained in August's fundraise RNS.
The recent accounting issues clearly add to shareholders' sense of injustice . Might management suffer a guilty conscience attack for having lured, with an overstated EBITDA, investors to the fundraise, and reduce the LTIP accordingly? Not holding my breath, but they definitely should!
Hopefully they get accounts finalised ASAP that give a true and fair view - at least then investors can take an informed view on the company, either way.
More buys than usual today - possibly a tenuous chink of light in the darkness?
SBK
SBK, been any response from the company?
Price not prize - as in the current SP!!!
prize looks appealing but there is definitely potential fraud here.
EBITDA can be manipulated so should not be used as a LTIP target - many other companies base it on the share price.
The fact that the CFO has benefitted directly and he is the one doing the accounts looks really dodgy to me.
Look at REVB - a minor issue became quite big a few weeks later.
I think there may be more bad news to come
Looking at the charts I too have sympathy for LTH’s
But lots of big buys above ask going through today
For my money this has been held down on purpose by the mm’s and it’s due a bounce
Ive taken a punt at 16p
Let’s see how the week pans out . .
So only in July we were told the company has exceeded expectations for the year, a few weeks later we then have a placing at 30p and afterwards the CFO twice buys shares via the LTIP.
Today it appears the EBITDA has been overstated not once but twice.
Of course the EBITDA (not PBT) is used as the main part of an overly generous LTIP.
The CFO and CEO need to go - Hudson already owns c25% of the companies shares, not sure why he thinks he needs any additional shares.
Over the last year or two the revenue and EBITDA have been growing nicely, however, the SP has been steadily declining from c50p to now less than 20p.
Clearly many knew things weren't quite right, and so it has been proved.
So sorry for all LTH (except the BOD)
The most activity I've seen for months, big buys
Agree with all the sentiments here about management's upcoming underserved LTIP bonanza.
It'll probably be a futile protest, but here are two questions I've formally submitted to September's Retail Investor Presentation (admittedly post- wine, hope I've managed to remain objective):
"Retail shareholders like me have been diluted by the August fundraise, while already nursing heavy capital losses since the IPO.
In this context, the recently-clarified LTIP implications are clearly an insult to shareholders. While management has worked hard to increase adjusted EBITDA, this is an easily manipulated figure. Morally, management should not be handsomely rewarded for delivering significant capital losses for their shareholders.
In a recent RNS, MJ Hudson publicised research by Progressive Equity Research. Were the dilutive implications of the LTIP factored into these projected earnings per share figures? If not, to knowingly direct investors to overstated figures would be deceitful management conduct.
To restore MJ Hudson's integrity, good name and trust, will management please consider urgently revising the LTIP, to delay the vesting awards and ensure staff are only handsomely rewarded when shareholders also receive a return on their investment?"
Fingers crossed for a positive update in the presentation, but not particularly expecting one.
SBK
Excellent Twitter thread on the extravagant LTIP packages.
https://twitter.com/PerpetualValue/status/1557406966997102592
Another one along with Duke who have given 1 days notice, hopefully not a trend.
Serves them right the sp is already lower and Another I will be voting against all directors at agm (as ii is easy to vote on) . Won't make much difference but if a few more shareholders do it would!
The earn outs are the biggest problem, not just with MJH but other companies as well. If investors are to make informed decisions about the company, they need to be informed on the liabilities. All reports should have details on existing earnouts and progress reports on potential payouts.
NFC acquired a company, Mach49 and apparently agreed an earn out with no financial limit, what was the Nomad doing? Got found out because the acquisition is doing well in the US. In February, they came to agreement to settle at $300m max. Wiped out NFC's profit for the year, still paid a dividend though.
Leaves a very sour taste.
Another management that care very little for shareholders while rewarding themselves handsomely.
Didn't see this coming after the positive trading update only a few weeks ago.
Nothing wrong with raising for expansion and ESG does seem to be a big growth area but it's pretty clear the market knew this was coming as the SP has been gradually falling over the last month or so. Retail investors the last to know as always.
Borrowings are a bit on the high side so improving the balance sheet is no bad thing. However, i find it difficult to value MJH based on their p/l etc. Always makes a healthy top line EBITDA yet is still loss making. These one off costs always seem quite high and never seem to disappear. Professional fees are very high IMHO.
Finally announcing a retail placing after hours and then closing it within 1 hour must have caught people out - the hoped for £1.5m raised £220k.