Firering Strategic Minerals: From explorer to producer. Watch the video 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.
Started: Rich62, 11 Jun 2024 08:12
Last post: Rich62, 11 Jun 2024 08:12
Good discussion last night on Mello Investors forum, over the merits of Ramsdens.
Mark Simpson (a private investor) put forward a strong case for RFX being undervalued (p/e x8) and that in his view there was still good growth to come from the 4 income streams.
RFX key metrics were then compared to H&T pawnbrokers, which Kevin Taylor (another private investor) said he preferred (as he is already a share holder), but said he could be persuaded to buy RFX shares.
At the end of the discussion and review of the numbers and potential, both panel members rated RFX a buy.
All Mello viewers were invited to vote following the discussion, results as follows:
Buy = 34%
Avoid = 11%
Sell = 0%
Hold = 55%
Last post: Troajan, 10 Jun 2024 23:14
Started: Rich62, 5 Jun 2024 14:08
Last post: Rich62, 6 Jun 2024 06:38
Continued...
Ramsdens has now replaced its primary finance provider and is now benefiting from higher online sales of premium watches (average sale price of £3,800). Liberum is pencilling in full-year divisional gross profit of £13mn, a conservative estimate given the ongoing improvement in higher-margin pre-owned jewellery sales and the recent rebound in premium watch sales, both of which account for 35 per cent of divisional sales.
Fourthly, the balance of analysts’ full-year gross profit estimates are from the group’s foreign currency exchange business. In the first half, gross profit from this activity edged up to £5mn, representing a third of Liberum’s full-year estimate. The business has a second half weighting due to the summer holiday season, so it’s reassuring to note that chief executive Peter Kenyon is “sitting quietly confident at this stage”. The board was certainly confident enough to hike the interim dividend per share by 9 per cent to 3.6p.
Unwarranted low rating
Even though there is a good chance that Ramsdens will outperform full-year earnings forecasts, its shares only trade on a forward price/earnings (PE) ratio of 8.1 and offer a healthy prospective dividend yield of 5.6 per cent. Moreover, the balance sheet is heavily asset-backed, so a price/book value ratio of 1.17 times seems overly harsh for a business that is delivering a respectable post-tax return on equity of more than 15 per cent. Buy.
Simon Thompson's article in full, from the e version of Investors Chronicle. I'd expect this article will go into this Friday's weekly magazine as well - hopefully get some more private investors to buy into this solid growth, decent dividend paying stock.
This bargain stock could deliver another year of record profits
The lowly rated financial services group is benefiting from buoyant precious metal trading, a rising pledge book and resilient jewellery sales
Middlesbrough-based financial services group Ramsdens Holdings has delivered a bumper first-half performance that underpins expectations of another set of record annual profits.
In fact, with first-half pre-tax profits up 8 per cent (£0.3mn) to £4mn, house broker Liberum Capital notes that there is scope for outperformance of its full-year estimate of £10.5mn, which only embeds 4 per cent (£0.4mn) annual growth. I would agree, especially as the directors are clearly confident of delivering another record year of profits. They have every reason, too.
Reasons for optimism
Firstly, cost of living pressures mean that more customers are now looking to sell unwanted jewellery, gold and precious metal items to raise cash. The trend is also being driven by greater media coverage and a buoyant gold price, which have increased consumer awareness.
First-half revenue from these activities increased by 35 per cent to £14.1mn and boosted divisional gross profit by a quarter to £5mn. Trading prospects remain overwhelmingly positive, so much so that Liberum raised its full-year divisional gross profit estimate by 7 per cent to £9.9mn, or a fifth of the group forecast of £49.4mn.
Secondly, the challenging economic conditions and weaker consumer credit competition in the pawnbroking space have resulted in rising numbers of new customers willing to pledge their assets as security against a six-month high interest loan. Ramsdens’ pledge book increased 12 per cent year on year to £10.8mn, with the average loan value of £346 rising 10 per cent. With restrictions on other forms of small sum credit – peers such as NSF, Amigo and Morses have all run into difficulties due to company-specific or regulatory issues – and household incomes being squeezed by higher bills, there is real potential for the segment to outperform Liberum’s full-year gross profit estimate of £11.4mn. In the first half, divisional gross profit increased 15 per cent to £5.6mn.
Thirdly, the jewellery business delivered 6 per cent higher gross profit of £6.7mn on flat revenue of £17.5mn despite weakness in premium watch sales, which account for half of online retail purchases. This was mainly caused by the group’s third-party retail finance provider reducing approval rates for big-ticket purchases (more than £2,000) as it was in the process of exiting the market.
The IC tipping record has improved immeasurably in recent years. Some 30 odd years ago, it could be compared with the legend, Bob Beckman. For those that have never heard of Bob Beckman, he was an American that had a one/two minute slot each morning on LBC commenting on markets during the 1970's and '80's. He had made and lost several fortunes, but was a very engaging chap.
Provided that you did exactly the opposite that he recommended, you would tend to be up. Markets were very choppy in those days and unless able to afford discretionary portfolio management (£50,000 was the minimum) then you relied on word of mouth and newspapers for your research. One of his memorable comments used was that "the market was like an elevator, with a lunatic at the controls".
Anyway, this is likely to be my last post on this board. I am content with my holding, intend to add to it as circumstances permit as, aside from being a well managed company that is inherently defensive in a portfolio, organic growth should follow as the world returns to normal.
Bank of Canada reduced interest rates today, Europe is expecting a cut tomorrow. These should help to bring investors back to equities.
Thank you for your diligent research and contributions.
Simon Thompson has covered Ramsdens again today - rated a Buy at 195p
His summary = "Unwarranted low rating
Even though there is a good chance that Ramsdens will outperform full-year earnings forecasts, its shares only trade on a forward price/earnings (PE) ratio of 8.1 and offer a healthy prospective dividend yield of 5.6 per cent. Moreover, the balance sheet is heavily asset-backed, so a price/book value ratio of 1.17 times seems overly harsh for a business that is delivering a respectable post-tax return on equity of more than 15 per cent. Buy."
Started: surprised, 5 Jun 2024 07:17
Last post: Florence141414, 5 Jun 2024 10:04
Feels like OTUS are taking the opportunity to sell in a manner unrelated to the quality of the results on what is likely to be a day of decent liquidity. Speculation, of course, but I think these prices should represent a good entry once they're out.
Typical buy on anticipation sell on results reaction, actually. Once the dust has settled one might expect an upward drift.
Numbers read well enough to me though the market reaction has been a little disappointing. Early in the day, of course but, as far as I am concerned no compelling reason to sell.
Solid numbers indeed but also a bullish forward looking statement, including new store openings. Looking good here.
Nice solid set of figures today. 5-10% up I reckon.
Started: Rich62, 5 Jun 2024 09:11
Last post: Rich62, 5 Jun 2024 09:11
Excellent H1 results here as others have pointed out - yet muted share price reaction. Clearly there are some who still want to exit this share and will take 190/195p for their shares. Hard to fathom really??
The Board appear to be doing everything right; growing at reasonable rate, solid results, bullish outlook and rewarding shareholders with higher dividends. Not sure any private investor could want much more?
I just hope there is some decent coverage in the media to get some additional buyers in to clear the overhang..
And just as reminder, there is an Investor Presentation by the Board tomorrow at 1630.
Started: sheffieldowls, 13 May 2024 19:13
Last post: Alas_Smith, 28 May 2024 10:58
I've added a few more today in my SIPP. Won't move the price but a nice little pot boiler company.
Thanks for that information Jerry I wonder why there is this exemption.
RE the disclosure thresholds. it seems there is an exemption under 5.15R(1) for fund managers, meaning only 5%, 10% thresholds need to be reported.
https://www.handbook.fca.org.uk/handbook/DTR/5/1.html
Rich 62
As mentioned on the ADVFN board there should be a declaration when a significant shareholding ie 3% is reached and every 1% increase in the holding after that is reached and the same should happen when reducing a holding. This does not appear to have happened with the shareholding of Otus Capital I am wondering why that is the case.
Yeah Otus Capital finally declare their massive reduction in holding from 9.61% to 4.95%.
Good news, share price can now hopefully recover.
Started: sheffieldowls, 14 May 2024 13:55
Last post: sheffieldowls, 14 May 2024 18:58
Alas_Smith
I do believe that these institutional sales have kept the price of Ramsdens holdings lower than they should be however I don't see much downside with the share price at these levels. I expect the price of Ramsdens to increase after the interim results are out but that's only my opinion and what do I know as I am somebody who was born and bred in Manchester but decided to support Sheffield Wednesday!!!!!LOL.
Fund management companies have many teams and different funds so it is actually quite easy for one team to have a buy note and a sell note in place for the same equity. If Downing on the one hand wish to dispose of a holding in one fund, there is nothing to prevent a different fund controlled by them in acquiring the stock as a matched bargain. They might even have notified the Co Secretary that this was to be transacted and reporting the transaction was not necessary as the market is not affected.
The reduction by Otus is notifiable as it reports the change in holding by Otus. In common with sheffieldowls, I suspect there may be further weakness in the share price to take up the slack that this disposal creates. At this stage I am not looking to add to my holding preferring to wait until the release of financial results in a couple of weeks time.
Good point.
However Downing also have opened a new IHT Fund this tax year, which has been targeting new investors money and their on line prospectus shows companies that they plan to invest in including RFX!!!
I am surprised that the reason that I have been able to buy in some size in recent days has been through the selling of stock by Otus Capital Management. This makes it likely that there will be further institutional sales to come from Downing due to their proposed special dividend to their holders so the Ramsdens share price may be lower than it should be because of this further overhang of their shares.
Started: sheffieldowls, 5 Apr 2024 12:00
Last post: sheffieldowls, 22 Apr 2024 18:22
Rich 62 As mentioned on earlier posts Downing have been blocked by Milkwood regarding reducing their holding in Ramsdens.
Yes saw the Holding RNS - looks like I was wrong in believing that Downing were reducing their position.
Up from 9.99% to 10.17%.
Lets hope they continue to see value here and add more for their IHT fund.
TR-1 has been issued today with Downing increasing position to over 10%
Have tucked a few more away today, this time for elder son in his ISA
The dealings showing on this board are not always accurate hence my purchase this morning of 5309 shares at 186.9p is recorded as a sale and not a purchase which was the case for this deal.
Started: Rich62, 10 Apr 2024 18:06
Last post: Chelsea11, 11 Apr 2024 09:00
Wasn’t the Downing wind down blocked by Milkwood?
https://www.morningstar.co.uk/uk/news/AN_1712161896305451400/downing-strategic-wind-down-blocked-by-new-shareholder-milkwood.aspx
Downing hold 3.18m shares in RFX (10.05% of total shares in circulation), so clearly if they are disposing of these shares over time, they are obliged to notify the market....
Ironically, whilst they are winding up their Strategic Micro Cap fund and retuning monies to investors, they are touting for new investors to put money into their AIM Extra Planning Service ISA (an IHT scheme) where the brochure shows companies that they plan to invest in, including....and you guessed it......RFX!!
I'm expecting Ramsdens to rise as this year progresses..
Not sure if their holding is notifiable, but worth keeping an eye on portfolio changes as disposals, even when planned can with small companies take a little time to clear and, on occasion, provide opportunity for the retail investor to accumulate a decent quantity at beneficial rates
It is my understanding that this fund is being wound up over the next eighteen months so it seems likely that they may have further Ramsdens shares to sell in the market.
Started: Groucho., 11 Mar 2024 16:38
Last post: lordloadsoflolly, 12 Mar 2024 14:42
I view all broker notes with scepticism & wouldn't pay too much attention to Liberum's latest.
Owning H&T shares, I certainly don't recall them issuing THREE downgrades in the past year. There was one in January '24, but can anyone point to the other two?
H&T has - in any case - since reassured the market with its Prelims this morning. And its share price has responded well so far.
Hopefully some of this will eventually rub off on RFX too. I don't hold Ramsdens currently, but view this whole industry as pretty attractive & significantly undervalued right now. Decent dividends from both players too!
If you read the next paragraph it explains exactly why.
Makes perfect sense to me.
Am I being dim, but how does having a higher P/E than it's closest peer make it cheap? Ot is that a typo for the H&T P/E?
BUY, TP 290p
We retain our BUY recommendation and 290p target price, based on a blend of a FY 24 P/E valuation and a dividend discount model. The shares are trading on a modest CY 24 P/E of 7.5x. We think that is too cheap when closest peer H&T is on 6.0x. Ramsdens is more diversified and has delivered three upgrades over the last twelve months, which is in contrast to the three downgrades delivered by H&T. A dividend yield of 5.9% is also much higher than the c.4% average since listing.
Started: Rich62, 11 Mar 2024 07:46
Last post: Chelsea11, 11 Mar 2024 07:56
Good to see store expansion strategy continuing. Effectively one store per month for the 5 month period and so reasonable to think another 5+ before calendar year end.
Board have put out a very upbeat trading update. Assume this is to reassure investors with share price 35% off last Summer's high of 265p. Note in 2023 they didn't put AGM trade update out; so a clear sign to holders not to worry and in fact add more at lowly prices (with Downing II selling off RFX and other small caps to close a fund down)
https://www.londonstockexchange.com/news-article/RFX/agm-trading-update/16369858
Started: the_shareminator, 7 Mar 2024 13:02
Last post: the_shareminator, 7 Mar 2024 13:02
Given the translation here last year of a high gold price = increased net asset value + increased company profits the 5% gain in the gold price this past week will at some point be reflected in the market value (30% off it's peak).
Started: Rich62, 26 Feb 2024 09:48
Last post: Alas_Smith, 5 Mar 2024 17:14
Good to note that gold is at an all time high today.
Patience required as Downing selling down their holding, however, broker note out with target price 290p
https://twitter.com/surprised_trade/status/1762759745981628713
Have topped up again fingers crossed
Totally agree. This is a very good entry point if you are not currently invested here.
For those of you who are tempted to buy - here's a reminder of how solid this business is!
The key metrics here are:
Market Capex at share price of £1.80 = £56.97m
Net cash = £5.039m
Pre tax profit = £10.1m
Dividend = 10.1p (5.6% yield)
Started: Rich62, 19 Feb 2024 12:09
Last post: Rich62, 22 Feb 2024 16:06
No idea mate! Another couple of biggish trades went through earlier around 175/6p..
I'm looking forward to a Holding RNS or two, to confirm they are done.
Between 2 funds, they have taken off 33% of the share value here - just constant sells, against any liquidity.
Very frustrating for holders
I find the crazy thing is that by selling piecemeal into any liquidity, these funds are destroying the value of their remaining holdings of RFX!
Simply madness....
But agree with you, a lovely opportunity to buy shares at daft cheap prices.
Hi Rich, yup I see Downing appear to be selling down as they close their fund and it is therefore providing a rare opportunity to secure some cheaper RFX shares, seems rude not too 😉
427,830 shares gone through at 186p
I'm expecting to see Holding RNS soon that big seller is out..
Share price should recover then.
Started: surprised, 16 Feb 2024 09:51
Last post: Rich62, 19 Feb 2024 09:31
Good call, Surprised! A couple of funds have been selling RFX for a while, presumably due to PIs taking money out and funds closing. As a result, any decent PIs buys have been sold into and this has spooked / scared others from buying.
As always market makers drop bid hard, at first sign of a few large sells and spread can be large..
However RFX now dirt cheap at this price (35% off year high price, despite record £10m profit) and decent dividend too.
What's not to like!!
Back in after a year, sp dropped on ex div couple of days ago and now on a 52 week low surprisingly, RFX generates, profits, FCF and organic steady growth plans for 2024
https://twitter.com/surprised_trade/status/1758427520796430647
Started: Rich62, 9 Feb 2024 16:30
Last post: Fincent, 10 Feb 2024 09:05
Rich, it may well be that many of the small "sells" at 192p were in fact buys. Mine was a buy for exactly the reasons you say. At the time the broker quoted sell price was 185p.
The weird thing for me here is that there are still private investors selling small blocks of shares around 192p. Makes no sense when this goes ex dividend next week 15 Feb at 7.1p a share. Surely they would hang on for a few more weeks to pick up their 3.5% return.
Yes there are other PIs buying around 195-197p, but its pretty much stalemate at the moment in terns of buy / sells.
Started: Alas_Smith, 6 Feb 2024 21:13
Last post: Alas_Smith, 6 Feb 2024 21:13
High interest rates are here for another 6 weeks. The reality is that they are not that high when compared with the long term, simply high for recent memory.
https://www.cnbc.com/2024/02/06/credit-card-balances-jump-to-new-1point13-trillion-record-at-end-of-2023.html
This link shows that credit card balances are rising (29% rings a bell for some reason, though I have not used a credit card for a decade or more) and https://www.cnbc.com/2024/02/06/credit-card-delinquencies-surged-in-2023-indicating-financial-stress-new-york-fed-says.html that there are defaults.
The UK tends to lag the US by a few weeks. Gold is hovering a little off its highs but is stable. https://goldprice.org/
This SHOULD translate to pride a boost to the SP but at worst simply limit the downside. Very rarely, I have marked this as a weak buy - not investment advice, simply an old duffer with an opinion and some basic supporting narrative.
Oh, and as far as I am concerned, "weak buy" is not as strong as "buy" and a long way behind "strong buy". Almost 100% of my posts have "no opinion" as my default. And now, I have an appointment with a fresh glass of claret as the tide appears to have gone out.
Started: Rich62, 19 Jan 2024 12:28
Last post: Alas_Smith, 6 Feb 2024 15:31
Spinal_Tap, the dividend payment will be reflected by a corresponding drop in the share price. If this is a candidate for a bid, it is likely that a substantial premium needs to be offered to tempt shareholders. The positive side is that the company is profitable, throws off lots of cash has gold trading at record highs and has holiday season to kick off in an Olympic year. Airlines are noting bookings are rising.
Expansion is happenning organically for RFX and there has been some press comment that de-banking of pawnbrokers has taken place. This does allow opportunity to grow through acquisition. With the exception of Albermarle & Bond and H&T, not sure that there is any more competition that has capacity to put a bid forward. Management buyout, I suppose but would need to have quite deep pockets.
And could be a takeover target at these levels.
Even more puzzling considering there is a big dividend due very soon(ex-div next week).
Have added a few more today. Seems a great entry point to me, though disappointing that the shares remain in the doldrums.
Agreed mate - I'm not suggesting you sell. I'm a holder here and as far as I'm concerned they are a bargain at this price. Unfortunately there have been forced sellers (funds) where PIs have taken money out of these funds and they are scratching round trying to liquidate assets. Also PIs generally are harder to find when you can get 5% in a deposit account with no risk. However RFX share price will turnaround this year and I fully expect to see 265+ plus later this year.
Started: Rich62, 15 Jan 2024 15:02
Last post: Alas_Smith, 16 Jan 2024 09:53
Three is also a mention, though rather pessimistic, in todays Times. The link is behind a firewall though.
Perhaps the IC article will bring new investors in…………
https://www.investorschronicle.co.uk/ideas/2024/01/15/a-harsh-market-reaction-to-ramsdens-record-full-year-profits/
Simon Thomson, Investors' Chronicle, just now...
"It means that Ramsdens’ shares are rated on a lowly price/earnings (PE) ratio of 8.5, offer a prospective dividend yield of 5.4 per cent and trade on 1.3 times book value despite boasting a heavily asset-rich balance sheet. That’s a low rating for a company that has just delivered a post-tax return on equity of 17 per cent. It’s worth flagging that Ramsdens is forecast to deliver growth even after absorbing the 10 per cent increase in the national living wage in May 2024 and £0.4mn higher energy costs this year, a reflection of the strength in its underlying businesses."
Last post: Alas_Smith, 15 Jan 2024 16:19
Indeed, Chelsea11, that is not an unreasonable point to make.
Perhaps we may read of changes to managers holdings over the next few days? A token single buy sets alarm bells ringing for me. Anyway, I re-aligned my portfolio in October to reflect the huge uplift provided by 4 US holdings and will review things again in March.
Odd that we have not had a January effect (yet) - it might be that as markets in November and December were so strong gains are being recorded, losses crystalised and geo-political concerns are such that cash is best at home on the sidelines.
Taiwan, Pa(k)istan, India and US have elections this year with a pretty high chance of the UK joining having a bunfight too. I am confident that Rachel Reeve will be a breath of fresh air from the unpleasant whiff in the wind from this discredited Government.
Ah well, people will still go on holiday, some will have too much month left for their pay others may have surplus trinkets to be scrapped. I just do not see any compelling reason to change the qty of shares I have.
I suspect it’s also the case that some of those selling aren’t just Traders, they are Investors who don’t see any short-medium term inflection points ie. they expect the SP to just bumble along sub 225p for the rest of the year and want to place their bets elsewhere.
Traders tend to do what they often do - sell the news and buy the rumour. I'm now back from a refreshing holiday and see nothing to be worried about in todays news so will make no change to my holding.
Looked v good to me, Market reaction never ceases to amaze.
Started: Alas_Smith, 31 Oct 2023 07:41
Last post: Chelsea11, 23 Nov 2023 10:23
Both BEG and RFX are in the UK Shares “beaten up over the last couple of years” large bucket - far, far wider reaching obvious reasons than the ringfenced performance of individual stocks.
Topped up here today.
Encouraging to note todays RNS for Begbies Traynor which fleshes out the impact that interest rates have for business insolvency. The share price in BEG fell but it rose for RFX. Possibly because one if corporate facing but the other consumer.
Both SHOULD be thriving in these difficult days. After all, business failures are up (at my last research point in the summer) by 13% and there has been another couple of interest rate rises since that time. Shares have been slow to rise in both companies.
In todays business section on the BBC, the lead article comments on the report by Begbies Trayner, (I do own a few shares in BEG still) of company failures rising. With the price of gold rising in response to Middle East, it mitigates any slowdown in foreign exchange over winter months. The cost of living for many remains problematic.
Started: Stuartrm, 18 Nov 2023 03:04
Last post: Stuartrm, 18 Nov 2023 03:04
Comment in the IC this week.
“Although Ramsdens continues to outperform analysts’ earnings expectations, prompting another round of upgrades post results last summer, the shares are only priced on a forward PE ratio of nine and offer an attractive prospective dividend yield of 4.9 per cent. A price-to-book value of 1.3 times is modest for a cash-rich company generating a post-tax return on equity of 17 per cent and one that is performing well during a cost-of-living crisis. Liberum’s target of 290p is more than a third higher than Ramsden’s current share price.”
Started: sheffieldowls, 26 Oct 2023 11:46
Last post: sheffieldowls, 29 Oct 2023 20:41
Rich62
I have found it interesting in the last week or two asking my stockbroker what the price and most especially the size the market makers were prepared to deal at because as you know this is not a company where you can usually do a deal in more than ten thousand shares with in being a small cap Aim stock. If the price remains this low I will add to my holding as funds allow.
Hi SheffieldOwls - I think you are right.
It looks like Otus have simply sold shares in order to return monies to private investors who have withdrawn from their funds. The haphazard nature of their selling suggests this - if they simply planned to "trim" their investment in RFX (as it had become too large in value for the fund size, with the share price increasing over the years), they would have sold one big block of shares in the summer at the highest price and when liquidity was better following H1 interim results RNS.
By selling in smaller batches as the share price fell, ironically Otus have actually significantly reduced the value of their current 9.61% holding. Like shooting yourself in the foot...
I would imagine the fund manager must be frustrated with the private investor withdrawals forcing his hand to make these sales.
I have benefited in the last week or two from an institution selling shares in Ramsdens hence I have been able to buy Ramsdens shares in size so I now own over 2.1% of the company. In recent days. Several people on this board have recently speculated why an institution has been selling shares at such a low price. I have been in contact with several people about this matter and I have been advised that sometimes fund managers on AIM have fund liquidity issues and sometimes they sell performing shares as they are easier to sell. Another reason why some institutions may sell Ramsdens shares is because of overweighting in a fund because in the last two or three years Ramsdens shares have increased in price while many shares of companies on AIM have fallen.
Started: sheffieldowls, 20 Oct 2023 11:10
Last post: sheffieldowls, 21 Oct 2023 14:52
Rich62
Thank you for posting this interesting information about the share dealing of Otus Capital.
Had a quick look at Otus Capital's holdings of Ramsden shares;
- First declared RNS was a 6.19% share block added on 8/12/17, as part of a 9.5m share placing at 165p.
- Increased holding 9/7/21 to 10.07% - share price at this time was around 181p.
- Further added 24/1/22 to 11.38% at around 175p.
-Finally added 10/2/22 to 12.31% at around 178p
Started to reduce holdings after June 23 interims:
13/6/23 - sold approximately 120,516 shares to take holding to 11.93%. Share price at this time around 257p
Sold 2nd batch before pre-close trading update.
1/9/23 sold approx. 313,978 shares to take holding to 10.94%. Share price around 220p.
Sold 3rd batch following pre-close trading update.
18/10/23 sold approx. 421,809 shares to take holding to 9.61%, share price around 200p.
Probably not much to conclude, other than they haven't bought at the bottom (IPO was at 100p, CV19 lowest I recall was 70p) and not sold that many at top of the market either (272p in the Summer), which is strange if they planned to reduce?
Certainly they have taken some profit on the share sales and also some decent dividends along the way.
However can't see them selling at much less than 200p when their average purchase price must be around 175p, so that would put a base on the share price.
But why reduce now?
+ Ramsdens are on for record turnover and profit this year, so its hard to see why they have reduced their position in the last 5 months. Unless its concern over a slowdown in sales on watches / jewellery or FX for travel. Not much else surely?
+ Pawnbroking side should be growing significantly in current macro climate i.e. cost of living crisis and we know Ramsdens used the lockdown period to move shops to better positions in towns with more footfall and have recently opened more stores, including in the South.
When Otus first bought RFX company shares at 165p, company was turning over £40m with pre-tax profit at £6.31m. Despite the CV19 lockdown and other stumbling blocks along the way, revenue this year should be over £80m (H1 was £38.99m) and last RNS told us that they would make more than £10m profit. So in essence business is now twice the size it was when they first invested at 165p, but share price is only 25% higher...
Perhaps I'm overthinking it and they are just trimming their position and need to money elsewhere for another opportunity??
It does look like this fund manager has not finished reducing its shareholding in Ramsdens because I was speaking to my stockbroker this morning and the market maker I have been dealing with in recent days is still quoting a price to buy further Ramsdens shares in a size of 50000 shares on the touch screen which is quite unusual in terms of the size. It is my understanding that the seller is offering shares to the market maker in tranches of 50000 shares. I agree with Rich62 that it makes no sense to be selling Ramsdens shares at such a low price.
Started: Rich62, 19 Oct 2023 17:12
Last post: sheffieldowls, 19 Oct 2023 17:39
Rich62
I totally agree with you but I am pleased about it as it allowed me to purchase a further 100000 shares from the market maker early this morning actually too early in the morning for me as I am enjoying the sun here in Florida.
RNS = Otus Capital reduce holding to 9.61%.
Truly bizarre reduction. Would love to speak with the Fund Manager and understand his reasoning for this?