Proposed Directors of Tirupati Graphite explain why they have requisitioned an GM. Watch the video here.
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Some of the latest research indicates that mutations in Omicron mean that it is now able to infect rats (below).
If rats (and mice?) can then act as reservoirs for evolution of new variants there will be a lot of focus on controlling the rat populations - should be good for RTO.
https://www.ncbi.nlm.nih.gov/labs/pmc/articles/PMC4836852/
'These mutations, already found in Omicron and other emerging CoV-2 variants, thus have the potential to both increase human transmissibility and extend these variants into rodent populations. Acquisition of mutations that enable CoV-2 to bind rat ACE2 is a cause of concern, as this has the potential to facilitate transmission of the virus to a species that is widespread and lives close to humans.'
Yes- 9 of them purchased shares.
Not sure why they did not do it when they were <520, but that is a pretty bullish batch of purchases
Close to £1.4M worth of shares bought by company insiders and associates. Looks like like they took advantage of the over selling as well.
Make that a week for the 'dust to settle',
The II's have now had time to cast their eye over the deal and look to have pressed the buy button. Quite a strong rise for a day when the market had a big drop.
JP Morgan has also reiterated its 700p target (which seems very bullish to me).
Clearly there will be some US holders in Terminix who will not/can not hold a UK listed company, also there will be some who hold both, this may be why there appears to have been more selling pressure in the afternoons (or is it that they are more aware of the past problems of Terminix?).
It will take a few weeks for the dust to settle then I am hoping for a rise into the final results at the start of March.
Bullish by RTO to issue an RNS with the line “S&P Global ratings is expected to move the Business Risk Profile from Satisfactory to Strong to reflect the Group’s increased scale and no.1 position in the USA.”
Whatever the markets think about the merger - the need for pest control is only going to increase as populations become more urban.
from BBC-
Everyone in New York has a similar story to tell, she explains. "We have a complete and utter rat explosion."
"You see them when you come out at night," agrees Deborah Gonzalez, who, like Diem, lives in Manhattan's Lower East Side. "When you walk on this block you see them running back and forth."
It is difficult to gauge precise numbers, but calls to New York City's complaints hotline mentioning rodents have jumped this year, 15% up on pre-pandemic levels.
Their M&A Director purchased 15K's worth at 559-
I wonder if this was by choice or if the other Directors made him do it as punishment......
apologies, it should have read-
company would have been a lot more expensive to buyout.
I don't disagree . Fortunately I had reduced my holding here before the announcement but have started to rebuild again now.
The are issues with Terminix which is why it was cheap (compare it to RTO and Rollins). They have lost their CEO and there are issues over termite insurance claims and staffing costs. This was all raised at the Q&A's yesterday and RTO are clearly quite aware of them.
In the next year it will also cost RTO 150M for the merger but it will not gain a comparable amount in annualised savings for three years.
RTO do have a lot of experience in acquisitions but I can understand why the price has dropped. In the short term they would be better off not doing this merger but they clearly feel that the longer term benefits will out weigh this.
I think that the largest concern is over the insurance issue which adds uncertainty- but then without this the company would not have been a lot more expensive to buyout.
But the SP is down 30% for a reason. RTO are clearly overpaying hence there own share price rapidly heading to its own 30% decline. 80% of acquisitions destroy value to the buyer. Clearly this is not one of the 20% exceptions to that rule.
An excerpt from an article in the Times-
'He’s picked his moment, too. The deal’s at a 47 per cent premium. But, as Stifel analysts noted, Terminix’s “share price is down 30 per cent since July”, while Rentokil’s is up from around 500p. Pro-forma free cash flow tots up to £458 million. And, after £113 million of synergies, the take-out multiple is 13.9 times Terminix’s forecast 2021 ebitda: a valuation about half Rentokil’s own.'
Not sure it was win -win for those who bought at 660p this morning (had they not read the rns?).
RTO have a good track record of acquisitions but this will take up quite a bit of time and spare cash over the next year.
I wonder if we will now also see the sale of French workwear soon?
It's a huge acquisition but at quite a high premium . It will be interesting to see what happens with the price over the next week.
I wondered the same, a weak £ will explain it in part as it definitely moves according to fx rates (they must have it built into the quant algos) It was a reasonably safe bet with covid so maybe the increasing numbers of cases (outside of the UK) have helped drive some to buy in. Perhaps it is just one or more of the II's has decided to significantly increasing their holding.
The only other thing I can think of is if they have lined up a buyer for French Workwear but I was not expecting this until next year once covid is more clearly out of the way.
I topped sliced my holding a couple of times as it is hard to see that there is much more headroom left for it to go up without any significant news but who knows....
What's happening with Rentokil. Over the past week we have seen a rise in the share price. Other than the fact that it's products and services will always be in demand does anyone know something about this company that I don't?
Article in Nature 6th Oct-
'Real-world data show that filters clean COVID-causing virus from air.
An inexpensive type of portable filter efficiently screened SARS-CoV-2 and other disease-causing organisms from hospital air.
' the scientists found that the filters don’t only protect against SARS-CoV-2. When the filters were switched off, the air in both wards contained detectable amounts of other pathogens that cause infections in hospitals, such as Staphylococcus aureus, Escherichia coli and Streptococcus pyogenes. The filters largely removed them. These organisms are not typically thought to spread through the air, but “this study suggests that these infections may also spread by aerosol”, Fisman says.'
This could be a real boost for RTO, the study should certainly help them with their marketing.
It looks like this was well received. It was a good set of presentations by the company with increases across most metrics projected for the next few years.
Personally I think that their Pest Connect will be a winner. It offers better monitoring and reduced rodenticide use and should become a very strong marking point for them to play to companies who are looking for suppliers with good ESG credentials. It will also offer a large barrier to more 'old school' pest control who would be competing for tenders against them.
Of the main competitors only Anticimex has also gone down this route so it puts them in a good position compared to all of the other key players.
On hygiene they are back in Europe and are looking to establish expand their services in this region.
Reorganisation of corporate reporting , has notably, left French Work Wear on its own - clearly a prelude to being sold off when the right offer comes along.
There is certainly loads of potential here. Looks like a good hold for the foreseeable. End of year results should be interesting. GL
RTO's big push last year was disinfection services, with people returning to offices they are now focusing on air filtration. I think that once again the management are showing they are on the ball with their strategies. There was an article in the NY Times on this which showed how effective these can be-
'A study in a Melbourne hospital recently showed that adding two portable air cleaners to a patient’s room eliminated 99 percent of aerosols in minutes, reportedly raising the protection level equal to about 30 air changes per hour'
They are a visible and easy thing for a business to do - it will be interesting to say what they have to say about this new strand to the business at their capital markets day.
Given the recent rise in share price, it is good to see the CFO only selling those performance awarded that he needed to, to cover tax.
Nice rise today on the back of the results. It does make you wonder why Aviva and Fidelity sold nearly a quarter of their holdings earlier in the year driving the price down. Still, their loss was my gain so I should not complain.
Look really good, especially the profit figures.
M&A looks strong, this was also mentioned in Rollins Q&A where they said it was to do with potential tax changes in the US which was generating opportunities.
France work wear etc was better than I had expected, this will help set it up for it's probable sale this year or next.
Surely it will be up today on these results? It is not like they had a bad year last year to make these results flatter.
Rollins results were good today so hopefully rto's will follow tomorrow.