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Hold on a minute, are you lot not reading what I’m reading? 1, Cancellation of contract. 2, Director sells 3, ii Sells in April 4, ii sells last Thursday 5, share price drop of 47% 6, form states they are unsure why the contracts been cancelled when they know full well they may have just crossed the line of competition rules. Wake up... this needs to find the bottom first before you invest.
not in... but that accounts for 7.5% of revenue plus litigation costs... nearly equivalent to year on year rev growth?
best case scenario 8% drop in revenue in 3 years time?
meh... easy pickings IMO if you time entry
GL
Onwards and upwards hopefully? Good find..
a little surprised they haven't rns'ed this... maybe tomorrow to stabilise the sp.
June 03, 2019 08:00 ET | Source: Scapa Healthcare
WINDSOR, Conn., June 03, 2019 (GLOBE NEWSWIRE) -- Scapa Healthcare, the trusted strategic partner of choice to the world’s leading companies in advanced wound care, medical device and consumer wellness markets, inaugurates its new built-for-purpose medical device manufacturing facility in Knox County, Tennessee today. The 152,000-square-foot facility doubles Scapa Healthcare’s Knoxville footprint into a single site of operations, allowing for greater operational efficiency through proximity and scale. The new facility has already created employment opportunities in the region and is anticipated to add 100 new jobs in Knox County over the next five years.
The new facility was strategically designed for efficient workflow and materials movement across the cleanroom, printing, packaging and warehouse departments. The layout creates ample development space to accommodate increasing demand for medical device manufacturing.
“The new manufacturing facility is our Turn-Key Center of Excellence for North America. We have heavily invested in new capabilities to continue providing customers with innovative solutions,” said Joe Doherty, President, Scapa Healthcare. “We are committed to the Knox County community as we look forward to strengthening our partnerships with global customers.”
https://www.globenewswire.com/news-release/2019/06/03/1863157/0/en/Scapa-Healthcare-Opens-New-Medical-Device-Manufacturing-Facility-in-Knoxville-TN.html
Let's hope the rns when it's released by Scapa's media department reassures the markets?
loss of revenue from today's rns doesn't warrant a drop of near 50%. Expecting a higher finish by Friday.
Strong sell IMO.. Investec Wealth & Investment Limited bought in on the 20th of May when the share price was 373p... OUCH but just happened to sell on the 30th of May at a share price of around 298p prior to the drop .. and apparently Scapa have no idea what's going on.
Think I will sit back and watch this one as someone is still selling today and possibly this week.
Investec Wealth & Investment Limited just happened to sell out on the 30th of May prior to notification from Convatec Inc. That stinks....
Unfortunately investors chronicle now have changed their minds on Scapa's buy rating and now have a sell rating on the stock. This is based around a storm of uncertainty surrounding the business, directed by a transitional management team with a posse of recent appointees, and a lack of visibility over it's earnings prospects :(
Halfpenny, do you have a link? Great find if you have. My gripe would be that Scapa made the purchase announcement on the 18th of September 2018 and completed the purchase in October I believe, if this is the case than why have ConvaTec waited 8 months to deliver the cancellation? Perhaps they had spoken with Scapa and could not come to an agreement perhaps for a discount or something? What is strange though is that Scarpa state in the RNS that they have no idea why ConvaTec has cancelled the agreement. Stranger than that is that the director sold a ship load of shares around March time as did an ii only two weeks ago... did they know all along that negotiations were not going well? Finally I am now concerned that another 10 million worth of shares have hit the market potentially with yet another ii selling?? And there I was thinking I had a great entry point.
Last half hour showing 1.5mil buys vs 36,000 sells.
Maybe they'll be able to use their sticky plasters on the sp and it'll heal quickly ;)
ConvaTec's gripe is that when Scapa Group bought Systagenix, a competitor of ConvaTec, it automatically breached the agreement of the 5 year deal, which is only 2 years running to date. Which one would say was feasible enough, a possible conflict of interest? The Investors Chronicle estimate an earnings downgrade of 20% to Scapa's business :(
Didn’t seem to have the impact everyone thought they would have even though we had a drop. Could it have been an II that was caught out?
with clarification how much effect will the company suffer
Here is the RNS detail -
" Scapa received notice from ConvaTec Inc. (ConvaTec) that it was terminating the Master Supply Agreement (MSA) with Scapa Tapes North America LLC; accompanying the notice was an action for a declaratory judgment concerning the MSA filed by ConvaTec in federal court in New Jersey.
Neither the Company nor Scapa Tapes North America LLC accept that ConvaTec has any grounds to terminate the five year supply agreement in respect of which a three year term remains, nor to pursue its declaratory judgment claim. The Company and Scapa Tapes North America LLC have instructed external legal counsel and will strongly contest and defend their rights under the MSA and in response to the New Jersey action in which it will assert and pursue all appropriate rights and remedies. "
The MSA provides for a binding contractual commitment for a minimum circa. US$30m of revenue per annum. The Company is assessing the potential profit implications and will issue a further update accordingly.
Broker Reiteration dated 3 June 2019
from Berenberg Bank
3 large sellers out ... but were they sellers as now the price has dropped and it looks like a 1 million buy
now 167p to BUY
will head back towards 200p
over the next little while - in my opinion
Get in quick
IMHO DYOR
http://www.thebusinessdesk.com/northwest/news/2042749-firm-to-take-legal-action-after-multi-million-contract-cancelled
23 Million revnue does not equal a 47% drop, especially if they can recover what would have been the lost profit as a settlement deal.
ConvaTec's revenue is 30 million per annum which is barely 10% of Scarpa's turnover so why this has resulted in a drop of 45% is beyond me? I would suggest over sold.
ConvaTec isn't doing so good this past year, it lost CEO last year and profit warning this year, it's shares have slumped this past few months.