The latest Investing Matters Podcast episode with London Stock Exchange Group's Chris Mayo has just been released. Listen here.
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Interesting that their cash position actually went up from £135m to £142m from first trading update on March 26th to April 30th. May should see a more positive result still given France and Germany trading effectively back to normal, with Uk and Ireland operating at maybe 50% for the month.
As for June ...
Really cheap share at these levels.
Think that your 50% figure is very optimistic.
From my finger in the wind poll based on being a contractor the figure at the moment is probably around 30% and rising slowly.
There are still plenty of sites that remain closed with the remainder operating at a fraction of capacity that they were pre Covid.
Also trade counters for walk up contractors are severely restricted and in general pick ups are allocated 30 minute slots.
Even with construction being the fulcrum of any economic recovery it will still be many months before the industry is running anywhere near to its former glories.
Also it has to be remembered that there is also possible significant bad debts from defaults from SHI's many account holders.
However the above will have been factored into the current share price, thats why it is languishing in the 20's!! But the potential for recovery (and possible bid) is why SIG is such an attractive proposition over the next few months!
Dont forget though, like with any other shares, there is no such thing as a certainty and on any hint of impending bad news this and any other share price could plummet!
All in my opinion of course!
There is something about this share which we simply do not understand. It has not recovered despite the fact it will be returning to a reasonable degree of normality soon.
Some companies like Cineworld have come within 25% of the pre Coronavirus level, but are still closed. Other companies like the Bus companies quickly recovered, despite being effectively closed and they face huge challenges. I am concerned this ever went to 15p and should really be 40p. I know it will recover though, could be 40p within a couple of weeks.
Don’t think 50% unrealistic for May and I would think June at 90\95%.
From last operational update:
UK:
“The Group is currently planning for the majority of its sites to be open by mid-May.
Europe update
In France, all our sites are open and trading has gradually increased during April as French Government guidelines have encouraged more of our customers to resume trade.
We have remained open in most of our other countries of operation and trading has continued on a near-to-normal basis in Germany, Holland and Poland, all within local government guidelines in each country.
In Ireland we have followed strict Government instructions and remain closed, except for a small number of sites supporting critical and emergency projects. As in the UK, we are currently planning for the majority of Irish sites to be open by mid-May.”
I think with the two profit warnings last year, coupled with debt, selling off parts of the company (Possible signs of a company in distress), senior management leaving and then finally the very small matter of Covid-19, the company looked destined to fail. No income due to force closure, no Senior team, it all became too much. Not surprised it tanked down to 15p. However, certainly now and post results it should be trading 30p+ IF the market buy into the future plan (whatever that may be!). Hoping for a positive start Tuesday morning.
I have been waiting to buy in to SHI , but will wait longer now and just posting this so that you all know... might be nonsense but forewarned is forearmed https://twitter.com/DavidBurton1971/status/1264470255214133248
Personally think the share price is a bargain at these levels. Having sold some at 31.5p from original buys 18-20.5p, re-bought all in the 23-26 region. Market is forward looking. Most of Europe is out of lockdown, the UK is being more cautious, but I think this changes. Couple of institutions have continued selling otherwise this would be back in the 40s. I fully expect this to recover and look forward to the financials.
They have £142m cash. No need to raise funds.
I hope not for all PI's mbingo but it will attract the damn trolls to talk it down , just giving a heads up , will keep any eye on it and wait a little longer.
yeah not sure why they'd need to raise cash right at this moment, but then again that surely hasn't been written for no reason... there might be something in that, we will find out on thursday
David Burton is probably a paid pumper / dumper. He was promoting AML at 50 A few weeks back and it tanked below 30 about 1-2 weeks later.
Calling a “top journo” a Mail on Sunday rumour monger (Remember the claim that Amazon was in talks to buy the owner of Odeon cinemas?!) is another example that he has no credibility.
Yep, Pure speculation. Sure that they could take on debt if they really need - it is available. No need for an equity raise..
I think most brokers when reading articles just dont have faith in SIG.. but that's mainly down to loss jan and feb.. business numbers in slight decline vs competitors
CEO CFO being sacked..
Because we dont know anything about what's going on behind the scene.. speculation is rife..
Key here is hardly any debt ..
Has cash in the bank..
New ceo is highly regarded at turning around flagging business.
Market cap currently 137mill..
It's worth more..
Lifts a risk.. and my opinion. It's worth a punt.
His article doesn’t make sense - according to him the SP has been “hammered” due to Corona and “largely” In respect of investors “fretting” over the company’s liquidity - that was partially addressed in the April RNS - remains liquid with £142m cash and support from lenders should it be required. If his article was recently written, then it seems like dump attempt.
Not wanting to deramp but wasn't Tullow a bargain at 38p where did that go after its little burst back to 69p. Nmc healthcare was cheap at 8.00 where did that go. Aml just to cheap @ 20p forecast. Yes all have different outcomes from fraud to debt but all have one thing in common can just take your money on whatever bull s*** news they can find on the internet.
From 30th April RNS,. As a result of strengthened cash control measures, the Group has been able to preserve its liquidity position and, at the close of business on Friday 24 April 2020, it held cash of £142m. The Group remains in dialogue with its lending group in order to release additional liquidity as required.
Why would they need more liquidity if they have £142m cash?
Cash raise could be seen as a positive by the market. Strengthen the balance sheet. There have been numerous raises these past few weeks which have been seen as positive. Although £140M cash as per last update I don’t get it.
That article uses the words could and may. That indicates they know nothing. That article could have been written that way about a large number of shares at this moment in time especially for companies in a negative cash position which this wasn’t at the last update. The update put out to announce the reopening of branches in Ireland stated they had fully stocked up and suppliers were supporting them to keep on top of stocks. If there was a significant issue those suppliers wouldn’t have been paid and they would be protecting their own backs at this moment and not supplying.
Our biggest risk comes at the moment from bad debts from our own customers which is again a position all companies are currently in.
We will only find out the true position when the horse speaks...
Nevertheless, in a sense we were put on notice in April, but I tend to agree with Colebrooke - if it occurs it would not be an unusual development to protect the balance sheet in these times. Sig customers, returning to work, rely on their broad supplier base to have the right products available at appropriate times. It will likely take a while before supplier chains are once again in sync with requirements, from manufacture through to end product, with temporary knock-on effects.
Cash in the bank £142m, market cap £141m.
This is AIM, PI's are always the last to find out what's going on,
by then it's usually too late.
This is not AIM it’s Ftse share
NMC Health was a FTSE 100 company
Raise would be seen as a positive shore up balance sheet. Net debt at 31 December 2019 c.£162m. Air Handling sale net proceeds £152m exclusive of debt owed to SIG by Air Handling of £34m. So a raise could make sense? Regardless the business has minimal debt a luxury at this time!
March trading update RNS: The Group received c.£187m in cash (including repayment of intercompany debt) from the sale of its Air Handling division to France Air Management SA on 31 January 2020.