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I agree. Pret is a good example - it’s cheaper and higher quality, and also had a strong high street presence and has remained open to a far higher degree, so many may have “made the switch”.
While I think all the “the office is dead” talk overblown, I do agree that some people will take the opportunity to wfh a day or two a week - and it seems likely that the group of people with the freedom to do that will likely be a similar group to those with £5 to blow on a sandwich every morning.
My suspicion is that air travel for business will take a proportionately bigger hit - while I know many people who miss the human interaction in the office, I know very few who miss business travel, especially regular travel. Plus the high cost will be harder to justify now that we know remote meetings are “good enough”.
All of that said - I do wonder if SSP has further to go as a “recovery play”. In general the recovery move has been fairly muted in the UK, particularly when compared to the US where many lockdown-affected shares are at an ATH. Investors here seem to be more cautious - which is commendable - and I believe that the continuing uncertainty around variants, vaccine uptake and safety etc is still weighing down these recovery stocks; I’m bullish on the recovery and hope that this weight will be lifted over the next couple of months as lockdown continues to ease up.
So I agree that I won’t be holding these long term... but not quite ready to give up on them yet!
...would it be time to take some profits?
Pre-pandemic, this was trading well above 600p. Under the circumstances, the current value of about 345p looks great, bearing in mind that I've just added the rights issue shares.
I can see a long-term potential but, equally, I can see a few constraints.
Inevitably, there will be less business travel. More people will be working from home, some maybe two days a week or so. Trend of having meetings on Microsoft Teams or similar has been increasing for a while, well before the pandemic. This is likely to increase.
One of the main problems with SSP is that they are quite good at pricing their food out of the market. Why would you pay a fiver for a sandwich when you can get one for half a price at Greggs just outside the station, and still £1+ cheaper at Pret a Manger (which is of better quality anyway)?
Getting air travel back in action will be crucial for this company as that's where most of their profits are likely to come.
Thanks guys! I had a wobble moment where I thought by taking no action I was somehow going to lose out completely!
The broker should sell the shares accordingly and deposit the fund made into your account... or at least HL are offering this.
From p65 of the Prospectus:
(b) If you do not want to take up your rights at all
If you do not want to take up your rights, you do not need to do anything. If you do not return
your Provisional Allotment Letter to acquire the New Shares to which you are entitled by
11.00 a.m. on 21 April 2021, the Company has made arrangements under which the
Underwriters will try to find investors to take up your rights and the rights of others who have
not taken them up on your or their behalf. If the Underwriters find investors who agree to pay a
premium over the Rights Issue Price and the related expenses of procuring those investors
(including any applicable brokerage and commissions and amounts in respect of VAT which
are not recoverable), you will be sent a cheque for your share of the amount of that premium,
provided that this is £5.00 or more. Cheques are expected to be dispatched by 29 April 2021
and will be sent to your existing address appearing on the Company’s register of members (or
to the first-named holder if you hold your Existing Shares jointly)...
I have let the rights issue lapse, am I right in thinking once the company sells these I will be paid? If so any idea how long I should expect this to take? Thanks!
and the rump placed this morning.
Well done., all concerned!
Freetrade doesn't offer this rights issue. Can we transfer it some other broker or any other suggestion?
For example I have 25 shares
Current price ; 320
Total money : 320 *25 = 8000
I get 12 shares * 185 = 2220
After rights buy if I sell (25+12)*320 = 11840
Is this how it works or people can't sell the 12 shares at all?
If you sell your rights shares at the price offered now, it means you sell them below their value to the underwriters (banks) Normally, people who do it are those who don't have money to buy them. So instead of loosing the rights completely they get something for them. If you have money, then you're better of buying your rights, not selling. That's of course if you believe that the company is going to do better after rights issue than before it. But I guess you wouldn't buy shares in the first place if thought different)
Yes noticed the 2 word reasoning on 10 shares that counts as Daily Mail financial analysis. Bit useless for DM. There are plenty of buy notes too from analysts but that would not suit the DM needs to put a neg slant on a daily drop.
The Daily Mail has put the reason for the fall down to an Analyst note...
This is going to fly when the airport reopen and passengers increase from the current small %.
Fwiw the Fri fall was probably due the uncertainty / reopening delay, the TUI bond news, profit taking, most travel stocks went down.
A top up opportunity. For me, the ups and downs are great for trading and I welcome the chance to get into recovery stocks at lower prices.
The update will be positive, RI secures future, soin on reopening Jun Jul Sep but this year.
Imho the travel sector is taxiing and about to take off.
DYOR.
Will be interesting to see what price this recovers to as now post RI it would be 550 range to be at pre-pandemic levels.
As Europe is SSP’s biggest market c40% it is key the vaccinations and cases come down soon so it can start shooting up based on fundamentals.
If this can get to 450 would be great as this is one of the recovery stocks that still has the most upside.
Also any idea about big fall Fri afternoon apart from locking in profits ahead of more guidance next week?
Cost (incl stamp, & comm - estimate £10) £1,091.78
If you do not purchase but sell your rights this will lower your cost without having to pay for the rights.
Take up rights 132 x 1.84 £242.88
Total cost to you is £1334.66/408 = 3.27 per new share so you have a small loss after today's fall.
Excuse my ignorance but having never been part of a rights issue I'm not sure what my bets option is.
I own 276 shares (bought 390p) and have been given the option of 132 through the rights issue.
If I don't purchase, the day of the issue will mean dilution and I'm probably better off selling now?
If I exercise my rights is it all possible to estimate the value against cost currently?
TIA
Many people won't be returning to offices full-time. The firm I was working for are looking to implement hybrid arrangements.
Having said that, idea of home-working is nothing new. I first heard someone mentioning it in 1995!
In my former office, we had 80 desks for 100 people. This was assuming that someone would always be on leave, off sick, away on business or, indeed, working from home. This arrangement was made in 2016.
COVID-19 has no doubt made this change faster.
I think this will go to £5 easy, i'm not invested at the moment, but looking too. But are Companies bringing back staff to the office, or is the new work from home the best option, save cost on office. I think keep staff at home is the way forward here. employee gets a bonus, reducing the travel costs too.
Winner all round
Once things get back to normal, and as long as people keep on buying over-priced food at stations, airports, hospitals etc, this share should boom.
SSP's premium price model is of some concern. Will people keep on paying a fiver for a sandwich as is the case at James Martin Kitchen. SSP makes Pret a Manger look affordable!
Although I refuse to pay spend my money on SSP's over-priced outlets, I will subscribe to the rights issue shares. I think there are plenty of people who just don't care about convenience food prices.
Once reopening starts next week, and people go back to work
All the big banks have started bringing all their staff back, just the begining
BOOM
still surprised that is still in 330+ . I was expecting in the range of 200. Well done SSPG
Think the rights issue has been remarkably well-received by the market - bullish!
Mary,
I think your reference to bottom picking is way off subject . creates to many interesting angles .
Not a recommendation.
An option could be to ease into the stock but what I refer to as racking.
10% of what you intend to buy at your initial entry price.
20% if it moves lower 30% lower still and 40% if lower again.
It means you ease in your exposure rather than bottom picking.
I intend to buy more as I am comfortable in this stock, but not at these levels.
I will wait for a sell off day (market crash) to start a new rack and blend it over time with my current low average holding.
If the airports recover so will this stock.
and if they do not, it can only go to Zero - (the pigs will fly)
Great johnny
The tradeable rights are also there with a £1.48p premium at the moment should you not have the cash to take up the rights.
Just another option and this cash will reduce your overall cost of your original holding compensating you for the drop.
I have taken mind in full as this is an exciting stock to hold and the market have received this well.