Member Info for 305020

Wow, 16m gone through today, along with typically 500k to 600k each day for the majority of recent weeks. i suspect we will find out more by the end of the week. here's hoping.

all imho, dyor and bol,

RNO is in my top5 hldgs

A previous rns said the tender results would be made on 22 nov.

i think it very usual to miss a regulatory driven deadline... i wonder if something more happening behind the scenes - hopefully positive

all imho, dyor and bol

ntbr is in my top5 hldgs

I'm finding this a fascinating situation!

disc: i hold.

i've concluded that the current price is low because the directors are happy to hold their shares and to increase the indebtedness of the company.

they were keen to stress that investors would have info before tendering. i can only assume they have more good news to tell and that they don't want ordinary shareholders tendering as this means the Chair can sell out more of his stake i.e. why leave the over hang.

anyway there is a buyer in the market which i think is interesting as why would one buy now at 60p and 62p when there is likely to be an overhang next month and could prob buy mid to high 50's.

then i wondered if there is any chance of a bid. there is a willing seller of 29% at 62p so an offer of 65p could be sufficient. a larger group would be buying on a very low p/e and that is before the removal of listing costs c.0.5m p.a....

anyways interesting to see where we are in 12mths

thanks Crober33 for posting the link.
and noted re other posters.
i will try to spend a bit of time going through each posters history and then filter.
i will also dig into the actual RNS's of Superglass and Indigo to see how i think the CFO did.
from memory i thought Indigo was taken over at a big premium.. but want to check out facts first.

thanks again

thanks Capt -

do you know which companies he was involved with?
i would like to know the details - i.e. when he joined etc...

thanks if you can help

the company and broker make a big deal of the fact that the CFO has been involved in 2 turnaround situations in the past.

does anyone know who these companies are?
and the details of how good these turnarounds were in share price terms?

thks

i've seen little analysis of the pension on this BB so thought i would add my analysis.
I have worked through each asset class and each liability assumption - but below is just the summary
ASSETS:
bonds compared to last year are down c.8%
but the equity classes they invest in are up c.15%
i estimate the overall impact is a slight growth in assets.

LIABILITIES:
there are effectively 3 factors - longevity, discount rate and inflation.
the biggest impact is longevity and although it is not profiled this has declined because of covid.
the discount rate is higher but inflation expectations are also higher - these 2 factors net off.
so overall for me the liabilities i think have decreased.
PFD have said before that the liabilities are heavily hedged for interest rates yet the reduction in the combined premium from >1bn to 500m at the end of September was stated as being b/c of the fall in interest rates.
i cannot quite reconcile that but in hindsight we now know that sept 2020 was a nadir low point in interest rates,
so again this re-enforces my thoughts that the liabilities will be lower than Mar 2020.

i am no actuarial expert and have just been able to use spot rates,
but the long and short , for me, is that i think assets are prob slightly higher and liabilities slightly lower.
which combined means tha tthe combined Pension Surplus should be at least similar to the mar 2020.

ALL of these figures relate to IAS 19 accounting assumptions.
The actuarial process is different and more conservative.
However at the last actuarial date (Mar 2019) the 2 calculations were 'similar' at a combined break even
(if you count a £300m difference 'similar' !)

So by my calculation the combined actuarial valuation would show a surplus,
and is likely to be better than the situation in Mar 2020 when PFD presented the 3 scenarios.
My conclusion is thus that the pension combination will be at least as good as the middle scenario shown in the slides last year - i.e. the 40m p.a. funding will reduce to c.20m p.a.

On trading i broadly agree with all the detailed K posts on here.
I think it is easily seen that FCF could support a 5p divi in 24 mths time,
which to me is a price of 125p

disc i hold

the valuse of BMS's stake in AB has soared since AB announced results and more recently a acquisition. AB seems to have bedded in the acquisition last year very well and are very confident to achieve 3.5m of cost savings with the new merger. so it is no surprise that the AB share price has risen from c5.5NOK to closer to 10NOK. I think the price has risen not just because of the future profit growth, the merger savings but also size will give them critical mass and the mgt team have obviously spotted a niche in their markets. All of this is excellent news for BMS. their holding of c.20m AB shares and potentially 6m warrants means the quoted stake has a value of c.£20m GBP. of course the share price of AB can go down as well but for my analysis it allows me to net off almost all of BMS debt. which leaves CASH profits of c12 to c,14m for a MV of 45m. That seems an attractive value investment risk/reward to me.

All IMHO, DYOR + BoL
BMS is in my tiop5 hldgs

fingers crossed for the results tomorrow. i think the Q3 results from AB gives positive clues as to what BMS might say. For me it is all about the plans to reduce debt rather than the level of profits. Also added to debt is some potential deferred payments though of course if this needs to get paid it means the acquired business is trading very profitably. On the plus side the stake in AB now worth c.10m

just to add my two pennies worth.agree with all points made - shares tightly held and ESG concerns means that many funds not interested and cant buy in scale anyway - thus price of shares driven by shorter term minded private investors. for me it is a reasonably unique business on the UK market that is demonstrably generating big CASH flow. That CASH flow is worth a lot more to a bigger corporation than the stock market will value it when there is a dominant CEO and thus risk. So if there is a bid - it will be at a huge premium (All IMHO) but i have held a couple of similar investments over the years - INB, WTM and when the bid does come it is at 100%+ premium.on the downside...i know the paying down debt strategy is widely praised but i am sceptical.when one has such huge cash flows in a long term growing demand market then it makes sense to be geared.which made me wonder...does it suit Gupta to have the company debt free...he can then raise CASH secured against his 52% holding to bid for the rest of the company he doesn't own.the banks will fall over themselves to lend to such a CASH generative business.I hope he will pay a premium but also am aware of the risk that he is in control and can manipulate market sentiment such that the price is very low and he gets a bargin. just speculation on my part. re-enforced by them saying that the business is not for sale - that is inappropriate. ALL BoD should be ready to sell the business if the price is right etc...I have asked the CFO this question but he did not comment.that all said - it is an interesting move up in the price today .. let's seeAll IMHO, DYOR + BolOPG is in my portfolio.risk adverse investor

The Chairman buys 2m shares at 32p.
He also bought c.1m shares at 30p just before Christmas.
I think this is even more positive than it first appears because....
1 - Keith Daly (KD) is in charge of the big multi-national contracts (with BP etc...).
He bought yesterday after the TU (so obviously he was in a closed period).
So not only does it mean that negotiations must be going well,
but also as he knew he was going to be buying 2m shares ,
i think it is likely he was not pushing to get contracts over the line.
Now that he has bought the shares, i think contract announcements will follow.

2 - the shares are tightly held. there was a lot of over hang over the tender and people banking profits but selling out of a small value holding post tender. i dont know if this overhang is all cleared yet but we must be pretty close. i.e. if there was another 1m share available surely he would have bought 3m.?

3 - ST in the ic has covered these regulalry before.
I think he is very likely to cover again , mentioning the CEO purchase and significant holding,
and highlighting the attractive risk / reward on offer.

All IMHO, DYOR + BoL
CKT is in my portfolio

did anyone else have their short forced closed yesterday? my short with IG was forced closed yesterday it would seem like NW is calling the shots, in innocence maybe the lender wants the shares back so they can sell them? either way it is horrible to have such manipulation but it does so they can in the terms - i just didn't think they ever would..... so any short position in any company they can close out with no notice!! why would i take the risk of any short again?? how IG prioritise who to call first? i got no explanation as to why other than lender wants their shares back it all adds to the smoke and mirrors of PURP

On the bigger picture no one seems to mention BREXIT in relation to PURP. Who knows how it will all turn out - but there is a good chance it will create uncertainty, which will slow transactions on the housing market.It amy not but there is a riks that it will. Also at a very simplistic level - the 10 directors sold tens of millions of shares at 300p only 10 months ago..... why wuld they do this when they had started developing the US and the UK was booming? - just saying time will tell - good luck all

Hi Gdog74 yes you are right and the maths can be attractive at some price points. i think the last quoted figure was �166,000 as the average PURP house sold. lets' say it is �200,000 - so yes spending �900 is probably cheaper agents % are reducing though so I think 1% is the current norm, and there is nothing stopping them to say - ok - pay me �900 and i will list your property on RMV. in fact it is logical that they could offer this service cheaper as they already have fixed costs so the income would be marginal to their current / they will be forced to react to survive. So , my conclusion, yes PURP have opened up a new pricing structure in the market, but anyone can copy it, and have started to copy it so logically (to me) relative growth will start to slow..... We know the interest rates are likely to rise, we know the BTL is reducing, and that recent years has been a golden period for house prices, availability of capital and speed of transactions. Thus, relatively speaking to their first 4 years, PURP is operating in a falling market, a tougher market, a market that imitators are starting to enter, and one that competitors have started to react to. The consumer will be a winner as PURP has started a revolution to make housing transactions more efficient... that however does not mean that the share price can rise endlessly. Current MV = �1.4bn, current profit (NIL), profit forecast for 2020 �30m All IMHO, DYOR + BoL

Hi Cyberduck You make a good point about the poorer agents dropping/being forced out of the market. The market will change and PURP has driven that - credit to them for that indeed. Of course the examples and instances you quote are valid and not disputed by me. Of the �260 turnover fcst by 2020 , �180m is attributable to the UK This year they will have �80m sales in the UK. So it is already assumed they will growth by 50% a year for the next 3 years - there is risk this will fall short. We know that the UK is lower margin than first expected profit forecasts have been gradually lowered during this year both for the current year forecasts and future years. We know that momentum behind all highly valued shares is falling, and that is also true of PURP - 6 months ago it was 540p, now it is 430p via 300p, so for the last 6 months investors are already valuing PURP at lower multiples than before. As before, I dont dispute that PURP is disrupting the market, what i think is pretty sure is that pricing in housing transactions will change, the point is that with no barriers to entry lots of competitors will be able to change to a better pricing model. Some agents will not eb able to adjsut, but also some will. CWD, FXT have been slow to react but they will react, by definition the more successful PURP is the more they will be forced to react. They have an advantage of heritage and scale, but the disadvantage of shop leases etc.. However as they get squeezed into a corner they will, worst case scenario, run their businesses for CASH and cover their fixed costs - not pretty for their shareholders maybe but it is competition for PURP. They have already started offering listing fees services, which are then dedcuted if you go for the success fee service. So for my analysis to be correct i only need one of 5 things to happen: 1 - the general stock market to fall 2 - valuations of 'big futrue profit' companies to fall (note Apple, Amazon, Netflix down from highs) 3 - the momentum of falling valuation at PURP to continue 4 - competitors in the industry to do a better job - either incumbents or new comers (e.g. EasyHome) 5 - PURP to grow at only slightly less than expected 6 - PURP itself to stumble in its execution so my analysis concludes that the price will fall even if PURP grows (UK) at 40% a year for the next 3 years and that is only one of 6 factors i need to go well..... so i see it that the risk reward is in my favour. i am not certain i am right but the rewards if i am would be attractive. as mentioned before , the level of shorts has not change recently the selling has been done by holders, and i can understand those successful enoguh to have held a 5 bagger want to take profits. All IMHO, DYOR + BoL PURP is in my top (short)

Hi Cyberduck Revenue should be recognised when it is earned. So if your contract with the customer is to list the property, then when it is listed on RMV you are done and you book the money. the issue for PURP is that they advertise they are the same as a normal agent and they will work for you until your house is sold. they have quoted that the Jeffries stats are wrong because of many properties taking a marketing break - what exact % PURP don't say but Jeffries deduce to be c.20%. So if they work for the customer until the property is sold then the fee for doing so should be earned over the numbers of months that is. so PURP do have a problem is they do one thing (work til the end) and account for all the fee up front. I suspect that in reality PURP make some allowance. But i also suspect that Jeffries KNOW that the allowance is a 'generous interepation' (how difficult would it be for Jeffries to find out from some-one on the aduit team, on an ex PURP employee in accountant department). In my opinion it would make a difference, how large i don't know without knowing the facts. However i think the point is that i had not thought of the issue before - now i am..... The new accounting standard on revenue recognition comes into force 1 Jan 2018 (i think), and of course CLLN has brought it into everyone's mind..... One point in Jeffries i thought was interesting..... They pointed out that PURP changed the wording of their accounting policy in 2017, but they didn't change any of their historic numbers. So the auditors obviously wanted some clarification about their policies, the interesting point is that the wording for 2017 and 2016 imply quite different things! Of course there are vested interests at work, it is true of me expressing my view of the share price, but without doubt PURP is valued very highly for current and even future projections, to maintain that PURP need to operate and deliver at the edge of excellence. their last 3 trading updates have been "in line", from my observations of other highly rated companies - "in line" trading is not enough to support a high share price, and in addition i think the PURP response is not convincing, to say that the competitors don't quote the houses sold ratio is missing the point, As a customer i only pay country wide if they sell my house. By getting to a figure for PURP of close to 50% Jeffires were able to use the phrase the PURP coin flip, i.e. you pay your �1,000 heads your house gets sold 9with low fees), tails you lose �1,000 and 10 months! if that phrase sticks it could cause serious damage IMHO in reality the figure is probably above 50%, but lack of visibility from PURP erodes confidence. And of course because 88% was quoted in October 2016... even if the figure today is 78% it means that PURP are less successful now selling your house than 16 months ago it seems very much like between a rock and a har

cyberduck, it goes without saying that the Jeffries research has an agenda..... personally i am not taking what they say as the ultimate truth, but their analysis has made me think about pricing in the industry..... 1 - PURP have an up front fee (for listing your property per their accounting policy) - it is a fixed amount. 2 - several new comers have a small up front fee and then a success fee if your house sells - it is a fixed amount. 3 - traditional agents have a success fee if your house sells - it is a % of value. PURP has defo shaken up the market place and increasingly the customer has choice which route to go. each method has its merits, depending on circumstances. So the customer will choose. Thus it makes sense to offer all 3 alternatives. Jeffries show what the average of all 'online' agents charge for either option 1 or option 2. The maths imply that on average option 1 is successful c.50-60% of the time. But the point is that to compete PURP will have to offer option 2 at some point. This has to be c.�1,500 - �2,000 So this is first 'egg on their face', but more importantly means they are less differentiated from the rest of the market. And if they aren't unique then why are they valued at �1.4bn with current zero profits, and even profits for 2020 of only �34m. My short position is not based on saying PURP is no good etc... or acheving these or not, it is based on concluding that other investors will feel less certain and start to sell their shares. I have a list of all UK listed companies that have a MV which is > 30 times their 2020 profits c.80% of them have fallen > 20% from their 2017 high (thus officially now in a bear trend). These companies are still growing earnings (on average > 20% per year) but the rating on them is reducing, i believe that will also happen to PURP. All IMHO, DYOR + BoL PURP is in my top5 (short)

madmax - there are less shorts open today on PURP than there were in November. (this is publically available information) thus share price fall is NOT driven by shorters, but by sellers of long positions with few buyers around. IG index which is the largest Spread Betting company has not permitted shorting of PURP on its website since mind November because there is no stock available to borrow in the market. i.e. those holding long positions are not lending out their stock. I also note that back in June you posted that you saw no barriers to entry into this market. That is an issue for a company that expects to grow its UK turnover 100% each year for the next 3 years. Facts remains MV of 1.4bn and profits = nil and now questions on its accounting policy.

one would assume over time that the pricing model will change to offer an upfree fee and a success payment. like you say at the moment you charge zero up front and take all the risk. it is easy to offer the customer the choice and let them decide. Jeffries did analysis on this. point is .. this will reduce differential between 'on-line' and physical estate agents... thus more competition. i also assume that jeffries will produce the same analysis next month to show a trend, and i would assume that they have already done this and it shows materially the same result - otherwise they exposed to lots of egg on face... anyway it is pretty clear that 1 - the issues discussed are not going away 2 - it is not good news for PURP

apologies - typo in last post - opening line should read.... you have �1million pound house.....