Member Info for Alas_Smith

If we reflect on the past we can consider it in terms of the present. Can we draw against this intelligence to plan the future?

Let me start that I do not deny climate change. I do believe that Nature cannot be controlled - we see this when road change leave a pocket vacant. 3 or 4 years it is overgrown. Nature does take over. Oil is not in favour. Many reasons. With the benefit of a decent Pomerol the grey matter considers the trivial nature of matters of high importance.

So today the price of shares in RDSB rose - and what of it? Well for day traders that might be hugely significant but for me, simply noise. Same yesterday and tomorrow. I have maintained a holding in Shell Transport and Trading since the late 1970's. I am not rich and have cashed in my holding several times to discharge creditors. I have though, been disciplined in buying each month a few shares in Shell I know that £500 is chicken feed for many but that is all I can spare. RDSB is not the only arrow in my quiver. I sold the majority of my shares 3 years ago and have a couple of decade to go before I return to former qty. I'm getting more for my money now and WANT the price to remain low.

In 2008 I rationalised my portfolio from 46 holdings to 11. It concentrated wealth in areas likely to grow. For the most part they have. There have been losers (inevitable) but each year I try to add 3 new holdings, to my portfolio. A consequence of disciplined savings regime , frugal lifestyle and re-investment of dividends. In 2012, I pannicked when I realised that my scatter gun approach approach as a sucker for "chasing a rainbow" stocks discovered 50% capital in "blue sky picks" and the rest in core components. From blue sky picks, my track record from large numbers of losers was covered by occasional absolute corkers.

Professional advice was needed. Embarrassed, I approached a couple of stockbrokers - one "old school" the other "new kid (and I HATE that word) on the block". After a telephone call with each and a meeting with the "new" one, I transferred my account in specie to the "old school" outfit apart from some howlers. It is managed on a discretionary basis. Compound growth as an average that I had made between 1977 and 2012 was 12.5% was ****ed into a hat. It has been around 14.6% since then. 2019 saw a rise of over 27% and this year around 2%. My holding that I transferred in RDSB was sold in 2018. Old habit die hard and I have continued to add £500 each month to build my holding in RDSB.

Whether we like it or not, the world will rely on Oil for many decades to come. Although the sun will rise, wind will blow, rivers and tides flow to produce energy, food will not grow, or transport to where it is consumed without oil. At a tenner a share this might be very expensive or very cheap. I don't know. I do know though that stock markets rise over time as populations expand and oil will be in the chain somewhere. Maybe climate chang

As an aside - whether we like it or not, technology is going to be with us for a very long time and I see no reason that the growth will not continue. In particular, companies involved in artificial intelligence (AI) and machine learning (ML) should do best. Tesla is at the forefront of battery power - yes the bloke, Musk is a lot of a knob - the storage of renewable energy for urban transport is the key for the next generation of electric vehicles.
Once batteries are able to be fully charged in 5 minutes OR uncharged cells can be removed and replaced with fully charged ones in service stations in 5 minutes, then and only then will there be appetite for electric vehicles to replace the internal combustion engine. The downside for them is that they are almost silent - the use of electric taxis was the main reason why I refused to return to Zermatt for my winter holidays. With climate change presenting deluges that cause flooding, I'll stick with a Land Rover.
You could do worse than consider NVIDIA as a holding, though, if you prefer to spread your investments Allianz Technology Trust has done very well in the past and no reason to challenge its performance in the future. Not advice, of course, simply the musings of a mug punter.

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Forgive me. I have owned shares in Shell to a greater or lesser extent since 1977. The bulk, I sold last year, though I have been buying again in small amounts during 2020.

Let's look at the wider picture starting with the negative side of things. Crude is being pumped at levels that are just about at "break even", though simply replacing stocks which are at bursting point. The price at which crude is traded is not important to RDSB, but volume is critical. It has been an "ordinary" summer for the zones between the tropic so no enhanced used of energy for air conditioning and the world has yet to fully resume work. There are no notifiable wars in the middle east and the world has a different problem with which to contend. In short, low use of energy.

On the positive side, more KNOWN stock remains in the ground, there is a reduced appetite for exploration, stock for distribution is full and there remains the smaller consumption by ships, trains, power plants and lorries - none of which are either about to be declared extinct or not reliant on oil as a power source.

At, or close to a tenner a share, it makes sense to add a few shares each day/week/month. Might not actually rise very much in terms of return on capital, but the (terrible, new) dividend will beat interest rates and any capital appreciation will be a bonus.

No prob bigsmoke. I will never contribute to this share thread again.

While I applaud the sentiment, Pokerchips, there is a point when OPPORTUNITY cost outweighs hope.

And while this is not advice, I can point to my own failings for my LONG term support of Albert Fisher (frozen pea company - very dull and utterly predictable for decades, but branched into lettuce - a few months later bust) , Marconi (need I say more) and then there was Torotrak (brilliant engineering but no sales), Graphene Nanochem (company with rogue managers inventing sales) CeNes (had potential for pain relief but ultimately failed), Image Scan (still around but yet to invent themselves). Tungsten (even a company where a cousin known as a rainmaker was CEO and remains a major shareholder) is one that is limping along. Hey, I can point to many failed investments I have made, as, not doubt can you.

Where I am struggling , is to find companies where the SP has fallen 70%-90% in a year that has survived. Now I concede that 2020 is unusual, and LGEN remains at or close to a 12 month low, if Insurers are singled out, but there are rather more companies that are showing a V shaped recovery from those HORRID 2 weeks in Feb and March that those that are not.

I hope that Saga will survive as an insurance business as that is where the money is made. As a company it should have been coining revenues from Insurance divisions and taking advantage of the furlough scheme to lay off all but essential staff on cruise ship. A few cleaners, pilots to drive the boat, engineers and some caterers and all fine and dandy with the others resting. Same with the insurance staff - work from home, provide VPN and technical support..... look hindsight is brilliant, but the current CEO was brought in to sort of the mess that Batchelor left in his wake. Sure Covid-19 didn't help, but we are all in the same boat. Sutherland might be considered a valuable asset to some, but he is a quitter and seems to like an easy life - fair game for a brown nose getting stuck into the corporate track in the 1990's, but doesn't wash with me. The failure to publish information on a proposed bid was the final straw.

Hence my change of tune that advocated HOLD to the point of results. I've voted with my feet and have begun to re-invest proceeds in other companies.

The price has gone as a consequence of a number of things. First, the results are dreadful, second, that 50% revenue is (usually) from cruise/travel and that has evaporated, third that the company appears not to have taken advantage of the furlough scheme and last that no matter how investors look at the proposal for de Haan to rescue things, there is going to be dilution to a greater or lesser extent. I will not be participating in the offer and have sold 84,000 shares after the results.

I retain 10,000 shares, the value for which is inconsequential. I have written this investment off and as there is no guarantee that de Haan will be appointed Chairman and even if he is, the role of Chairman is to ensure that the CEO is doing his job the outcome will be to have a dilution albeit at a higher price. A higher price which at face value is 225p. At 200p it might be worth a punt but as there is no prospect of return on capital (from dividends), this is not an attractive proposition for any investor IMO.

The latest set of accounts are dreadful. I am disappointed that the company had not disclosed the bid approach. I understand that Saga had its roots in holidays and cruising has been in fashion in recent years, but it contributes little to profits. much to turnover, yet costs a fortune.

I have today sold most of my holding in Saga taking a loss on my investment. Good luck to all.

These are very poor results accompanied by statements which have been padded out with corporate BS. There is assumption that the cash raise will be a success, but not from this investor.

Notes suggest no contribution from cruise until May next year where the bulk of expense lies. I've not found anything yet to explain the takeover approach that was rejected. Even KPMG have doubt that this is a going concern.

There is an alternative way to avoid dilution and raise cash. The Issue of Preference shares

Michaelwood47, you make a very interesting and valid point and certainly one that has not yet been explained by the Board.

I am NOT in favour of open offers or Pre-Emptive offers. I am usually pretty ambivalent to Rights Issues andt, if the price is attractive, then I will usually participate. This link might help:
https://www.lexology.com/library/detail.aspx?g=869c5959-7813-482c-80e8-127f0343f215

The document explaining matters had better have a bloody good case for the sort of qty of shares that will be issued and at an extremely attractive price to encourage participation. I suggest a discount of at least 40% to the current share price MIGHT get the shares away, but anything more than that and there is a good chance that not only will the offer fall as flat as a witches tit, but many shareholders will walk.

Perspective from the FT is worth reading.

https://www.ft.com/content/176b9bbe-56cf-4428-a0cd-070db2d8e6ff?shareType=nongift

hi putmeonlist. First, let me make it very clear that I not a financial advisor. Second that there are an awful lot of punters that confuse a low share price as valuing a company as "cheap". Third, that until we know what the offer is, we can only speculate on the outcome.

The contention that I a putting forward is that I have never heard of an issue at a premium to a share price and an open offer is very different from a rights issue. Both tend to offer new shares at a discount to the SP. A RI, gives the right but not the obligation to participate in fund raising and the rights themselves can be bought or sold. An open offer is a way to sell shares raise cash efficiently and at a discount to the market price.

Both will dilute shareholders, though with a RI, in selling the right, the dilution is partly mitigated.

None of us know the terms, cut off dates or timings. The takeup is not a done deal, and, from what I infer, the cash is needed to shore up the cruise division which has a whopping level of debt (the life of a ship is measured in decades) and has lost 50% of revenues. According to Peel Hunt, the cash burn in the travel side is £8m per month.

We know from FJGooner that de Haan was a competent and effective manager and, to coin a phrase, it is rather like a dog returning to its vomit in his offer. I believe it is a distraction, which although has lifted the share price has opened up a different can of worms that have yet to be explained.

The can of worms being the bid approach that was rejected without reference to the shareholders.

On a much more positive note, though, is that although cases of Covid 19 continue to rise, deaths are gradually falling in a diverging pattern. Certainly not a time for complacency. The cynic in me feels that de Haan is taking a measured bet that cruises will resume and, in time not only will treatment better secure the outcome for patients, but one or more vaccine programmes will be approved and rolled out.

I am not convinced, bigsmoke that you have thought through the effect of the issue of shares to raise £150m.

You start with the assumption that based on the statement that the numbers are set in stone. They are not. £60m at 27p I agree, but the remaining money is subject to ensuring that the placing is approved. The offer must be attractive enough to encourage firstly eligible existing shareholders to participate (provided under 15p a further £15m will be chucked into the hat) and secondly that in the event that there is not takeup by shareholders a further £25m will underwrite the first £100m of the placing.

At the current SP, the figure bandied around in the statement, 15p is not sufficiently attractive but a price closer to 10p might tip the odds. Ignore what the company does with this cash and just concentrate on qty of shares that will arise as a result of a successful placing at a lower amount than 15p which will be added to those already in float.

We will not know until the update from the company and that is scheduled for 10 September. It is possible that the opportunity has passed, cut off date being perhaps immediately before the statement of intention was made.

Although Bigsmoke has dismissed my contention that at 15p (based on the current share price) takeup will be muted. There needs to be a very good case for the cash other than a) want to install a new Chairman, b) prevent the company from sorting out the mess it is in, albeit due entirely to Covid 19, c) exploring other avenues and that, I'm afraid means flogging off the losers.
It is the same with a portfolio. Run the winners and sell the losers. I have today sold shares in APF and placed the proceeds in AUGM. Not advice, but have taken a haircut with one that I fully expect to recoup. All I am actually doing is accepting that a mistake has been made, getting out with some dignity and maintaining investment at or close to 100%.

Once I have the terms of the offer in front of me, (and this applies to all shareholders), I will have information that will allow me to made a decision. I do not believe that the company will go bust in the next few days so will wait. If there is to be a cash call and the terms are at a substantial discount to those that I can buy in the market, I might participate, but it will depend on how it is proposed to use this cash.

Encouraging news, mehinks.

https://www.reuters.com/article/us-health-coronavirus-russia-vaccine/results-of-russias-covid-19-vaccine-produced-antibody-response-the-lancet-idUSKBN25V1I2

Actually, another perspective might be jedclampit, that until the managers present the statement in a few days time outlining proposals and these are approved by shareholders , the proposal by de Haan is simply one on the table for consideration and not a done deal.

With the SP at present levels, getting any new shares away at 15p is ambitious and unlikely to be accepted. The discount is insufficient an incentive.

accipiter - I have a very substantial amount invested in USA - this afternoon my portfolio was reduced by the equivalent of 18 months salary!

Pianista - please note that my name is not Alan and at the risk of seeming irrascible, I would be grateful if you gave me the dignity of referring to me as either Smith or Jones

https://www.hl.co.uk/shares/share-research/202009/saga-raising-new-equity

Pianista, I think you are missing the point. Perhaps I have explained myself badly?

Simplistically with rounded numbers, the issued shares at the current price give a Mkt Cap at the moment of £202m. There is the proposal to issue new shares to introduce £150m new cash. From that, de Haan will bung £60m at 27p/share and £15m at the launch price of new shares provided these are issued at a price under 15p/share. The company has turnover split 50:50 betwreen travel and insurance that last year was £110m apiece. We know that travel has contributed about nil this year so turnover is reliant on insurance.

The profits when split accross the various divisions are not in the same proportion and roughly 75:25. The company has taken on a collossal amount of debt to buy 2 new ships and has deferred some payments. Operating margins have fallen from positive territory in 2016, 2017 and 2018 from being around 20% to -15% in 2019 and worsening to -35% in the accounts ending Jan 2020.

In short the company is in a parlous state and will be far worse from the cash drain to re-imburse holidaymakers and cruise passengers and no meaningful revenue from travel division.

Shareholders will be able to participate in a fund raising exercise that might or might not be at 15p - it could be lower - ships will continue to require maintenance. Only once I know how the money will be used will I be able to make the judgement to participate and add good money to bad. Perhaps a compelling case will be made, but simply as a method to average down is not a compelling reason to support matters.

Yes, this has been complicated with the appearanace of de Haan, but we should be grateful that had statement not been made, then shareholders would not have been aware of 2 potential suitors. I believe that the company had been oversold and with each day passing where the ratio of deaths to cases reduces around the world (yes, even in America) suggests to me that the Coronavirus is mutating to survive, remains highly efficient in transmission, but its strength is perhaps diminishing as doctors discover more effective treatment plans.

The market has worked out what the price is likely to be with a successful fundraising which is where we are now. With a doubling in the number of shares in issue, it reduces the prospect of takeover. At the moment therefore, I do not beleive that the prospects as a shareholder have improved despite the uplift in the share price. Decision to deal at all is not there for the taking IMO.