Member Info for Analysister

No that’s not what I’m implying. The company is already pretty heavily geared as it has net bank debt of c£365million and annual rental payments of over £100million plus annual hospital capex in excess of £100million. Plus bank interest charges. The company only generated £39million of free cashflow in 2024.

They may be able to sale & leaseback a few hospitals to reduce bank their debt, but why bother as the landlords will demand a higher annual finance charge than their banks. Plus remember that CVC did a sale and leaseback of their best performing hospitals just before the IPO!

For me the key here for Spire is to have a laser focus on reducing their operating costs. They already said they have to find an additional £30m p.a. to cover additional employer NI and other costs. Plus the Labour Govt is pushing up the cost of employing healthcare professionals generally. Easy for Govt to do that as we all pay for it in our increased taxes! Not so easy for a private provider. Good luck

Personally I’d be shocked if there was an unconditional bid coming next week (hope I’m wrong tbh). I’m sure Mediclinic would have been looking around for a buyer for their 29% of SPI for some time now as they have had some well documented financial issues themselves.

The SPI property valuation is 100% driven by the level of sustainable ebitda and the rent cover calculation and the huge pressure on their operating costs & revenue mix will impact property value. Not sure these “sole use” assets command a premium valuation tbh.

Best of luck anyway.

Presumably when the restructuring of Mediclinic is completed we will see some action with their Spire “investment”

Today’s news wont have helped any offer price…..

It’s the delays to the Sangomar development that has caused the sp drop. The US$100m cash they were expecting to receive this year will probably now be zero due to the delays in the development of this massive project operated by Woodside.

Egyptian economy meltdown isn’t helping either as conversion from Egyptian currency into dollars proving very difficult.

Can’t blame “old management” they set up a very attractive takeover deal that would have netted shareholders over 300p in cash and equity value.

Look elsewhere for the value destroying culprits.

So we are reducing our G&A still further, walking away from all our growth assets except a very mature, non-operated field onshore Egypt thats eats capex just to keep the production from declining. Oh and (surprise, surprises) the Egyptians are overdue with their cash payments for the gas. Looks like a winning strategy, not!

We sure did. what an own goal that was voting out the old Board with their proposal for a very large and immediate cash distribution plus a % share in NewMed's giant eastern med gas fields! Now we are left with a mature, small, declining gas asset onshore Egypt reliant on an Egyptian operator selling gas to a country running out of hard currency plus a disparate bunch of exploration financial commitments and no coherent plan from management. Hmmm...

poor commercial terms, deep water Mexico, one untested exploration well. hmm after drilling this well probably a few million dollars less cash now available to distribute to shareholders and no real prospect of realising any short term value from the Mexican acreage.

In Egypt "certain gas wells performing below expectations" doesn't sound great. Non operated fields in Egypt so no control on timing of new wells or cash invested. No mention of the exploration Capex commitments in other countries either. This exploration expenditure will deplete cash balances further.
Shareholders voted down $620m of immediate cash plus another $300m of cash from Newmed producing fields over next
five years plus promise of much more from discovered gas in the eastern mediterranean. Amazing.

Well I suppose as Palliser couldn’t improve on the existing deal with NewMed the new Board had no choice but to walk away.
I look forward to the new Board members buying millions of Capricorn shares now to give us all confidence in their new strategy. It’ll be interesting to see how much net cash they can generate for shareholders while still keeping the company adequately funded for all their drilling and work commitments in Egypt and elsewhere. Remember going concern requires sufficient funds for more than 12 months of operation. Good luck.

Good luck to the new Board.
Selling a small, non-operated “asset” in Egypt, a capital intensive “asset” at that that requires constant drilling to keep oil & gas production levels flat. God knows what discount rate the small population of possible buyers will apply to that cash flow??????? I shudder to think. Let’s hope for some political stability and no sudden fiscal changes in Egypt??

Shareholders must be lining up to vote FOR the NewMed deal. Great stuff, the alternative is bonkers imo.

Imo all roads lead to them making an offer for this gas discovery. They are really comfortable and hugely knowledgable of this area through +30 years operating Bayu-Undan, just picked up the block next door. Our market cap is hardly an impediment to them as the G&G costs and overheads plus a well cost here etc would add up to same price and we have already taken all the exploration risk for them!!
Hopefully our management are spending some of the overhead on flights to Italy :))

I’ve yet to meet a “good” loss or a “bad” profit. However what I do know is that supermarket margins are wafer thin and getting squeezed even further. How sticking an expensive system in a warehouse and driving lorries all over the place to deliver 50 quids worth of shopping can create any positive value whatsoever is beyond comprehension. The margins just aren’t there!!! Pinhead dancing can’t go on for ever.

In the past two year she has done extremely well sorting this monster out against a horrible investment backdrop of Covid pandemic, wars, political nonsense from the UK govt etc. She has sold the non-core businesses, returned billions to her shareholders, increased the dividend to a fantastic level and positioned the company well for the tough times ahead. I hope they pay her well and retain her services as long as possible.

Oh and it’s a whole lot easier to “grow” the business in relative terms from a smaller capital base!!

Incredible that there are still idiots around who attend public events such as an AGM and make stupid, crass comments that have nothing to do with the business. The CEO has done everything she said she was going to do, can’t fault her tbh. Returning billions of capital, tax efficiently, to shareholders, increasing the dividend, navigating through Covid, consolidating the business in “safer” more stable countries in today’s world!! What more could be done? I commend the CEO and the Board. Seems we have moved on with better quality people in charge and I will be adding to my holding as this share is an income source that’s very welcome in today’s world.

It’s a tech company in sheep’s clothing. It is a perpetual loss maker but (as with most tech stocks) it will make gazillions of dollars at some indeterminate point in the future. Therefore it must be undervalued. No?

In no way do I blame Mr Ash for the current situation. Personally I’m happy we have him as our CEO. The main issue with Spire is as a result of the financial transactions carried out during Cinven’s ownership period. They sold the 12 “best” and most sellable freehold hospitals in 2013 to property investors for £704million on long leases with annually increasing rents. They did this as the hospitals weren’t performing as well as expected and they wanted to generate cash for their PE investment returns. They also floated the business with a significant amount of bank debt. Personally I would question why the Cinven representative is still a director. I suspect the former chairman was heavily involved in discussions with Mediclinic & Ramsay. I would give the new chairman plenty of time to steady the ship and look for new growth opportunities along with the Exec team.

Spire now face the problem of selling the Mediclinic 29.9% stake. It was clear that Mediclinic needed the cash and the proper thing for them to do would have been to place their stake with a few Institutional investors in London. However they Board chose to try and sell the co quickly to Ramsay, that failed and now they are back to square one.
There’s a good business here imo and a market with infinite demand for the Spire specialist healthcare and medical services.
Hopefully the Board can take advantage of these opportunities and improve their financial results accordingly. Glah.

Not long to wait for the voting result!
I’m still astounded by the negative contents of the Board’s 5th July RNS. That RNS has guaranteed that if there is a “no” vote it will crush the share price tomorrow and in the short term. This is the same Board who turned down the Mediclinic bid price of c300p per share in 2017.