Member Info for asclypius

Interesting observation mr benjamin. I estimate the shares to be worth c. 35p each to a private buyer and will be inclined to vote according to my opinion. Would prefer to take my chances in administration than accept a derisory bid.

Based on what I've read in the news, I'm under the impression that Apollo may already own a decent portion of the debt.

I believe the correct interpretation of the firepower mentioned in the article is that H&T don't have the ability to buy the equity and also to deal with the broken banking covenants (e.g. by also buying the debt). EZCORP might have the ability to do that but maybe they are betting that effectively nobody else will show up at this auction and they will win with an extremely low price?

I am again increasingly nervous about this but if the buyers of the debt succeed in owning 100% of ABM, I'll be genuinely amazed. Amazed if nobody else turns up to take over a company at a big discount to net current assets with most of its units looking capable of good long-term profitability. I suppose stranger things have happened.

Thanks for the responses. I need to get 22p to break even and I suppose anyone who has been buying recently can consider themselves fortunate that they are not long-term investors in this company, for whom it appears that management created a financial tragedy.

Benjamin, can you put a probability on no buyout and no refinancing, followed by the disposal of the debt by the banks, followed by a deal which leaves ordinary shareholders with nothing? I don't see that happening but I must admit that it remains possible, maybe 10-20% probability. The shares seem underpriced to me but I think this is what happens when there is extremely negative short-term news, massive uncertainty, and the risk of total loss.

You're very welcome, Sunseashares. Doing my best to be patient here. Good luck to you.

Canaccord are advising the Company but also executing trades on behalf of their customers, and are therefore obliged to disclose these small trades. I'm increasingly nervous about this even though I don't think anything has happened which has fundamentally changed my original analysis. Tangible Net Worth at 30 June was £45m, or if we assume that their fixtures, fittings and equipment are worthless then it's closer to £30m. Lease liabilities are £38m. One of the big questions for me is: how many of these leases will have to be broken, and at what cost? We have to subtract the cost of breaking the leases, the special advisory/restructuring fees since June, and the operating losses incurred since June. We have to subtract all of this from the value of the company's profitable operating units. I think the company's profitable units should be able to earn c. £5m net income per annum, implying a value of c. £40m. And so after all the subtractions mentioned above, I think it should still be worth at least £20 million to a buyer, or 36p per share. £20 million is also an attractive price even if the company was to be liquidated with perhaps 1/4 of the leases broken: take the £30m Net Current Asset Value mentioned above and subtract 1/4 of the £38m leases. I have a larger investment in H&T and my dream scenario as a shareholder in both companies is that H&T makes a reasonable bid of say £20-£30 million, closes some more Albemarle stores in an orderly fashion, and creates a UK pawnbroking mega-chain. I am biased, might change my mind at any time, might buy or sell at any time, do your own research, etc.

Maybe Moulton can buy TALV while he's at it. Get some nickel in the Albemarle stores.

The curse of matlot strikes again. Useful reverse indicator though.

Don't include Apollo, who only want to buy the debt from the banks. Potential equity investors: Better Capital, H&T, EZCORP. Each of the above 3 would likely have the financial muscle, if they controlled the company, to dissuade the banks from selling the debt to Apollo, who would attempt to force an administration. DYOR

Yes I do. I look at companies that have exceptionally attractive P/B, P/E or P/CF ratios, and then examine whether the market has priced them correctly.

They now own 5.58% of the shares.

They showed a long 1.8m share position held via CFD's, and then disclosed that they had closed two thirds of that position. That's a bit unusual. Worth noting that they were short of 1.5% of Provident Financial in 2011, a trade which looks like it can't possibly have been profitable. That was when CG was an MD in Provident. Looks like they've been following his career with some interest!

Thoughts on the Fortelus RNS?

I would prefer if there wasn't a scrip dividend option, but as equity issuance goes it's not too bad. Shareholders can accept the 7-8% yield or increase their stake in the company accordingly. Since the vast majority of the scrip dividend is accounted for the by Chairman, who is choosing to forgo taking cash out of the company for himself but to increase his stake instead, this doesn't bother me at all.

Hard to say. Just bought more, average price paid for me is now 21.9p. Need £12 million value to break even.

Correction: But if three quarters of the stores remain open and profitable as a going concern, we might estimate ongoing operating profit of c. three quarters of the £11.3m which was just announced. Let's suppose £7m.

Current Assets - Total Liabilities at June 2013: £30.6 million, down from £36 million a year earlier. My investment thesis was that NCAV would remain positive and remain higher than the market cap of the company at the times of my purchases. We need to subract operating losses and special advisory and closing costs for the last five months from this figure, which I would estimate at £7 million (there is a lot of variance around this figure, it's the best I can come up with at present). Let's also suppose that one quarter of leases are broken at a cost of £9 million. That leaves NCAV of approx £15 million. But if three quarters of the stores remain open and profitable as a going concern, we might estimate ongoing operating profit of c. three quarters of the £11.3m which was just announced. Let's suppose £11.3m. Let's ignore financing costs and find out what it's worth on an unlevered basis. After-tax net income would then be in the region of £5m. Using the 8x multiple which applies to H&T currently and which seems fair, we get a going concern valuation of the remaining open stores in the region of £40m. The company can't both liquidate all of its working capital and keep three quarters of its stores open, and I don't know exactly how any scenario might play out. But the average of my NCAV estimate and going concern valuation is about £27 million, and that's my best central estimate of what the equity is worth. This valuation allows for the sale of the majority of stores as going concerns combined with substantial liquidation. I am long HAT & ABM, might change my mind at any time, might buy or sell at any time, do your own research, etc.

Welcome kz. I don't know what happened as far as the auditors are concerned. As for the other concerns: 2) It has not been a public entity for very long and was previously a private family business. I think investors have to accept that it is still being run with the culture of the latter and not the former. And we each have to discount our valuation of the company for the corporate governance vulnerabilties which we perceive as a consequence of this. 3) Have you looked at http://www.naibu.cn/Brand/index.aspx and http://www.naibu.cn/Enterprises/index.aspx ? 4) Try some of these links. Also bear in mind that the company is selling in low-income cities to low-income clients where people are far more likely to be able to buy goods in-store than online: http://brand.shoes.net.cn/naibu/ http://www.luckygoo.com/naibu/ http://www.paixie.net/naibu/intro.html http://www.baidu.com/s?wd=naibu&rsv_bp=0&ch=&tn=baidu&bar=&rsv_spt=3&ie=utf-8&rsv_sug3=10&rsv_sug1=1&rsv_sug4=2124&rsv_sug=0&inputT=2503