Member Info for bigpunt

Not sure March 31 has anything to do with MLM's vision of PFG. PFG are moving from a niche player under MLM to a challenger bank under IMcL.

Amount of credit is very high at the moment so I understand the downward pressure on share price, especially with quite a lot of credit issued in vehicle finance

I don't mind the SP going down as I need to fill up my SIPP in the next 6 weeks

I find it quite a good investment strategy to do the exact opposite of what the small and mid cap analysts like Peel Hunt call for. Even when they are broker-analyst they get it wrong!

I can't see how they come back from this, clearly the sub-leaseholders feel like they have been loaded with FRI liabilities. Their immediate customers are not-for-profits, I can't see how they will continue to trade if they start going legal

Also Theborn, there are many pension funds who's investment policy will state the fund can only allocate x% of fund assets in equities in certain countries and sector. I've not seen many that allow investment in UK equity below FTSE250 level

I didn't think it was well-written to be honest.

There were large swathes of text related to immaterial trading (e.g. asylum accommodation). It would appear that CIM are under pressure because there was a lot of self-advocacy. The aged debt analysis was not clear at all - what is the KPI (which one would expect to be the weighted average from each tenancy agreement)

You have to question whether the business model of sub-letting the service provision is robust enough with so many regulatory issues - what is the risk management is in the event of these providers defaulting? I also noted comments about repairs provisioning. It only takes a few providers going belly-up with severely dilapidated property for covenants to be at risk

Absolutely. I'm sure we will see MLM on the board as a NED receiving £100k pa for doing nothing, and don't forget his significant shareholding taking pleasant dividends.

The business will almost certainly be looking at a significant finance raise to properly participate in the mortgage market and a new CEO is a big part of this

Great news. I could foresee PFG becoming a proper bank with the launch of personal loans, and it seems the wheels are firmly in motion now. This will now be my #1 share using up my 23/24 ISA allowance

I'm just glad we got a good period of getting in while the price started with a 1

Yes there will be choppy waters to navigate but the bank have seen away practically all of the sub-prime competition and I'm sure they will be a major player in the banking market by the end of the decade. I just hope they are not tempted to internationalise too quickly

Thomas, you make a good point about their view of SBTX. However it depends how the deal is structured, and I am not aware that there has been any announcement in this regard - if there is no 'paper' in the deal structure, your point is quashed.
I'm not even sure I would buy that point even if management were contracted to remain for 2/3 years and retained a miniority shareholding

Just offering some thoughts HX.

PFG is synonymous with paying a high dividend (between 5-10% of mkt cap). Execs hate paying dividends, so perhaps this would be a motivation to keep a lid on the share price? Equally, if the share price soars, new institutional investors may come aboard with great expectations of the company and this would be a threat to the Exec's jobs.

The cynical but unavoidable view is to consider that the Execs are creaming it. This is absolutely true. I personally think they deserve a huge amount of credit for the action taken over CCD and I actually enjoy the share price being suppressed (in my view) because I want to increase my position!

Thomas, that was a good line

CEO needs a decent reason to fundraise. He didn't have one, until he found this customer list to buy

Elrico, with the very greatest respect to you, I think you are obfuscating. You are diluting the (historical) blunder with (prospective) "new territories" and increased margin on lower cost of sales.

I have set out my views on the very basic accounting error. We all know it is non-cash, but I am alarmed at how basic the error is. With such a small business, I am highly concerned at a CFO that can't be all over this material number on the balance sheet. You can bet your backside that someone capable of making this mistake will make further mistakes. Manprit is not competent.

With regards to "new territories" I sincerely hope they have got a proper sales strategy in place and they will have the product in the right place and are selling through the right channels. I have noted the expensive use of advertising on Facebook, probably on a pay-per-click basis, not quite the shoe-string operations we have been made aware of

Aquae, you are usually more thorough in your analysis. Having someone making "schoolboy errors" at the helm of (probably) most of the operations will result in continual drags on earnings and you couldn't even put a number on the downside from someone with such a lack of curiosity running the legals.

It is for the good of the business to get rid of this sloppy CFO. In isolation it is spooky news, but announcing alongside the acquisition, I think it will have no impact on SP.

The issue of stock overstatement is reflected on this board with such partisan views.

The fact is that the auditors disagreed with the CFO. The issue is that an auditor (probably a newly qualified senior on £40k pa) is asking questions that the CFO is not. I think it is reasonable to refer to it as amateurish

The CEO must show real leadership at this critical juncture and the best course of action would be to bin the CFO as soon as the acquisition completes. It is virtually guaranteed that the share price will rise on this news. If he has not at least contemplated this, we are doomed

Estate value has limited relevance in my view, dadean. The freehold is an asset ie helps generate inflows. For example, JDW are paying interest of £x pa for a building rather than rent of £3x pa, and it follows that their prices and profit margins will struggle to be bettered

I agree though that looking at NAV vs mkt cap is a good acid test and it is very easy to conclude that this share is trading below a conservative estimate of NAV

Until it is explained how this acquisition will help the firm exploit its assets, we are left scratching our heads as to how this will enhance the prospects of the company, although we can guess. It is not right that such a divergence from current strategy has been entirely unexplained; although it appears the II's are well informed and the unwashed (PI's) are not

Putting that to one side, does our CEO and his team have the dynamic capability to integrate, build, and reconfigure the existing competencies and acquired competencies to address the market successfully?

rebarm, yes, unless I am corrected by those that know the chronology better, I have never been made aware that the company were looking to acquire anything. It sounds like a grubby distraction to me.

Clearly they are looking for sales channels. Given their track record, it is entirely wrong for them to acquire a business, they will only fck that up, and probably all of the talented individuals that come with the acquisiton with fck off and take all their customers with them.

I've been involved in a company that made a terrible acquisition just get the exec another 2 years in post. This feels similar

My favourite comment is: "We have current and new investors who wish to participate, and we are offering the opportunity to our retail shareholder base". It's deeply concerning that a fund raise has been on his mind for so long that he has done the rounds with NEW SHAREHOLDERS(!) - it wasn't long ago he said a fund raise wasn't required. Is he Meghan Markle in disguise?!

I agree the sector will need to navigate choppy waters Doug, but I believe they have the most robust business model. It would appear Timbo has cashed the interest rate hedge at the right time as interest rates appear to be normalising significantly lower then when it was cashed. An exciting time to be invested

Doug, try and be a bit more rounded. If benefits, pensions, wages are all going up 10%, we could conceivably see sales prices rise accordingly. Not all of JDW's costs are increasing at such a rate so it could be positive. It will be harder for lower-volume establishments where the overhead is a higher % of sales

What a lovely present we have been given - another buying opportunity!

Hans, not paying a dividend is not a working capital inflow. The trouble with Kier is they recognise profit while their cash position goes down. Cash and the relationship to WIP is the acid test of a contracting business