Member Info for chris_g

Price just gone back up to 290. Maybe an RNS in the morning?

Just had a closer look at the results and interestingly H2 operating profit was £51.6m compared to £56.8m in H2 2019, so not bad at all under the circumstances.

Only a shorter extension this time, so assume they are close.

Results looks reasonable. Encouraging performance in H2 and optimistic tone on the outlook suggests that the ERC writedown at H1 was a bit of a kitchen sinking exercise and there is a reasonable prospects of writebacks in the future. Strategic targets imply significant profit growth over the next 5 years, but we've all seen overly ambitious strategic targets in the past so some caution is warranted. The intended earlier resumption of dividends is a positive sign. I think that the 307.5p offer is a fair price under the circumstances, but I won't be distraught it it falls through as there may well be bigger returns available in the long term for a patient investor.

This has the feel of a combined announcement of the preliminary results and a recommended deal.

So a deadline extension and a slightly improved proposal up by 2.5p per share that is likely to be recommended. Well the Board and advisers have to demonstrate they are adding value I suppose, but 2.5p is hardly worth the effort. Another 2 weeks to see whether they can reach agreement. It feels like this might happen now.

Yes, we should know by the end of Monday, or maybe first thing with the RNS releases, whether TDR have managed to reach a deal with the board. With it going down to the wire, and no further news or rumour, my expectation is for them not to have agreed a transaction. And I can't see TDR going hostile, especially with the Aggreko deal to preoccupy them. So I expect the shares to drop back the low 200's and I'll reinvest the proceeds of my recent profit taking. I do think there is a lot of potential here for the shares to go higher in the medium term so look forward to seeing what management can do. The only thing I don't understand is why Zach Levy broke ranks and agreed an irrevocable undertaking at the proposed offer price. Unless perhaps he is on a promise from TDR? Anyway, let's see what the day brings. It will be interesting either way.

I sold about 20% of my holding at the initial announcement and will reinvest the proceeds if the price falls back if there is no deal. I am happy to to hold for the long term with the business performing well and strong growth prospects in a world awash with debt .

TDR announced an agreed offer for Aggreko this morning at a total acquisition cost in excess of £2bn. Wonder whether this might have implications as to whether the ARW deal moves forward?

OK, I thought you were looking at it from an EV perspective. But ongoing EBITDA is likely to be running at much lower levels than this year, which when you add in capitalised development costs of £4m -£5m per year means operating cashflow of maybe £2m p.a as a starting point for 2021?

Edwina

June 2020 interims cash £8.3m, debt £13.6m, net debt (excluding leases) of £5.3m. So if cash is now £11.6m then net debt is likely to be £2m.

Not wanting to rain on your parade, but H2 EBITDA will be c £3m and there is also debt that means they are in a net debt position of c£2m at present. At the moment this doesn't deserve a growth stock rating as top and bottom line are going backwards after a brief COVID boom, so its probably trading around FV at present.

How do you manage to get September/October revenue less than pre pandemic levels?

This explains the absence of trading updates recently - they had no good news to give. And what on earth is going on with all the vacancies they have been advertising?

I wondered whether an IC / Simon Thompson update might be behind today's move. Thanks for the confirmation.

I guess we'll find out in the next few days whether it was Quilter, as they'll have to issue an RNS if they have further reduced their holding.

So they've acquired just under 15% of the shares and waived the 20% condition. I assume this exercise will have flushed out short term traders / less certain holders, so liquidity may be tight for a while and this could underpin the share price. I wonder what their long term aim is - having a 15% stake means they have a reasonable starting point if they were to launch a full offer in the future. What we really need is a period of boring performance that starts to see the discount narrow. I still like the aim of the trust and the portfolio is reasonably diversified, particularly with minimal retail exposure.

I suspect they've struggled to pick up many and that they won't meet the condition of acquiring 20% but may well end up waiving this. As to the issuance of new shares, the problem is that the shares are trading at such a big discount to NAV that existing shareholders won't want to see an issue of new shares to a new shareholder at such a discounted price, diluting NAV per share post issue. This is the conundrum the Board face. They need to establish a better track record and then there is a chance of getting a rights issue away to existing shareholder that would help address the scale issue.

Great company but the valuation and rating is looking toppy to me now. I've sold my last few shares today after being a holder since 2005.

Yes, positive. But I'm slightly puzzled there were no comments on trading,

If you're putting out an RNS with contract win news, why wouldn't you update on trading in July and August at the same time? No doubt there'll be something on outlook in the interims, but still a bit surprising.

Not sure where you get £15m from? Net debt at December 19 was £11.4m and that was £5.4m at the end of June, so I make it £6m inflow in 6 months. Not shoddy by any means, but I'm afraid not £15m.