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The head office was purchased in 2015 on IPO, and not been revalued. Neither has the factory completed in 2017.
I am not saying this is straight forward, and the lease liabilities for the branches must be eye watering.
I was just making the point that I think someone will want this. You are right, there are so many variables here that unlikely anyone could value this without more info. However, I do not see administration, for reasons I have posted on the Aurelius thread. Its obviously a gamble and carries some risk, but this seems an over reaction today, given the RNS was positive with new lenders and existing lender willing to allow covenant breach. A buy out would make most sense, to be run by an entity with deeper pockets, until economy improves. That is my position here.
I did not include any good will. Just the hard assets, Factory and head office. Head office purchased for £4M, Factory built from scratch for around £15 (inc fitting). I actually think there should be some thing added for intangibles (work force, accreditations etc). This business is described as a high barrier to entry at this scale.
67% owned by II, not including the BOD
https://www.safestyleukplc.co.uk/investor-relations/major-shareholders.aspx
Cant see them selling down here. The liquidation value (net assets) would be around £8M.
I thought the RNS was a positive one today, lender willing to skip covenants, old and new investors willing to lend. I have taken some more @ 2.4p. Last one of these TPX impact, I doubled my money. I think its a tree shake today, with all those SINT flags. Maybe final stage of a short now that there is no placing. The factory and head office are owned outright must be worth over £15M. It isn't possible to go in to administration with that many assets, and nearly 50% instu. holders, who would usurp power immediately. That is why there is appetite to lend here.
Have a look at the existing lender, https://aurelius-group.com/en/
"In the company acquisition process, AURELIUS Equity Opportunities concentrates on identifying, analyzing, creating and exploiting all the opportunities afforded by the market. "
As an active investor with a long-term investment horizon, we are searching for European corporate spin-offs and medium-sized enterprises with the following characteristics:
"
growth potential given close operational assistance;
below-average profitability;
synergies to existing platform investments.
Investment criteria:
Revenues between € 30 million and € 1,000 million
Investments in companies in the lower midmarket (AURELIUS Equity Opportunities) and midmarket (AURELIUS European Opportunities IV)
Majority interests acquired, 100% holdings targeted or co-investments with AURELIUS European Opportunites IV
Add-on acquisitions for existing portfolio companies
Flexible contract structures in line with the seller’s preferences are possible
"
These guys already done this with loads of companies, here are a few building sector ones:
https://aurelius-group.com/en/equity-opportunities/companies/youbuild-mpro/
https://aurelius-group.com/en/equity-opportunities/companies/b-p-geruestbau-gmbh/
https://aurelius-group.com/en/equity-opportunities/companies/zentia/
https://aurelius-group.com/en/equity-opportunities/companies/silvan/
https://aureliusinvest.co.uk/news/aurelius-portfolio-company-ctd-tiles-limited-acquires-13-branches-from-tile-giant/
Here is the one that makes Safestyle an ADD ON
https://aurelius-group.com/en/equity-opportunities/companies/unilux/
-----------------------
Soros, Atlanta, Henderson, could sell their stake, but at what price? 17p previous placing be nice wouldn't it.
That would be best case, but worst case, this will have at least 12 to 18 months to limp on. Bound to see more than 2.5p to sell in that time. Easy buy for me today.
I have never said that this is a great company. I have always said that the assets, and the ownership makes this an easy take over. Anyone buying sub 10p should do well IMO - Aurelius would be the perfect buyer.
I dont agree that the price is set by the market, on such low volume. Not a single trade over £1000 today. Easy to move this price with a float £20k, if you were so inclined. I think those on the short side should be the nervous ones, its only this low due to them taking it there. Who is going to sell down here, and no placing to cover, yikes. Could do a couple of hundred percent by end of month. The RNS tells you that this is a done deal. Cant discuss any more today, busy elsewhere.
I thought the RNS was a positive one today, lender willing to skip covenants, old and new investors willing to lend. I have taken some more @ 2.4p. Last one of these TPX impact, I doubled my money. I think its a tree shake today, with all those SINT flags. Maybe final stage of a short now that there is no placing. The factory and head office are owned outright must be worth over £15M. It isn't possible to go in to administration with that many assets, and nearly 50% instu. holders, who would usurp power immediately. That is why there is appetite to lend here.
Have a look at the existing lender, https://aurelius-group.com/en/
"In the company acquisition process, AURELIUS Equity Opportunities concentrates on identifying, analyzing, creating and exploiting all the opportunities afforded by the market. "
As an active investor with a long-term investment horizon, we are searching for European corporate spin-offs and medium-sized enterprises with the following characteristics:
"
growth potential given close operational assistance;
below-average profitability;
synergies to existing platform investments.
Investment criteria:
Revenues between € 30 million and € 1,000 million
Investments in companies in the lower midmarket (AURELIUS Equity Opportunities) and midmarket (AURELIUS European Opportunities IV)
Majority interests acquired, 100% holdings targeted or co-investments with AURELIUS European Opportunites IV
Add-on acquisitions for existing portfolio companies
Flexible contract structures in line with the seller’s preferences are possible
"
These guys already done this with loads of companies, here are a few building sector ones:
https://aurelius-group.com/en/equity-opportunities/companies/youbuild-mpro/
https://aurelius-group.com/en/equity-opportunities/companies/b-p-geruestbau-gmbh/
https://aurelius-group.com/en/equity-opportunities/companies/zentia/
https://aurelius-group.com/en/equity-opportunities/companies/silvan/
https://aureliusinvest.co.uk/news/aurelius-portfolio-company-ctd-tiles-limited-acquires-13-branches-from-tile-giant/
Here is the one that makes Safestyle an ADD ON
https://aurelius-group.com/en/equity-opportunities/companies/unilux/
-----------------------
Soros, Atlanta, Henderson, could sell their stake, but at what price? 17p previous placing be nice wouldn't it.
That would be best case, but worst case, this will have at least 12 to 18 months to limp on. Bound to see more than 2.5p to sell in that time. Easy buy for me today.
Blackrock have slightly reduced to 1.54%
GLG on 0.87%
Taking the over all 'notified' short position to 2.41%
Euroclear shows 2.89% for August, this will include smaller notifications not tracked by the over 0.5% rule.
Encouraging that large trades continue to roll through today, so hopeful of seeing further reduction.
Hi Yvellkan, thanks for taking the trouble to register on this site, just to get my attention. Perhaps I could turn this back on to you and ask, can you demonstrate that you have knowledge of the market place for windows and doors? Can you tell us about the key players, what sort of market share they have? Where they are located, who owns them etc? I certainly can. Its all very well pitching up here and making broad statements like you have "renowned for terrible quality", but can you back this up? Do you have any statistics or evidence of this? Can you offer anything other than a opinion? If you could this would be really useful to all investors here. I am happy to hear both sides of an argument, but only if it is based on tangible facts.
If I go down the road to a local window supplier and fitter, he is not making the frames. He is ordering them in, and the glass. As his customer, I don't know where he buys them from. I know that I get a guarantee, and that they meet certain regulatory standards, and that the biggest risk in the purchase is the fitting. Of the windows that I have fitted here, the uPVC frames are no different today, to how they were when fitted 10 years back. It is just plastic and metal. The main issue would be UV exposure, but all uPVC is treated for this. I have replaced a couple of hinges, but I think their failure was probably my fault - handy tip - clean around the opening once a year, and lubricate the hinges.
I actually think the making of window frames is very simple, and almost impossible to get wrong, once you have a jig etc. This is why all of these companies offer very long guarantees. Companies that make frames are only assembling profiles made by other companies. Safestyle has its own glass furnace so can provide the finished glass too. I think you picked on an aspect of the company that isn't an issue, where as I would agree their reputation in other areas is less than perfect.
Please do share your market insights with us.
Ok Neil, we will see. I thought the day ended positively. Most trades today are buys. I doubt there will be a raise, I think it is far more likely that the credit is extended. As I said before, we might not see any news on that for 6 weeks or so, as they gauge whether sales pick up or not. I will share my notes on the lender soon, perhaps then, you will be convinced. Stay tuned!
I liked the strategy going forward, of focussing on their core businesses, concentrating on getting right what they currently have. However, it is astounding that things have been allowed to get so bad, they mention running loss making businesses etc, previously considering low margin work outside of their competence. Facilities run down. Sounds like the board room was empty last year. I shall continue to hold, and wait and see how the next TU looks, as to whether I increase my position here.
Its on youtube now:
https://youtu.be/a50MXSRBi44?t=38