Member Info for devonplay

Wonderful, so it says it in the RNS, and as they so, "wont be payable until 20 March 2023." "interest will ACCRUE at a rate of 5.0 per cent. per annum"
"it just won't be enough to make sizeable inroads into the debt mountain," so we are agreeing on something.
So that means the only hope is Phoenix to forgive debt, when they've clearly extended the obligations and indicated they are accruing the interest......sound a bit like they aren't going to trade their way out of it ,and shareholders only comfort is the crumb of hope. I can see why you feel the need to "ramp this shi7 on loads of other non related boards today" as @Daytradenovice so elegantly puts it LOL

"They are earning nothing from the debt, and I am not sure it is actually accruing"
For goodness sake, it's IN the bloody RNS:
From the update "namely that interest will ACCRUE at a rate of 5.0 per cent. per annum but will not be payable as to principal and interest until 20 March 2023."
(my u/c to emphasis)

@Daytradenovice......I've just seen, Pearls has posted on 5 unrelated share's threads LOL
Pearls, how desperate are you to be out of SGI hahahahahah
This is the funniest page on the whole site.

"I meant if Phoenix cancelled the debt, just like Pearls said in one of his posts…"
As they can't/aren't servicing the debt at the moment, it wouldn't free up cash to pay dividends anyway. If that's what you mean. They need earnings in excessive of future capital requirements, and they just don't have those. Unless we are suggesting Phoenix would cancel their debt, but allow SGI to take other debt so they could pay external shareholders a dividend...just can't see that happening.

But they don't need to do they, they have both equity and debt.
So why would they want to share the benefits of cancelling with other shareholders...and if it was that simple why do thy keep allowing to be increased and accruing it. The share price is secondary for the foreseeable is not the main game, it's control & leverage.

Then you simply have to ask yourself why they are increasing debt and accruing the interest.
The company can't pay dividends anyway, have you forgotten it can't even service it's debt! It showed :
Profit before tax (£m) (4.08) for last year.....a £4m loss.
So no dividends for ordinary external shareholders, but Phoenix are getting 5% accruing. Why do they need to share it with external stakeholders? So no, they get interest and more control and the opportunity to leverage the name for their other private business....meanwhile what are you getting as an ordinary shareholder........
That answer your question?
I think give the past 3 years my assumption is credible, those shouting for a share price increase...not so much.

Just to be clear, they've never said how the debt is structured, so I'm presuming is being accrued and will be added to the principal. It's rolled up in someway, I've had a look in the past to see if there's anything available on the debt structure, but I couldn't find it. I guess it could be possible to make some assumption by looking back through published accounts. I believe it compounded, but either way it's accruing and the increased commitment isn't going away.

@Pearls, this is the point you usually say "you obviously know a lot more about corporate debt than I do"
- and then try to correct me LOL

"if Phoenix keep waiving the repayments, I cannot see how they can compound "
What? Please, look up the meaning of "accrue", they waive the payment, but let it accrue. By waiving the payment, they don't waive the commitment pay down the road.
"It's pointless"
It's a further burden. Lots of debt works on the same basis. It's isn't all just interest and repayment. You get accruing interest and Payments-In-Kind (PIK's) as long side other types of instruments. I've invested in lots of debt that accrues over the years.
My view: they will be happy to keep taking/accruing long term debt and eventually develop an interest in the equity as a way of deleveraging. They'll use gullible retail investors as an exit strategy whilst still having ultimate control of the business through debt. You must remember who that works from Debenhams....that's what I would do if I was them anyway.

That means next year if they don't take on more debt, which would surprise me, then it's (£17m + 5%) + 5% ....in simple terms that makes repayment more difficult every year unless the earnings explode and we know there's been no indication of that happening.
Compound it out and see what the debt looks like in a few years time. SHOCKING AMOUNT.

From the update "namely that interest will ACCRUE at a rate of 5.0 per cent. per annum but will not be payable as to principal and interest until 20 March 2023."
(my u/c to emphasis)

"It seems to me that with each year that passes the financial covenants are waived, and / or interest payments on the loan either waived or largely reduced"
Nonsense, they've waived the repayment, but the interest is accumulating. It's simply compounding and increasing.

-11% (minus) at open......

Cancel the debt? LOL Unless you missed it they JUST increased it, and for good measure started SGI buying from one of their other companies, so not only increase the balance debt, they also increased the business-as-usual reliance on Phoenix.
To me that suggests they aren't the bothered about the share price, just in leveraging SGI's name for their private business.
For the other SGI shareholders: you are just trading in the goodwill arising from the tarnished name. So a couple of million, c 0.5p...future earning won't translate into x PE, they'll just translate in to debt payments and service charges.
NO earnings=no share price increase. Simple.

On what metric? There's no earnings, and unlikely to be for the future, so it comes down to goodwill, and assets, presumably the assets are security for the debt.... that can't be serviced, they are in default, in fact they are having to increase debt levels, so it comes down to good will and value in, what appears to be a diminished, and from a shareholders perspective tarnished, name. Hence once the support from speculators has cleared and if they keep selling over the next few day, sensibly 0.5p is on the books.

Pearls....you are going into melt down. Please stay away from naked flames and falling knives....!
Lol Buy more , you've changed your tunes some much over the last few day.
0.5p....see you there and I'll pick some up myself.

But you will also note that "goodwill" hasn't stopped the business going bust on at least 2 previous occasions and being on life support now. How much that goodwill is worth is debatable, for my money ,a couple of million as I've indicated. I see very little value beyond goodwill at the moment. Lots of promises, but as we know they aren't worth much in the cold light of day. Invariably, it could go bust again if Phoenix come under more pressure. That's why I comment on the DTY and Castelnau IPO. For clarity, I have a small position in DTY's corporate debt. I think our are right about the timescale bing five years, my worry is that in 5 years if they don't make any success of the fractional issues, they haven't so far, their core client base will be that much older.

"so let us imagine for a moment that the annual turnover therefore does grow to say £16m or more by April next year."
But you were forecasting £20m by the end of last year......please get a bit more serious.
"company cannot be generating positive amounts of cash / be profitable? This was not clear from the update. "
I think you've answered your own question.
"Given their overheads have been cut to the bone"
And then increased by the expanding debt burden, what do you think would be better in a people driven business? People or debt......
"Devon, you are bang on the money as you say", yet you won't be able to see 0.5p coming down the tracks if we have a few more days of savage dumping will you?
Now your turn! Are you brave enough to buy more when you appear to be willing to encourage other to do so....I doubt it, liquidity problem again LOL ?

1.85p BANG ON THE MONEY! ;)
If we get another few days of this, hold out for 0.5p then go long for 5 years.
......I just bet Pearls still ISN'T adding any more ! Time for a top up Pearls? Lost your nerve or still think you can't because of liquidity? LOL
On a serious, last figures showed an increase in losses, the trade update showed more additional debt and there's no sign of earnings growth. Frankly, I think the business is only worth a couple of million. Being in the debt would be much better as we now know it's compounding at 5% per year...unlike the earnings per share.
Let's be generous and let's say it worth about £3m for the equity cap.

Nice little rally across the market today.
DTY looks a bit sick down 4.17% and Castelnau is at a low point since the float.
Phoenix running out of steam? If they catch a cold, then, as I've said before, SGI gets double pneumonia with sepsis, but we can rely on Pearls to call it hay fever LOL