Member Info for f1nesse

Thanks for bringing this to our attention however as you will appreciate we cannot comment on nor action anonymous complaints.
I would draw your attention to our results and presentation as of the 30th September which I think makes clear the excellent progress being made across our business.
Regards,
Investor Relations
HSS Hire

Hi No1Scarlet and others. Shares only go up when there are more buyers than sellers. Despite the good half-year report no significant buying has happened so the share price has gone nowhere. There is what they call an 'open tap' somewhere so the market makers can get all the shares they want without raising the price. There are also a ton of 'stale bulls' in this share, dying for any small rise so they can sell. This is both from before the rights issue - the share price churned at 40p for a time - and even after the rights issue when it leapt from 10p to 25p in short order and now everyone would sell at 25p in a flash. Moving the share to AIM will have reduced institutional interest too. I do believe however eventually the price will rise as the value seems to be there but we may have to wait a while to work our way through the above technical situation.

The good bit of the announcement for me was that they have reduced the gearing so that it should be possible to refinance the company with 'normal' bank credit rather than the eye-wateringly expensive loan capital they have at the moment - currently paying 6 or 7% over LIBOR. This is in their plans and mentioned in the RNS. There will be a chunky one-off cost but it should free the profits to flow to the bottom line. At present we seem to be looking at annualised profits of around 4p a share ( it was 1.61p at the half and 'Revenue, EBITDA7 and EBITA7 all above management expectations in Q3 2021 to date.' Also 'Management now expect full year EBITDA, on a non-IFRS16, continuing operations basis, to be ahead of market expectations and EBITA7 to be materially ahead ' ). That puts the shares on say about 4 times earnings. If you think that's cheap then just sit it out and eventually someone will start buying... My 12-month target? 28p perhaps with most of the rise coming on the refinancing announcement.

FWIW Speedy has a crapped out share price too (but not by as much). DYOR.

Well. I have cashed out at 1.76. I am pleasantly surprised it has been so strong but I think it may run back a bit. Will buy in again later unless i am wrong. GLA DYOR.

No wonder this placing is well supported: "The Placing Price represents a discount of 13.8% to the 3-month volume weighted average price of 1.57 pence per Ordinary Share on 12 August 2021. The Placing Shares and Consideration Shares will represent approximately 43.0% of the Company's enlarged issued ordinary share capital on Admission. "

IMO 3 months is a long way back to get to the weighted average price. It's been firmly established above that since the improving results became apparent. And the 13.8% discount is hefty as well. So the 1.35p placing price is a giveway. That would be all very well if existing shareholders were invited along. But they have not been. In practice therefore existing shareholders are flat out subsidising the new shares and by quite an amount. Many of the placees will be in the position to take an immediate profit and may do so. If it drifts down towards 1.35p from its recent peaks of 1.70/1.80 this transfer of value will be all too apparent.

From RNS dated 30 June 2021: "The Board will provide further details on Group performance at HSS' 2021 half year results update, expected to be held in September 2021."

They let the market digest each time. From the May announcement:

"Further to its announcement on 10 May 2021, UKGI announces the successful completion of the disposal of part of HM Treasury’s shareholding in NatWest Group plc (the “Company”). The disposal was effected by way of a placing (the “Placing”) of 580,000,000 ordinary shares with a nominal value of £1.00 each (the “Placing Shares”) through an accelerated bookbuilding process to institutional investors.

The Placing price was 190 pence per Placing Share (the “Placing Price”). The proceeds from the sale of the Placing Shares will be £1.1 billion.

As a result of the Placing, the shareholding of HM Treasury has decreased from 6,918,753,194 ordinary shares, representing approximately 59.8% of the issued ordinary share capital of the Company, to 6,338,753,194 ordinary shares, representing approximately 54.8% of the issued ordinary share capital.

Subject to certain exceptions, UKGI and HM Treasury have undertaken to the Bookrunners named below not to sell further ordinary shares of the Company for a period of 90 calendar days following the completion of the Placing without the prior written consent of a majority (by participation) of the Bookrunners."

The debt that HSS carries has always held the company back since flotation in 2015. The debt was refinanced expensively (700bps over LIBOR) in 2018 - https://www.lse.co.uk/rns/HSS/hss-successfully-secures-refinancing-mpw0117e5dscodl.html That was all they could get at the time and it is in place until 2023 - the banks had them over a barrel.

The company needs another £25m of trading profit to cover the interest bill before it breaks into pre-tax profit. 'Annualised cost savings of £15m' for closing branches may provide half of this but that still leaves a gap to be closed. If it gets back to 2019 'profitability' EBITDA was £63m in 2019 vs £47m in 2020 so there is scope. In 2023 if all goes well - big if - the company may be able to negotiate less costly debt finance. Then it becomes a gearing play pure and simple; if it can beat the bank-sters it will eventually fly.

It was notable that nothing was said about the carrying cost of the debt in the Final Results statement. Present market cap is £150m so it needs profit attributable to shareholders of £15m to put it con PE of 10. Do-able? DYOR