Member Info for Fevertreeman

1. Desperate frantic round of discussions leads to
Lousy deal for equity holders. Too clever by half financing is my prediction -debt raise with equity swap element; draconian offtake arrangements; Ethiopians start to play hardball around royalties etc

Never plays without a marked deck; the fact is that ANS legged him and us over; they never had the cash , and he seems to have deliberately withheld material facts that theirs was an exclusive arrangement. What on earth does the Finance Director do ffs....

Are not rooted in commercial reality. Potential partners only have to look at the cashflow which is non existent versus the costs which are existent to realise that the Greek is rapidly running out of money. All well and good to talk about options but the purchasers can just wait for this business to go belly up and then get what they want for pennies rather than pay a premium to The Greek.

Wonderfully crafted RNS of the type that for 25+ years I sieved through professionally. Some classic tells:

1. The apology to shareholders ( there’s more pain dilution and ruin to come)
2. The “we’re keeping a lid on costs” excuse, having run thro a pile of cash already
3. The market cap extrapolation a la Fools n Horses “ If we dig gold out now this is worth millions”, and that all time favourite the name change
4. The erasure of inconvenient facts - note that ANS is no longer referenced by name

It is a classic of its kind seen many times before...I very much doubt this business will survive under this team. Richards won’t find another raise and I doubt Kefi S/holders will do The Greek is stuffed unless a miracle happens...

This Is a sign of The Greek's utter desperation. Richards has a stellar record of value destruction for his fund investors who were unable to exit from his Special Sits fund back in 2011 having endured a 3 year lock-in. Aas well as investing in N Rock, Richards also I recall tried to sue over Lehman, and predating one Mr Woodford held something like half to 2/3 of the fund in unlisted securities.
Richards I recall wasn't too fussed as he and his co-founder had made a complete killing thanks to 2 +20. At the time he mumbled some rubbish about making mistakes, learning from experience etc...I am sure the Mittal Family felt suitably heartened at the time having invested c$200m into his funds and pretty much losing the lot. So this is who H is hanging with - and my guess is that the the seller lurking is actually RAB.

Never a truer phrase typed. The Greek is a total banker, who has funded a fun lifestyle hob-nobbing with the third world's assorted leaders and henchmen, whilst producing SFA in actual progress on the ground. One hesitates to use the word competent when talking about him, but there is a world of difference between a mining financier (feet up in Cyprus) and somone with hard hat experience grafting delivering projects on the ground.

Crap management ; crap merger that destroyed value; crap incentives for top team that bear no relationship to value created! How can reorganising the deck chairs, flogging a couple of businesses and getting green light for ATM justify the largesse plied on the CEO and CFO. Total rubbish. What on earth is the chairman doing ffs

Little Hur is now worth less according to the market than say Everyman Cinemas which has a market cap of £118m, turns over c£65m and makes a net profit margin of low single digits! Utterly crazy but then they only have 90 odd million issued shares compared with the zillions of Hurricane. Still what that says to me is (1) Hydrocarbons are seriously undervalued as investments (2) Hurricane as a profitable business with cash in bank must be worth more than this (3) the wheel will turn assuming the Board doesnt f@@@ it up

Short position is currently c2.15% which isnt huge (PMO is at 8.5%). I think the issue here is that some professionals have got spooked by the exit of Dr T , coming hard on the heels of the CMD. I think there is now a lack of strategic clarity combined with some operational issues that has led to some institutions heading for the hills. Plenty of other E&P companies to choose from if you want exposure, and that have a clear strategy. I assume the BoD recognised the risks they were taking with exiting Dr T and so there is a road map there but equally they may be clueless. Either way on fundamentals this is worth more than current sp....time will tell but not for widows and orphans

My take is less gloomy Mathematics. Having proven up the concept, found some decent oil, Trice was always going to have to move aside for a proper business person; the announcement last month was the last straw for the institutions as clearly came out of left field given the market update before that. Fund managers hate surprises and clearly there wasnt a firm enough grip on what was actually happening infield. If this was truly going to hell in a handcart, sp would have cratered and that hasn't happened. I think this is good news for shareholders who had run out of patience with Trice.

Message about Dutch PM visiting was none too subtle point that Renewi is viewed as strategic infrastructure in Benelux and has government support and backing.

The update showed to me that finally perhaps we have a chairman and ceo combo that gave real ‘grip’. Very Business-like, action-oriented and decisive. Scary headline about relaxation in covenants suggests that they aren’t assuming we’re out of woods on C-19. Frankly as good as it gets. I think that the share price should settle in mid 20s and that we will see more institutional buying now. Slightly whiffy that there was so much volume ahead of this as s/o seems to have been dumping wholesale and no short interest here....did they know an update was coming? Any way I think fearful followers can now dip back in and watch the sp move up 20pc

This company has £1.7bn of revenues i.e. sales every year and is currently valued at only £148m. Even if you add back the debt it looks a steal. Imagine how much it would cost to replicate from scratch their infrastructure & facilities, market & customer relationships, environmental and building permits etc in the wealthiest part of Europe.....this businness is just crying out for some proper strategic direction and lets face it some good luck.

Typing with my former investor hat on, its clear that there is a seller in size here who has either decided that (1) the coming update is likely to be negative about prospects and wants out or (2) more prosaically has decided position is too large vs risk and is downsizing....hard to tell. My lingering concern is that the company might spring an equity raise which would go down very badly esp with the newly acquired Euro investors. Time will tell

Thats my message.....

I think this is genuine volume and as I said yesterday there is very little in the way of short interest. This suggests to me that market is short of stock and bidding it up. Not sure whether it will hold this level as its got a whiff of euphoria about it but does signal that Mr Market likes the equity story here .Very pleased I topped up yesterday am

My own work and the annual report

Stocks like Loungers, Gym Group, Hollywood Bowl, Dart etc have all rocketed in the last few days as FOMO led punters to indulge. Saga remains a far more compelling story in my view: (1) Profitable insurance business with a loyal policy holder base which should, if they get the underwriting right, be producing decent profits...which are then ploughed into (2) bespoke cruising business with strong customer loyalty, excellent demographics and decent profitability.

The business had lost its way and thankfully is now getting back to basics under the new CEO. The two elephants in the room are of course (1) Debt which is a punchy £662m though thankfully most of that is long term . They have to focus short term on repaying their loan and RCFs due in 2022 and 2023, which is what is driving the finance considerations at the mo. Assuming they can repay these, the capital structure should look much cleaner
(2) Covid though the signs are good from the big cruise companies re booking and CEO said as much re. Sept.....I see no reason that the sp is trading where it is, except for fact that Mr Market wants to see proper progress before deciding this is a worthwhile trade

(2) C-19 and a return to growth...which is any one's guess though there were encouraging comments about booking for Sept....short sellers interest here is low, which is also interesting. I think we are bumbling along the bottom....worth pointing out that current market cap is not far short of underlying OP in 2018 of £180m . Despite all the turmoil in 2019 with big assocaited costs ( big insurance restructuring, new CEO, launch of cruise ship etc), the broking business alone posted underlying profits of £90m.

Sterling is proving consistently weak agianst major currencies which should prove a tailwind for these guys as most revs are in Euros

Depends how big the shareholding is but normally CEO and CFO are in regular contact with top 10 shareholders. Shareholders tend to voice displeasure via:
1. Feedback post results to the company's brokers
2. Direct feedback in 1-2-1 meetings with management
3. If v unhappy about direction of travel, speak with Chairman or Senior NED 9or)
4. Flog your holding

Imho I think it is likely that with the Euronext listing and the fact that most revs are Benelux , some UK funds will be offloading as they have other UK-based options ie Biffa or Augean. This makes investing in this business trickier because unless that slack is picked up by Euro investors we could have a consistent trickle of UK sellers. It is not a fundamentals issue but a portfolio management matter. That said, on fundamentals this is a very attractive business, esp given they have shorn off the troublesome parts and paid down some of their debt, and are in a v. strong space in Benelux....

I followed this since it was Shanks &McEwen and like other fund managers supported the Carlyle bid. The disastrous merger with the Europeans really signalled to me that management was going to destroy value as they subsequently did, not helped by some happenstance that forced them to shut down etc; the debt profile was a cause of concern then, as was the execution risk around the merger. We were proven right as soon sank like a stone and the architect of the deal jumped ship (amazed he got another ceo job frankly). However with the arrival of the new CEO for the first time there are glimmers of Hope here, hence my interest in building my own position ( no longer actively fund managing). There is value here no doubt but they really need to (1) reduce debt (2) string together a consistent set of results (3) Prove they can deliver consistently higher and sustained operating margins (by driving into higher value added areas as they are trying).
The mists around these businesses are high in theory - govt regulation, permitting, cost of building infrastructure etc...It should be an attractive investment and one that would fit well within a private equity/infrastructure group. Time will tell but I think investors will put Otto on watch at some point . Keep the faith