Member Info for Franalex

Knigelk, I know this should be the case but am aware of one individual who lost money that they could ill afford after seeing posts on the Carillion Board by individuals continually saying the government would not let it fail and predicting an immediate bounce to 40p and back to 3 figures with a year. These people may not be posting but are reading and frankly we have seen the same sort of nonsense on Debenhams. I made my mistake on Marconi many years ago where “experts” were saying price could go no further. All shares have the capacity to worthless, for those to young to remember Marconi it was a massive business with huge amounts of cash on the balance sheet that made a series of bad decisions.

Not entirely correct, it does protect 90% subject to an upper limit and there are also quite complex rules about future indexation based on when the service arose and also if you are in retirement, these can have a material impact on the future value of the pension but nevertheless it does provide a significant degree of protection.

Agree financially very different as were Carillion and Afren to name two others. The similarity is that in the days leading up to failure there were individuals on these message boards, posting with conviction that there was going to be a big increase in the share price. Anyone who is an inexperienced investor or can not afford to lose their entire investment should steer well clear of this type of share, and that includes Debenhams. You are as likely to lose you money as make a large gain.

Do not know much about Tullow but understand premier have positive operating cash flow in excess of 500m dollars. Positive cash flow is key as I have said before. If you can service the debt from cashflow it is not an issue, it becomes an issue when cashflow dries up.

If you had bothered to read my posts you would know what my holding is. Clearly you do not bother to read. As I have said, everyone is entitled to have a view based on their analysis and experience. I have given mine. You clearly take the view that if someone disagrees with you, they must be wrong.

Because the asset base net of valueless intangible is almost zero, and it’s profits and cash generation are poor. The share price does reflect its true value. Revenue is vanity, profit is sanity but only cash is reality.

Even by message board standards, we have seen a huge amount of hopelessly inaccurate predictions this week. “Wall of money hitting shares”, “strong bounce in next few hours” “12p” share price, “bids from Ashley and others”. This is a badly broken business, with a weak balance sheet and poor trading. Any sustained recovery in the price will need an announcement that the trading decline has at least flattened out.

Sj. I think it depends on what happens over the next few weeks and if the business can buy enough time to effect a transformation. I made the mistake of getting in when Ashley initially bought and then averaged down but still have a fairly high average cost (9p) and hope it may recover but have written it off in my head. Given the seemingly endless amount of bad news, I have never believed that Ashley would buy the business unless via a CVA or administration and do not believe there is another bidder out there. My preference would be for Ashley to Chair the business sitting over a new management team and retaining his current stake but fear that is a much wishful thinking as those who expect a sudden uplift in price.

Sj. I think it depends on what happens over the next few weeks and if the business can buy enough time to effect a transformation. I made the mistake of getting in when Ashley initially bought and then averaged down but still have a fairly high average cost (9p) and hope it may recover but have written it off in my head. Given the seemingly endless amount of bad news, I have never believed that Ashley would buy the business unless via a CVA or administration and do not believe there is another bidder out there. My preference would be for Ashley to Chair the business sitting over a new management team and retaining his current stake but fear that is a much wishful thinking as those who expect a sudden uplift in price.

Exactly the pattern you get on penny shares, should read nothing into it. I may be one who takes a tougher line in negotiations than Ashley (although I very much doubt it) but given all the facts and lack of other alternative bidders, I would be going nowhere near 10p to get this business, safe in the knowledge that in the remote chance of a white knight I have enough equity and fire power to block any deal that does not suit me. The institutions are not as dumb as you seem to think, there is enough money available to large scale speculators to have moved the price upwards if they thought that there was a reasonable chance of Ashley or ANO bidding much higher than the current price.

Are you going to be expecting a wall of money to hit the share price for the second time this week?

Try reading the notes to the balance sheet. The property figure is almost all fixtures and fittings, almost no freehold property and intangibles are an accounting calculation that generally have little value. At least MA will know he is getting nowhere near a billion pounds worth of assets. A CFO of a large PLC I worked for, regularly quoted “profit is a figment of an accountants imagination, balance sheet values are largely irrelevant, the only true value of a business lies in the current value of its future cash-flows”. Slightly simplistic but we used it as the basis of buying businesses costing serveral hundreds of millions.

My view is that there probably is no break-up value given the costs associated and liabilities but I was merely correcting the point on fixtures and fittings.

I am referring to break-up value in fixtures and fittings. If anyone is looking at a CVA, which they will, if only to rule it out, they have to put a realisable value against all balance sheet items and fixtures and fittings are normally assigned a value of under 10% of book value.

Just the Mail’s inability to read a balance sheet. If they had gone to the notes they would have seen it is almost all fixtures and fittings and under £2m freehold property so almost no break-up value.

“Bounce really hard over the next few hours” - not really one of your better predictions along with the others predicting big SP increases. Probably worth us all having a rest from the board for a couple of days and see what unfolds.

Agree that, subject to the terms, then this will keep them going for a while but unless they can find a profitable, cash generative business within the current portfolio then it just buys time. My view is that it would stop a bid from Ashley and do little for the share price in the short term. It is just my view based on completing over 25 buy/sell corporate transactions as a CFO, including quoted PLCs, but time will tell as the truth is most of it is speculation based on incomplete information.

Fundamentals are well known and in press for weeks; poor trading, lower footfall, no value in balance sheet once intangibles removed, and some hefty long term leases, all of which are negative. I did say throw money away. I agree he may invest more but this will not be by paying more for the equity than he needs to. If I were him I would look to acquire control via an insolvency event (CVA or administration) and not spend money on items that that could be dealt with by a process.

Totally agree as I have said before. A few people posting earlier should look at their comments “wall of cash hitting shares”, “12p” , “going to move a lot higher”. If there was going to be an attractive bid we would have seen an upwards movement over recent weeks, but the professional institutions understand the fundamentals and have kept out. It may recover over time but large scale reorganisations of a business of this scale are huge and will consume vast amounts of cash that the business is not currently generating. MA is no fool and will not throw more money away on this business.

Hope you are right but very much doubt it. There is insufficient information to make any rational judgement and no amount of available funding changes the trading fundamentals. This board has been full of individuals predicting major rises for weeks and they have been wrong so far. This remains a high risk share and anyone who ends up losing money can not complain.