The latest Investing Matters Podcast with Jean Roche, Co-Manager of Schroder UK Mid Cap Investment Trust has just been released. Listen here.
Hi Moni & Truth - now therein lies the problem when throwing out a "low ball buy in target" when the sp hits your price you have to back out. Now to be honest you have each confirmed yet again, my expectation that both of you are extremely unlikely to ever buy in here.
With a lack of news until the interims in Nov. ( save perhaps for the possible sale of Stobart Air ), and the immediate challenges facing the Aviation Sector, there was always the chance that, the SP would drift downwards.
I wonder if either of you fooled, anyone else looking in here, either, holders, or those on the sidelines, that you were sincere, lol. Perhaps, someone could post and let us know.
BTW did you know there have only been 17 posters apart from ourselves on here during Aug and Sept.
It's pretty much us three "shooting the Breeze" lol.
G
Could today's latest drop be related to the Covid outbreak at Devonport Dockyard.
Initial details are less than 5 cases, though they may not be all linked.
G
Truth - you have done well over on SCE, am guessing you've not put all your pension eggs in the one basket, sure you haven't.
I was lucky to retire early at 55, some 5.5 years ago. Building a pension pot I know is less easy nowadays than it was for me, I just had to work for a large Company with a final salary pension scheme.
I'm guessing looking at today's annuity rates, someone looking to retire at 60, and planning to live in retirement, for say 30 more years, would prob. need to build up a pension pot of say at least( £500K ). Where the state pension will kick in and what it will be worth is open to question.
If SCE were to 5 bag from here, a holding of 250,000 shares would do the trick, on value, though I guess somewhere down the line, it would only be prudent to de risk take some profits and diversify into other holdings.
G
Hi Truth - Looking good for SCE - know you got in early over there. What's your strategy, are you looking to bank some profits, and perhaps top slice, or are you planning on holding for the longer term ?
I've just settled down, for the afternoon, been painting the decking in the back garden, and baking in the sun ! it's a bit like the Forth Bridge !
Going to look in on the Parliament channel - the second reading of the "UK Internal Market Bill" could be a bit of a bun fight.
G
You too truth.
Emm, just seen that buy show up at 17.08 - 695,310 shares @ 23.80p - value of trade - £165.48k.
G
Another of the recent "U shaped" trading days for STOB, with the SP on the slide in the morning only to recover later in the day.
Small value sales, on the drop,in the morning, then a number of larger "off book" buys showing later.
Wouldn't be a surprise to see a further TR1 pop up some time next week.
gla
G
Moni & Truth - be great to have you two on board, so lets hope you both get your buy in prices.
Agree Moni - we are looking at a difficult Autumn and Winter in terms of social distancing. Sure I've mentioned here that I've postponed both my June and Sept 2020 holidays and moved them onto the same times next year.
The world needs a vaccine, though travel and other sectors may find a partial solution, by way of a quick Covid testing, system, some of which are being trialled. I'd love to be able to watch alive footie match again sometime soon !
Next update will prob be the half year figures to the end of Aug 20, which won't really give much additional info, we could do with some management figures for Sept and Oct, when they are released in Nov, particularly on the Energy Division.
At the same time the BOD could confirm that STOB is operating in line with the cash flow projections previously given.
The sale of Stobart Air would be handy.
We've been through recent period of low trading volumes, and in addition, we are seeing many many small sales going through, dozens and dozens a day under £1k. Looks like PI's selling ( perhaps some that bought around the placing price ). On the other side Directors and Institutions have bought in, perhaps, looking at STOB for the longer term.
gla
G
Richard Griffiths / Serendipity Capital Limited now holding 23,240,624 shares, ( 3.71% )
G
Hi Castle - another good spot by you early doors this morning with your link.
Hi Volcano - STOB had to respond to the press speculation, so it does look like progress is being made here.
If and when a deal is struck, how it's structured will be key. It'll surely be contingent on securing the extension to the Aer Lingus franchise contract. ( anyone interesting / invested should re read the 4th June RNS, to understand the relevance of this potential sale ).
Should it proceed it's another tick in the box. For me if STOB complete this transaction, so quickly on the back of the sale of the Rail & Civils, it confirms the BOD are progressing the strategy, outlined in that key RNS in swift order.
This transaction, hopefully could / should remove those ongoing lease guarantees, which would strengthen STOB's financial structure and cashflow moving forward.
gla
G
Emm - off book trade went through at 16.38, at 24.66p for 309438 shares, value £76.3K
G
Hi Truth - yep Gatwick in a pickle too, reporting a £321M loss for the first six months of 2020.
Stansted boss slams Govt. for "illogical and chaotic" approach to travel quarantine.
https://www.eadt.co.uk/news/stansted-airport-boss-slams-government-1-6810818
Looks like a number of airports are getting twitchy - as we look forward to the Autumn / Winter period.
Does anyone know if any of the other airports in the UK have a second source of revenue ?
STOB seems very fortunate to have its Energy Division, lets hope over the coming months, it gets back to its monthly pre covid tonnage output as soon as practical.
I listened to Sadiq Khan on LBC this morning and he laid out his case for an extension to the furlough scheme, post Oct end, on a focused basis, clearly his agenda is London. But I do wonder will we see another Govt. U Turn.
Then just to add another bit of doom and gloom, Norwegian Air says it could still go bust despite its bailout :
https://www.lse.co.uk/news/norwegian-air-warns-it-could-go-bust-despite-bailout-jgf5ajbgal6klu3.html
Oh to finish on a brighter note - Ryanair says it's increasing Portugal flights from Southend :
https://www.echo-news.co.uk/news/18680867.ryanair-increases-portugal-flights-southend-airport/
So it's not all bad lol.
gla
G
Moni - welcome back lol
You just couldn't keep away could you. I took a small wager with myself that you'd break your promise not to post here till it was at 20p, emm when was that - oh yes 31st July, where have you been - oh yes I see from your posting history you've been over on the AVCT bb "cheering them up". No agenda there then "wink wink".
Last time you posted here - STOB shot up to 30p within a few days, I did very well out of that little run up. Maybe you could make it a regular thing.
No in all honesty its great to have you back - in truth I only really got going posting here because of your "rounded and considered thoughts".
G
Birddog - I'm with you on your later post, "stemming losses/ cash drain" which hopefully will be through close management of costs.
As STOB have highlighted, to this end
- no div costs
- reduced cap ex - £10m for Southend and only £2m for the Energy Division as a whole this year
- reduced finance costs, with bank debt cleared atm - though this will increase as monies are drawn down.
- Rail and Civils Divisions dumped
- Regrettably likely further redundancies in the Aviation Division can be expected
Let's hope the Energy Division is delivering in line with BOD's recent projections/ expectations.
G
Hi Birddog - You raise some valid points in your latest post, and perhaps we are on the same page to some extent, though again drawing different conclusions from the info provided.
To be honest I'd be pleasantly surprised if they generate half the 2.14M passengers, achieved last year, we've had all pretty much the whole of the first 6 months trading for STOB Feb - Aug end. The busy spring to summer period has passed. We now move towards to the Sept - Feb period, which is historically quieter, plus the EZJ decision and quarantine challenges.
I suggested previously that the Southend project has been put back 12 - 18 months. As to a break even passenger number position - Surely that is influenced by the amount of Capex spent in any particular year. I know I've raised this many times, but it continues to be ignored.
In previous years capex has been substantial - it had to be to get the airport from A - B. This year STOB are only spending £10m on additional improvements, and the BOD has outlined capex for the next two years, again at much reduced levels in that RNS I continue to flag, lol.
One thing I would say- Southend has demonstrated that passengers will happily use it if and when flights are provided, 2.14m confirmed this last year.
May I focus in on one comment you make in your second paragraph where you say :
" the debt it has to service needs a huge amount cash"
I'd remind you that following the placing a few weeks ago STOB cleared it's bank debt, and was sitting with cash on account.
It now has its increased £120M jt RCF, which it will utilise, over coming months. ( I did cover this with you in my post on 5th Aug ).
The BOD outlined it's RCF usage expectations ( based on a worst case of zero passengers at Southend until Feb 2021 end ). The figures are there for all to read. Their expectation as the likely RCF headroom by Feb 2021 end is also there.
May I politely ask, are you distrusting of the cash / debt figures provided by the BOD, and the projections - if that's the case, could you outline, where is it that you disagree with the info provided.
It's very likely that operations at Southend will need to be wound down through the autumn and winter months - all things being equal, and regrettably some further redundancies are likely when the Govt. furlough scheme ends.
It's no bed of roses,for Aviation, I agree, roll on a solution to passenger travel, I from one would like a break.
G
Thx for that Truth, agree the major Institutional shareholders are down here atm.
Yep David Shearer is a shrewd guy, though his average here is high bearing in mind his previous buy in prices, though he did average down recently. Not sure he strikes me as the type of guy that knowingly chucks good money after bad, ( particularly when it's his own funds ).
I'm not one for sp predictions, will continue to look for trades on dips, buying on blue days, want to add to my "free carry" shares, as and when i can. To be honest STOB is not one of my major holdings, but hey - what fun is there chatting on other bb's like ULVR and the like.
G
Hi Castle - i'd not read that article - thx for sharing.
I'm taking it we all want to find a way to beat Covid 19, to allow Aviation and many other sectors to recover.
I've cancelled two holidays this year and re booked them for next year.
No one likes to see people losing jobs, I still feel STOB has two undervalued Assets, though I'd except, owning an airport does depend on it functioning and getting flights in and out and servicing passengers.
At present, it's fair to say, the future is uncertain. STOB will no doubt put in place the measures to conserve cash, that it's previously outlined. It also has it's increased RCF's ( RCF A - £80M & RCF B - £40M ).
We'll know more on the Energy Division performance in Nov.
In the meantime, I'd anticipate, ongoing speculation here, that's understandable.
gla
G
Gatwick Airport to cut up to 600 jobs amid travel slump
https://www.lse.co.uk/news/update-1-uks-gatwick-airport-to-cut-up-to-600-jobs-amid-travel-slump-a79thy18rvxdxcs.html
"Gatwick said that currently 75% of its staff were on the
government's job retention scheme which is due to end in
October".
It'll be interesting to see how all Airports deal with the ending of the Job retention scheme, very challenging times.
Not great for the workforce, servicing all airports atm.
G
Hi Birddog - in response to your post ( 12.23 ).
You post re Southend Airport loses - :
"With the best ever numbers for passenger numbers, aircraft movements and revenue in the 19/20 FY yet they still lost tens of millions".
You follow that with :
"Maybe there's something I can't see?"
The audited accounts provide info on the Aviation Division as a whole, last Financial Year
Aviation Revenues - £56.8M
Aviation Profit - £8.6M
Added to this were the profits from the Energy Division and losses from the Rail and Civils - now dumped.
These figures were of course before the write downs and impairments ( Non-underlying items - (138.6) ) ouch ! But it's important to drill down on those write downs, to consider whether that's it - or can you see more to come ?
As Truth mentions can STOB avoid further banana skins ? It has it's cash, it has rightly written down assets, in the last Financials.
I'd offer two thoughts on Southend - it's worth considering the capital expenditure, that was required over recent years to take it from A - B, then review the BOD's capex plans for the airport going forward. Secondly it may be worth looking at breaking down the Aviation Divsion performance, as a whole, and then attempt to isolate Southend's delivery - if possible to get a clearer view and value of the Airport.
That said, the future of Aviation, world wide does depend on finding solutions to the virus, the future is uncertain, and at the very least it's likely that the Southend project has been put back by 12 - 18 months.
It's very "foggy" out there lol.
gla
G
Hi truth, yep all good this end - hope its the same with you.
been a little tied up recently - am selling a second home down in the west country, lots to sort out.
Its been quiet on here - until today, I tend only to post in response to other's thoughts.
People tend to overlook the Energy Division, I'm hopeful that included in the interims in Nov. as well as month on month tonnage from Feb - Aug end - the BOD will put in info on Sept and Oct progress too, with guidance as to the likely full year delivery to Feb 2022 end.
Hand grenades - or perhaps land mines lol. Emm, a lot depends on solutions to the virus moving forward for Aviation.
So no movement on your buy price at 20p, I've been in and out twice more since our last chat. My only question to you personally, and it's a genuine one - why is STOB a buy at a Mcap of £125m but not at it's present Mcap of £165m ? There's not much in it. Considering the potential valuation of it's two principle assets, being circa £1Bn. Simplistic - I accept, there are other issues to consider.
G