Member Info for Gerry65

Morning Volcano - not an exciting morning where I'm looking to get in. No trades today yet.

Took a dip trade on SGE earlier in the week at 5.85 it's just crossed £6 seems to be clinging on by it's fingertips - not a lot there for me.

Am trying to puzzle out whether a move to cyclicals will continue, or not. It's very patchy out there.

Am looking for longer term dip opportunities on some longer term safer div. holds as well as day trades.

TF - it's quite toxic over on RMS this morning. On ESL lots of newbie buy ins this week so expect some glass half full posts, as the golden tickets may need moving on.

Perhaps the most important question for me this morning is which tier we are all about to enter lol. Will I be I able to buy a pint, or will that include a meal, or is it still take outs ?

Gla

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Volcano - nice one, no additional trades for me today.

Am benefitting on some of my holdings with the recent move back into cyclicals, but keep a watching eye on some of my FTSE favourites, which are drifting back into my " buy territory" for longer term holds.

It's a different trading landscape this year over the past few years where you could buy in and ho!d for a period of time on a trade.

Atm to me it's a case of get in - get your price then get out again.

Tomorrow always seems to bring further opportunities.

Time for a long walk lol.

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TF - got to agree with you on that. Nothing wrong with buying into shares linked to covid testing / protection.

Have traded quite a few of them myself this year, have backed out of most if them now, don't really like bb's that become "bun fights" - often known posters arrive and it becomes a bit toxic.

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Morning Volcano - did you get in early doors, maybe around £9 or just below. Nice trade if you did mate.

I decided to sit it out so missed it today.

Been in and out of this one many times, over the last 5 years.

Anything above £9 is just a little too warm for me, will keep a watching brief - prefer an entry at around £8 - £8.50 range.

Watch it shot northwards now, lol.

May be a chance for me later in the year. To me a pretty safe share, maybe an ex div dip play.

Gla

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TF - lol - bit rampy pampy over there on ESL today.

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Volcano - it looks like 4m shares were traded, 1341 trades in total for the day as I type, over on ESL, loads of new ramping posters appeared there today.

Probably many dived in on the back of the initial rise, looks like they created a "bubble" - seems the BOD's rns popped it for the time being.

Some made money, many are nursing headaches, I guess, got to love these bb's .

Gla

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TF - rns from the ESL BOD, may slow things down over there.

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sorry LSE - ESL bb.

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TF - the rampers are all over ESL, atm - but I guess you know that.

If you think it's wild on the LSE - RESL bb - check out the ADFVN bb lol.

Hot air / P& D / genuine news coming - what are your thoughts ?

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Hi Volcano - looks like cpi is popping over 50p which you predicted. Not in there atm, can't be everywhere.

I took another bite at TLW on 22nd Oct think it was, about a day or so after the Uganda confirmation. Must say it didn't look too good by early Nov. Still I left it in the oven, and it seems to have browned off nicely.

UU. results out tomorrow, it's drifting. Not sure - think I'll see what the market thinks, in the morning. Every chance of picking it up again before Xmas maybe I'll look for an ex div dip a week or so before the end if the year. Would rather luck it up around the £8.50 level, maybe I'm being unrealistic.

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Morning Volcano - the absence of stamp duty also helps here. Am guessing you make a few quid on STOB today.

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TF - just to mention based on the timing of your post on the close yesterday, mid price sub 24p.

Traders that bought can be out for 25.8p as I type somewhere around a conservative 7.5% for about 1.15 hrs invested here.

Still feel trading this one offers up regular opportunities. Am making no comments on the longer term.

Many trades available this morning on many Co's of course.

Gla

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Easy trade here on the back of latest Govt quarantine rules / testing on return to the country.

Gla

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TF - different Company - different circs. though the CINE rns today confirms - "Agreed bank covenant waivers until June 2022"

We live in unusual times.

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Hi TF - the base case figures and amount of cash burn are not my personal analysis, and I wouldn't wish to make such a claim

The Analysis that I have posted is drawn directly from the interim statement dated the 4th November and is freely available for all to read.

I like to play with a straight bat and I feel it's only reasonable to debate matters based on info provided.

So those are the figures reported by the BOD, not mine.

The possible monthly cash burn was known when the RCF's and placing raise where TOSCA pushed more monies in was arranged.

Again we have no knowledge of the RCF covenants but generally speaking Banks do prefer to see cash flowing in and out of overdraft facilities, though if there is a clear plan in place ( ie the sale of non core assets or the eventual sale of the Energy Division ) then they may well be more relaxed.

I would say that over time, any proportion of an overdraft that does not return to credit with monthly cash flow, would be considered longer term debt - and there could be justification in re classing that proportion into a long term debt or loan, depending on serviceability in terms of interest and capital reductions.

All we can do is watch wait and speculate. What will come first
- positive cash flow
- asset sales
- asset buy in
- debt restructuring ( through potential placing )

In the meantime - I'm looking for my next trading opportunity, will it be on a dip, or a sale of Stobart Air, or maybe on the back of vaccine / testing news.

Gla

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Hi TF - my understanding we have the original RCF at £80m and the second additional one was agreed at £40m, that's what has been presented in various RNS.

As you know the placing was agreed and designed to clear all Bank debt back in June, which was achieved.

More recent RNS give base and worst cash burn calculations with debt headroom figures to Feb 2022.

(The base case forecasts indicate that the Group will have facility headroom of c.£47m at February 2022 ).

Again terms and covenants, as would be expected are not disclosed as far as I am aware.

Agree with you on exiting Stobart Air, though I'd suggest the orderly sale of the Energy Division is at least 12 months away, the BOD will want to have it back in fine fighting fettle, before looking to achieve a sale.

Don't dismiss the "strange concept" that both the Energy Division and the Aviation Division can create revenues, very quickly if external headwinds can be overcome lol.

That's the fun of being here, never a dull day.

Yes many are under water including all Institutional Investors, but to date, no movement from them.

Others are very much sitting on decent rises from the 18p level.

Here's a thought - round numbers but anyone with £1k in here at a £1, and underwater, could have put £2k in on a second trade at 18p recently and have been up and in profit overall at today's closing price of 26p.

Sure some took the kind opportunity offered, to recoup.

TBH - i was hoping for a dip opportunity on the loss of the Aer Lingus tender, but as yet the market has not been kind to me, with the positive effect of vaccine news. Still tomorrow's another day.

Got to be in it to win it lol

gla

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TF - With debentures in place i'm guessing that when asset sales come to pass, they will be subject to conditions therein.

The two Division are presently not producing sufficient revenues, that's a given. Aviation is pretty much shut down. Though the Energy Division is getting back on its feet.

As to the future - much depends on planes flying again for the Aviation Division., which is not something the BOD can control.

I don't have access to any conditions attached to the RCF's, I'm guessing you don't either.

I suspect that the RCF's are secured by standard debentures, so asset sales do require agreement from Banker's.

I would have though that de risking the business by the sale of Stobart Air would be generally welcomed by all parties.

Small non core assets sales £10m - £40m , to create liquidity may be acceptable to all parties.

Any sale of the Energy Division or a % sale of Southend will very likely, involve a restructure of RCF's and that would be fully expected.

Not sure what you consider a substantial RCF, though the facilities would have been agreed with "worst case" in mind.

I'd say nothing is blindingly obvious here lol .

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TF - 2020 could and should have been the year of transformation for STOB. It came into the year having spent considerable monies on developing the Energy Division and Southend. Both were set up for a strong year and future. Regrettably Covid came along and scuppered things. No use crying over split milk. It is what it is, and the BOD have to deal and play the cards in their hands.

It could be said that STOB took on two large projects from a relatively small capital base, a company with a higher capital structure would have probably have found it easier to navigate present challenges.

You mention the naughty sister, with hindsight STOB played a blinder here - back in 2017 it held a 49% stake in ESL, and through regular sell off of its ho!ding cumulating in the bond deal, it has managed to pick up considerable cash funds, which in part have been utilised towards capex. If it had sat on its ESL holding you might have a case for challenging why. Fortunately it didn't.

To me if you are riding a raft down a fast flowing river there is little point worrying about the raging waterfall around the corner, first you've to avoid the rocks lol. So I'll say once again STOB needs to deal with the priorities that it can effect. First a sale of Stobart Air. Second get the Energy Division back up to full throttle.

That said any solutions to flying over coming months will reduce Stobart Air cash burn quite considerably going forward.

Turning to an approach to a % buy in at Southend, by someone with deep pockets, that would need approval by it's Bankers. The RCF's will be secured by way of Debenture with charges over fixed assets. So any introduction of funds from such a source would almost certainly involve a reduction in any RCF borrowing at the time + an amendment to ongoing facilities.

With valuable assets STOB has options to work through present headwinds. Though it will likely be an entertaining year or do. How that will impact pi's is open to question.

Gla

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Hi Birddog - so we here we are - me with my free shares and you with your historic investment, not large as you say, but one that you have given up on recovering any funds back. it's more emotional investment now! and I understand that.

I'm happy if you don't want to test the BOD's claim that 2.5m passengers represents their projected future break even position at Southend. Much depends on what factors go into calculating that figure. But any info you have to counter their claim would be useful to me when planning my next trade.

You say you'd rather rely on your "desk calculator" as its never lied to you.

What did it say to you at the time you decided on your investment here ? Perhaps there is there is an argument to suggest that it let you down on that occasion my friend. May I ask what drew you to buy into the STOB story, btw I'm guessing the various outcomes and the impact on the sp have done much to dampen your spirits here.

Saw your figures for context regarding Southend yr end Feb19 figures. ( your post 15.55 )

You didn't mention the £40M cost of sales figure for that particular yr, which had an impact on the figures you presented.

For further context the Feb 18 figures based on much lower passenger no's were:
Revenues - £21.1M
Gross Profit - £17.5M
Loss for yr - £6.5M

I agree if the operating costs were to stick at the Feb 19 levels then you'd have a case. If they revert closer to the previous years costs, with passenger numbers up at 2.5m then perhaps the BOD's statement has some credence.

STOB has no control over Covid, all it can do is aim to manage cash burn, and focus on what it can effect, so priority one is the sale of Stobart Air, and priority two is to get the Energy Division running at full throttle.

Its down to external factors as to whether passenger flights will return next year.

It's going to be tight lol.

gla

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Birddog -The 2.5m passenger break even figure quoted by the BOD in a recent RNS, is based on very limited ongoing capex. It's a forward looking statement.

In previous years considerable sums where spent on the airport to create and develop what we now have at Southend. You get how that impacts the bottom line I'm sure.

I'm clearly not summarising what the BOD have said very well and for that I'm sorry.

Maybe you'd like to pull together the YE Feb 2020 reported figures, due out soon. Add in the extra 400K passengers, by providing a revenue value for them, then calculate the variable costs for the additional passengers on a pro rata basis. Not sure how you are going to factor in economies of scale into your figures though.

Following that exercise please ensure you strip out the cost lines that the BOD believe will not be there in future.

You'll then be in a position to present to this bb, your recalculated version, of the accounts, and we'll be able digest your figures, and debate them.

Once we have reviewed your workings and come to an reasoned agreement to their accuracy, we can look to see if what the BOD is saying has merit.

gla

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