The latest Investing Matters Podcast episode featuring Jeremy Skillington, CEO of Poolbeg Pharma has just been released. Listen here.
Avocet I think you give banks and sensibility too much credit. Greed always kicks in a bubble. We are humans and naturally flawed. House prices were red hot pre covid and interest rates were starting to rise
They then boomed to new highs over covid and no one thought it wasn’t prudent. The reality is now you have over inflated asset (which means bigger mortgages) all sold on rock bottom rates. When these rates end people will face huge increases in mortgage costs or just extend their mortgages into the future (which will create a retirement crisis)
Sorry but we need a reset. We knew this the 12 months prior to covid. It was just lost in boredom and funny money flooding the system
I’d have though GLG and Blackrock would follow they will both be at a loss now on their shorts
Hopefully we can surprise in terms of cash generation and then the shares will fly
Hoping the article attracts a bid for the whole group
Let’s hope they can get something away. Ultimately £650m isn’t a huge cheque in PE world. My only slight annoyance was a sold a handful at 590p. I was nervous around interest rates and didn’t want to waste the chance to de-risk but at the time I did it I was happy
It’s a shame to split the group as I do think there’s a great story in software and service delivery combined but x-sell is always harder than envisioned
I traded in and out of housebuilders but I don’t own atm (but very keen to add as I strongly believe they will recover)
I’ve read some of the debate below and enjoy the views. I might be wrong (and happy to be) but to me this does feel like 2008 on the mortgage side of things. Lots of people moved home during covid, house prices booked by 20-30% and those houses were bought on BOE rates of next to 0%
My son has to remortgage next year (he bought well before covid). He has £140k left to pay and when he does his annual interest costs (and therefore annual payments) will increase by £3k! That’s a huge hit. When you apply that to £4m households along with hot housing prices. It feels like we are possibly going to get a wack
Is this too simple? I haven’t even factored in that the food shop is up by £1k etc
Can anyone see the Times article just out?
My first few buys were around that level. I’d previously been selling up near £8 and was trying my luck again
My thought here was always that this was worth more in the PE world. I therefore averaged down (but didn’t grab the bottom and I’ve lightened the load on the way back up)
Ultimately this is what the fire business should be worth. The software side then (hopefully) is valued like Ideagen which got taken private for £1bln on a £30m EBITDA
I did think someone would like the group as a whole tbh
They will have to RNS now
Brilliant news!
The software platform then can get valued the same as Ideagen! Which would be near £1bln
Agree with all the below. The business needs capital and PE have it to deploy. PE multiples are those numbers but on EBITDA
I have to admit I got a bit excited today when google incorrectly quote 993p share price. I thought a bid had landed
The clear whey drinks in boots is good. The issue is is that they aren't in the fridges. They are just on a shelf so not really "grab and go". The Manchester market street store has them in but they are a struggle to find (bottom shelf)
Why buy a warm clear whey? Hopefully this is just as they trial and then they move to the fridge
Interesting that it's on EBIT and not EBITDA given how high those figures are but I guess that then accounts for future M&A spend ie amortisation of acquisitions
770p seems low for a SOTP valuation. Can you provide some insight into that and any other points
I agree a raise isn’t needed but there is more than a £50m drag on the equity due to the debt and rising interest rates therefore a raise will drive a rerate it my view
All makes sense to me
You refer to an investec note? When was this and do you have a link to a copy?
My thoughts atm are whether we should just do a raise. Say £50m or so. I think the slashing of debt would take away any down side risk and we’d see more than a 10% rise in share price
Do we think there is anything to this rise? or just positioning ahead of results?
Citation was acquired for 17x and PTSG a similar multiple. This would be ripe for PE takeover who could clear Marlowe's debt and unlock the FCF
It doesn’t generate any cash at all. It’s just a number on the balance sheet but the cash related to it has already been received and spent
It comes from say Marlowe raises equity at £8 and the nominal value of shares is 5p then the £7.95 goes to share premium and the £8 goes to cash
It won’t add any liquidity. All it is for is to move the balance within share premium to p&l reserves. Having a higher p&l reserve gives you more room to pay a divi or buy back shares
So it’s possibly positive ie small divi (which I think will be so we can access more investors) or a buy back of shares given price is so low
I’m not a fan of either atm with debt high and interest rates still rising
As you describe it is literally how most placings are done! Look at Asos here they got in fully underwrote by the two largest investors. You can get them to say yes within hours or days
All you need to do then is have the banks build the book which again can be done in hours (you saw that here as well RNS goes out and results in the morning)
Its also very typical that a placing is done after hours as then you have a locked price! You can't announce a placing in the morning as then open trade starts so you no longer control the price
That you didn't know these things tells me you're just frustrated (which I get) and you don't understand these basic things
It's not naive at all its factually true. Just because you didn't how mechanically and legally it worked isn't my issue
Another way to look at this. If the CEO said something MATERIAL to the market which he knew to be false (which saying there won't be a placing while he knew that there would be). He'd now be in handcuffs and facing a huge lawsuit
So yeah I'm naïve
Placings don't take a long time at all. They can be done in a few hours
There's little documentation needed and as pre-emption rights are already waived at the AGM then you don't need to get permission
Remember when T4G would argue blind with us all that capex would return to £30m. Seems that view has changed
Also what he's saying re net sales is incorrect. Boohoo need to clarify the definition as the net he refers to is without tax. The other net is related to pre-returns. I emailed boohoo IR a while back but if you do the same they will clarify
Capacity is £4billion and not £8billion as T4G has claimed