Member Info for hxulcolrdoh

Very good point HMHG re “TIMELY & ACCURATE” information.

There are two types of information

- operational / production data
- financial data

BMN are better at the former and there have been improvements in operations over time. The next RNS will probably be of this nature. However the company are woeful at financial reporting. Rio Tinto who produce numerous products from numerous mines, in numerous countries on multiple continents published their YE Dec 31st accounts in February. BMN will probably produce something at the end of June. It will probably be painful to read but it will be six months out of date - which might be good or might be bad. Frankly BMN really ought to able to hit the ‘PRINT’ button in mid January.

Should a forthcoming RNS highlight operational improvements it would be foolish to hail this as ‘light at the end of the tunnel’ unless it is read in conjunction with supporting financial data.The ‘light at the end of the tunnel’ could be an oncoming train.

My point is that I have no idea what the state of BMN’s finances are and neither does anyone else on this board regardless of how big a fan they are. Probably the next time that reality and reporting come closest into alignment will be the September reporting of the interims at which point debt refinancing will loom over the horizon. Meanwhile there is no obvious margin of safety in BMN finances. Taking a position in BMN is a two element speculation a) will the business model be profitable in the long term b) have they the financial strength to get there.

What is the old adage “Turnover is vanity, profit is opinion, cash is king”. If and when BMN produce a financial update look at cash reporting.

I see the remuneration committee is getting a new member. I think the first item on the agenda of the new committee should be a review of the Restricted Share Plan introduced under the auspices of Andrea Blance in 2021.

Whilst I agree that overall in the longer term the RSP should align the interests of senior management with those of other shareholders in its current form it does have flaws and potentially sets them at odds with other shareholders in the shorter term.

If one was minded to ‘game the system’ then there would be an incentive to suppress the share price when a price was being selected for the ‘shares to the value of’ exercise (though only if the price could subsequently be recovered). Conversely there would also be an incentive to decelerate the price if it was rising quickly. Regardless of whether anyone did ‘game the system’ it would be better if there were safeguards.

Thus far the scheme has not been a staggering success. Though I suspect MLM will have the last laugh. ‘As luck would have it’ for 3 years running the RSP prices has been ever lower – but should recover when it matters.

Their Total Addressable Market (the data shifting business) between AI, video being pushed to the cloud, 5G etc is huge, growing exponentially and I’d have though recession proof.

If they can make the cut a very rosy future awaits. Will they? They have a considerably stronger proposition now versus their IPO (though just over a quarter of the price).

It is time they started making a move. I’m looking forward to next Fridays results presentation.

It does seem like there is a 'dirty tricks' campaign to get rid of Roger Brown in favor of someone who is more 'flexible' on corporate governance / willing to play 'Nigerian rules'.

Part of the outgoing CEO’s remuneration includes shares to the value of 100% of salary.

I notice from the annual report released yesterday that last year the price (296.28p ) was set on April 7. Presumably the details of his final tranche have been determined, presumably at a knock down price. So I’m thinking the journey back to fair value might commence sooner than I thought.

In the short term he will not be that bothered about the share price but he will in a 2026/2027 time frame when he can get his hands on them. It probably would be in his interests to launch them on the right trajectory before he leaves.

I could be wrong but I think VANQ should be trading at near multi decade lows only if there has been no turnaround. If there has it shouldn’t, but it is. Why?

I suspect one big contributory factor is management’s implacable opposition to providing any form future visibility / measurable targets (though they probably demand such of their staff).

One of their ‘how long is a piece of string’ targets is “The Group ‘plans’ to accelerate its receivables growth during FY'23, versus FY'22, whilst maintaining its focus on credit quality and risk management”

Yet at one point during the Q&A section of the results presentation when a question was asked “You talk about accelerated receivables growth, can you give a 'range' of potential growth outcomes and how this might vary across the various businesses ?” MLM's response was basically "it would be inappropriate to provide this today, we'll send you through some information off line".

a) It was a simple and reasonable question that management should have been able to answer (particularly after they’d highlighted it as one of their ‘targets’). Why was it not answered ?
b) Why would the information subsequently be provided to a privileged third party off-line?

A year ago on results presentation day VANQ opened @ 323p. Subsequently after expectations were re calibrated based on the information that was not supplied the share price collapsed and on Oct 24 managed to plumb new depths of 137p. At this point they have limped back to 216p.

A year on and it is ‘deja vu’ all over again. No lessons appear to have been learned. I will retract the “woeful performance” remark if anyone make a case for VANQ’s performance being in line with what was happening elsewhere. Woeful was probably the wrong word. Abysmal might have been better.

At this point I’m probably resigned to the fact that if there is latent value to be recognised this will not happen until new management takes control.

Given the profitability, prospects and dividend yield of VANQ it is hard to credit that its share price languishes where it does (IMO).

In recent times VANQ has woefully under performed it’s sector and it’s peers. This rules out general market conditions as an explanation and points directly to current management.

I do not suggest that management should ‘big up’ the share price. However by the same token I do think they do have a duty to make the case for VANQ as an investment opportunity and that there has been an epic failure to do so. Where I see other companies engage with the market through Capital Market Days and provide investors with some visibility/guidance on a companies prospects, this is conspicuous by its absence at VANQ . Why ? The options are

- incompetence
- design

The failure has been so wilful, persistent and obvious that I don’t think it is the former. Which leads me to consider the second. This is MLM’s last gig. He can afford to burn bridges. Where his remuneration includes shares ‘to the value of’ I do think it possible that he has decided that his long term interests are best served by a short term share price that is in the toilet (even if it is at the expense of institutional investors, private investors, employees with SAYE options, whomever).

I suspect the remuneration committee at VANQ are too smucking fart for their own good.

Eg one of their 'clever' ideas is the RBA - a percentage of salary is delivered in the form of shares. In theory it will align the interests of management with those of shareholders. In practice if one wanted to 'game the system' it could have the opposite effect. If you knew you'd get say £100k of shares which should be worth £4 (an award of 25,000 ) then you'd not be upset if in the short term they withered to £2 and you were awarded 50,000.

The message from last weeks year end results presentation seems to have got lost in translation.

Although I thought it was a bit of and improvement it must still be too woolly and non committal

Initial impressions

- They are boasting of a £127m adjusted profit before tax
- They have re committed to dividend pay-out ratio of 40%
- There seems to be good foundation for the business going forward
- With the exception of central costs (which I'm not convinced are under control and expected to be repeated in 2023) the numbers are moving in the right direction
- They expect their addressable market to grow.
- They claim not to be seeing any deterioration in arrears etc rather improving numbers
- They say the year thus far has got off to a good start
- As ever there is NIL GUIDANCE (other than banalities such as "we will continue to focus on credit quality whilst accelerating receivables growth")

Overall there is nothing that adequately explains why VANQ is where it is (ie I suspect it is undervalued) or makes a compelling case for why it should be reassessed. MLM will present the next interim's. Maybe then after the change in leadership it will get a re rate ?

https://www.thisdaylive.com/index.php/2023/03/24/court-to-rule-on-application-to-set-aside-suspension-of-seplats-ceo-on-march-30/

I’d have thought that in theory VANQ’s business model should be relatively simple and more akin to traditional retail banking.

The problem with larger banks tends to be that the retail element gets corrupted by an investment banking element. The later tends to involve complex products, derivatives, and derivatives of derivatives etc. Nobody generally knows what their third party risk is – least of all management. However management are happy to bury their heads in the sand while the bonuses roll in. They never have to hand them back (eg Dick Fuld trousered $500m in the run up to the collapse of Lehman brothers)

Whoever fronts the presentation I’d like to see them make clear concise numerate case as to why VANQ is now investable and a good home for shareholder funds.

(Though given the rambling shambles that was the last annual report I’d not be surprised if proceedings veered off course with an announcement that thanks to the installation of bidets/Dyson dryers and the elimination of bog roll in the executive loo’s an area the size of Wales had been spared from deforestation in a commitment to climate change. Further checking more tick boxes a rainbow themed windmill had been donated to a LGBTQ drop in hub in Hebden Bridge etc)

I wasn't sure who would present. The new CEO was slated as joining 'in the summer'.

I was thinking it would be MLM's swan song performance ?

A good gig from OF's perspective. 2021 remuneration $2.027m. Also $1.68m paid to Red Cedar Energy DMCC of which OF is a director for consultancy.

https://www.lse.co.uk/SharePrice.asp?shareprice=VANQ&share=Vanquis-Banking

Not long now until we get the 2022 year end results – Friday March 31st.

Is there a good story to tell ? I suspect so - based on the (information light) messages throughout the year. If only we knew what ‘management expectations” were. See below.

The bigger question is probably can management communicate the story in terms and with sufficient detail that provides the market with the confidence to buy into the story. The ball has been fumbled in recent times.

Q1: "The Group continued to trade in-line with management's expectations during the first quarter of 2022”

Q2: "I am delighted with the Group's first half performance. We have delivered growth and returns in line with market expectations”

Q3: "The Group continued to perform in-line with management's expectations throughout the third quarter of 2022 and into October.

Q4: “The Group continued to trade in-line with management and current market expectations for FY'22 during the fourth quarter of the year.”

Might need a punch line.

Might swap out "Unsatisfactory Offer for Hurricane" for a play on the Churchill line "Never were so many screwed by so few"

There is low visibility of BMN's CURRENT state of finances so it is hard to say where it is headed.

The YE results for Dec 2022 will probably arrive at the end of June.

The bad news is that they are likely to be disappointing. The good news (sort of) is that they will be 6 months out of date. This allows anyone to take a pile of interim 'dots' and join them up to make a donkey/goat/swan/whatever.

That will be management filling their boots with shares that are now valued at 12.5p. Obviously.