Member Info for Jinny122

Only guesd is market wanted bold decisive action (e.g. loan book disposals, transformative M&A etc) and are disappointed by just tinkering on the edge

£21,000 Million in Assets

£15,000 Million in Deposits

2 million customers

60% LTV conservative loan book

Minimal unsecured debt.

HOW ON EARTH does anybody allow this to sink to £120 Million in market value???

Does management / big backers conclude that the turnaround plan has spectacularly lost the market's confidence.

Is there currently a bank in Europe with a lesser market cap than Metro Bank??

Past mistakes aside, this was a miles better investment under VH and CD, they believed 100% in the business and the market bought that.

Comments from the PRA in Jan 2020 ( source: Telegraph) on the matter of rumours about a Metro takeover

“We approach these things with caution, we’d have to be sure it made sense for the resulting entity,” says Woods. “It’s been quite striking to me that really we’ve only had that one consolidation [in banking] – Virgin Money and Clydesdale. The possibility of others seems to me quite relevant and would not be problematic in principle...ENDS

... and that was before the covid devestation of Metro. Metro now also flagging that it'll breach MREL regulatory capital in H2.

IMO it needs to be taken over BEFORE it sells another crown jewel. ESS is an absolute cash cow. Invest in it, not just flog it to pay down down debt (which will inevitably increase again as in the past).

Main issue here is lack of top line growth, selling hugely profitable businesses is a no no

There's HUGE value to be unlocked here, any PE buyout will make huge returns imo if they pay down the debt, totally change the current shrinkage strategy and preserve the group's businesses. Huge value.

That was not a convincing slap down by the company.

They didnt even try and sell their prospects as standalone, they didnt even back their transformation plan as their priority.

Nothing there discourages bids for the company, if anything it has encouraged it.

£2BILLION blown in 3 years, and yet loss making, struggling to meet debt covenants. no sustainable free cashflow, totally collapsed SP.

Money raised since 2017:
• Sale of asset management arm: £888m
• Rights issue proceeds: £700m
• Sale of Parking Eye: £235m
• Others: £100

Anyone have a precise figure on how much money has management raised since 2017 and how many businesses have been sold since then to now?

Rough calculation is that it is around £1.5 BILLION when considering sale of its asset management admin business, £700m rights issue proceeds, sale of parking eye, and many others..

Sold off many of its crown jewels for no discernable benefit. Lost profit from disposals have not been replaced and debt kept growing due to poor performance.

Horror show

Looking into this company it looks like the transformation plan has failed. Management may struggle to argue for more time, it will have been 3 years in 1 December since new management took over and SP has accelerated backwards since

https://www.thisismoney.co.uk/money/markets/article-8691425/Private-equity-giant-CVC-plots-bid-TV-licence-collector-Capita.html

Is this worth a punt?

Zccax77 - good info on the leases at £700m.

Well they should write off substantially all of it, banking is going digital. By next 20 years, those branches will be near worthless for a bank. Dont forget, Metro frequently leased two floors , then gutted the top floor and knocked down the floors to create high ceilings for the lower floor.

Coupled with your suggestion of £250m 'fix the bank costs', thesale price for the bank falls further to £300m / 174p.

They should sell asap and run for the hills imho.

Solution for Metro.

1. Write off full value of ypur leases: -£350m
2. Discount MREL payments for 5 years: -£150m
3. Take another £200m bad debt write down: - £200m
Total Discounts: £700m

Deduct from Net asset value of £1.3bn, gives £600m.

Sell the bank for £600m / 348p.

Job done. Trapped investors can salvage something at least

Many have watched this stock continually rinse holders from 900p /share last summer all the way down to 68p/ share this summer, and declining again.Yet many on here dismiss this trend and are continually singing praises of investment in Metro. Why is this?Truely puzzling.

To report an UNDERLYING loss 20% HIGHER than your revenues in H1 confirms SERIOUS structural problems.

That is exactly equivalent to a scenarios of Lloyds reporting an underlying loss of £8.9BILLION in H1 2020.

Absolutely horrendous results

....that's key. No one wants to wreck the business given the economic backdrop.

Anyone think this makes a RI impossible now, and a full on sale of the business now more likely?

Kcfb.

It is not that high when you consider it is multiples of base salary only, not total comp.

FTSE CEOs earn multiples of base salary as bonus alone.

Some CEOs dont even take a base salary, like Elon Musk. But he has a $55bn long term incentive share plan to compensate.

Saw it somewhere previously that a FTSE CEOs have minimum shareholding requirements of around 200% to 300% annual salary.

You could also read it as bad news, surely this is outside the closed period pre-results? Not sure.

For example, if ypu were launching a rights issue its helpful for the directors to have skin in the game prior to the announcement collapse. And then participate in the raise pro rata

Jimdson.

No one is going to go hostile on a high street bank during the current climate.

Mad to do so given the sensitivities.