I have debt at around 18m in my notes. Interest cover on the debt was around 10x so I'm not particularly worried that the business goes bust.
Perhaps the other chunk of money you're thinking of is the deferred consideration? This isn't debt in the traditional sense, as it is only payable under certain conditions. There's an explainer note on this here: https://www.capitalaccessgroup.co.uk/research-portal#/portal/capital-access-group/research/23_2021051710364967558
" despite IFRS requiring an estimate be included on the balance sheet as a liability of a fixed size, it is almost entirely contingent upon the revenue and cash collection of the purchased businesses. In other words, if the purchased businesses don’t meet revenue estimates set at the point of acquisition, deferred consideration is not payable on the shortfall"
I agree with the general sentiment, but my God the share price is attractive...just can't bring myself to sell at these levels. There's a decent operating business under there somewhere, we just need to hope that management don't destroy it
This article in the BBC bodes well - https://www.bbc.co.uk/news/uk-england-beds-bucks-herts-61426148
Luton Airport hiring staff in expectation of the busiest summer since 2019. I don't think we operate from Luton, but shows the industry is going the right way
I'm not sure if it's the same thing, but there's a write up on the BBC news website today with Steve Heapy stating that demand is ahead of 2019.
https://www.bbc.co.uk/news/business-59905680
Didn't doubt them for a second. It was all a grand strategy to avoid trading on the day the new variant was announced. Genius.
Well, at least we're not getting delisted before Christmas then
Has the deal been accepted on the Arden side? I assume their shareholders won't be jumping at the chance of swapping shares with a delisted company
You're correct. 2 weeks left. This is from the London Stock Exchange site:
"If an AIM company ceases to have a nominated adviser the Exchange will suspend trading in its AIM securities. If within one month of that suspension the AIM company has failed to appoint a replacement nominated adviser, the admission of its AIM securities will be cancelled"
Maybe it was strategic. The share price got battered after the last placing, so this time they made sure that trading halted while they diluted shareholders.
Or maybe I'm being too cynical
I've been looking at PIP for a couple of days now, considering whether to open a position, as the operating business looks decent, and trading under fair value, however I can't get past the sense that this is a vehicle for Gordon Watt's self-enrichment. Can anyone translate what happened with the sale of SUMO a couple of years ago as it makes no sense to me at all. He sold Pipehawk's stake to himself...but loaned the consideration amount to Pipehawk, paying himself interest? Can anyone make sense of this?
"PipeHawk announces that it has sold its 28.4 per cent. joint venture interest in the ordinary share capital of SUMO Limited ("SUMO") to Gordon Watt, the Executive Chairman of the Company, for a consideration of £197,499, being the original cost of the investment, subject to shareholder approval ("the SUMO Share Sale"). The consideration will be satisfied in cash. Gordon Watt has agreed to pay the consideration immediately and therefore the payment of £197,499 will be treated as a loan, on identical terms to the existing loans due to Gordon Watt, until such amount becomes payable under the agreement for the SUMO Share Sale"
I might email ir on that very point. The CEO made a very specific statement about acquisitions coming from cash flows not capital raising. I understand that circumstances can change, but in 4 weeks and to acquire a business you already have a working relationship with and we're almost certainly discussing acquiring before the AGM. What annoys me is that there is no justification given to shareholders. I would expect something in the RNS explaining why they changed their minds (they want the cash to repair the balance sheet, etc.)
I've decided not to sell my holding (not that I can at the moment anyway) as I think the operating business is good, and shouldn't be sold for £32m or whatever the market cap is currently, but I've lost faith in management over this.
I'm hovering over the sell button myself at the moment. In the AGM last month Adrian Biles specifically stated that future acquisitions would be funded through internally generated cash flows and there are no plans to raise further shares. Why mislead your shareholder base?
It's a shame really, for while I'm obviously happy to see such a quick return, I think the business is being flogged off at a big discount. Fair value would be closer to £9 per share in my view. I sold out this morning to redeploy elsewhere as I think the most likely outcome is probably the £6.80 is accepted
The language is a bit unclear though. I'm not sure if they're saying their mitigation will bring the loss down to £15m, or if the £15m is the worst case should the mitigation not work? Either way, a 13% drop in the market cap is over done.
"We are working closely with our customer and are making progress, jointly with our supply chain, towards recovery of the programme and mitigating this risk to less than £15m."
Some interesting comments from Jet2 in response to the red list changes today, feels like we might actually be turning the corner - https://www.bbc.co.uk/news/uk-58838682
"Airline Jet2 said there was a "genuine reopening" of international travel, with bookings trebling in some cases."
"Jet2 chief executive Steve Heapy said there was "enormous" pent-up demand and customers are responding to the "assurance that the UK government is finally giving them"."
The comparables were fairly high - last year's H1 revs were up 51% on the prior year...some consolidation should be expected after such a result, and the fact that we've still seen some modest growth (or at least flatlined profit) is positive. I could understand some disappointment if this were 40p a share, but at 16p you're getting a good risk/reward if growth pushes back into double digits going forward