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The deal is nailed on ... its subject to shareholder approval (which I think will pass easily), and subject to regulatory approval (US anti trust) (again should be fine). WSP is announcing the deal on their own investor call this morning, so both sides aligned. WSP have stated 'acquired the business' ... not 'intending the acquire'. Deal is pretty much certain
I think the management team was keen to get the news out about successful sale (which by the way is no mean feat, given inflation / markets / etc), that they did not think clearly on proceeds. Either way, i struggle to see how they can go wrong from here. Should look back on this as an opportunity to add
It's both - they're going to tackle the liabilities plus reinstate the dividend. I think one possible reason is that people were expecting a debt-free balance sheet, and they have indicated they will keep debt on balance sheet (which is a more optimal capital structure for any company). Again, it's puzzling to me.
Aucuba - is this the reason for the drop? Really? He just delivered a significant deleveraging of business that was (in effect) in financial trouble. Looking ahead, and ignoring the CEO who is moving on, the business now has a very strong financial position, and the pipeline is strong. It's a capital growth story from here (Oh, and they will bring back the dividend ... so it's a yield story as well).
The mgmt team are not charismatic sales men, and did not highlight the impact of the deal well enough ... but I expect sophisticated investors to see the deal for what it is, and not how well they present it. Honestly a bit perplexing
I'm actually impressed by the speed of the deal - the more likely outcome was to say "we're in continual conversation with parties" meaning a delayed deal ... the management stuck to the timeline, and delivered a good EBITDA multiple deal. It's a job well done
Amused by the comments here :) It's a great update and game-changer ... cash position will be looking very rosy ... retail traders 'running for the hills' .. i would hold or add here. It has 3-4 pounds written all over it once the dust settles.
Possibly buy some more here in coming days if I free up some cash elsewhere
This is a 5-year hold for me
Question is whether you are able to get out again ... be careful
$1.2bn deal
Too much happening, and too much potential in the platform .. regardless of Art, this will rise. Big 2022 coming.
Davand ... that's certainly one option ... we should all write to David and the CFO and remind him of this option ... they might just do this ... another option is simply to gear up our £100mn cash (and take an acquisition loan, say £200mn), which gives us a £300mn war chest to buy some DIVIDEND-PRODUCING, NON-COVID REVENUE stream ... any covid testing that stays on is simply a bonus. Either way, the downside here is starting to get minimized.
Yes, people on this board bicker too much ... it's actually a great time to put some money to work here. Think we can get a proper bunce back soon. Whether testing stays or not, I'm pretty sure the team at NCYT isn't sitting twindling their thumbs ... I'm sure they're thinking about revenue the whole time. They'll figure the next steps out.
A business that's close to 1x cash ... I've been away from this share for a while (thankfully) ... yes, Covid is over, but they will find a way to re-pivot ... really feel we've found a technical bottom here. I'm chucking some cash in here.