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I suppose things are so dire, chiefly because of debts, that if they simply had the results with no potential solution, the fall would have been even sharper. Too much debt, increase in interest rates (albeit only back to long term norms, so completely predictable), and the tide has gone out and left some businesses trying to hold on to their dignity…
Well, yes. But on a maximum £400 monthly deposit and only for 12 months (then reverts to standard account at 0.9%) and only if you are a Club Lloyds customer, which has a £3 monthly fee to maintain the account (waived each month that you pay in £2,000 or more) and pays erm 1.5%. As Lloyds says: "For example, if you deposit £400.00 every month for 12 months you will have a balance of £4950.00 after interest is paid." So actually £150 interest over the year, which, if you had the full £400 x 12 at the start equates to 3.125%... Good for monthly savers, but a lot of hassle for the £150 interest over the year. Can't see it moving the needle much
Commercial law firms do best when there is a vibrant economy (unless they are hedged by strong litigation/insolvency practices). Firms heavy in real estate may be particularly vulnerable if that market slows down (commercial property is in the doldrums for structural reasons). That said, it's easy to identify risks, but the tricky bit is assessing how much of that negativity is priced in already....?
The c£2bn drop in deposits may be the issue for the drag on the share price - in that sense Lloyds is losing money. The profit is based on interest rate spread, but if depositors park their money elsewhere, then either traditional banks have less money to lend or they have to up their savings rates, each of which reduces future profit. If I wasn't lazy and already tied to a traditional bank, would I use Lloyds or any of the other usual suspects for my deposit account? That's a challenge because Lloyds needs new depositors (in my day, you could bag a customer for life by giving them a book token or indeed a bag!)
Another pleasing set of results. Price up well today, but still way off the year end NAV per share per the results. I shall be holding.
Interesting discussion. I too was pleased to see that pretty much all stock was sold. I don't believe that the diamond market movements justify the precipitous fall in share price over recent months. The company's lenders appear to be supportive. Yes, the debt is substantial, but in this business you have to invest. I agree it may be a bumpy ride to recovery, but am sticking with it for now
I would have thought a greater second half weighting given the tender numbers (I think there is generally a greater second half weighting in any case?), but the basic point may be right re revenue. I wonder how much of this is already priced in though and therefore how much today's news should be impacting share price?
More news this morning. Making further investment is another sign of confidence. The company is confident, the lenders are confident, and so I am confident that this ought to rerate further. It's still at a very low price historically. We'll see...
From LSE Finance News: "RBC Capital Markets said: "While we caution against attributing value to fancy colours, we would estimate a price of +$100,000 a carat based on the sale in Q3 calendar 2014 of a 16.4 carat stone for $2.2m ($134,000/ct)." It said that suggests Petra could realise $2.3m-$3m." But the key point for me is that it is a reminder of the potential.
Now now. It's all about value and perception of value. If a company buys a business worth 100 and issues 100 worth of shares for that business, then no dilution, I agree - the value per share is the same. If the buyer over-pays, which is more tempting when using shares to pay, then there is dilution. I remain cautiously optimistic, but until we get that RNS it is speculation; there is no certainty. That is not to say the management isn't working away at closing a deal now - but we don't know and we will have to wait and see.
Lots of companies may look good, but it's not just about flashing the cash pile. Sellers may look for CSI shares for their shares, especially in a growth company context, and before you know it there is dilution for CSI holders. It's just a question of waiting and seeing. I remain cautiously optimistic, but the end of December will come around very quickly and by then, one way or the other, we should know more.
I don't see a benefit in selling before we have news either that there is a deal or that there is a return of capital. The share price seems to be fixed around the cash in hand value. The only downside I can see is that if there is a return of capital, that might trigger a sell by those who'd been hoping for the upside of a deal. If that happens then I suppose even more patience is required, to sit it out for a full return of capital over time (assuming that the one announced by the end of December will be a partial return rather than a full payout). As others have said, if there isn't a deal on the table by now, then I can't see it happening before the end of December. The stars seemed to be aligned for a deal, but we are not the only outfit looking for acquisitions and we'll want to pay the right price, so there's simply no certainty. Harrumph.
I think the price fall is largely to do with concern over debt covenants. It would be good if the company could allay the concerns. It feels worryingly POG-like at the moment, where every top-up is gobbled up in the downward spiral. Good luck all.
Still a ten per cent discount to the indicative deal price, to reflect uncertainty and the delay to receiving proceeds, which begs the question whether to top up and treat as a high interest savings account...
One of those little catherine wheel fireworks going off now! This show of confidence all bodes well!
"In the absence of identifying one or more suitable investment opportunities, we anticipate bringing a proposal to shareholders for an initial distribution before the end of December 2015". Getting an "initial" distribution based on a smidge more than current share price in December (assuming no increased liabilities between now and then) is not the best return in the world, but it's news before December that I'm looking for! I was encouraged by the Board confirming that "We continue to evaluate acquisition targets", which, whilst bland, supports an active and ongoing process. I'd be pleased with a combination of a substantial new investment and a return of some capital to help with Christmas! Agreed - not long to wait now!
Yes, but the current price reflects a discount for uncertainty. If an offer does not materialise then the price is likely to fall sharply, so buying now carries a risk. It is a guess as to whether an offer will be made and if so at what level (although one would expect higher than today's price!) and whether there will be a counter bid from another prospective buyer to push the price up. So, it's a good old fashioned punt to decide which way to jump, based on an assessment of the upside versus the downside risk.