DireCons - unless the messenger’s Tee Dubbya of course.
Hardboy - according to Thisismoney, H&T HAVEN'T acquired the Ilford property freehold:
"H&T will enter into a lease in respect of the store."
www.thisismoney.co.uk/money/markets/article-13108401/Pawnbroker-H-T-Group-acquires-pledge-book-Essex-based-Maxcroft.html
In terms of the new financing, according to UK Investor Magazine: "This takes total funding to £85m. Some of the new capital will be used to pay down the revolving capital facility (RCF) with Lloyds".
That Lloyds RCF was priced at 2.4 to 3.3 percentage points above the sterling overnight interbank average rate. Sterling's overnight rate currently stands at 5.19%, so I can't see them saving a great deal there.
It's all starting to look a bit more haphazard to me. Funding has been increased multiple times in recent months, some of which now looks like it's going to be paid down in favour of using yet another new lender. Fair enough if it saves them money overall I guess. But why keep raising finance piecemeal? To me, it's beginning to come across as a bit more tactical than strategic - more whimsical, less planned.
Personally I'd have preferred them to raise any additional capital by offering fixed rate preference shares to existing investors. I, for one, would have happily subscribed to H&T preference shares offering, say, a 7.5% annual dividend, redeemable at par after 5 years. But I suppose this might be a less predictable/more costly & cumbersome way for H&T to raise the capital it feels it currently needs.
Whilst I normally have total confidence in H&T's management, the £11.3m acquisition of selected Maxcroft assets looks dubious & EXTREMELY overpriced to me.
As far as I can see, Maxcroft only has one outlet. Google it. It looks like a small converted house in a largely residential, non-retail area. And the main acquisition is their pledge book, valued at "just" £6.1m. Plus they'll assume the cost of Maxcroft's five (yes, only five) employees.
I get that Maxcroft's customer profile offers diversification, with a far higher pledge loan mean value. I also realise its employees may have some expertise in targeting a different customer demographic. But £11.3m? Really?
That said, so far the market has reacted positively to this morning's RNS, including news of an additional £25m financing at relatively high fixed interest rates.
If the share price nudges slightly further up, I'll be banking profits on the additional shares I bought at 319p when their TU was first released on 23 January. But that would still leave me with a sizeable holding here, as I remain confident in H&T's 1-2 year prospects. Just don't want to be over-committed to any one company.
In terms of the SP drop - though it was announced 11 days ago, news of Opti's auditor swap may have shaken confidence.
It's not 100% clear to me whether this was Opti's decision or the auditor's, though the phrase "its termination as auditor" suggests the former.
The RNS does state the old auditor "is not aware of any circumstances connected with its termination as auditor that it considers should be brought to the attention of the Board, creditors or shareholders of the Company."
Even so, there's always a reason (though it could be something as innocent as cost / culture clash / perceived incompetence of former auditor).
Dallo - it would be good to get an acknowledgement though, just so you know she received it.
There was a trading update on 28th Feb 22, but nothing around that date last year.
So as martinu rightly said, they're ad hoc.
Basterman - you say "I don't think Cliff has any idea of when, how, or even if he will exit. There are so many factors to consider it's not feasible to make such a commitment to investors."
Problem is, Cliff is on the record several times suggesting the initial holdings would be exited (and a special dividend distributed) within the next 1-2 years. And we're rapidly getting to the end of that period now, as he started saying this some time ago.
I wouldn't mind if he'd never suggested as much. Nor would I ever have invested in the first place.
And that's the crux of the problem here - investors have been deliberately misled. Which is why Tek is trading at such a discount to the sum of its parts. And is likely to continue that way unless Cliff rapidly delivers on his promises.
Badsterman - assuming Tek is now exploring new opportunities (which will presumably require significant funding to get off the ground), how exactly will existing investors ever get a decent return?
Sure Tek still has stakes in its existing holdings (which - with the exception of Salt - have lost significant value since IPO). But if Tek has to dilute these stakes even further to fund new initiatives, when will investors ever be able to extract any benefit?
I believe this lack of any clear exit strategy for existing investors explains the continuing heavy discount to NAV.
Pedro61 - Last year I'd have said the same.
But since then - with an imminent Living Wage rise & a sticky retail backdrop - I'm not sure 500p+ is achievable this year.
That said, I fully expect the share price to rise above 400p at some stage before 2024's out.
GrowthmanPO - yes that's certainly been the pattern here in recent years.
I doubt it'll be any different this time and only expect growth to start building in the second half of 2024 at the earliest (if then/ever!)
All the posters writing excitedly about the recent small uptrend should perhaps remind themselves that this time last year the share price was double what it is now. That said, I do expect significantly better times lie ahead. Just not quite yet.
Djframboise - you carry on labouring under that assumption then, as it obviously makes you happy.
ICB888 - maybe, but surely that discount tells us something (namely that investors don't think Tek will ever crystallise Salt's current full paper value)?
How else do you explain Tek being worth less than its current holding in Salt alone?
Djframboise - wrong on every count I'm afraid.
1) The last time IQE closed below 20p was just under a month ago. Check it out on Google if you don't believe me.
2) You've no way of knowing why the price has drifted back over the past couple of days as my post highlighted (again, look on Google if you don't believe me). It might be down to selling. It might be something completely different. So equally, you've no idea whether or not we'll soon see another rise.
Apart from that your analysis is spot on, so jolly well done.
Looks like Adastra's finally got bored of pumping a share that continues to lose value pretty much every day at the moment.
Hawker - one problem with your theory - the share price HASN'T risen in the past couple of days. It's falling. Again.
Tom78 - suspected as much!
When it comes to NAV discounts, I don't think there is a "normal" unfortunately. Just a range - which in SMT's case has fluctuated between about a 5% premium and a 23% discount over the past 5 years.
At the moment, we're roughly in the middle of that range. So I guess you COULD call that normal. But I don't think it is really. The period when the discount was at its highest largely coincided with the period when interest rates were hiked substantially. Now rates look like they've peaked, my guess is the discount will continue to narrow. But it IS only a guess!
Tom78 - I guess it's all relative. At least a consistently rising NAV will normally lead to a stronger share price (eventually).
That said, if the discount to NAV widens, we could be back to square one.
But that discount has also been narrowing in recent months. From about 23% at its worst last summer to just a little over half that currently.
So for the moment, trends are positive.......
Thefrogster - thanks for that link.
Some of their points have already been made by posters here.
But I found the bit about an average holding period of 20 years interesting. Reiterates why the fund is more suited to investors willing to hold longish term (though I’m not suggesting anything like 20 years. Just not for those who might need their capital back in 1 -2 years).
Adastra - I presume you do know investing is about trying to MAKE money?
Here's your post from 25 January 2024:
"In all honesty mate if you loaded up yesterday or today at around 1.60 you'll be laughing.....spot on imo! Hat off to you."
Whilst you might be laughing eventually, you certainly won't be currently. IMM was 1.6p just over 2 weeks ago. And 1.35p (max) at close today. That's a loss of over 15% in 15 days. Cue calls for celebration. Very well done. Laughter all round.
Maybe Microsalt WILL take off.
Or maybe it'll go the same way as its closest non-potassium chloride-containing predecessor - Tate & Lyle's Soda-Lo.
Fact is, nobody knows at this stage. And it's kind of irrelevant, if TEK can't demonstrate how it proposes crystallising any value in its holdings & returning some of this to shareholders.
After all, Microsalt's value has already increased over 30% since its IPO on 1 Feb. That same day, Tek closed at 10.5p mid. And it's currently 10.5p mid, despite owning 77% of Microsalt. So to date, whilst the book value of Tek's SALT holding has increased, it's created zero added value for any shareholders wanting to exit now.