Charles Jillings, CEO of Utilico, energized by strong economic momentum across Latin America. Watch the video here.
Batfasted I think 27p is somewhat optimistic.
Maybe if everything goes to plan then 27p in 12 months is not out of reach, but if it hit 27p in the next 2 weeks it would drop down again as people profit take on the 12p shares they have just bought.
I can see a small bounce to 15p in old money but 27p would be a huge turn around, the capital raise minimises the risk of the company defaulting on its current covenants but it does not solve the problem of all the debt.
Most of the debt will be there and currently only the insurance division is servicing that debt.
In other news the Saga 3 year deal on insurance will not be so unique if the regulator has their way, in the news this morning it is proposing to make insurers limit how much they can raise premiums for existing customer to the same price a would be offered to a new customer
So I can see more companies following saga and offering deals longer than 12 months.
Pianista its worth keeping an eye on the SP.
Everyday so far it has had a period where it is over 13p. Its not tons of money but if you can sell a tranche at over 13p to buy back at 12p then it is a further 8% saving and that 8% you can either keep the cash or buy something else.
I am disappointed in myself for not working out the number of shares I was due and selling at 15p the day after the record date, but in the end the maths just makes sense to sell at 13p and buy them back at 12p unless charges would wipe out any savings made.
Just a thought as I too am overweight in Saga and so did not want to risk more capital, so this was a way of reducing that risk. I'm assuming that my full allocation will still be 5/9ths of the shares I held on the record date and not what I now hold, if that is not the case then it not a tactic to use.
It's really difficult to predict the future so the short term tends to carry bigger weight than the long term.
I think at the moment for many companies it is not about growth and expansion it is purely about survival.
My view is that this share issue will help the company survive and get come out the other side of this crisis. I don't expect any dividends for 3 maybe 4 years. So in that sense it is a bottom draw share. But if it can survive then there will be other players who will not. At that point Saga can then start to grow.
One of the benefits is the market Saga serves, the unemployment that is coming is less likely to hit the target audience and their income.
Any vaccine to get cruises up and running will help this share turn around quicker. But if Saga is still here in say 1 years time I think a SP of 22p (in old money) is not out of reach or £3.30 (in new money).
One thing that has occurred to me is will people need to review any trading limits they have set in place. For example if you have a standing sell at 30p then come consolidation that 30p will be passed. Will that lead to an automatic sell? Or will brokers adjust any autotrades?
Just a thought, I've turned mine off just incase.
Thefarend: I'm with HL and there was an ability to apply for more shares, but it was not guaranteed. There were 3 options
Take up your basic allocation
Take up more than you basic allocation
Take up less than your basic allocation
The 4th option was do nothing and your basic allocation would be returned to the pile for others to pick up.
I have to agree Jed, the share offer has provided this SP some shelter today. Still moving around the margins of 12.5p and 13.5p
It seems I am once again long on Lloyds as the SP has not even sniffed 30p since I bought.
I think shares are my way of gambling as I can never pick em, but I still keep getting tempted to do so.
This is the biggest retail bank in the UK and is currently worth less than a website selling holidays that you can't go on (experian).
Personally, I'd be ultra cautious about transferring out of a company pension scheme and bank shares are no certain bet.
I should know I am in Lloyds and that has fallen to horrendous lows and had its dividend cancelled.
Yes, they may not go bust, but they can still erode your capital.
Depending on your age, I would recommend a Life time ISA, you get the benefits of the 20% from government and you can invest as you choose, but its an added extra. If it all goes wrong you still have your works pension to back you up.
Just imagine you are in the year before retirement and then another shock hits the market wiping 25% off your pot. Suddenly you can't afford to retire and need to work an extra 10 years. It's a big risk to take.
Hi Finders, its all alearning game this share issue.
Given my time over again, I would have sold everything at 19p (I missed the 24p rise).
Then bought back in at 15p to benefit from the new share offer, then sold 5/9th of the shares at 15p (or 16p if you were lucky) the morning after the record date only to buy them back at 12p as part of the offer.
Sadly hindsight is 20/20 and instead I waited for the broker confirmation of my allocation at which point the SP was at 13p and all the smart cookies had done their business. Like I say its a learning game, some of it was my fault I was greedy I saw the 24p bounce and wanted some of it, so held on too long at 19p.
I think we saw that short happen on Tuesday on the 4150000 sold at 14.99p thread.
So if they sold at 14.99p it was about £622k worth of shares, if they buy them back at say 12.5p then its a quick £100k in their pocket, with very low risk of the SP increasing in the next 10 days.
Ah broker recommendations, the soothsayers of the modern age.
If I set my doubts about the authenticity and duplicity of "free" broker recommendations, then I would say that brokers are doing the same as we all are on here. They are looking at the company and stating what they think is a safe position for the next 6 months.
e.g. buy up to 30p
So its not so much a recommendation for today only, it has to cover all outcomes for the next 6 months. However, I do wonder how much faith you can put in advice given for free without charge. If they were spot on then surely they would be asking for commission or would run their own fund investing in equities.
I have been considering the position of shorters (I know I must not be right in the head).
Lets say they have sold at 18p with the share offer they probably predicted that the SP would fall to around about the 12p of the offer. So they could be buying back at this price.
But assuming they feel the SP can fall further they can they keep that short in place? I assume so.
My understanding is that they must simply buy back the shares at their end of their short to return to the party that loaned them. So post consolidation they only need to buy the equivalent number of consolidated shares as to those that they loaned.
So I'm not sure it makes a difference to shorters. The only impact would be if the loaning party wanted to sell the shares themselves. This would lead the shorter to having to buy back the shares, but the effect would be neutral as the loaner would then sell them again.
In short I'm not sure the consolidation impacts shorters to any significant degree. Happy to be corrected though.
What has helped shorters is knowing that the market is likely to priice the share close to the offer price.
Talking about volume, who buys 9 shares for £1.20. The trading fees alone must wipe out that trade.
I'm not sure how you can tell that you can't buy in volume unless you have an order in for 100000 shares. But I imagine few are buying until the market settles on a new price post trade offer.
Whilst I wish all those saying 30p -40p well, personally I can't see us hitting those kinds of levels without solid results.
I can see us continuing to drift between the 15p - 20p range for the foreseeable future until some results are published (or if you are a MM when you get the nod that results are improving).
I think if cruises are recommenced then we will be at the higher end say 19p-21p. But the main worry from the market is the debt and the cash burn. Many businesses go bust not because of lack of profit, but lack of cash.
The refinancing will help but we really need the ships to start to at least breakeven to take the pressure off and they can't do that whilst laid up in the docks.
I do wonder what proposals the industry has been putting to the government to get cruises going again. I would hope that they are beating down the door with ideas around testing before departure at the very least.
Whilst yes the company has been tied down with debt, the future of its income is for the moment out of its hands to control.
They crossed the threshold on Friday so not at today's levels.
To be fair this maybe a bit of a speculation as 3% seems fairly low to mount a bid, could simply see an opportunity for arbitrage, between the offer and sale price.
I was thinking that when it fell from 600p.
To be honest most of my shares are now bottom draw shares until the impact of COVID passes. The issue for UK shares is that once COVID is out the headlines we still have Brexit ready to hit.
We've had no good macroeconomic news for about 5 years in the UK. Everytime we get over one crisis, we seem to have a way of creating another.
My non-UK funds are going great, but UK shares are pants.
It will be 15x the sp on the closing date before consolidation.
It can't be done at a set price otherwise the company and not the market would be setting the price. Even if that was possible as soon as the shares went live the market would correct the new consolidated SP
The financial position is not at that level once the open offer is confirmed. You can read for yourself in the several RNS that debt will be cancelled and remaining liabilities renegotiated on better terms.
The falling SP in my opinion is holders looking to reduce their average. Depending on how many shares you hold this will become less and less worthwhile the closer it gets to 12p.
I can't see anyone selling below 12p, the real question is whether once the offer has gone through will the SP bounce back to 15p-16p or remain at 12p.
You don't go bankrupt from a low SP, you only go bankrupt if you run out of cash or creditors call in their loans.
The capital raise actively prevents both those from occurring.
It has certainly been an education for me as I have not taken part in a share offer like this before.
If I had my time again, I would have set a sell for the day after the record date for the number of shares I could buy at the offer price.
Waiting for the brokers to tell me my allocation has cost me 3p per share.
As they say life is an education and this is one more thing to learn about share offers.
Well percentage wise £4.88 per share is as far away from today's "future consolidated SP" of £1.95 (or 15*13p)
as 44p is away from 13p.
So it is no more difficult for the SP to increase by + 300% at either price as the SP is only a result of the market cap of the company.
What ever percentage increase you need in the SP to break even will be the same post consolidation, however I think Jed's point is that historically following any consolidation in a company under stress the result can be that the SP just continues to decline. Medium to longer term it has no impact but there is a risk that the market sentiment is that people see the SP and not the market cap and therefore equate the new consolidated SP to the old SP.
My average is about 18p so to breakeven I'm still looking at a 40% increase in the SP.