Member Info for MrMaggoo

Long time poster on this, former employee. Gave up looking on here due to idiots. Situation is so inevitable, its just XL holidays all over again. Fosun need their heads testing if it is repreaved and given a stay of execution - the current publicity will kill all consumer confidence. The hole in the cash that has emerged today will be driven by a lack of sales for 2020 driven by lack of confidence already created. Banks are calling it, they know it's good money after bad...

Btw here is one of my postings from July (which I probably got hammered for by someone who knew more than me about the business apparently):

It's truly all about the trading. Think about the cash lifecycle for the year. The maximum positive cash position is Aug/Sep when all holidays are paid for. You then move into Oct-Dec where the company borrows millions as it loses money due to lack of holidaying in those months. That is the point where debtholders will decide if they give them another year by bankrolling it further into the cashflow cycle. In the position they were in in Q2, the auditors had already said they were likely to run out of headroom. It's likely that they are a long way adrift of this now due to worsening trading in Q3. 

You seem to think that they will be sitting there debating "ooo we could sell this part and it'll all be fine" Or "oh no we won't do that deal it'll be bad for our shareholders". That isn't what is happening, they are way past that point. They need to sell now or the banks will call it in Aug/Sept. It happened to XL holidays and it will happen to TCG. Either way, the shareholders need a miracle now.

And this is why I left... I want to talk about the fundamentals of the company, how they need go change and what that might mean for the future of the staff.

I'm not coming on here to be insulted in pigeon English by people who clearly have more money than sense. If you cant write a sentence properly it is no surprise you cant figure out basic maths either Carry on your delusions if you're still holding (you've lost another 8% today) and good luck to you. There is no I told you so's on TCG, the problems have been so obvious for so long only they weren't even needed. Only the daft would still be here. Good luck to you.

Manchego - and your point is? If you look at my nov posts the price was 95% higher than it is now. I will just leave again as really there is nothing left to talk about here. If you are holding shares, sell then whilst you can and go to the bookies with what you have left. Your odds of a profit are higher and its quicker than this slow painful death.

No need to argue on this but I don't feel like its I told you so vs the others. As soon as we heard that the cash had deteriorated significantly in q2 and the auditors gave the warning it was a huge red flag. Ever since that point it was really a gamble with people holding on second guessing on what the press or board released. The fundamentals were still shocking though so it's pretty frustrating to be pointing that out to then be accused of scaremongering by people who are seemingly gambling with their hard earned cash.

Would take too long to replace them now. They will be gone one way or another soon. That FDs pay package was discussed on here before - I think they are paying him 8k per month living allowance.

Doesnt anyone know what the rules on Plcs issuing delayed results are? I find it strange that they have been allowed not to publish

I see both sides here. I think Mirav is correct though, the BOD backed into a corner through their own incompetence. I'm not sure what investors expected them to say - "we are in a serious trading hole and buyers for the airline are there but are wanting it for nothing". If they had said that it would have created even more panic with customers so would have hit investors either way.

At the same time it is clear that they have been economical with the truth. I would say that is 100% standard on all market announcements though. My company has a poor H2 most likely in the offing, they wont announce it to the market, just say that there are risks.

All the more reason not to invest without doing your own research to understand. As Mirav says, if you were in the industry you would be surprised TC is still going, they have their proposition all wrong. Just injecting cash was never going to solve it although it might have given investors a better option to get out for by buying time.

Many people conspicuous by their absence. I got accused of scaremongering, look back at my past postings. Look back at my postings - called this in Nov/Dec and again in May. Got a load of abuse so left. People posting blind positivity on these boards are normally desperately underwater with little knowledge. Listen to the ones who actually string a sentence together & can reason an argument and you wont go far wrong.

Original comment is a plain lie. Board of directors would never ever talk about share price, it's not even a consideration. Theyre running a business trying not to let it go bust not thinking about the share price in a year. The deal will involve a restructure meaning dilution, everyone knows that. Absolutely ludicrous remark, dont come on here making rubbish up to mislead people.

Rights issue is normally x shares for every 1 held in return for cash. Given the market value of the shares is £80m or so you would have to issue a lot of multiples of shares to generate anywhere near the cash they need. And then you have to find someone willing to part with cash for more shares in a company that is on the edge of administration with no obvious sign of a turnaround plan. So it's not happening. Might have been a good idea 6 months ago.

Q3 was the problem:

In May, Thomas Cook boss Peter Fankhauser said the group had taken a “number of prudent early steps to de-risk our business”.

Individual shareholders, which together own 20% of Thomas Cook, have seen their holdings in the company slump 79% to 5.18p over the past three months due to concerns about disappointing trading and a debt pile of more than £1.2bn.

“We have also taken the proactive step to approach our financing partners and are engaged in constructive discussions to ensure we have the flexibility and resources to continue investing,” he said.

In February, the company announced plans to offload its airline business following a strategic review of the business.

However, in Friday’s announcement the firm said the airline disposal had been put on hold because trading conditions had deteriorated and it would be unable to fetch a price that would make a difference.

What difference does it make what Fosun or the bondholders want? The situation drives the decision not some decree by a greater power "because we are Fosun we shall not let this occur".

TC have been borrowing more and more money to make a loss in the past couple of years and with difficult trading they will be accelerating that borrowing, this is why they are moving towards administration. Simply put, they are still spending more than they are making (by a long way). If you look at the financial statements for Q2 you can see a big increase in borrowing year on year, then factor in fewer sales (including the recent debacle's impact on trading) but same cost base and the cash position could be almost at the point of no return. The going concern note from the auditors is basically coming true.

Fosun's £250m is irrelevant, they have lost that, they know it. I would estimate that you are looking at a debt position of £1.2bn+ so £750m doesnt wipe that and the question of how much it actually reprives against a poor trading situation is the biggest one. There has been a lot of press questioning of why Fosun are bothering. It's a £750m purchase of more debt than that in the hope that they can restructure and trade out of it and somehow get that £250m back. It's a pretty confusing deal to me, are they buying part of the business or all of it? I don't see how they can cherry-pick.

To keep saying "just close 200 shops and make people redundant that'll fix it" is also wholly inaccurate. All shops have leases, you close them but you have to pay rent/rates until the lease ends. So you are making a bigger profit/cash problem in doing that since you reduce the revenue you drive but still have the cost/cash to pay. You also have to pay the cost of redundancy so you get even more of a cash problem. And you are also shutting down 10-20% of your turnover source.

You are right in saying it needs scaling down but you have to do the lot - smaller airline, tour operator, back office etc etc. Easiest way to do it is administration so you can avoid paying up the cost of doing it and get the benefits. this is the best hope for now - i struggle to see how Fosun will make the numbers stack. Either way the share valuation is reflective of the situation.

Kind of gave up commenting a couple of months ago, too many people not listening to common sense or wanting to hear it. Got silly in the end, people need to grow up.

Sad about what has happened and certainly not gloating, it's been on the cards a long time thought. I hope for administration now, just because it'll help people keep their jobs if they can completely restructure. I'm afraid the shareholders have been looking down the barrel for a long time but seemingly a lot on here lack basic knowledge of even how company rules work hoping for what i saw as a miracle.

Ultimately it's all about cash. You can come up with all the conspiracy theories you like on Citi but the company put itself in this position through clueless management and strategies, particularly over the last few years. Once you borrow more than you make you are a long way from home...

Being realistic, trading is most likely worsening (not helped by recent bad publicity), no progress on airline sale /tour operator sale. Probably another going concern flag from auditors - it was already stated that if they didnt sell the airline they would cease to trade. They clearly haven't sold it. That caused them to have to listen to a bad deal from Fosun/Creditors and effectively suspend reporting so that they can use this negotiation in their financial reporting - ie "we have this deal which means we will be able to continue to trade". Without that it would be the disaster of publicising imminent administration forced by the audit report.

Ultimately they are on the precipice. I would suggest that administration would be the best thing all round as it would allow restructuring (ie closing hundreds of stores) without having to be liable for leases. The only reason Fosun are trying to save it is that they are not at the front of the queue under administration so they will have blown their entire investment. I would argue that they have already done that and they are no better off than the rest of the shareholders who hoped for more.

If this deal doesnt go through they will most likely be running out of cash mid-Sep like XL Holidays did and that is what the auditors will want to have certainty on to report. BOD will have to step in before that as there will be a stampede of cancellations if that news gets out.

Hypocrite calling me out then aren't you. If I shouldn't be here then neither should you with your 4 shares.

I might be wasting my time posting reams on here but you're sitting there at 2am responding when the rest of us are sound asleep.

I cant be bothered anymore, will leave you to it. At least I can rest easy knowing you wont lose anything if this fails.

So why dont we talk about your position? How much do you hold and what £? Presumably it is one of:

A) You were holding at Thursday's price or above, in which case you lost 40% in one day.
B) you have averaged down or have held for a long time in which case you didn't lose so much
C) you bought in at fridays prices looking to make money.

In any of the scenarios above you have a vested interest in talking this up yet I am the one with an axe to grind?

Anything I am saying is really only things you can find out if you type Thomas Cook into Google news at the moment. Just doing that now and you find out another bad news story on the Nordic card acquires. Anybody posting positivity at the moment is making it up - I am not.

I do have friends in the business but I do actually think that their jobs will be safe. I think that the brand has value and that there is a salvagable business underneath it all. I just believe that the scale of the restructuring required means that administration will be the best option. It is likely that the banks and funds that effectively control this have realised the same.

There might be money to be made here, the price might bounce if the board says the right things and the airline is sold. But I think that will be a temporary thing and if you're honest that is probably what you're holding on for so you can make money.

If you think I am in some way gloating about all of this I am not. I was trying to give the benefit of my knowledge which is greater than most on here.

Like you say, there are a lot of naive and ignorant investors here aren't there...

If you think that anything you or I post on here in anyway impacts or has impacted the state, value or future position of this business then you are literally crazy. This is an insignificant page for a few people who invest in shares. That is all. I post because I know a lot about the business. I posted 3 weeks ago when they went for more cash warning that this was a serious serious problem. The likes of you called me a troll. The likes of you lost half of their money.

I used to work for TC. Im now a director of a £60bn turnover business with experience in other FTSE 100 companies and know what I'm talking about. I know where cooks is going and I know that shareholders will end up on the wrong side of it.

I am in no way influencing the share price I am just warning potential investors. If you want to see a serious influencer of the future of this go and click on The Sun website. Right now its 2 of the top 3 stories on there. But sure, yeah, I'm the cause of these problems if you like.

Going after people for posting opinions on a message board isn't going to get your money back.

This is a huge business that is on its 3rd profit warning in a year, is royally mismanaged and has audited going concern issues. Oh and it tanked 40% yesterday.

What do you expect people to be talking about? How nice their holidays were and how busy the shop in the town seemed?

Telling people to get out of this stock is hardly scaremongering- if you're not bothered by losing 40% in one day then fine but dont be surprised by the conversations around that.

Not scaremongering, I dont have any shares. Seems to me that there are a lot of people investing who know absolutely zero about business or basic reading of financial statements. It's not scaremongering that put pile of debt there and the desperate situation is it.

What difference does it make if someone is a billionaire or not? They have made an error in judgement in their investment (clearly based on what they have paid so far) but they wont necessarily throw good money after bad. They might well want TC but they will do it on the best terms they can for them now.

Dont know about you but my local debenhams is still open. Business wont necessarily cease but shareholders wont necessarily benefit.

Banks take control and sell to parties who are interested. Fosun are an interested party. Market value is now irrelevant, just because it's cheap and they are invested doesn't mean they will buy the lot. If you look at the debt trajectory (assuming that trading doesn't get too much worse) I would say you're looking at 800m of debt by Sept. (Excluding the airline sale).

So yes you can buy the business cheaply but you are buying debt and a business that needs millions of cost cutting cash spent on it.

Or you can let the banks take control who will look to recoup their money. You can pay say 500m for a business which has no debt and has been restructured at no cost to you under administration rules.

It's a rapidly shifting picture I agree but even if they swooped in on Monday they would need to be prepared to underwrite the debt, the risk and the losses of the business. Turnaround is along way off, it's not just a case of switching out the CEO or something. Add to that the challenging trading conditions and (IMHO) I would be amazed if they were to look to buy. They MIGHT look at it once the airline is sold but if I were them I would be looking at how close to the edge they are before paying a market price for it.

Assets higher than debt is true. Vast majority are intangibles though. This was essentially Citi's point - most of the balance sheet assets are goodwill valuing the brands. If they can wipe out 1.4bn which was seemingly there until Wednesday then how much of the rest of it is essentially irrelevant too?

Board need to issue a statement tomorrow or early Monday or this will bomb again on Monday unless anything else changes.

Reliance on sale of airline is crucial. Potential buyers of this and/or the rest of the business will most likely be asking themselves if better for them to wait and let the spiral continue.

The idea of Fosun swooping in at a premium to market valuation is frankly ludicrous. So they will pay a premium to take on 600 stores plus a load of debt?

Nope. They will wait for administration, buy the business without the debt allowing them to close half the stores and not owe the landlords a penny. Closing mass stores as a going concern will cost tens of millions, adding to the debt. That's the main reason they dont just do that now. You have to pay rent, dilapidations, redundancy etc - it's all cash.

There IS money to be made here but it's essentially betting on a bounce if and when a sale on the airline is announced. It will be temporary and quick and that is the point to get out.

For me, if you're not in now dont do it. Go to a casino it's the same odds and more fun.