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Banbury. The plot thickens. From Sept 2020
"Ardonagh has offered to sell Bennetts Motorcycling Services Limited, reversing its deal to buy the bike broker in a bid to address concerns raised by the Competition and Markets Authority (CMA).
The CMA has accepted this proposal from Ardonagh to fully unwind its recent £26m purchase."
Just researching who bought it.
There is an allowable (3 day) delay in posting an RNS relating to large holdings and I suspect that they were selling last Friday which accounts for the very suppressed/weak performance (as well as end of month on a Friday syndrome). Once that sale has cleared then upwards she blows. Setanta do still hold plenty though.
Well said Perturbed and agree wholeheartedly. There are others too including Banbury, Rogue, Beach etc (and we miss Alas Smith/ErogenousJones). The one thing that this board doesn't have (which I've noticed on other BBs) is any commentary on Level 2 stuff but I did notice a first time poster this morning making comment on technical stuff which is very useful.
Agree with you Ice. Elliott came in and bought 5% of Saga 2 years ago to try and get the two business units separated and make a ton of money but I suspect they realised that the Bank's lending the money to Travel had got Insurance guarantees (i.e. cross collateralised). So "future decisions" are difficult for the BOD when they have hands tied behind their backs.
When all is well with the world then there is an option for travel to stand alone and be sold or floated off - but they would probably want to keep it by then anyway.
Hi Banbury. I suppose we should disregard the Bennetts sale as it is a one off - so projecting forward the cash burn is £21m every 5 months (ceteris paribus). However this still gives the group more than 2 years of cash if travel is delayed. Even if the Bank say no to the £44m capital moratorium there is still plenty in the kitty.
Also on your £12m vs £24m maybe they didn't take the whole amount in cash from the buyer of Bennetts?? Deferred consideration or profit related payments??
I'm started to get wound up about how the BOD report their net cash burn. It's all PR at the end of the day but if you only ready a couple of paragraphs of The Telegraph (most people lose interest after that) then you would think that they have cashflow problems. They need to report that they burnt £9m of cash in H2 so people understand. Very kind contributors to this forum have done that for us but the average reader would think it's far worse. Rant over.
The media do like bad news don't they. A very prudent discussion with Banks is turned into survival talks. Utter nonsense.
One thought though, the last time they received a repayment holiday it meant they couldn't pay dividends until the repayments were back on track. This further discussion with the Bank will kick that "can" down the road another year so I could understand those wanting this stock to be a dividend provider would be disappointed. It was one of the reasons why I became interested in this stock back in 2019 as the Div yield was solid.
Thank BB for this and all your other great posts. I'm a 2 year holder (not LTH but have suffered pain) and believe in this business and it's future - and that it is grossly undervalued. I agree with your analysis of this group but fear the short term share price is driven by sentiment not logical analysis. The only way that I see that share price rising tomorrow (other than a bounce from today's fall - as at 08.34) is if they exceed brokers estimates (profit and cash) - or say the right things. To that extent does anyone have access to what the market is expecting tomorrow?
By the way BB I agree with you that the net debt figure is going to be really interesting - as to me it should be net 0 change as insurance offsets travel burn. If that is not the case and the net net monthly burn is still £6m-£8m then we have a real problem. I have felt for a while that the Board have been vague on this issue.
Thanks Rox. I would add that the maximum market capitalisation of this business was around September 2016 at £3.1bn. There have been changes to the business since that date but it is clear to me that there is potential for this to multibag - and by that I mean seriously increase - if the world ever gets back to normal again. DYOR as always.
Thanks FJG. Good work and thank you for your posts on this and the other "infested" board.
One quick question from me regarding the inaugural - Are they planning to sell every cabin on the ship or have they reduced the number of cabins for covid related measures. I'm trying to work out whether the 63.1% can only ever get to, say, 80% - or in other words is 800 cabins a full ship in "normal" circumstances. Cheers OL
Important milestone. Hopefully this will bring it onto the radar of some funds (which might trigger buying). Still some way to go before key next buying trigger (for funds) of FTSE 250 which is about £600m (although there are a few less than that in the index). Could be interesting if we get to £4.50 a share
Rox. Following your excellent calculations work this morning it made me start thinking about RDH and what he would have to pay per share to make a bit IF he went over the 30%. I think we all agree (sorry if i'm wrong) that if he bids within 12 months then he can only do so at his max price paid (due to stock exchange rules) which was 27p in old money. So actually the price isn't far from that number 0.27 x 8.12 (from your numbers) = £2.19.
Welcome anyone's thoughts on this as it is a vast difference from the often quoted £4.05 per share.