The latest Investing Matters Podcast episode featuring Jeremy Skillington, CEO of Poolbeg Pharma has just been released. Listen here.
As suggested, the veiled profit warning has materialised. A 25% fall in the Systems Integration division's performance. How MB can be pleased with these results is beyond me. I quote: ' Performed well in the first half'?? On what basis does revenue and gross profit decline, and nett loss widen equal performing well? It is certain that I am more self critical with my own business. I appreciate that other areas have been stronger, but they still haven't made up for the shortfall in revenue and profit. It looks like they took their eye off the ball in concentrating on the 'exciting' software side of the business, but forgot all about the core business. Some concerns for me in the running costs of the business accelerating too. I know that integration/ development /marketing costs money, but we really need to see customers flocking and soon! I am hanging on with my finger nails to this stock, very aware that profit warnings often come in 3's.
Trade show yesterday, so I missed the response RNS from REDS. So it looks like the initial approach has been recognised......and duly dismissed. No dialogue will be undertaken until details of an offer and a preliminary valuation is submitted. So the ball is back in AP System's court. 'Insufficient detail to enable the board to consider further' sounds to me like an invitation to proceed, rather than a 'not at any price' type response?
Good question..... if I were a journalist my questions would, no doubt, have been more inquisitive and less arbitrary. I am not the only shareholder with access to David Anderson's phone number to further interrogate, but personally I am satisfied with the answers he gave me. My call to AP was prompted by curiosity, and some concern. I have been positive about the new management of REDS, and the direction the company appeared to be taking, however the market (people in the know that have an ear to the ground) suggested that everything wasn't going quite to plan. What I find eminently frustrating is 'the market' called the 'end of year weighting' before we, the independent shareholders knew anything. It doesn't seem equitable to me. The current expectation is that REDS will make limited profit this year, major shareholders who were involved in the placing will want more, and will have expected more /will have been promised more. I await the results with interest, as it dictates my engagement with REDS moving forward.
Having spoken to David of AP, I personally believe he has made an approach, possibly to collaborate with a major investor rather than directly. What would be the motivation of making all this up.......fame??! He has an investment company also, if I remember correctly, so AP could be just a vessel. So an opportunist approach is my view, and as ERV mentioned earlier possibly a hostile takeover in the making. AP's website needs work, but probably serves a purpose for their business needs. Lots of questions: Why would a major shareholder sell out? Why would others invest? What will the results say about cash flow in the last few months? What will the results say? My guess is that there is some dissatisfaction with the placing and some shareholders want to shake up the management. This story isn't over.
I too am thinking possible hostile bid... The company is denying any approach, so it is possible the approach was/ is through institutional shareholders. If the results are poor in a week's time (already had a 'back-end' sales warning) a real opportunity for a swoop IMHO
Due to the 'approach' by AP any transactions by a party with 1% or more holding in the company must declare activity in the stock... hence updates. BTW just heard back from VIGO COMMS :'Thank you for your email over the weekend regarding RedstoneConnect and my apologies for the slight delay in responding. We cannot comment on a third party�s statements or comments other than to reiterate that the company has not been approached by A P Systems Holdings Ltd, nor have there been any discussions with A P Systems Holdings Ltd. I trust this provides sufficient clarity.' Hmmm.
I have contacted VIGO COMMS ( financial PR company enlisted by REDS) for clarification on this matter, as I have received conflicting information from each party involved. A further RNS may be required from one/or both companies. No smoke without fire!
I see everyone's scepticism and I raise you mine. The fact remains that the press release is still on AP system's website, and having spoken to their CEO who sounded plausible, I am of the opinion that they have made an approach... (I checked the number he phoned me from, and it was Systems house in Rhyl. BTW) I have a large holding in REDS, (hence my interest) and will be furthering my enquiries......
Speaking to a person who called me back this morning, purporting to be David Anderson from A P Systems (group CEO) he confirmed to me that an approach had been made. Categorically. He reiterated that no firm offer had been submitted, and that the release from REDS this morning was untrue. I am as confused as ever now.
Just spoke to a chap at A P Systems (phone number on press release) he was a technician at the company and wasn't aware of the message on their website. I directed him to their front page, and he said he would call 'David' and phone me back. 'They never tell me anything' was his response....
Positives: Premium to share price (20%+?) Other parties may come forward Investor interest whilst 'in play' Management focus on delivering results to win over shareholders Negatives Loss of focus (management answering due diligence queries and not developing business) Opportunist strike (only on a P.E of 12) Bottom line growth not going to show until back of this year (shares cheap) What do we know of AP Holdings? Uncertainty/ staff concerns whilst process plays out Thoughts anyone?
http://a-p-systems.com/ This is the business.
That's Hellium gone, and a sizeable overhang with it. IMHO.
Well something's happening. Those trades just going through are massive!
....and someone picked them up at near full ask, I would view that positively. Looks to me as if the buyer of these wants in before results.
Around about 3.5% of the share capital.....
Interesting volume late in the day today... 780k shares purchased??
Good to see, first time numbers have been mentioned in a contract for a considerable time. The market has priced in a flat year, no perceived growth from 2016 with a P.E of around 10, a few more contracts like this and a re-rate will be on the cards. Goldman' s new office? If so, plenty of opportunities moving forward! It will be interesting if any gain is held today.
I've always been positive about REDS, having been invested for a number of years. Back in the COMS days, all you could be was optimistic that things could get better. I am very disappointed that I appear to have been mislead somewhat. At the AGM in June this year, Frank Beechinor told investors that '2016 was a year of substantial progress' as the company completed a restructure and set out a new strategy. The AIM traded firm managed to see momentum achieved in the prior year, continue into the current year as well. Beechinor added. This now seems to me to be rather inaccurate. As todays thinly veiled profit warning demonstrates that the business has missed expectations in the first half, it would appear useful to have raised excess funds during the acquisition of A+K. I am now wondering whether the excess funds were raised more for working capital than to integrate A+K. Sold about 25% of my holding this morning and may sell the rest when I see the cash situation on results day. I have heard the term 'second half weighted' too many times over the years, not to be alarmed.
Is anyone expecting a trading update on Monday as in previous years? If so, it will be interesting to see if we're on track, level of business etc etc