Member Info for PUTUP

"As far as I can see he was given the option when he joined Shamaran 2 years ago to purchase 20M shares at Can$0.65 and cashed-in 11+M a few days ago at Can$1.50. It doesn't matter that he didn't purchase the shares, but was "given" them - then went on to sell a lot of them."

Award versus vesting. Quite different.

Summary

CBG published an H125 trading statement to 31 January this morning, ahead of results scheduled for 18 March 2025.

The key news is that they expect to take a Motor finance redress provision of up to £165m. This is based on a probability weighting of possible outcomes and knocks -1.5% off CET1 (pro forma 12.0%), although expect FY25 CET1 to recover to c.13%. It is tough to assess the adequacy of this provision as no additional information is provided around the amount of lending, average commission rates, etc. (KBWe total £465m). However, we note that it equates to c.8% of their current loan book, compared with the recent Santander provision at c.6% or FirstRand at c.11%. Elsewhere, first-half operating performance looks broadly in line with consensus. However, loan volumes look light and management do highlight a risk of additional legal and professional fees in H2 as well as potential impacts from new motor finance lending requirements. With that in mind, we downgrade adjusted EPS25e -9% to 61.4p (from 67.6p), adjusted EPS26e -13% to 66.2p (from 76.6p), and adjusted EPS27e -10% to 80.2p (from 88.7p).

Overall - CBG shares have rallied strongly this year (YTD +55%) as market expectations have grown that any motor finance redress liability will be lower than worst fears. However, the shares are still not expensive, trading on consensus PE26e 5.3x or PTBV24e 0.4x - a discount to book value equivalent to c.£830m of market value. We do not believe that the £165m provision will ultimately be sufficient, but it is a welcome step in the right direction and the shares continue to discount a potential liability considerably in excess of KBWe £460m. Reiterate Outperform, TP440p.

Let's not get ahead of ourselves. I 'm not expecting anything significantly bullish in the update except reiteration of the more favourable backdrop with respect to claims. The business turnaround has a longer trajectory. Buy any dip back below 60.

Yeah Mulder I'm liking it more and more each day...

Sounds like they called it right. About 7 years in advance.

👍

Private equity

Jxp101, I thought you sold?

"Awaiting a positive response"

Read what management says to shareholders. Don't be lazy. Do the work.

Teach a man to fish.

If anyone invested here hasn't read the August 2016 prospectus they're nuts.

Jjjjeeeeffff you want me to do your homework as well? Make your lunch? Don't be so lazy

How dare anyone ask such a pertinent question here rather than simply mudslinging!

The answer can be found in documents on the company's website. Go take a look.

Lucky you to have ISA protection. I don't. 😒 My position is still small - about 173k.

To be more precise I should have said "production capacity is depleting at 6-10%" but I was running out of character count...

Management told you such os the 23rd of January this year.

BLB, I think you'll find those sales shortsighted. Having purchased heavily around 40p, I trimmed about 10% of my position at 58p on the expectation that the strong resistance at 59p would hold. It broke - and decisively so. I bought back that sale on the retracement this morning and then bought another 20k at 59.9p. I don't think we will see 58p again absent a new shock. Could be wrong but that's my view. Someone is still accumulating off-market.

Rog, Straycat (still in my sin bin) keeps ranting about 100k. While 100k is an admiral goal for the future he hasn't done any analysis to quantify the benefit of reaching that level. He would willfully trade the receivables today (53p per share) for 100k production at some point in the future without an idea of what the gain from 50k to 100k might be. This would be a huge and unnecessary mistake. What's more he has no idea of the free cash flow that can be generated on the way to 100k. Luckily management are far more sensible.

There is room to pay out in April upon a March declaration the cash that's been generated since the last dividend. A lot of that is historical cost recovery - an excess cash generation which is about to end. And it should be - GKP is hogging too much capital and can achieve its goals with a lower capital base. What's more with the recovery of receivables, it can comfortably pay out cash generated from RECURRING operations between then and the next dividend date. Or if you prefer, it can pay out the receivables recovery and retain (or not) recurring operations cash flow for investment. But management need to exert considerable capital discipline and should not invest heavily until a large portion of the receivables has been recovered. That discipline needs to remain in place this year and into next - unless of course the receivables are recovered faster.

Now what about growth to 100k? That's likely an investment story for late 2026 with results in 2027 and beyond. We'd be lucky to be at 55k in 2026. And what might a jump from, say, 50k to 100k be worth? It ought to be bleeding obvious that even an imaginary light speed jump to 100k production today would not double the share price given the value tied up in cash on hand and receivables. Only the component of value attributable to future profit oil can gain from increased production. Even if I ignore the cost of the investment required to get there (and there is a cost to investment to GKP shareholders even though the company can recover costs: as production shifts to cost recovery as a result of greater investment there is less profit oil to share in) and simply assume we jump to producing 100k at the end of this year rather than 50k (amending the maintenance capex assumption to remain at 100k rather than the lower number) I get roughly a £1 jump in value. That's it and likely overstated for the reasons I mentioned. So let's not get too carried away and be prepared to trade 53p today for an extra £1 at some point several/many years out when BOTH can be achieved.

Note that I said BOTH and CAN. The question is whether given all current uncertainty should an investor pay today for 100k prod which won't be achieved for several or many years? If you want to, be my guest. In contrast, I will add it to my fair value as we make progress. Currently the field is depleting at 6-10% per annum and production is falling. Even paying for 50k is paying for some growth.

Bondsan still hasn't accepted, or learnt from, his past mistakes. And whenever anyone speaks with a sense of rationality he lashes out. Time for some long overdue therapy.

"I have held Provident / Vanquis shares since 2017. "

Unfortunately not a particularly attractive credential...

"Ah... ye newcomers with so much faith.."

Luckily we don't need anything like £5 to turn a very healthy profit. But we do agree that there's considerable upside potential from here.

14-day RSI hasn't been this high since January '23. But I'm liking the backdrop.

Once this off-book order is executed I expect the stock to fall back but the outlook is good. New blood being infused.