Member Info for Raleigh

30th. Sept.
The directors have discussed the future cashflows with two of the Group's major shareholders who are represented on the Board and, furthermore, note the continued support of these shareholders. In reaching their conclusion on the going concern assumption, the Directors note and rely on the letter of support provided by MXC Capital Limited at the time of approval of the financial statements for the year ended 31 December 2019 in July 2020, in which they undertake to continue to provide such financial support needed for continued operations for a period not less than one year from the date of approval of those financial statements. The Directors having made the necessary enquiries, have satisfied themselves of MXC Capital Limited's ability to provide such finance if necessary.

Why? Because it has RNS'd a contract on a Monday morning?

I doubt a placing. If the company is set to make headway over the next few years, it seems to me more likely MXCP will continue to support it if necessary, in view of their own personal interest and large shareholding, as was indicated previously.

An important company for MXCP. The founding partners have said they will sell up within the next five years, and divvy up. As such, eventual repayment of loan notes/sale is where they are going.

https://asiapacificdefencereporter.com/bae-chooses-4-companies-for-innovation-challenge/

They are working with SGN too
https://www.costain.com/what-we-do/services/consultancy-and-advisory/
and this is a development from it.
https://www.theguardian.com/environment/2020/nov/30/scottish-green-hydrogen-fife
There are other references, and other developments. But those reports put things into readable context. Tell an ongoing story. As things firm up it may form more of Costain RNS reporting.

Seeking inspiration as to where Costain are going with their consultancy and project management, and blending technology. Conversion to hydrogen, or a mix, will be a major change technically. And it seems at least on the cards. They are working with Cadent as well, future proofing with the possibility/probability of where national networks will end up. With Costain as acknowledged experts.
https://www.costain.com/news/news-releases/costain-awarded-150-million-programme-management-consultancy-contract-with-cadent/

I think that anybody expecting anything other than a trading update in line with guidance will be disappointed - it may seem like a damp squib. For me, the originaI investment case is likely to remain undiminished - improving if they can show a move towards profitability on whatever business they have done. And vaccine roll-out over the next year will help.

In the absence of anything Sig specific, I do not intend to post again prior to the update. To do so would just be adding (even more) twaddle with an update in the offing.

Turning to the trading update on 11th. January, we have been told in advance what the company expected to report. Given that the guidance was published half-way through the period to be reported upon, when the trajectory would have been reasonably clear, I anticipate a trading update at least in line with it. With regard to revenue, " the Board now expects full year sales to be moderately higher than guided in May." In May they guided "management expects revenues for 2020 to be approximately £500m lower than 2019 as reported, post the disposal of the Air Handling division." So something better than £1584.7m, and anecdotally, it seems to have been a busy second half in the sector.

On profit, a form of warning exists, insofar as we have been told "The second half of 2020 is expected to remain loss making, but at a lower rate than the first despite some increased pressure on gross margin in the UK." The more losses can be constrained to the point of profitability whilst clawing back market share, the greater the earlier recovery prospects. That is the nub of the matter.

Sig is far from profit, and funding without raising more cash, in the interim is essential. That is why in addition to earmarking cash from the capital raise to pay for the unwind of some £13m of various government relief in connection with the COVID-19 pandemic, and to give headroom for capital outgoings including restocking, as advised on 19th. June, they had arranged:-
£234 million of remaining facilities, with no amortisation or scheduled repayments until May 2023 compromising:
£139 million of Notes following repayment of £48 million of outstanding principal, at par (from the proceeds of the Capital Raise);
£70 million term facility (representing existing RCF drawings);
£25 million revolving credit facility, following a cancellation of existing commitments under the RCF.

Activities post end of first half led to Sig reporting on 24th. September that at 31st. August the Group had cash resources of £267.5m, with a net cash position of £29.2m. So good headroom there.

In my opinion :-
It has been a dire year, punctuated with thoughts on Brexit and Covid. There was some relief on a free trade deal, now yesterday's news, though there will be continued discussion on matters as they arise. The vaccine roll-outs news provided relief on the second. But again, that relief has evaporated, as commentators turn their minds to headwinds and economic recovery, and conclude that the economy will in any event lag nationwide and international vaccine programmes. Recent reporting has largely turned to the negative, and even in a supported sector like construction the slow recovery being forecasted for the sector warns of wobbles and unpredictability for builders, suggesting that those involved in taxpayer funded work, taking advantage of govt. initiatives, will be better placed than those working to the private sector. Sig, as a trade merchant, should be somewhere in the middle of that.
Paradoxically, unlike Sig, housebuilders have held up quite well in recent days. I can only conclude, on no company-specific news, that investors have less faith in Sig than they do in their customers, the builders, who have a better back-story than the previously poorly managed Sig. In a relatively low volume week, though some have bought in, pi's have on balance been coming out or trimming their positions. The upcoming trading update will also exercise the minds of those who actually read RNSs. Of those who do, some will want to be in, others out. Some will be pretty ambivalent with regards the update, and looking beyond it.

Eurofighter ( Bae partnership )
https://www.air101.co.uk/2020/12/the-eurofighter-is-already-most.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed:+co/fMxO+(Air101)

A mention of progress with Howitzers as part of India's modernisation plans.
https://theprint.in/defence/how-armys-artillery-modernisation-plan-stuck-in-a-rut-after-bofors-is-picking-up-pace/553053/

https://www.aerospacemanufacturinganddesign.com/article/lockheed-martin-delivers-123-f35s-2020/

No detail, but Bae a main player in this huge market, as one might expect.
https://www.businesswire.com/news/home/20201229005194/en/Global-Naval-Combat-Systems-Market-2020-to-2024---Players-Include-BAE-Systems-Saab-and-Safran-Among-Others---ResearchAndMarkets.com

One regional example ( no doubt there are others ) of social housing providers getting together to upgrade their housing stock.
https://www.constructionenquirer.com/2020/12/29/bid-race-starts-for-650m-housing-upgrade-framework/

Not too big and proud to take opportunity where it finds it.
https://www.aero-mag.com/bae-systems-nano-bug-drone-23122020/

"The strategy will support improved profitability as we seek to deliver our divisional margin of 6% to 7% over the medium term. To achieve this, we have a clear focus on the shape of our services with a future ambition for 45% of our profits to be derived from complex programme delivery (currently c67%) and 55% from our consultancy and digital services (currently c33%)."

Yes. It is all about profit. ".....we are firmly focused on securing new contracts that deliver consistent profits rather than revenue potential."

And the aim is to rebalance away from digging holes into a 55% bias to consultancy and digital.

If true, it becomes apparent that CD and R continue to consider their decision to buy into merchants to the construction industry was sound.
https://www.thisismoney.co.uk/money/markets/article-9089499/amp/Plumbing-company-Wolseley-targeted-600m-buyout-war.html