RE: Otus Capital reduce21 Oct 2023 12:10
Had a quick look at Otus Capital's holdings of Ramsden shares;
- First declared RNS was a 6.19% share block added on 8/12/17, as part of a 9.5m share placing at 165p.
- Increased holding 9/7/21 to 10.07% - share price at this time was around 181p.
- Further added 24/1/22 to 11.38% at around 175p.
-Finally added 10/2/22 to 12.31% at around 178p
Started to reduce holdings after June 23 interims:
13/6/23 - sold approximately 120,516 shares to take holding to 11.93%. Share price at this time around 257p
Sold 2nd batch before pre-close trading update.
1/9/23 sold approx. 313,978 shares to take holding to 10.94%. Share price around 220p.
Sold 3rd batch following pre-close trading update.
18/10/23 sold approx. 421,809 shares to take holding to 9.61%, share price around 200p.
Probably not much to conclude, other than they haven't bought at the bottom (IPO was at 100p, CV19 lowest I recall was 70p) and not sold that many at top of the market either (272p in the Summer), which is strange if they planned to reduce?
Certainly they have taken some profit on the share sales and also some decent dividends along the way.
However can't see them selling at much less than 200p when their average purchase price must be around 175p, so that would put a base on the share price.
But why reduce now?
+ Ramsdens are on for record turnover and profit this year, so its hard to see why they have reduced their position in the last 5 months. Unless its concern over a slowdown in sales on watches / jewellery or FX for travel. Not much else surely?
+ Pawnbroking side should be growing significantly in current macro climate i.e. cost of living crisis and we know Ramsdens used the lockdown period to move shops to better positions in towns with more footfall and have recently opened more stores, including in the South.
When Otus first bought RFX company shares at 165p, company was turning over £40m with pre-tax profit at £6.31m. Despite the CV19 lockdown and other stumbling blocks along the way, revenue this year should be over £80m (H1 was £38.99m) and last RNS told us that they would make more than £10m profit. So in essence business is now twice the size it was when they first invested at 165p, but share price is only 25% higher...
Perhaps I'm overthinking it and they are just trimming their position and need to money elsewhere for another opportunity??
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