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Micky - might be an idea for you to revisit the terms of the deal of read the info on the link below. AWS do not and cannot modernise or upgrade legacy systems - that's what MCRO do. The deal therefore is simply this - Amazon have chosen MCRO to become their preferred partner in helping Amazon customers migrate to the cloud (via upgrading/modernising legacy systems). Meaning, that in effect Amazon are acting purely as agent for MCRO with the sweetener being - the more customers they place MCRO's way, the more discounted options they can acquire. There is zero overlap in services here zero restriction clauses, period.
https://www.sharesmagazine.co.uk/news/shares/what-micro-focus-amazon-aws-deal-means-for-investors
You are right, there are strings attached within the AWS agreement but they are all stacked in MCRO's favour. Essentially the only "deal" in place is this - should the AWS partnership result in a "material" impact on MCRO revenue (materially usually equating to a c10% impact on revenue, ergo the need for an RNS), AWS then have options to purchase discounted MCRO stock - simple as that (i.e. there simply is no downside for MCRO.)
Yes, yes and yes! Also note IBM's positive results and return to growth in all its cloud operations as published this week.
That's actually incorrect - you cannot gauge a SP trajectory by a couple of weeks movement. We are still in an upwards channel which has been in place since December & whilst support at 520 didn't hold, we'd need to see the SP drop below c.485 to see this fail. Very short term - not good (agreed - didn't expect this drift but volume is pitiful), but medium term, nothing as yet has changed.
Shore Capital is reassessing Bab**** (BAB) after the UK defence contractor announced restructuring plans – including 1,000 job cuts – and shouldered a £1.7bn profit hit, but looked set to avoid a rights issue.
Analyst Robin Speakman retained his ‘hold’ recommendation on the stock, which shot up 32%, or 77p, to close at 319p on Tuesday.
Speakman is expecting the group to deliver ‘a flat profit performance’ over 2021 with ‘additional pandemic-related costs continuing with the impacts of the restructuring in the short term’.
‘The impairments may have implications for dividend payments in the medium term, so we will assume that these are passed for the next two years,’ he said.
If Bab**** can make £400m of disposals as planned, Speakman said it could end 2022 with net debt in a £350m-£400m range.
‘This is a strategic business to its clients, providing an essential service, and under long-term contracts. Debt financing for these long-term liabilities and commitments is appropriate in the group’s financial structure,’ he said.
https://www.investopedia.com/terms/b/bed-and-breakfast-deal.asp#:~:text=A%20bed%20and%20breakfast%20strategy,security%20they%20had%20just%20sold.
Good take on the situation with positive upside from Breakingviews.com......
"The company whose tagline is “trusted to deliver” is about to deliver a chunky hit to long-suffering investors. British defence group Bab**** International first spooked shareholders in January, when it said a review of expected contract income could hit its asset values and future earnings. A Financial Times report, which said the writedown is imminent, sent the shares down a further 8% on Friday. Still, Chief Executive David Lockwood’s reset could upgrade the company’s valuation over time.
Lockwood inherited a plethora of headaches when he started at the 1.1 billion pound company in September. Analysts expect the writedown to be as much as 700 million pounds, more than a tenth of the company’s total asset value. Heavy borrowings are another problem. Morgan Stanley reckons net debt could be around 3.3 times EBITDA, rather than the reported 2.1 times, after including additional liabilities such as supply chain finance. The company has also been under attack from short seller Boatman Capital Research, which two years ago accused Bab**** of hiding costs. Even before Friday’s share price drop, Bab**** investors were nursing total losses of 15% since the start of the year.
Yet there are reasons to be optimistic. More than half of Bab****’s revenue comes from defence, and UK military and naval spending is on a relatively firm footing. Prime Minister Boris Johnson announced an extra 16.5 billion pounds for defence in November – the largest military spending increase since the Cold War. That has helped push British defence giant BAE Systems’ valuation up to 11 times 2021 earnings, while Bab**** languishes on around 6 times, according to Refinitiv data. Closing the gap with BAE could deliver a 65% uplift to Bab****’s share price.
That would require Lockwood to first purge Bab**** of its ills. His background as a defence CEO, having previously led Cobham, should help to repair the group’s relationship with the Ministry of Defence, which short seller Boatman claimed was poor under the previous management team. And the looming contract review should at least give investors more confidence over future cash flow. Both Cobham and Laird, Lockwood’s previous other industrial-sector charge, were taken over at chunky premiums by private equity. Bab**** itself was subject to a takeover approach by outsourcer Serco in 2019. Investors have several ways to profit from Lockwood’s turnaround."
Bread and breakfasting is no long allowed, so I take it that as long as you didn't exceed the 12k profit, your accountant gave you the green light to proceed as you explained. More or less what I've done thus far and thanks for letting me know! Upwards and onwards.
By moving most of your shares into an isa, I assume you mean, you sold them, transferred the cash to your ISA and once settled bought them back from your ISA account? I hold most of mine as shares as was already full on my ISA allowance and have been trying to work out the best way to get £20k's worth into this years ISA without incurring a capital gain!
I added this morning @ 219 - a price I didn't think we'd see again! Bring it on I say, analysts already know of the write-down, so I'd rather they just get it out of the way and clear the way for recovery. In a years' time the SP will look a lot different for those of us who've being following this in background.
It's actually a lot better than that. The warrants can only be exercised IF there is a material impact on revenue for MCRO and in the financial world material translates as anything 10% or above. Ergo the pressure is on Amazon, not MCRO to deliver. Amazon gets MCRO the business, MCRO then offers Amazon the chance to take up the warrants. Win, win and as MCRO's share price goes up Amazon should be more and more incentivised to deliver, if it goes down (unlikely), MCRO lose nothing .
I meant 50 points, not 509 (slip of the hand)!!!!
espressodopio - I do both (as in hold shares and spread-bet). I've had X2 open bets for quite a while now and well up thus far despite a couple of rough rides! The daily charges aren't that excessive and my margin covers all but disastrous news, so happy to let them ride as I see this motoring by end of the month and on. Risk aside the great thing about spread-bets is that they are tax free. My advice is always ensure you have enough deposit to cover pretty significant swings - thousands loose out with stops less than 509 points away and not enough funds to withstand a short attack or unexpected news.
I thought so - just curious as to how someone said that their IG account had been credited!-
Hmmm, nothing yet on my accounts (both spreadbet and share dealing with IG).
"IT systems".....errm.........