Member Info for romaron

Hey spin - you might as well remove some barnacles. They can't even be bothered to switch the algos on today.

Hi Pooks- I've known them a long time. They lent my parents the money to buy my school uniform 60 years ago. My parents didn't even have a bank account at the time. I started investing c. 2010 purely to earn a return due to the abysmal interest rates. I wasn't that clever and used them more as a piggy bank. I got it right (accidentally) and they owe me nothing. I loosely follow the sector but believe I know as much about the "poorly served" sector as a hedge fund manager. PFG unusually have a pretty good reputation where I come from (Essex/East London). I'll repeat something I said before regarding the company and the FCA. I asked a close pal to question a tenant of his who worked for the FCA with special regard to investigations. The tenant gave little away other than to say that PFG didn't have many complaints for the sector and was not being investigated. Their systems had already been rigorously checked and found wanting relating more to the Crook era. They were fined and systems were overhauled. Even Crook realised that technology and taped interviews with clients was the way forward.
The company has survived two world wars and a highly trained work force and systems. We aren't a Wonga even though we employ one of their ex-executives as head of Moneybarn and the new head of CCD is ex Brighthouse and Amigo. This is a well run company and these are bargain prices imo.

Be lucky

Horse racing is happening just no racegoers. Same as football and cricket. that probably explains the increase on these boards of Neanderthals who regurgitate the same old tropes which have zero effect on the price/match but it helps with the boredom. Spindok is beyond help. He gets worse when the tide is out.

Spindok - I won't tell you again. It's AUGUST and the St. Leger isn't until the 12th September. If you want some action, go play with AMGO; it's quiet there at the moment (only 257 posts) but volume is 25 mio and growing. You'll soon hurry back here after visiting that madhouse. I doubt we'll see anything until next Thursday and hopefully we'll go crazily upwards.

Be careful what you wish for!

It's all relative but in the world of "the poorly served" PFG stands out. It made many mistakes during the Crook regime and strengthened its procedures for new lending and rollovers. I applied for a Vanquis card some years ago. Not to use but to go through the process of obtaining one and was impressed by the diligence and evidence required. You then had Van Kuffeler in a fit of hubris try to take market share from PFG via NSF. He did this partly by taking agents from PFG who were upset by the effrontery of PFG wanting to make them paid employees when they much preferred their "agent" status and freedom to do what they liked. VK was much more accommodating and look what it led to. I'm not surprised he was able to form a company so quickly after leaving PFG and co-founders like Neil Woodford were also taken in. The warnings were there and it wouldn't be the agents that were fined when slipshod governance was perpetrated. The dodgier borrowers soon cotton on to this and they were likely turned down by PFG but a new company chasing "market share" was meanwhile congratulating itself on its steals.
The same kinda thing happened to Amigo. Most know how difficult it is to get money back from friends and families and you often just write it off. Imagine then if the same person approached you and said that it won't cost you money but you just need to be a guarantor who will never be called upon. When you see explosive growth headed by a convicted criminal warning bells should ring. If you pause to think the whole premise of Amigo is wrong. The feckless will always find ways around any checks and no doubt many families have broken up when defrauded by kith and kin.
It also means that the worst defaulting borrowers went to companies with weaker governance. We have cherry-picked executives from the recent upheavals in this sector and once they've bedded in the future looks extremely bright.
PFG have been here before. A decade ago they were the most shorted stock in the FTSE and went from £6-£30. Another slow start but in a field of competitors that has been winnowed down.

Build it and they will come.

Hi Surfit - I'm not surprised you didn't get a response. The terraces prefer chanting and repetition. The article is a couple of months old but useful all the same. What is often missed is the ARCM specialise in credit and would almost certainly have entered into the position by buying the debt first. I don't know where you can get fresh or historical bond prices but suspect that it is hard to trade and may be "lock up" paper. The Retail Bond is easily accessible and I found with EnQuest that the HYN's in dollars are mirrored in the RB. It seems that hubris led to the board ignoring ARCM because even us retail investors can check out stock on loan. The current RB price is suggesting 79.13 and a yield to maturity of 40%. I don't know how real that is because trade volume is dismal and that too seems to be "lock up" to an extent but with survival practically assured not a bad punt.
When ARCM took out the position there were no guaranteed profits but we've seen how useful it is to play the equity as a hedge. Once you get ahead profitwise your options expand. There comes a point where the profits also become locked in. The problem can be unwinding but even if the equity rose your equity profit might reduce but the value of the debt (bonds) would increase. The RI will give enough movement and institutional involvement for ARCM to close the positions if they wish.
I'm not a debt specialist in any way but did once work for a company (Quadrex) controlled by Gary Klesch who moved into junk bonds. I can remember him saying that any company that didn't have a variety of law suits running weren't doing their job properly. These guys are quite fearless and accept losses too and are part of the game. I am no fan of ARCM but respect their balls. I have little or no respect for the authorities who allowed them to get away with not disclosing their equity short. Surely they have a duty of care to retail investors who don't have the contacts or expensive advice that the investment banks and institutions have? The PMO board were also guilty of being asleep at the wheel.
I'm not qualified to answer your questions but suffice to say when PMO's very existence was under threat mid-March the RB was at 35.25. I wouldn't worry about so much about the PMO performance in this debacle but work from a clean sheet. I recently bought some equity so will enjoy the ride.

Be Lucky

https://www.carboncommentary.com/blog/2020/8/23/how-much-space-will-a-100-renewables-uk-require

Interesting article and I picked these two from the conclusions:
[7] Aviation fuel will be made from electricity which is converted to hydrogen (80% efficiency) and then to hydrocarbons (50% efficiency). So making chemically similar fuel will require input energy of two and a half times the energy value of the aviation fuel used today.
[12] This sounds impossible, or at least very difficult. I don’t think it would be. Over 20% of the UK’s land area is given over to unproductive grazing of animals on rough pasture. This is concentrated in Scotland. However the total amount of all grazing land just in England would be almost sufficient to provide the total space required for the UK.

Good and bad. The aviation industry hardly needs more expensive fuel to get back in the air but the good news is that most onshore wind will be in Scotland and NIMBY. In the South we'll protect our bluebell woods, newts and butterflies whilst the Jocks get a new source of income. In mitigation they won't suffer from solar panels as you need the sun to shine more than a couple of times a year. We'd better move quickly as they're threatening another referendum.

N.B. Possible use for the ribbons of green belt that are currently used almost exclusively by fly-tippers seems to have been overlooked.

Be Lucky

Frac - sorry but you talk tripe. Volume was miserable today and the UT amount was nothing special.

What SeekingAlpha gloss over is that the Institutional sellers of oil stocks have done very well and no doubt these Institutions take credit for their ESG credentials in their glossy Annual Reports The selling of oil stocks has been self-fulfilling to an extent and on the other hand they're ramping Tesla to high heaven. Bubbles and confirmation bias come to mind.
What Seeking Alpha misses is that these institutions are going to have a problem reinvesting in oil if it does enter a bull phase. It may even prevent a serious bull market. To cloud it even more many of the largest oil companies are also banging on about their ESG plans. I think it is tokenism and I'll start to take notice when BP sells Rosneft or Equinor sells Johan Sverdrup. Existing sales and farm outs would have (imo) happened anyway with tired and problem fields (Bressay?).
So where does that leave EnQuest? I'd say very favourably placed but don't expect the cavalry to arrive under the flags of traditional major funds/Institutions. The largest investors have to show themselves to be socially responsible and public opinion matters to them. Their CEO's like a quiet life and the knighthood that often follows.
I'll repeat myself and say that we'll never have crowds out cheering us but the returns will attract the slightly more adventurous funds or those that don't have a public image to burnish. Oil will become a dirty little secret and still be the backbone of many portfolios. We will be throwing off cash and unmissable if you like annuities.
In 1980 oil & gas was 28% of the S&P Index. Today it is 4.4%. That doesn't look right to me.

Build it and they will come.

Hi all - I struggle to get info about outstanding bonds whilst the easy equity is easy access and most often discussed. I was looking at the recent tender of £75 mio which was priced at 96.90
I found this: https://www.londonstockexchange.com/stock/43ZF/provident-financial-plc/company-page
and am wondering what the price is now? Is it around the agreed tender price or is it now c. 102.38. Any info welcome.
I'm not too concerned about tomorrows figures as Covid has decreased credit demand (for now). There is a flurry of activity surrounding AMGO and NSF which although not really affecting PFG does weigh on the share price. We've had our problems with the FCA but they have been addressed and these 2 companies were asleep at the wheel and not paying attention to governance when it comes to lending. When this is over there is a good chance that they have disappeared or are weakened to the point of irrelevance. There is no benefit imo of PFG buying either company.

I liken the tender to a kinda share buy back. Demand for loans is lower so they are repaying costly capital. Why pay 7% for 3 year money when Vanquis only has to pay 0.75%. There are probably limits on how much they can borrow internally from Vanquis and the use the funds are put too but it is a safety valve in these trying times. PFG is often misunderstood and lumped in with some really poorly run companies with terrible reputations. Every time I read "door step lender" I immediately question the analyst or reporter's qualifications and knowledge of the industry.

Will we be able to listen in to a webcast tomorrow?

Hi Therapist - you just confirmed my last post. We each go down different rabbit holes that interest us individually and bring them to this message board. They sometimes trigger memories or tidbits that others have picked up and takes us forward. If EP becomes scrap it is in the price but if it can be used again it's a different story. Thanks for the update and research.

AMGO 1280 posts as I write. It is a challenge to find one informative post but it does confirm the delusion and ignorance of punters. Some may win but it is the same as coming away from bingo or the casino when you pick the right numbers. The ex CEO and founder is a convicted criminal but the majority seem to want him back. The whole concept is flawed and the business revolves around getting guarantees for borrowers who cannot raise finance elsewhere. Some of them are feckless and promise the guarantors they won't be called upon. Anybody who has lent money to friends or family know that repayments can be irregular or non-existent. The point of this post is that an active message board is not a blessing and you cannot find the informative posts that plague certain stocks where most are just terrace chanting and puerile handbag fights. We are lucky not to be so infested. We are also better in this respect than the PMO board. My conclusion is that in contrast we have some knowledgeable posters whose experiences and opinion certainly help me in my decisions. If you were in the oil business I can imagine that reading a message board often makes you wince with the ignorance and lack of commercial nous so there aren't many oil people here. We are lucky to have individuals whose knowledge may not be oil specific but are well versed in economics, accounts and human behaviour. Just glad I don't have to read the AMGO board and never invested there.

correction - this is the video I was referring to https://www.bbc.co.uk/sounds/play/m000lstj

Hi Tom - I have lived through enormous swings in interest rates. This was a recent memory jogger https://www.youtube.com/watch?v=WdjTi-uhoqI
I was already up to my neck in the Lira devaluation the weekend before. I had a mortgage in 1980 at 18 percent. I have no illusions about knowledgeable governments anticipating and being in firm control of finance. Fred Karno would possibly have handled things better! With this background you just have to get on with it. When Jim Buckee says "you need to know the real cost of your capital and its not 10 percent, make sure it's less than 10 percent." I know people will say that oil was much higher when he said it but so were associated costs. You have to look at it in the round imo. People get excited about anything above zero nowadays but what would you expect of a mid-sized company going through an industry transition as well as its own specific challenges? LIBOR plus 4 would give you 5.80 percent. An excess charge of 2.5 percent with all whats going on looks very favourable to me. I'm not too worried about getting the finest rate because TBF the timing by PMO is poor. Like most of us they never anticipated Covid or OPEC actions. I stopped looking for perfection some years ago. The situation with oil is as febrile as ever and I expect this to whittle down the competitive field even more. There will be big rewards for medium sized survivors and I expect both EnQuest and PMO to be highly profitable companies. As for 8.34 percent "it is what it is".

Build it and they will come.

Hi L7 - No criticism from me. These boards seem to find difficulty with the fact that the debt holders increasingly call the tune once you breach or come close to breaking covenants. Like you I think 8.34% is fair. They're not Triple A. In fact with all the talk about the ARCM equity short there was little discussion of their debt holdings in PMO.
I know it was 2013 but listen here at 5.10 https://www.youtube.com/watch?v=WdjTi-uhoqI JB also says you should "always explore out of equity and develop out of debt". That neatly sums up one of the differences between bond and stock holders. "We'll let the kamikaze equity holders take the majority of risk whilst we'll fund the development so we always have a mortgage on fields and will always be left with something if it goes tits up." Of course, the returns for equity holders when they get it right are enormous.
I'll leave the sums to you, hitman and others.
Agree with the executive comments and the bar bill at Santini will confirm. I've been negative on PMO for several years but it has some good assets and the HoT's suggest they're close to concord. It will bounce big time providing the oil price and Covid don't crater in the next months. I bought a few on Friday.

The PMO RB seems to be holding up but like ours has low turnover. I think we're held down by the PMO RB as our financial situation is far better. Of course that could also be read by PMO holders as we're happy with the bond because the equity holders are gonna have a lot of pain from dilution. It does seem that PMO's survivalis almost guaranteed.

*Have to say some of the recent posts have been top drawer and good info on the accounts which I struggle with. I particularly like Squif's devious triangulation to getting informative data.

The day punters aren't interested in the fundamentals. I will have to buy some shares at a discount from today's price 4:7 or something like that, does anybody know? Not a fan of TD but he may well be forced onto his sword. However, he does have the contacts and a passing resemblance to Houdini. All oil shares success depend on a rise in the price of oil and a Covid vaccine to an extent. Afraid I can't help there but with the RB holding up I've bought a few. The RB went to 35.50 in March and bond holders are famously more timid than shareholders. I fancy the professionals more than this message board. It's overdone imo.

Hi Pelle - I'm with you. I think the chances are slim of us being asked for more money. Under a stressed raising of finance, which RI's often are, is usually a requirement for extra shareholder funding. I guess the unspoken part by the "deep state" of finance is that the shareholders are putting up a kinda guarantee and will lose the lot if the company fails so mitigating the risk of the lenders. We get a 100% of nothing whilst they get anything left if the company fails. Having said that the lenders wouldn't probably go ahead without this commitment which is often just extending or raising the rate to allow breach of covenant if they thought the company was a 'basket case'.
We area few years in advance of where PMO are with debt but both companies will take off if a Covid vaccine is found and the oil price rises. I'm not invested in PMO but this is the first time I've thought that they might be worth a tickle.

correction to previous L7 post "I suspect that over recent days the Enquest share price has been caught up in the PMO, BP and RDS sentiment, and I don’t think we should be surprised."

Hi L7 - The PMO post was a waste of my time and a poor attempt to gain knowledge from that source. Most of us here have an idea how a RI will go but if they secure the longer funding then it's a whole new ball game for them imo. Tellingly not one of the posters/punters appears to have a clue about the impact of a future RNS announcing they have agreement and with the RI underwritten I think PMO have a decent future. I think the rates mentioned seem fair and not gouging. The assets don't appear too bad either and their RB is still way above its March level when there really were existential threats. The PMO board efforts for refinancing will be very important indicators for us but not, it seems, to those on their message board.

Good spot with the $30 mio and it suggests that Equinor would like to see the back of Bressay. Negotiations obviously ongoing and hopefully we'll maybe get a bit more on the 3rd Sept. Maybe the deal driver was Chrysaor who feared that the field might be mothballed/stranded? C2 resources aren't valued that highly it seems. Amazing that most of us missed it whilst you picked up on it and shows the value of this board. I'm guessing here but think developing Bressay without the input of EnQuest would make its development less likely so we have a fairly strong hand in the negotiations. We're close enough to ask if the Party wall Act applies.

Regarding the future there are still money brokers doing what I was doing 20 years ago. They are reduced in numbers but there are some things that technology isn't so good at. When it hits the fans this market goes to auction. FX hesitates but never stops. That is when experience and contacts count. I'd say this is one of those times. I reckon Equinor gave up on Bressay some years ago and Chrysaor only have a holding because it was part of the Shell bric-a-brac they picked up. The majors aren't interested in this field but imaginative smaller companies see the possibilities.

Hi Therapist - to avoid any confusion I agree with your post. I would never accuse AB and his team of being "patsies". This isn't anything like previous deals with majors and we also have the nod from Chrysaor too. I do believe though that in the current climate it suits Equinor to use us for a variety of reasons. One they wouldn't admit to is because of activist or fund pressure. I had a conversation with Roger Ramshaw when he was Chairman of Xcite and he had a decidedly different opinion of Norwegian openness that the world seems to accept. He suggested that the Fjords were very deep and dark and hid a good many secrets. Whatever their motives I doubt they would tie up with a company whose future was in doubt!

Build it and they will come.