Member Info for Saab93se

Full year results, RNS of April 29th 2025 states “At 31 December 2024, the Group had £803.1m of cash and undrawn, committed facilities and a covenant gearing ratio of 2.8x (FY 23: 3.0x).”

Why would an RI be imminent?

If you’d invested over a decade ago (11 years) at around 250p you’d have accumulated 80p dividend payouts or could have sold at 300p+ for 6 of those 11 years. If you’d done nothing and just collected the dividend, with that cash you’d now be able to triple your number of shares. I strongly believe the share price will more than double at least once during the next 5 years so I don’t think it’s such a bad investment if you’re prepared to hold for the longterm, especially if starting at an all time low. Just my opinion.

I agree. Net debt to be reduced by the same proportion as ebidta, leverage ratio unchanged but more cash generative and greater focus on the profitable areas of the business. Future dividend payments should be more consistent for this.

If you missed the rise following the recent reiteration of FY24 ebitda guidance and the BETMGM update, this is a gift.

Interesting read on why Manolete should be doing incredibly well, but the numbers speak for themselves. Business opportunities don’t mean profits as proven thus far with debt greatly outpacing revenue growth in the last 5 years. According to the article, Manolete’s insolvency litigation cases typically conclude within 12.7 months, so it’s not like time hasn’t been on their side.

Had a look through the trading updates and I’m amazed Manolete’s shares are still nearly 50% of the IPO price of December 2018. Full year results 2019 included £6.8m profit before tax, £9.7m cash and no debt. Fast forward 5 years and FY 2024 reveal it’s making a loss, £1.4m cash (up from £0.6m the previous year), £13.7m debt (increased by £3.2m). Huge increase in debt and only £5m left from HSBC’s £17.5m RCF. The healthy balance sheet of FY2019 was only due to £14.7m net proceeds from admission to AIM and it’s been barely generating any cash since. I don’t understand why the company chose to pay dividends between 2019 and 2022 with profits and cash decreasing and net debt rapidly rising?! The outlook for insolvency litigators may be rosy but until I see any sort of improvement in Manolete’s ability to become profitable and generate a sustainable return for shareholders, I’m remaining out.

Currently no open short positions over 0.5%

(though I’m sure Marshall Wace and other funds are still lurking just below)

I work in a Halfords retail store. During the busy weeks around xmas Departmental sales revenue for motoring and cycling were slightly above last year and all sales performance targets were achieved. Bought myself another 2000 shares at 124p today and will be very surprised if the next update isn’t as good as the last.

Tencent Holdings Ltd down 7.28% during the night. Alibaba down 0.91% and Meituan down 1.33%.

Quick recap of the decline in share price following the 3 profit warnings: 07/10/24, SP: 1273p

08/1024, trading update: “The estimated one-off impact of adjusting for the revised development cost assumptions reduces the Board's expectations for adjusted profit before tax for FY24 by c. £80m, for FY25 by c. £30m, and FY26 by c. £5m. The reduction in expectations in these three years relates to overall cost estimates across the full life of the developments. As a result, the Board now expects Group adjusted profit before tax in FY24 to be c. £350m.”

Resulting SP: 964p

07/11/24, SP: 874p

08/11/24, trading update: “Group expects to deliver adjusted profit before tax in FY24 of c. £300m, reflecting the additional impact from issues in the South Division and reduced expectations for completions in the year”

Resulting SP: 738p

23/12/24, SP: 654p

24/12/24, trading update: “Vistry Group announces that it expects adjusted profit before tax for FY24 to be c. £250m, compared with the Group's previous guidance of c. £300m”

Resulting SP: 548p

Within 3 months, PBT expectations for 2024 have gone from £430m to £250m (-42%). In the same timeframe, the share price has gone from 1273p to 558p (-56%). Whether or not the price action is fully warranted, I don’t know but the reasons are legitimate.

I’ve been browsing their website, trying to understand why they’d increase their short position by another £20,000,000 when the price at 650p is already down 50% in 6 months. Doesn’t make any sense to me.

“The investment philosophy of the firm is that the consensus is too focused on the short term and real value is generated in long term analysis.  By minimizing the market exposure and with the stock picking process driven by micro rather than macro factors the returns should be driven by idiosyncratic single stock risk.” 😵‍💫

Not really worth getting angry at the shorters, who no doubt will be keeping a very close eye. They don’t have the privilege to forget about the share price and come back in a year or two.

Added my final spare money at 668p 🤦‍♂️ don’t normally like to sit on a such loss but the company is profitable enough that I’m not overly worried.

Could get very interesting if Glg Partners start trying to close their £28,500,000 short position.

Less than halfway through a £130m share buyback, is there any reason Vistry would want to prop up the share price with a reassuring RNS?

Ex-dividend but could be a good day anyway. SSE index up 3.2% overnight, Tencent +4.5%, Alibaba +3% and Mietuan +8.7%. Excellent value here.

The problem is, they have previously set a target of leverage reduction to less than 3.5x by end of 2025 (stated in an RNS of 29th November 2022) which is now expected at the end of 2026. Confusing that little more than a year and a half later this target has been completely forgotten (“No change to existing FY25 expectations” according to the last RNS). Definitely no dividends in the meantime and it’s going to test the patience of the most ardent investors (myself included) when the targets are continually shifted. End of 2025 was ok but I don’t want my money tied up an extra year in a business which over-promises and under-delivers when there’s so many other better opportunities out there...

Capital Markets Day 2022, included an updated strategy “focused on delivering shareholder returns, driven by rapid deleveraging and improved profit margins, supported by accelerated and increased cost synergies…” -none of this has been achieved. I know it’s under different leadership now and a rebranded company but so what? Deleveraging is proving painfully slow, profit margins are not improving and revenue appears to be in decline, brought painfully to light in the recent H1 results.

Amazes me that two solid dividend paying companies, 888 and William Hill, with yields often over 5%, when combined can deliver nothing to shareholders for 5 years or more despite the promised cost synergies.

That said, although I’m in no rush to buy, I certainly wouldn’t sell at under 60p. The market cap is too low, hence my opinion to “Hold”.

48,294,478 new shares sold June 2023 at a discounted price of £12.30 each to raise £600m with strong support from new and existing shareholders. I didn’t buy any then but I think those who did might argue this stock is now severely undervalued?

“ EBITDA H1 23 - £61.9m vs H1 24 (this week's filing) - £53.8m.” -don’t you mean revenue?

This was explained in the statement “with the reduction owing to the planned conversion of the Group's US business into a sourcing-only operation”

Ebitda during H2 would have to be down 50% year on year, or net debt suddenly increase significantly, for the leverage limit covenant to be breached. I don’t see that happening this year, do you?