Member Info for Schmoky

JG, that's what I mean. Isnt the worst case (in case of no NA sale) an increase of cost to service the hybrid, keeping as equity? No breach of covenants and plod on with recovery. I am not clear where the route to bust is coming from

They can service the debt now. They could even service the hybrid converted to debt, however we know that would likely not be possible with current covenants.

Howver is the worst case not the hybrid is kept ans increases +4%/£20m cost? That will hilurt cash flow but give time for further recovery? It feels like this would be the least damaging for shareholders and provide breathing space, unless I have misunderstood.

I'm probably missing something obvious and can't read the original report, but how do moodys conclude negative cash flow in next 2 years?

GOG is another one, CFO effectively sacked on accounting scandal. Intra day SP c400, people saying no-one will touch it for years its dead, suspension, game over and... buyout at 1600. I was in it heavy and sold out two thirds before it jumped as i was fatigued being stuck in it. Massive regret. I fear this one has potential to break some hearts the same way!

I would think it is as JG alludes, to give time to demonstrate the business potential. By doing that it should stand up and attract wider interest. Only when potential bidders sense competition around them will they lose hope of getting it on the cheap and instead bid decent prices. So it pins on how actually attractive it is and how much interest it garners. Can it reliably deliver margin for the buyer > their borrowing cost? FY23 2.4% does not deliver that, but I think they said Q4 run rate implied 4.5-5% margin in 2024 and if by Q3'24 the new leadership can bolster this upwards it might just become attractive?

In their defence we have not yet closed Q1. No other companies are yet reporting on Q1 for that reason.

Doesn't it have to be higher than the highest closing share price in past 12 months or something?

How would price get decided? Cosmens would obviously do anything to get cheap and have increasing voting power. On the other hand its probably worth £2-3 on open market. Wondering in what scenerario that wouldn't be achieved and the likelihood of that

Ah OK, thanks.

Why do we think these recent 3% rns are cosmens rather than other opportunists?

The 5% cosmen stake increase equates to over £20m insider buying right with this Jorge chap on BOD?

Cheer up JG. Rates dropping in 5,7,10 year projections. Will help the business case/price of NA sale.

Twas tongue in cheek!

By -2bps

If they did get that much or anything close, what would the share price be on announcement?

Surely a cash injection of x4 share price would do something similar?

Full recovery not likley, but sharp acceleration in SP to a higher level than here possible after disposal/deleverage

Does anyone have any estimations on what this might get?

Fair point on margin being worse tha i estimated if revenue is higher. In fact it may be likely as they seemed to switch away from margin guidance..

As you say still looking at a possible 7.5-8% next year with the possibility of further margin recovery down the line. The additional interest will be offset by a 1bn jump in revenue vs pre-covid. And this does not consider any drop in interest rates on a medium horizon

Someone else has pointed this out yesterday, apologies I lost track of who.

We have H1 OP of 4% with FY outlook at 7% (based on ca210m OP). That means H2 is at 9% OP. I don't see any reason for backweighted margins normally (2019 and 2022 flat phased).

Extrapolating H2'23x2 at 9% OM out for 2024 delivers OP of ca230m after -82m of interest. This is comparable to 2019 levels.

Unless I have missed something, this will have a major re-rate as the business catches up the inflation curve over the next 18 months.

Depreciation is non-cash and factored into net debt as per his estimate, as is debt.