Member Info for Sneedway

Thinking about topping up if ends up showing sideways movement for a few weeks. It's a shame LISA top up has to wait until next year.

Was looking over cash flow for this. It's a bit cheeky putting cash adjustments from onerous contracts, restructuring etc under free cash flow. Same with hybrid bond payment, albeit it is technically an equity dividend. That's over 40m of cash outflow that isn't really "free".

@Fishb0n3

I agree we can't predict impairments or adjustments. But it's worth brainstorming it.

Looking at the data now, it looks like the more dragging adjustments such as onerous contracts are sharply decreasing which is very good as I question if those should even be there.

One offs/short terms such as restructuring costs, furlough repayment, extra tax charge are contributing a lot this H1.

Amortization is steady.

Hopefully barring any surprises adjustments should overall be lower for H2 and even lower into 2024 as restructuring costs go away.

I wonder if there is anything significant from results we haven't considered.

One thing to look at may be the adjustments for H1 that take the statutory profit to a loss. From memory about half of the adjustments were cash, the others non cash. Some were one offs but they also included onerous contracts in adjustments which was only a small amount, but more operational and maybe a bit crafty to put it there. And the short term restructuring costs and general amortisation.

Is the market pricing in further/significant adjustments for FY?

He's referring to net margin I believe. Operating margins were >10% pre COVID.

Agreed regarding the timeframes. While I was thrilled to be buying at the prices I did, it's going to be a set and forget for a couple years at minimum. Worst case scenario, the market will treat this as a zombie company until rates come down and/or debt is outgrown.

As long as the cash flow is there, the stock is "safe" for my own risk tolerance. There is enough operational cash flow to pay interest, capex and everything else. Enough free cash leftover for growth capex and to treat shareholders to a payout. It's not like it's burning through cash, cineworld style.

Moneymule.

It may be helpful to remember the EBIT forecast is adjusted, not statutory. Amortisation is adjusted for and this is consistent with previous results. Nobody knows if there is another impairment, you can only speculate. Regardless, it would not affect cash flow which is likely to continue to be strong.

Also as lerkule notes, you don't subtract amortisation or depreciation from EBIT. The 200m is after D/A is subtracted. You get your EBITDA by simply adding those back in.

EBIDTA for FY should be 440m assuming depreciation and amortization is steady and 200m EBIT. Post interest and pre tax that's 125m profit. Do note they adjust amortization out of EBIT

Assuming no surprise that is

I've bought another 600 today. If the mutual funds don't want it, I will take it.

Although admittedly sub 80 does test your nerve.

Excuse the unfinished post

1. UK/US inflation comes down further and a positive sentiment on rates comes in

2. Revenue/Margin growth to simply outscale the debt

The company is being priced in as a zombie company, although this is unjustified. Bad sentiment can really mess up a share price.

Or as low as 3, depending on how FY results go. Crazy low.

I expect we may fail to get a meaningful reversal until

1. UK/UIS

2. Revenue/margin growth outscales the debt.

What is the source for 3.4p final? That would be would about 20m in cash outflow, they should be able to afford a 5p final again.

CEO going back in time to destroy Flixbus and dominate all European bus routes.

Who was saying management is incompetent?

Apologies, I jinxed it.

On a day when everything is down the toilet on wage growth news. Pretty good bottom sign. Food inflation going down may make tomorrow's inflation reading better than expected which would provide further buoyancy.

JG

The refinancing is (presumably) accounted for in the 75m forecast/2024 82m forecast for interest charges.

The 500m hybrid bond is not treated as a liability or asset; it's equity. They can repay it from 2025 at their own discretion. Payments can also be stopped if the dividend is suspended but that would be bad news.

Hard to see the reasoning for a rights issue. In HY2 we're likely to see 150-200m operating cash flow if maintenance capex stays similar to HY1. More than enough to service debt interest (59m), hybrid bond payment (20m) and have enough FCF leftover to give out even a 6p final divi (36m).

I've put in an order at 79.90, hence it bounced off. No need to thank me.

The 500m hybrid bond is probably a factor in this. That was one of the reasons for the Liberum downgrade since it's a form of quasi-debt but listed as equity, not liability.

200-215 goal is EBIT e.g. before tax and interest. Interest will be 75m for this year so that will take a healthy chunk. By 2025 interest should come down as rates are cut.

I have also bought 1000 further shares. Order took a good 3-4 minutes to fill. Lack of liquidity suggests bottom.