Member Info for Stoopid

570.5 live, only fly in the ointment was a large increase in net debt. Its still within management targets of 1.2/1.5xEBITDA though.

Everything going great guns, still trading at an EV of 4.8xEBITDA which is still far to low, market will have to rerate eventually. The market is lagging the business transformation, just look at the business mix. Paypointy have sucessfully transitioned away from the old "corner shop/cash" legacy business. The market will soon wake up to it and the price/EV multiple will rise...

Well, 3 days until results, the share price is stagnant at around 550 with low volumes and currently going no where.

Lets see what the market makes of the forthcomming management guided £90m EBITDA, EPS of 70p - 80p, net debt 80m-90m and the parcels volumes +20%. The Barclays target of 420 is likely to look slightly stupid/out of touch.

My Opinion only - Mid 200s? Well, look at the reason CBG crashed to low 200s/190 in the first place? It was purely because the market (and a lot of others) took the view that CBG was going to go bankrupt or have a hugely dilutive rights issue because of car finance liabilities?

This is obviously not the case now with the publication of the FCAs 26/03 and the fact that VW etc are attempting a JR and it may be that the years from 2007 to 2014 may well be hugely legally vulnerable to this challenge as noted by Knot, others and legal professionals.

CBGs Liabilities for 26/03 are currently capped at £320m (+/- £50m - £100m buffer for costs etc which can be covered by retained profits). CBG have 400m in cash, NIM of 7%+, a CET1 of 14.3% and are currently trading at a ludicrous 0.48/0.5xTNAV of approx. 870/910 meaning you are getting CBG for a 50% discount even now.

This wouldn’t be the case in the US or India for example, where it’s likely that the share price would have recovered to at least 0.8xTNAV due to better liquidity, better multiples and the FTSE suffering large structural capital outflows.

The discount that the UK market is still applying to CBG is ludicrous and will take some time to resolve, the restoration of the dividend will be one of those catalysts.

So, return to mid 200s? I would doubt it, CBG weathered the COVID crisis due to their loan book quality and resilience, I suspect they will do the same with any UK macro downturn and any generalised market crash due to enormously overpriced tech and AI stocks. In fact higher interest rates will more than likely boost profitability and margins.

I would suggest you keep an eye on your stops, I wouldn’t want to be stopped out on a macro crash and widening of spreads. Especially if your average is in the mid 200s and your stops are tight on the current share price?

So Patience, you are suggesting that you are currently sat on approx 127,500 shares at the moment? Thats a big bet on CBG. I wish you well.

Well, not much to say really, its clear that they are all Quants/Stratagy based i.e. they dont care about the results on the 11th June, they only care about the charts, liquidity and things like the trailing 12 month figures, for example the trailing 12 month EPS is like 25p or something? Some of the spreads in the morning over the last month or so have been like 6%/35p suggesting little or no liquidity and so the shorts are able to walk the price down.

This is exactly what has happened since the CAT, some exited just before the judgement and then came back, also the 2.9% currently disclosed isnt the whole story, there will be (in my opinion) between 1% and 5% hidden short positions on top in leveraged TRS (Total Return Swops), CFDs, other derivatives etc.

Even when the figures are posted on the 11th june, management have raised expectations so the figures better be good or as guided or Paypoint will be hammered. Barclays are the only Broker with the outlier of 420 which is simply ludicrous. All of the other brokers are 800 - 1150.

Paypoint are a transformed business, the market hasnt woken up to that yet. The royal mail deal and rebranding is transformational. Look it up, Paypoint are set to make net 25p per parcel, plus the new kiosks will have OBConnect software embedded in them to leverage the kiosk/card usage. The Lloyds partnership, again transformational. OBConnect will start to monetise its products. Paypoint is now a Utility/Cash/Parcels/Finetec Hybrid and should command an EV of 8 to 10. Currently PAY are trading on an EV of just 4.8xEBITDA. That is a business in decline/old cash business/going bust. Not a business thats generating over 90m EBITDA this year, a dividend yield of over 7% and target EBITDA of over 100m next year all whilst reducing the share capital from 72m shares to 60.3m currently.

But, until the market gets the concrete figures on 11th June, no one is buying. Remember, 100m EBITDA was "promised" this year. The partial collapse of the share price price in November was due to Paypoint stating that it wouldnt reach 100m EBITDA this year, essentially a profit warning or the shorts used it as such even though it wasnt really a profit warning and the price collapsed from about 700 to 440.

Surprised there hasnt been a rise in the share price into the Q3 Tomorrow? Especially with the UBS note yesterday? Down 10% since the 06th May, just coinciding with the increase in short positions funnily enough?

Algos in control at the moment, wait for the £90m+ EBITDA to print on the RNS on the 11th June. 90m EBITDA, 60.4m shares, this is an EV of only 4.5/5xEBITDA, yield of 6.7% currently covered more then 2 times by profits, Net Debt of 80m/90m, Roll out of IDS/Royal Mail business which is set to be transformational, doubling parcel volumes by 26/27 results, OBconnect Monetisition, Lloyds collaberation, Love2shop cross selling, the positive list goes on. Plus the continued reduction in the share base, another 60k bought and cancelled in the last week.

PAY are outrageously undervalued and hopefully the Full Year Results will see a re-rating. With the EV multiple at 4.8/5x EBITDA Its trading as a legacy business that is going bust/under. You only have 4 weeks to wait. Institutions know the value, they are just waiting for it to be confirmed on the 11th June.

The results on the 11th June will be the catalyst back to 850+ when record results of 90m+ EBITDA is confirmed and they reiterate 100m EBITDA for next year. Even at 850, the ev multiple will still only be about 6.5xEBITDA, still well undervalued.

Also, foward guidance for the fully rolled out Royal Mail/Parcels contribution will be good to see. Then hopefully they can show increased monetisation from DIgital and OBconnect......

Maybe, or have they just dropped under the 0.5% reporting threshold?

A 1.26% drop in the shorts (from 4.94% to the current level)would be approx 768k shares, and there was no notable change in the share price from friday 19th April to when it was reported? I still believe that there is considerable short interest below that 0.5% threshold thats not currently visible......

Must be costing them a fortune, especially having to have paid the two divis and the carry costs etc, especially if highly leveraged?

There will be no major move over the 660 holding level until the results on 11th June or the CAT judgement lands and is either an outright win or a loss on competition issues but a negligible compensation payment due to counterfactuals like "Frankenstein Mess" and Scottish Power

This isnt actually a Judicial Review via the high court is it? They’re applying to the Upper Tribunal, they’re not doing a standard High Court-style judicial review?

So, this is technically an application for a statutory review by the Upper Tribunal FSMA (Tax and Chancery Chamber) ? Not a direct JR on whether or not the scheme is legal/ultra vires?

They are saying that the calculation method is irrational or unlawful in how it measures loss and the approach to interest and harm assessment is legally flawed if i am reading this correctly?

So the scheme can continue whilst this appeal is run in tandem. They will have a hell of a job proving their argument, it would need to prove a misapplication of legal principles from Johnson v FirstRand, whether the FCA’s “hybrid” calculation properly reflects actual loss, whether compensatory interest is calculated in a legally sound way and if "excluding" certain agreements is irrational or inconsistent. So, A high bar indeed.

Most shorts appear to have taken positions from 650 to down under 500, just after the Share consolidation at 750 and RNS about not hitting that 100m EBITDA target this year. So, totally agree with you that some of them, especially those hidden ones (under 0.5%) with TRS (Swops) and derivatives could be well under massively water especially if leveraged.... The CAT judgement could mean a very large short squeeze as they try to exit? looks like they might still be betting on that 173m being a black swan event which, with the evidence and commentary available publically, Paypoint will win....

Respect your decision to take some profits but think you are a bit premature. Record results 25/26 already hinted at by the board, interim trading update due next week 22nd where no doubt the record results due will be mentioned along with the H2 trading update.

Also the CAT Tribunal judgement is due very soon - "Frankenstein mess" - Global365s own emails call their product this. Global365s prepay software was also turned down by Scottish Power, EDF and British gas. The fact that they are claiming they could have won a massive 35% market share is ludicrous.

There is no way, on the publicly available commentary/evidence, the court will award anywhere near the amount Global 365 are claiming.

Even if PAYPOINT lose the "anti-competition" argument, the counterfactuals are so strong in Paypoint’s favour against Global365, that it will still be like a win because any compensation awarded will most probably be in the range of 0.01p - £10m, which in this case is still a win.

The current EV is only about 5.8 and Paypoint are predicting £90m+ in EBITDA (or thereabouts) for this year. So the company are still trading at a distressed share price and the valuation gap suggests that PAY should currently be valued at about 850+. But this valuation gap will not resolve until the CAT gives its judgement. Paypoints EV should be at least 7.5 but it is currently depressed due to awaiting the CAT judgement, some macro factors and the large short interest of over 4.75%.

Another reason the share price disconnect is so large is also due to the PAY share buyback. The amount of shares is now down to 60.6m and will be under 60m soon. This has a big effect on both the share price and the large short interest currently trying to exit a crowded trade.

I will hold for 850+ which I believe wont be long in coming.

@NiharRoy it doesnt matter what you personally prefer, it only matters in relation to CBGs "book" and the optics through which each may or may not be seen in relation to the markets, investors and the press.

A buyback is not "free" capital-wise. Under the PRA (Prudential Regulation Authority) and EBA rules, as soon as a bank announces a formal share buyback programme, it must usually deduct the entire maximum amount of that programme from its CET1 capital immediately, as a "foreseeable charge" so, for any real affect in CBGs share capital they would have to announce what? £100m? 200m? 300m? buyback?

The optics would not only be terrible but would also immediately affect CET1 by 1% - 2% putting massive pressure on the share price? Can you imagine the reporting, CBG blow 200m whilst not compensating properly, selling off the family silver (CBAM and Winterflood) and dropping their CET1 below their own guidelined of 12% - 13%? The press would have a field day and CBG share price would get screwed and management would get a torrid time?

Whereas a quick 20p - 30p reinstatement of the divi would only be 30m - 45m and could be covered up by 2026/27 earnings (projected 150m) and no hit to CET1? It may also encourage income funds and yield seekers to buy CBG?

Just having this discussion makes me think that a dividend or buyback announcement may be quite a bit away in either case.

A restart of dividends at 30p would signal confidence in capital strength and a number of other things I believe are still holding the share price back currently;

It would show CBG now have a resolution/containment of issues tied to the FCA Scheme 26/03 and that the outlay of £320m is affordable and non-existential.

A shift from being defensive with capital retention to a shareholder-return mode

For me, this surely would signal a possible strong share price rally, definite short covering because big income funds who were barred from buying CBG would be tempted to buy. The share price would rise and shorts would be forced to cover? Especially at a 30p dividend which would be approx. what? A 7% yield?

Might also trigger possible analyst upgrades and a return initially to 0.6 – 0.8 x TNAV? TNAV will possibly rise to 920 – 940 next year as the loan book expands and profitability returns (150m Profits next year? EPS of 100?) so a recovery to anywhere near TNAV is probably at least 12 months away.

I know some would suggest that a dividend return would not be that helpful. I think it would be the final signal that CBG are over the worst and now in full recovery mode and on track to 10%+ ROTE again?

Good Post, thank you Liberty.

Viceroy’s letter specifically asks the FCA to check if the company's auditors "independently verified the estimate or relied on management representations."

So, essentially Viceroy is suggesting/accusing PWC of either having lied/mislead (not done their job properly) about the auditing of CBG or that CBG may have given PwC a "sanitised" summary rather than the raw, messy data of all 720,000 loans.

This is just a ludicrous claim to make surely. And using Moneysavingexpert data to prove your claim that CBG and PWC are misleading the market?

For CBG to "lie" to a firm like PwC about a multi-hundred-million-pound provision in relation to a high profile event such as this, it would be a massive, career-ending risk for the executive team, including CEO Mike Morgan and CFO Fiona McCarthy, both of whom are themselves chartered accountants, not to mention prison time for fraud?

Unless the bank are actually lying and PWC have been negligent, Viceroys claims, yet again, are just total rubbish fantasy maths to support their position?

With over 320k traded and a 20% rise in the first hour or so, it looks like a bit of a short squeeze is going on for the 3.11% notified shorts and possible estimated 5%+ shorts either below that 0.5% line or in calls, derivatives & swaps.

I genuinely hope that people have managed to put aside the noise and scaremongering from idiots like Birdsong (posting a political position and not any actual facts and figures) and Viceroy and not sold their positions. Opposing views and opinions are necessary and welcome, but not when they fly in the face of facts and truths.

Hopefully now CBG have quantified the loss the TNAV is essentially rock solid at 870 currently and a return to 0.6-0.8 x TNAV initially is on the cards (522 - 696) in the comming days and weeks. Hopefully once a return to divis is announced it will be the catalyst for a further rise.

Https://irhosted.profiledata.co.za/firstrand/2017_feeds/senspopup.aspx?id=544210

Regarding First Rands RNS, i would like to point out that in their outlining of the flaws of the FCAs scheme, they specifically state that the £240m initially set aside, was in direct response to the SUPREME COURT judgement, not the FCA consultation 25/09;

"This results in a much larger number of the groups' contracts now included in the redress scheme compared to the group's original estimate which had been mapped against the SC ruling."

I would suggest that this is why they have under provisioned so dramatically?

CBG posted their initial estimate of £165m in Feb 2025 and then upped it by another £135m directly in response to the FCAs 25/09 consultation in Oct 2025? As the FCA proposed scheme is almost the same as the 25/09 consultation I would still suggest CBG have already provisioned enough with their £300m (+/- 50m-100m).

I would also point out that in the two Supreme Court Cases;

1) Johnson v FirstRand: The commission was a whopping £1,650.95. This was considered outrageously high and represented 25-26% of the loan amount and 55% of the total cost of credit (interest and fees)

2) Hopcraft v Close Brothers: The commission was only £183.26. CBG were well known to have low and often fixed commissions. Since the commission was low and there were no other significant factors of unfairness like those in Johnson, CGB essentialy were not liable.

So, two completely different loan structures and models of lending, and if First Rand had such a commission structure for a large proportion of its loan book, its not a surprise they have had to treble their provision, especially if they set it by what was said in the Supreme Court ruling rather than what was proposed as the future scheme by the FCA.

Meanwhile, CBG have consistently stated that they were not aggressive users of DCAs. Their core defense has been, from the start, that a significant portion of their historical book—like the Hopcraft case—involved low cost, fixed commissions, which are not subject to the FCA's redress scheme because they wont be classed as unfair. So, again, I would still suggest CBG have already provisioned enough with their £300m (+/- 50m-100m).

As others point out, a Judicial review now appears a certainty for some banks to explore, there is going to be some bad financial fall out over all this with a possible JR just being the start and as Knot points out, a drop in tax take for the treasury?

Knot, you have been saying most (if not all) of this all along. Thank you once again for all your input on here. It makes a change from some of the idiots that post the same drivel week after week.

John Swift KC contends that the FCA’s motor finance redress scheme (PS26/3) is ultra vires, arguing the regulator misinterprets Section 404E of FSMA regarding consumer definitions and wrongly applies retrospective rules for periods overseen by the Office of Fair Trading. Swift further asserts that the scheme improperly transforms fact-sensitive "unfair relationship" tests under Section 140A of the Consumer Credit Act 1974 into a blanket rule that inappropriately disapplies standard limitation periods.

Implication: Swift argued that the FCA is attempting to retrospectively apply new rules to a period when it did not have the statutory powers to regulate the activities in question.

Swift identifies a fundamental misinterpretation of the Financial Services and Markets Act 2000 (FSMA), specifically regarding how the FCA can exercise its redress powers;

Section 404E of FSMA: Swift contends that neither the FCA's consultation nor its final rules in PS26/3 properly addressed the meaning of this section. He argues that under the "ordinary language of the statute," the regulator cannot lawfully exercise powers that did not exist at the time the original activities occurred.

Section 140A of the Consumer Credit Act 1974 (CCA): This section relates to "unfair relationships" between lenders and borrowers. Swift argues that the FCA is bypassing the "highly fact-sensitive exercise" required by this section—as clarified by the Supreme Court in the 2025 Johnson case—by instead using a "cohort-based model" that presumes unfairness across millions of agreements.

Then, he claims the scheme as ultra vires because;

Retrospective Rule-Making: He argues the FCA is applying current standards to agreements dating back to 6 April 2007, a time when the Office of Fair Trading (OFT), not the FCA, was the primary regulator for consumer credit.

Departure from Supreme Court Precedent: Swift claims the scheme ignores the Supreme Court's ruling that non-disclosure of commission does not automatically make a relationship "unfair". By building a presumption of unfairness into the scheme, he argues the FCA has exceeded its mandate.

Disapplication of Limitation Rules: The scheme relies on Section 32(1)(b) of the Limitation Act 1980 to override the standard six-year time limit for claims by assuming "deliberate concealment" of commission. Swift describes this broad disapplication of statutory time limits as a major legal overreach.

Novel Economic Analysis: He criticises the FCA's "hybrid remedy" (using an APR adjustment rate of 21% for pre-2014 loans) as being based on novel economic theories rather than established legal principles of loss.

Im reading it slightly differently in relation to the recent scheme release, it would appear the FCA is actually trying to use Sec 32 to support their argument of cases back to 2007. And Why wouldnt they "ignore some aspects of their submission if it suited their case?

They are also suggesting that it falls outside of Hurstanger - The Defendant did not merely fail to provide adequate disclosure; it deliberately structured its documentation to prevent the Claimant from understanding the existence and effect of commission, particularly the link between commission and the interest rate.

As the Financial Conduct Authority accepts, disclosure does not negate secrecy where it is deliberately obscured or misdirected.

This case therefore falls outside Hurstanger Ltd v Wilson (which concerns imperfect disclosure) and instead constitutes deliberate concealment within s.32 of the Limitation Act 1980.

Consistent with Johnson v Gore Wood & Co and the Supreme Court’s approach in Johnson v FirstRand Bank Ltd, the Court must look to substance over form: a term that is present but functionally hidden is not disclosure at all. Which relates back to Sec 32 and the "six years does not start to run until the customer actually becomes aware of the issue/discovers the "concealment"/could with reasonable dilligence have discovered it"

No, sorry to disappoint you, their holding has only increased by 1% due to the number of shares and the 30m buyback PAY are undertaking.

i.e. they still hold the same number of shares but that number of shares is now 33% of the company instead of 32% as paypoint have effectively reduced the number of shares from approx 72m to 60.1m by their £30m buyback scheme.