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SJH is technically insolvent as liabilities exceed assets and loss making in half year before dumping insolvent subsidiary to in house lawyer (it’s the fourth time SJH have used that tactic). I suspect group solvency will look better once they offload Market Access.

It still has £2 million of legacy debts which depend on winning legal actions to get paid.

70% of turnover is from mature lottery business that made a £1,000 and payment business is heavily loss making even before impairments and write offs.

Today’s deal will enable SJH to stumble on but awarding options at 10 p per share when price is 65p is very generous.

SJH is cheap for a reason it has terrible track record of losing money. The best thing about today’s deal is that CEO will be replaced.

Acquisition - unless vendors of Singapore are stupid they will look at market cap of SYME and won’t sell cheaply which means that a share swap is highly likely probably with a lock in.

John Henry given Skin is listed fair value equals market value under IFRS 13.

John Henry. Tern values it’s investments at fair value ie equivalent to market value in its own accounts so I don’t understand your argument. In Tern’s case you also have to factor in immaturity of portfolio companies and its constant need for placing in its market capitalisation.

Certain commodities are a great sector for inventory monetisation as product does deteriorate with age, is fungible, often multiple buyers.

Also area where Inventory monetisation has occurred before see Trafigura.

Presume SYME will want to use shares to pay (given it has no cash as it is borrowing from TAG) which is also smart.

John Henry why would you value Opti’s stake in Skin at just Skin’s net asset value. Opti’s accounts post TW’s observation on Opti’s accounting error means that Skin stake is now reflected at at fair value in its IFRS accounts.

Anyway strong trading update today reflecting continual growth in product rollout even if Woolworth can see progress being made.

The presentation slide deck contains an interesting note that since first writing ERMs the cost to of date NNEG in terms of actual losses has been 10 bps. Given chronic U.K. housing problem I am less concerned about NNEG risk than the theoretical models imply.

The black scholes valuation model of NNEG results in a much higher provision being carried as a deduction in the yield to maturity discounting the liabilities. Over time as this liability doesn’t crystallise the excess reserve over current experience drops through to profit.

I don’t think Just will hit IFRS net asset value because both Aviva and Phoenix trade below net asset value and they have less capital issues than Just but if they trade at 75% of IFRS nav that still offers upside. The common factor in all three is that they trade at discount to IFRS net assets and beyond goodwill and PVIF in balance sheet there is effectively no other value attributed to future profits. The fear is that future credit losses will exceed provision made in the IFRS balance sheet and that solvency restrictions lock up capital and prevent dividends.

1 Sold ERM portfolio above IFRS book value - this does help underpin view of assets value.
2 Recaptured old financing reinsurance £940 million which reduces size of balance sheet and eliminates historical legacy financing
3 All debts now through Just Group plc which simplifies debt structure in group
4 Earning fees for selling ERM assets which helps expense efficiency
5 More cautious view on property growth within figures which increases robustness of IFRS net assets

Bobbist. Opti owns a quarter of Skin so your ratio of 1p in Skin equals 0.5p ratio is a bit strong.

Opti may become a cheap way to buy into Skin soon!

L&G have communicated and conducted much more consistent strategy over the last few years under a well regarded CEO who has sold of small and or underperforming businesses including retail funds business most recently. In contrast Aviva has had a succession of new CEOs in that time who have struggled to explain Aviva’s strategy in similar compelling terms. Amanda’s has made a good start with rapid divestments but hard yards start now as she has to improve results of remaining businesses. I think we could see further gains if Amanda keeps up current rate of progress.

PJ is a disqualified director as regards a VAT matter a few years back

Doctor100 loans and interest aren’t the supply of goods and services which means that they are outside of VAT. The administration fee is a service and is thus VATable. It isn’t that complex.

It’s a convertible loan note where LDA will get shares for cash and it will proceed to sell shares probably on a forward settlement basis so LDA is guaranteed a locked in profit on each tranche of debt converted.

Iconic had one of these and it smashed the share price as number of shares went from 1.6 billion to over 37 billion in around 12 months.

Only desperate companies with no means of accessing traditional debt finance and a need for cash enter into these deals.

Key takeaway for me is that implied shareholder net assets are £9.21 so Phoenix trades at big discount to net assets and future profits from ongoing businesses.

Briggs is a quality CEO as well, lost Aviva job to chap who left very shortly afterwards.

A rouge underwriter equals red faces all round. This is poor control, a single rogue underwriter should not be able to destroy any business.

Sterowlamds. I have used Primary Bid on about 6 occasions. Reliable but takes a few days to get from PrimaryBid to II account.

PrimaryBid get a lot of offers both big ticket companies in retail placing plus smaller IPOs

Bumblebee why would the end of the U.K. tax year be relevant to SYME?

At 31 Dec 2020 IFRS book value was 493 pence per share so Aviva is trading at 20% discount to net assets. So effectively no value attributed to future profits.

Yes I know that some future profits are effectively recognised on the IFRS net assets in goodwill and PVIF but these are reducing through business sales and amortisation of PVIF but broad point is correct.

The sale of remaining Italian operations at multiple of IFRS carrying value will have modestly increased this discount.

Amanda has delivered the sales of overseas business at pace as promised. Poland will be probably be next and that will complete I think significant country sales. It will retain stakes in ventures in Singapore, China and India three huge life and savings markets which could be monetised in the future.

Amanda’s focus will then turn to getting core businesses to run better which will be a tougher challenge but I think she will also trim non core businesses here as well. Looking at scale of Aviva head office is also another area for cost cutting.