Hi Mark, yes I know they take risk but the locos and wagons are contracted from DB Schenker, if they have take or pay then ESL will have to take the pain, unless they claim force majeure. I was thinking therefore they don't have many assets on the rail side whereas thought that are in maritime container haulage have lots of trucks and drivers idle.
@Mark1973 - Yes I know they do the rail work but assume as that is sub-contracted (ie to the rail companies) it would have less effect on them than perhaps Maritime who are now big in rail but have a lot of trucks moving containers, which has obviously seen a big drop off. I just think all is not as rosy overall as people think and with food and fmcg slowing down as people have less money and no panic buying, there will be pinch point they need to address in May before the rents for Q3 are due at the end of June.
@Oldpache - really !? Actually I didn't advise to sell, although it is OK to do so on this board, hence why they have an opinion option scroll down !! Misleading - not sure why you say that ? Uncollaborated (sic) lol no it is had been widely reported about the downturn in the press, both national and trade press. If you don't agree with me or don't like my post, that's your right, but stick to the facts.
Although the supermarket and FMCG sectors are doing well, many other sectors where logistics is involved are not. To be fair ESL does not have a big presence in the deep sea container or high street sectors, but in the Industrial and other sectors they will have seen a downturn in volumes. Also supermarket and FMCG volumes have now stabilised and ESL will have higher wage costs due to backfill for increased sickness and absence (like a lot of other businesses). I think therefore there will be a pinch point next month in May - which is also when DBAY indicated they would be considering some type of corporate action. I am sure DBAY will do very well as their control of the assets, debt and holding company puts them in a great position, but I fear for shareholders in ESL, hence what I think is in part driving the sell off which will continue as institutions seek to de-risk. Although as many know I have been in and out here, there will be many more options with better returns and lower risk over the next 4 weeks - tread carefully here if you are holding as May approaches ! GLA !
Hi sharesaplenty - Your point about the cash injection is spot on and this should be the saviour for TRX. It appears from press reports that the selfish (b)ankers are hanging on to the cash to protect their own self interests. Hopefully with the new Chairman's connections he can twist the arms of the money men because they only care about themselves and aren't particularly intelligent, while assuming everyone else is dumber than they are, in my experience. In any case good luck and all the best.
LOL - If the Titanic had offered free 3rd class tickets just before departure that would also have been classed as ridiculous value - until of course it sank, at which point the value proposition would have to be re-assessed ! I hope those holding here have a good outcome, particularly as this is a good company, all be it poorly managed over the last 2 years. But this really will be a 200-500% upside or a 100% wipe out in the next 6 weeks. Personally, I think betting red at roulette twice and letting it ride statistically offers a better outcome than investing in TRX currently.
@B2HS2L - My understanding was that further funds from MidCap are only available at MidCap's discretion - which obviously as of today they have not given permission to. So therefore "all we need do is draw down the next tranche" is not an option currently open to TRX.
A loan under CBILS is not from the Government but from an accredited bank - who will not lend without security - the decision is made by the bank itself without input or reference from the UK Government
Cash is king and shareholders are dispensable - don't ignore these facts if you want to protect your capital
@gettingpoorer - yes using the same crystal ball - which was pretty clear, sadly. Looks like hello bright new future and goodbye faithful old shareholders, as is often the case. Cash is king.
@gettingpoorer - We have a different opinion on funding which is fine. The world will move on but it will also change and not go back to where it was - healthcare, retail, travel and supply chains will need to evolve. I await developments with interest.
So the MidCap deal was on the table when the world was a different place. The MidCap deal started running into trouble when sales came in below expectations. Since then there has been a USA production stoppage due to to cyber incident and now sales will slow again as all hospitals focus on Covid-19 for the next 3-6 months. The governments round the world have fired a lot of ammo over the last 2 weeks and not sure what more they can do ? All the banks and institutional investors are hoarding cash - to protect themselves and don't give a monkey about good businesses like TRX. It's a great business with great products and if you are invested I hope you get a result - but they are in ICU like many people and companies. I rode a bit of the recovery last week and went back to 100% cash on Friday - we are 3 weeks away from the peak in UK and USA and I can't see any good news - some hard hot companies are trading not far off where they were 6 months ago - that won't last ! Sorry for being a doom merchant but I think reality is needed if you want to protect capital at present.
I wonder if they could diversify short term ?
From CNN "Scientists at Oxford University have developed a 30-minute test for COVID-19, which can be done anywhere. The raw materials for it cost about $25.
A team at the Engineering Science Laboratory, working with partner medics in China had an 8 week head-start on developing the test, which uses a mix of chemicals and enzymes which turn from pink to yellow in color in the presence of the virus.
The test has a huge advantage in both its speed, but also because the chemicals only need to be kept at 65°C (or 150°F) for half an hour, which can be done easily in any hospital, or even eventually at home.
While there are hurdles ahead, the test may be able to complete clinical trials in the coming days.
"We have 3 things to do," Professor Zhengfang Cui, who led the team, said. "The first is to get clinical trials. We just started those here at Oxford University Hospital. The second thing is regulatory approval, which is based on the number of tests done.
"The third is to get industry partners to implement large scale manufacture. For that, we need clean rooms and manufacturing facilities. And then we can roll out he product," Zhenfang said, adding that he hoped the steps can be completed in 2 to 4 weeks."
While the new approach is welcome, I worry about the rapid departure of the long standing previous Chairman at such a critical time. But actually the key question is whether demand will be there for TRX products for the next 3-9 months, depending upon your view of Covid-19. I would imagine a large scale reduction id demand will require more cash than was originally expected ?
Take care TF, all the very best
@nomlungu - totally agree with your view. Over the last 4 weeks the world has completely changed - even since 7 days ago everything we took for granted has gone. Whereas TRX is a great company with great products, it needs cash and it's customers are now going to focus on Covid-19 for the next 3-6 months. I think it will be a miracle for a shareholder happy ending here. I wish it were not the case but all previous assumptions are gone in my view. GLA invested here, I wish you well regardless of my thoughts
@Gerry, totally agree with your thoughts on STOB having no interest on ESL and did post that last night but drowning people will look for any lifeline even if it is a mirage - having said that given the magnitude of what is going on that is me not being critical , it's just human nature in part - global governments have the deaths of millions of people on their hands
Well that would change things for sure Mark - thanks for sharing. I'm not sure that strategically they would want back into logistics as that is not their background in terms of the current Directors, but it would certainly sort the balance sheet and give them ammo.
Don't think I have seen the article on Southend - know a bit about the background but not in detail
Sonic,
This is where it gets complex as with the assets in the holding company buying ESL without the holding company isn't viable I think - and that needs DBAY approval given they own 51% of the holding company. As I saw it DBAY didn't want to buy ESL, they wanted to control the debt and the assets and bought the 27 odd % in ESL to achieve that. I could be wrong though as it is all a bit murky to me !