Member Info for WiganWarriors

Hi Fred, well now we have heard something ... ??. Seems a little overdone though, given current trading going well. Like to put a cap on shares for most of next year until we have more clarity on the actual impact, and word of how they will attempt to mitigate the tax rise. New CFO must be wondering which black cat crossed his path recently.

TMT, I broadly agree with your approach to investment. To paraphrase Keynes ... investment is like judging a beauty contest , were the game is not to pick who you think is the most beautiful girl, but are trying to judge who the majority will think is the most beautiful girl ... Never forget it is the Market that sets the share price.

Unfortunately Hammerhead is the real drag on RSE, being unquoted and under operational curtailment from Canadian government suggests no positive news flow likely in the near future. Just hope that RSE have a fair view of current valuation, otherwise another problem if its in the books at too high a price. CDEV likely to pick up if oil price picks up. Having said that, I have decided to buy a few today, and will take a long term view as I think that oil will recover over next year.

Depress

Don’t forget that Blackrock have been given the mandate to liquidate the Woodford Equity fund, which had a large Wimps holding. Likely to surprise SP until this is cleared.

Well, there is a reason for non cash adjustments to the balance sheet. Amortisation trims inflated non tangible assets, so the balance sheet more fairly reflects reality. Writing down goodwill from previous acquisitions is an acknowledgment of paying too much, and itself reflects on management destroying shareholder value.

Ratty, you misinterpreted my point. I am suggesting that with all the pressure groups and social change activists becoming emboldened in a world where the tail can wag the dog, it would likely be easier to operate as a private business rather than as a listed business.

Large institutional investors are likely to come under more pressure going forward than they have in the past, from these type of activists.

IMHO, there is no doubt that the new CEO will restructure , after all that’s why the existing management have been paid off. I think it’s certain that he will review debt as a priority, which then has knock on impact on future dividend distributions. As has been mentioned, it’s about a sustainable dividend going forward to give institutional investors visibility and certainty over >5yrs and more.

Also, don’t forget that IMB have benefitted from a falling £ over the last five years or so which has inflated profit via currency gains. Once,if, the £ strengthens if non hard Brexit achieved then IMB will suffer the opposite effect.

I would suggest there will be a period of “kitchen sinking”, and once the dust has settled the institutions will review again. However, social pressure will increase and the best days of the tobacco industry are probably behind it as far as a publically listed entity. Maybe private equity will take them private at some point. No rush to invest at the mo.

Hi Alex,

Sure, generally I agree. However think that it is a question of scale here ... "a SP that has been steadily falling for three years, and is lower now than it was ten years ago ..." is not just temporary, its more like a fundamental shift in valuation. That is why I put format my view ... "This is not an example of the market temporarily mis pricing a stock, more like an exercise in price discovery to find the real price at which IMB should trade given the structural changes the tobacco industry is facing ..."

Either way, let's revisit this conversation in six or twelve months time. It is always worth remembering that it is the Market that sets the SP.

Hi Gabster,
I guess you are under water with your investment in IMB, given your self reassuring response. It is a fair point that I made regarding your selective choice of some metrics you choose to self justify the "bargain" price of IMB. Some investors might stop to consider that a SP that has been steadily falling for three years, and is lower now than it was ten years ago might show a little humility and look beyond their own interpretation. This is not an example of the market temporarily mis pricing a stock, more like an exercise in price discovery to find the real price at which IMB should trade given the structural changes the tobacco industry is facing.

You seem to think that large non cash write downs is a badge of honour , when in fact it is destroying shareholder value due to poor acquisitions in the past. Look at retained earnings metrics if you need any further enlightenment.

Not sure why you choose VOD as a comparator to IMB, different business models. VOD high capital expenditure in technology requireing write downs as each new generation of technology is deployed. Verses IMB which does not, just cleaning up after poor acquisitions.

Again, IMHO, until new management are installed who recognise that the tobacco business is undergoing structural change with far fewer barriers to entry than previously, I would respectfully suggest that IMB SP is unlikely to arrest its current downward trend.

I am sure you acknowledge that my opinion is no more valid, nor less valid than anyone else who posts on this BB.

Well, EPS can hide all sorts of other issues. For example, and in IMB case, the large amount of debt. IMB have not been using cash flow to pay down debt, so if the business trips up at any point then suddenly its market rating can collapse even though it seems that its earnings are steady. The current CEO has pursued detrimental policies regarding dividend increases, rather than paying down debt and removing the need for balance sheet gymnastics. IMHO IMB won't recover until a new CEO is appointed and makes it a priority to rebuild the balance sheet.

Yeah, too many people being kept alive beyond their shelf life.

Also, jump seems to coincide with Corbyn saying he will support an election ... the market seems to like that option

Likely it was the commentary on house prices (stagnant or falling in general), seems to coincide exactly with shape drop across the builders.

We need someone to declare a " force majeure", as both sides are not able to move their respective positions forward. Notwithstanding the EU, and they may surprise everyone with the length of an extension, there's not much the Government (Executive) or Parliament can do to move forward. Might need a "lack of confidence" vote in Boris to break the logjam.

hard to see any support for the SP now, likely to deflate along with the hyperbole for a while.

Seems some interest again, and SP firming up. US / China likely to agree on trade deal, or at least tone it down so VLX should avoid getting caught in the cross fire. Looking good.

Hi Tom and Bamps, I suspect you are missing the point. With respect to Tom’s reference to ITV that has no relevance to Wimps, no one who has any experience in capital restructuring and general investment experience ever thought that ITV would be taken over, just chit chat on BB. ITV has been in decline for years, they are old tech compared to their competitors like Netflix etc.

If Wimps go private then that means they are not listed. So, PE will do their thing ( take massive dividends, and cut costs) then prepare to re list on a recognised stock market at some point in the future. Likely a period off five years.

Of course, being taken private would probably mean that the intrinsic value in Wimps will be transfer to the acquirer, and not the shareholder. Last accounts estimate that Wimps has ~ £51bn in future revenues from the then current land banks (including options).

Hmmm, interesting that Wimps have replaced their two existing brokers (Jeffries and J P Morgan) with two heavyweights (Citigroup and Credit Suisse), both "International". Maybe Wimps is positioning to explore opportunities to increase shareholder value. Seems unlikely that they have fallen out with both current advisors at the same time. Perhaps the brief is to look to be taken private.