Member Info for Wigwammer

I accept the scib data looks great, and that’s fantastic news for cancer research. But 1) even the next generation iscib patent expires in 2031, so by the time scib gets to market - perhaps 2027 - the owner will only have 4 years exclusivity. Surely that will impact deal terms? … 2) the unresectable melanoma market is $1.5bn, nice size but a fraction of what we hoped regarding moditope. The good news on scib does not offset the weaker news on moditope, though I guess the shares are now lower… thoughts?

Doldrums?! The value of my shares has more than doubled in 6 months! … it’s all about debt reduction, so if that continues and the market starts to value the company at a higher multiple of earnings as perceived risk diminishes, then 20p could be a base…

Party tonight on wigwammers liftboat…”These new contracts on improved day rates reflect positively in a market where GMS remains well positioned to capitalise on increasing regional demand for Liftboats".

Which covenants do you think they will miss, jadams? Be very odd for the lenders to agree to extending the credit terms if they suspect the covenants to be missed… short term voting machine, long term weighing machine… ATB

The lending banks were not sure about the debt 2 months ago …. Now they are…. Big difference IMO. GLA

But the situation is tangibly different to two months ago, m1600. The debt has fallen by circa £250m and the lenders have extended their support to 2027. The odds of a favourable outcome for holders buying here has materially moved in their favour, not against them. I have been buying and getting my average down, and expect that on a three year view I will

be well rewarded. What the stock does over the next few weeks is anyone’s guess. In the short term the market is a voting machine, in the long term a weighing machine … ATB

With respect m1600, you very much do suggest something. You suggest that to justify a 150p price then then the company needs to be making 50m but is actually trading at a loss (pretty much word for word).. Therefore you conclude it is overvalued. But obviously there is a very good chance that the company achieves much improved profitability in future years - which is exactly what the company and analysts expect. You can’t price a stock off one years earnings data. I agree the debt is important, but at a market cap of around £300m and a revenue base of over £2bn, it is pretty clear the market is already pricing in a material debt load. The reduction in net debt post the RI should materially reduce the interest charges, to around £50m pa, covered 3 times by current EBITDA, and that’s in a depressed year. Not bad at all. Presumably this is why the lending banks agreed to extend the debt facilities to 2027. ATB

M1600 - cyclical companies regularly post negative earnings during weak points in the cycle. Are you suggesting that at these points the companies have zero value? The point is to identify what profits you think they will make across the cycle and discount that, not take a bad year and assume it goes on forever.

Time to join the McCatee party?.. “She joins the Company at an exciting time, with significant momentum behind the Company's core markets of oil & gas and renewables".

Of course the party isn’t over, 4corners. Everyone is still having a great laugh at your expense… BOL :)

From memory, the “undisturbed” price in mid august (ie the price prior to the relentless pre RI fall) was about 80p per share, or a market cap around £376m. The market cap now is around £396m, so you are now paying the equivalent of 84p per share in old money… 80p versus 84p… BUT with the latter, you are now buying Synthomer with around £250m less net debt, and the support of its major lending institutions. I have bought again today. I have little idea where the shares will go over the next fortnight, but comfortable that the price I am paying should look good in the medium/long term (Financial health warning - I was pretty comfortable at 72p old money too!)… GLA

CyCoXX - with an annualised EBITDA run rate of around £150m, 5x EBITDA would be a net debt figure of £750m. Post the RI, I estimate net debt will be materially below £600m by December, suggesting quite comfortable headroom versus the covenant target. Happy to be corrected, if that doesn’t make sense. ATB

Lol. Expensive photo opportunity, candid! Reading through the prospectus - management are expecting group EBITDA to recover from circa £150m to £300m (ie doubling). Of that £150m recovery, around half seems to be expected to come from adhesives, moving from a 12m EBITDA run rate of £48m, to an EBITDA run rate of £118m. So £70m of the £150m…. Given adhesives has just made £15.5m in the last half, and management expect them to make £118m pa in recovery, this is certainly not a management team you could ever accuse of being overly conservative or pessimistic! … I don’t like attacking management, so the point that I am probably says something about how unusual this situation seems to be… “The Adhesive Resins Business acquired from Eastman, which makes up the majority of the Adhesive Solutions division, generated EBITDA of approximately GBP71 million in the 12 months to June 2021. Factoring in a further approximately GBP24 million of EBITDA from legacy Synthomer businesses that now form part of the division, the Adhesive Solutions division generated EBITDA of approximately GBP95 million in LTM June 2021, before the identified run-rate acquisition costs synergies of approximately GBP23 million per annum (approximately GBP118 million in total). ”

Half year comment on adhesives… remember they paid $1bn for this last year.. really rather unsettling .. “ In Adhesive Solutions, H1 EBITDA declined to £15.6m (H1 2022: £34.5m, H2 2022: £32.7m) because of the weak demand amplified by destocking as well as reliability issues. We saw more resilient pricing and volumes from our speciality products in the division relative to base products, which are experiencing greater competition. Whilst most raw material costs began to moderate this was offset by supply chain disruption and low reliability at some sites, as well as higher energy costs. We have expanded several of the original acquisition synergy workstreams with a dedicated 'self-help' programme under the new management team targeting improved operational reliability and cost efficiency. Within these programmes, we are also continuing to capture revenue synergies following our acquisition of this business last year as well as leveraging our range of leading positions in speciality adhesives in US and Europe. We have also reprioritised capital expenditure to broaden raw material supply as well as to expand capacity in certain high growth areas, notably in amorphous polyolefins (APOs).”

Well the performance of the shares over the medium term really depends on how the business performs (stating the obvious!) My ongoing concern is that net debt will remain high at £550m+, but also that the performance of adhesives has been a tragedy…. They paid a billion dollars for it, combined it with their own adhesives assets, and are presumably extracting synergies from it…. Yet it achieved just £15-16m EBITDA in H1 (compared to £70m+ annualised reported in the acquisition documents)…. Have management purchased a total dud, and given the recovery story is predicated on their belief that EBITDA at group level can double, how much faith can an investor put in what they say? I have sold enough to fund maintaining my position at a level it was at prior to the RI announcement, but management have a lot to prove… imo

Frankly joseywales, I couldn’t give a t0ss about your trades. I’m simply pointing out that contrary to your claim of being an expert trader, your posts have been poor so far. You bought in the 80’s and stayed positive all the way down. In fact, two days prior to the RI being announced, you dismissed it as unlikely. There isn’t really an angle you have called correctly, so perhaps less of the personal back slapping. ATB

Hi fairlysolvent… interested in your figures. The H123 numbers are showing EBITDA of £72m, so currently an annualised rate of £144m. Management believe this can be doubled over the medium term, so that would get us to circa £300m pa, but I don’t think that reversion is likely to happen imminently. One concern I have is that the Eastman adhesives acquisition was making circa £70m+ EBITDA alone in the years prior to acquisition, but latest half year numbers show £15m EBITDA for the half year - and that is with the two adhesives businesses combined, and presumably with the benefit of synergies. Not great! So I would like to believe management, but my lingering concern is - did they just buy a real dud? Need to have a lot of faith in them to believe that circa £300m EBITDA target. ATB

I don’t think you quite understand, joseywales. The only thing that needs to “jog on” is your assertions about having an average in the 40’s and a great trading prowess. The evidence suggests otherwise, and it tells us b@gger all about SYNT, but probably a fair amount about you… ATB

Hereshopin - Please can you explain the point of joseywales claiming he has an average in the 40’s, and a great ability to trade stocks “all the way down”? … Surely - before anyone takes his posts seriously - it is worth pointing out that the evidence suggests his predictions have been poor, and demonstrate no ability to trade the stock correctly. ATB

I see, joseywales. You can’t point to the posts where you state you are selling, because they don’t exist. So the only thing your posts demonstrate is that you bought far too early, along with many others, and remained positive all the way down. ATB