Member Info for Wigwammer

Sure. I can see the posts where you purchase in the 80’s, and repeatedly speak positively about the share all the way down. But I can’t see any posts where you claim to be selling… Perhaps you could point us to those posts, maestro?

Poor old 4corners. Everyone can see he has got it hopelessly wrong, but he continues to dig his hole… Now he is resorting to outright lies. What I actually wrote at 8.2p - “ I sold a few hundred thousand this morning at the bid, no problem. Still leaves me a couple of million shares. ”… Credit it to the MAC who has called it correctly - great stuff - and commiserations to 4corners who has been outed as a chump.. ATB :)

Hmm.. quite odd that joseywales has “no loss now” despite buying in the 80’s and talking positively about SYNT all the way down.. just sayin’ :)

Joseywales - there is no problem with the maths, except the post RI number of shares will be 165m, not 140m. And of course, if I commit vastly more capital to SYNT then a smaller movement in the shares will be required to hit breakeven - I would effectively reduce my entry price by purchasing at the lower price. But does it make sense to commit vastly more capital to SYNT here? When I purchased at 72p I had perhaps a target market cap of £800m, or 170p a share in mind, which would generate a 136% return. Post the RI, that £800m will equate to a share price of 484p, a 65% return from the theoretical ex rights price of around 292p… 136% vs 65%… that is the impact of what management have done, a massive reduction in the potential return for any investor buying today. My breakeven numbers are based on funding participation in the RI by reducing my position now, thus maintaining my exposure at the same level. Given the reduction in potential return it doesn’t make much sense to vastly increase it, IMO… ATB

You are forgiven, joseywales. But you evidently do not understand the impact of current management actions on the future potential of the shares. Prior to the issue, I require the shares to return to 72p to break even (a market cap of £338m). Post the issue, I will require the shares to return to a market cap of circa £800m - the equivalent of £1.68 a share - to breakeven. They have taken out some of the debt risk - although the debt will remain highly material at around £560m, but severely blunted the upside potential of the shares in the process. ATB

Well I’m certainly pleased you aren’t managing my portfolio, joseywales. It appears you believe vastly overpaying for acquisitions, writing down the value, excessively leveraging the balance sheet, issuing shares near the all time lows, squandering hundreds of millions earned in the covid windfall, witnessing a 70%+ fall in your share price over one year, seeing a 90%+ fall over 5 years - is all just part of the “ups and downs” of managing a company. And we haven’t even been in a recession yet! For the record - my average is 72p and nobody stated they had seen a heads up for a rights issue, did they? … ATB

Sort of agree mulder. But I have had many occasions where I have bought falling knives and profited. The difference here is that Synthomer management guided that things were going to be ok, they never mentioned the possibility of a rights issue, there was no suggestion that “all options were being considered”. There is wording that can be used in an RNS to put all holders on the same page, and this management chose not to employ it. They should be removed, and not just because they have proven incompetent, but are also questionable in other ways… IMO

Yes . They have made a series of dreadful decisions, and management has been moved on , but not Caroline Johnstone. Instead she gets a 23% pay increase. Possibly the most disgusting decision was not to mention to the market in the statements in May and July that all options - including a rights issue - were on the table. This created an entirely unfair market, where people including myself trusted them, continued to buy shares and lost money. They really are awful.

Caroline Johnstone was made Chair in 2020. Since then the company has squandered the windfall covid profits, overpaid for Esstman, and got the balance sheet into such a mess they need to issue vast quantities of shares near the all time lows to

keep things going. Incredibly, she accepted a 23% increase in remuneration last year. Surely it is in the interests of shareholders to get her out? Total negligence by the large shareholders to allow her to carry on…

Hmm. No hint of a cash raise in the previous statement. Executives were buying shares in the 70’s, thus encouraging others to do the same. Then suddenly those “in the know”

start selling down from 82p. An asymmetric market caused by abysmal communication by the company. Along with buying other companies at great premiums, and selling their own shares now at a massive discount, this has to be one of the worst managed companies I have ever come across in decades of investing. The one Individual who has been at the heart of all of it over the last 5 years is Chair, Caroline Johnstone. Will she be doing the right thing and stepping down?

Candid… assuming they take up the rights, a holder is paying the equivalent of around £1 a share in “old money”, or a market cap around £190m higher than yesterday. The reason they may be happy to do this is because the net debt will be around £260m lower. Well done waiting - wish I had - but still see good value here. ATB

KG…. £1000 worth of shares @ 43p is around 2300 shares. You will be entitled to apply for 6 new shares for every 20 shares you own, so that’s 690 shares. The issue price is £1.97p, so that’s £1360 (690 x 197p) to take up the issue in full. Happy for others to correct if I’ve got this wrong.

KGinvest - I think you have got it wrong, and it would be helpful for you to confirm this so that investors here are not misled… ATB

Well done hereshopin.. nicely explained.. and after an hour or so looking at it I reached the same conclusion. The market cap post the issue assuming the current price is around £480m, or just over £1 a share in old money. That’s £190m higher than this time yesterday but with the benefit of a £260m reduction in net debt… this assumes you exercise the rights of course… have your cash at the ready!! … happy for others to correct this and please DYOR… ATB

Hi Josey.. did a few calculations this morning and at current price of 43p with 470m shares in issue, this will be equivalent to a price of around 293p post the issue and with 164m shares in existence. The latter equates to a market cap of around £480m or just over £1 per share in “old money”. So the market cap will go up by around £190m but with the benefit that net debt should fall around £260m…. Frustrating but still looks good value and with a better balance sheet, just need to make sure you have enough cash in the coffers to pay for the upcoming issue. All these figures come with a health warning - do your own research - and they assume that the holder takes up their rights… ATB

I agree josey - the upside looks great and I keep adding each time it falls. So that’s pretty much every day at the minute given the relentless falls. Now my second largest positon…. Fingers crossed it’s just nervous FM’s wanting out at any price… ATB

The unrelenting share price fall does make me wonder if they plan to raise cash. If they do dilute at this level then management need to take responsibility and step down IMO, particularly Chair Caroline Johnstone. The only thing worse than the excessive price paid for the Eastman acquisition will be locking in the mistake by diluting holders at these levels… ATB

Well the last reported net debt is £795m, not the £1Bn you state, and both the CEO and FD have been replaced since the acquisition was declared. More importantly, the lenders are now largely in control - enforcing revised covenant restrictions, and encouraging management to the task of generating returns. Happy to let readers decide if being negative on a stock that has already fallen over 85% from peak represents a contrarian or a consensual position. Most importantly - the enterprise value is now below where it was when they made both the Omnova and Eastman acquisitions. They paid too much I’m sure, but I’d suggest assigning zero value is going way too far. With £140m ebitda this year SYNT just about covering the £70m expected interest charge and maintenance capex, if not the additional circa £37m EU fine. But that is a long way from the basket case territory the valuation suggests. Best wishes with your other investments.

I suspect there is a single large seller in the background, repeatedly using the U/T to offload at the end of each day, which gives the MM’s a new inventory of stock to pass on each time. Sooner or later someone will come in for the lot, so the positive trigger is likely to be a sudden spike in volume. Why this holder is selling is anyone’s guess - they had all the nous to buy SYNT at multiples of the current price ie not much… FM’s are very overrated :)

Or perhaps just somebody who understands that the price you pay is important to an investment decision, candidinvestor? The market already knows all your consensual points, which basically amount to - SYNT has debt, interest rates have gone up, the economy isn’t great… which of these points do you think the market isn’t already aware of? ..lol.. and the relevant exercise is to go back over the 35 years, identify periods where valuation and sentiment are heavily depressed, and work out what the ensuing return is over a 3/5 year time horizon… here’s some of your homework done for you: nov ‘90 to nov ‘93 = 300%+, sept ‘00 to sept ‘03 = 100%+, jan 09 to jan ‘12 = 500%+… it’s about price, valuation, timing etc… I wouldn’t be interested here except the valuation is low and sentiment depressed, and crucially the most consensual investors are reeling off consensual commentary as if they are the only ones “in the know”… ATB :)