Member Info for Wigwammer

Sain - thanks for conceding that I do adjust for a substantial fall in rental income, contrary to your first post. At the 6% yield you define as appropriate on a historic basis, you get a valuation of £1.5bn+ for the TC. Sounds like you’re starting to agree with me :)

Sain - you appear to have difficulty reading. I have taken 30% off the 2019 rental income of the trafford centre, and used that in the yield. You will be one of very few people who do not understand why the targeted yield on the Trafford Centre is likely to be substantially lower than on inferior assets.

In light of the reduction in rates and increasing liquidity, I’m raising my valuation on TC from £1.5bn to £1.6bn. This is based on a reduction in rental income from £85m to £65m in the first full year we get past CV, and applying a 4% yield. The lower yield is appropriate given lower normalised interest rates, but also the likelihood that a prestige asset like this will likely grow from depressed rents over time. Chance of a bid for TC rising as liquidity increases. Back in :)

Just to nail this point. They have 29 years to make up the shortfall. At a £50m deficit, that’s £1.75m pa - that was achievable. But because the regulators and trustees have messed about and encouraged/taken too much risk, we now have to pay more. Just put the frickin’ assets in cash and we can pay it back over time.

Shami - my thought has been there is a large and patient seller in the background. It is probably Lakestreet. Perhaps they know more than we do, perhaps they are forced sellers. Either way - they bought at multiples of the current price so are not immune from getting things wrong. Peel Hunt sold near the recent highs, but were also buying at the lows - hence profit taking. Hard to believe shorters are on the case given such low liquidity and market cap, but who knows. Things can change quickly - in either direction!

The dumbest thing is that the trustees will have been put under pressure (and no doubt will again) to make up the shortfall quickly. Consequently they will have invested in higher risk/return assets that will have suffered more in the sell off. Great system you’ve got there regulators. Great work trustees. The only people who deserve congratulation in this are the production staff who somehow managed to build a pot worth £165m in the first place. There is something verrr ****e about these DB schemes mainly revolving around the ridiculous and theoretical liability calculations.

Running through the numbers on pensions.
Pension assets £166m.
Pension liabilities £216m.
Deficit £50m.
Weighted average duration of liability 14 years 8 months, circa 29 year full maturity.
So over the next 29 years they need to pay out to pensioners on average £7.5m pa, and they have a starting pot to draw from of £165m. That doesn’t sound to me like such a bad situation. So you have to ask - what a strange regulatory environment we have that endangers businesses that evidently have (in all likelihood) the means to pay these very long term liabilities. Another thought - there are 3000 DB members on this closed scheme. That means each is due to receive on average a pension pot worth £715k. Jeeeedz. Along with QE, bailed out house prices, balllooooning state debts, bankrupting perfectly good companies to meet insane DB commitments - the generations above me really knew how to take care of themselves! Someone else will pay it off, don’t worry. Yes, I know the assets are likely a bit lower post the sell off, they’ve got years and years to make it back, assuming the trustees and regulators apply a little sense.

I don’t think they are sells. They are likely retail purchases being placed at below the mid price. There is I suspect a big and patient seller in the background just supplying to anyone who wants it. Whether that seller knows more than we do, or whether they just want rid of this £5m scrap, is anyone’s guess.

Hi Buck. They have pension assets of around £160m and liabilities of £210m, leaving a deficit of £50m. They also have net debt of circa £30m. From memory, the current arrangements expire in Q1 2021, which means they have to agree a repayment plan to cover the deficit with the pension trustees before then, and at the same time agree to revolve or continue the debt with their lender. Hopefully, the recovery of the technical plastics division and offloading of the problematic wipac division offsets the loss of aerospace earnings during CV, and they can agree a repayment plan which works for everyone. Hard to believe a company with a £5m market cap managed to generate assets worth £160m to put aside for pensions in the first place, and tortuous that the liabilities have grown in the way they have. But fingers crossed the core business is coming right just in time. Hope that helps.

Surely the best bet for trustees is to let the shares multiply on the back of the improving CV business - then encourage owners to issue equity at the higher levels to cover the pension shortfall. As far as I can see there has been little dilution here recently - a reversion to the £1+ a share valuation seen in 2018 does not seem impossible (if optimistic!)

Taking profit on my cyclical positions - happy with circa 60% made on intu. GL to holders :)

Fair enough, isthatawinner. Just trying to clarify to myself and others that there is not a large net debt position here. Best of luck with your other investments.

So you are agreeing they have little, if any, net debt? Presumably that isn’t true of many competitors, leaving sig in a strong position if/when things recover.

“ they are carrying a lot of debt”... with respect isthisawinner, it has been explained many times here why this is not the case, and it is clear from the RNS statements early this year that the sale of air handling has resulted in little remaining debt. Why do posters keep stating SIG has high debt? Also, regarding the outlook - given the enterprise value has collapsed over 80% ytd, why do the doom merchants think the market isn’t already fully cognisant of the difficult outlook? If they aren’t interested with the shares at sub 0.05x sales - perhaps they are simply saying there is no price at which they would buy. Odd reaction - though I have seen a few similar cases over the last month that went on to rebound - especially when construction is likely to be one of the first sectors to at least begin recovery.

Great post, crossthetea. I have purchased a substantial position and I agree - there is a good chance the sellers do not realise what they have (with a £4m market cap they just perceive Carclo as an irritating scrap at the bottom of the fund sheet). Convincing the regulators will be crucial - but hopefully it’s getting easier. ATB

Please be adult enough to keep what is on the intu board over there. The reason you have been filtered by the likes of Riddler here (a well liked poster on many boards) is because you come across as tedious and bland. Hope that helps.

Not sure I understand the petty and personal attack. Please be quiet if adults are talking.

Not only has sain lost money in intu, cwd and hmso.. but he’s daft enough to believe that a couple of posters on here can make a difference to the share price. The only casualty in recent weeks has been those poor punters who acted on his one sided negativity and sold at the recent lows :( ...” However for a couple of posters this has mainly been talking out of their own pockets ,ramping up any conceivable good news and burying bad news which is likely to impact INTU “

Hsbc cut from 36p to 3p. So they were 90%+ wrong. Another expert opinion we should hang our hat on :)

...and he thought HMSO was the “quality” investment... so that’s intu, cwd and hmso he has owned as they tumbled... there’s only one person wearing his pants outside his trousers today... lolololol :)