Re: RNS Hunter gone I would suggest that nobody has a clue if they are making £50m profits as one can have no trust in anything this company says. Even if they are making this, it certainly hasn't translated into cash, as they need bucket loads of it to stay afloat. In the absence of anything else to go on, I will judge this company on it's ability to generate cash (business model should have pretty consistent levels of capital expenditure, so cash generation can't be far wrong). Based on cash generation the company is a basket case. Can't see any reason for this one to be bailed out. Expecting a collapse therefore. Bad companies seem to think they have a right to lose more people's cash, they don't.
Re: RNS Hunter gone But also you wont have or be given the information to make a decision as to whether you would underwrite it.Im not sure people have read the announcements and are making like for like comparisons here.The company has clearly been badly managed given the disclosures. I think we all agree on that!! I think we all also wouldnt rule out more worms comin out from the proverbial can!However, the core thesis is this..... the company made an error in forecasting and profitability expectations slipped to £50m.....not good! The company then realised that the cash flow forecast was missing an expected payment to HMRC of £30m.......much worse as this is immediate cash flow drain and the company had limited headroom.However, the £30m doesnt drop off p&l as it was an expected number just missing from a crucial financial tool (cash flow). If the company had the headroom it would have been far less of a disaster but they were too highly leveraged. The £8m dividend recall actually makes the end debt position better ultimately as the £30m had also been included in that number.The problem is liquidity - they have none!What we do not know is what trading damage has subsequently been caused as insurers pulled trade insurance from suppliers which, in turn, would cause suppliers to change credit terms (cash flow again) and probably mean the company is unable to fulfil all its customer orders (no payment - cash flow again). This is the key in my opinion to the whole house of cards. A quick resolution and return to trade insurance will quickly put the business back on track. A protracted suspension and/or worse trading conditions and/or more financial gremlins could put it under.A business capable of making £50m+ is worth saving for £100m injection and a change of management. The info we dont have is what has subsequently happened to trading and customers.
Re: RNS Hunter gone I'm sure that unfortunately you are probably right-a financial can of worms-i was just looking to cheer people up before the next dire RNS-personally I had a quick in and out dip and made a few hundred pounds-unfortunately i then broke the cardinal rule and went back for more
Re: RNS Hunter gone It doesn't work that way cooperboy....when you adopt the creative accounting mantra too aggressively you book the sales twice and forget about the costs....there are NEVER any undisclosed profits!CVR didn't even make the third profit warning (a tradition, like London buses) before effectively throwing in the towel. I suspect there's quite a bit of seriously dodgy stuff not yet uncovered, there always is...
Re: RNS Hunter gone well you never know-perhaps there is a load of profit they haven't accounted for.....................
Re: RNS Hunter gone You seem to still have confidence in any number this company has reported, why? If they can't predict a £30m tax bill and their accounts also included an arithmetical error what is the chance that their accounting is correct, or for that matter anything is. This is clearly an operation with seriously lacking internal controls.The company suddenly needs cash, this tells me one thing, the company is burning through rather than generating cash. Why should I believe this will change? From the evidence I have available to me I can see no reason what so ever to put a penny more into this.
Re: RNS Hunter gone did they not say though that their profit was circa £50 million - from this the IR will take £30 but the cancelled dividend adds £8 back in (more for the year) so assuming there are no other gremlins (yes big assumption i know) surely the company would still be solvent
Re: RNS Hunter gone Courtier, I wouldn't underwrite a rights issue at 25p, doubt any bank will!Still not sure they will get any fundraising away. As we have seen recently if banks/investors are not convinced that this 'short term funding problem' isn't actually caused by the business being a basket case then funding will not be forthcoming.Sometimes these mess up's happen because the business doesn't actually make any money and therefore it is right that they go out of business rather than companies thinking they have a god given right for more investors money. What evidence does anybody have that this company is actually profitable, I don't believe a word of any previous statement issued by the company?Clearly Hunter has been forced out, maybe that's a good sign as this will surely be one of the conditions that any investor/underwriter has put on any rescue.How people like her are able to just sail off into the sunset with the huge salaries and bonuses they received for terrible and often misstated performance is an indictment on the current regulatory regime.
Re: RNS Hunter gone They got th timing wrong. Ie they expected the bill but forgot to include it in the cash flow forecast! Fairly basic but there you go.Thats another reason they kept saying net debt would remain as forecast. Ie the expected payment was built into some numbers just not the most important one!My suspicion is that there will be a placing plus underwritten rights issue, all heavily discounted. Provides cash now from placing and allows existing shareholders to recap business over a few weeks. I would be surprised if it is done higher than 50p or lower than 25p but you never know.
language Oh and btw I have discovered you can't use bad language-even the word parc spelt backwards with aterix! Though it was the least offensive adjective I could find for the current situation.............................
Re: RNS Hunter gone I fully agree TX2 - CVR need investment quickly and they are not going to get that from PIs buying a few thousand here and there. I still dont fully understand if the £30 million to the IR was a mistake of timing ie they knew it was due but didnt realise now-or if it was completely forgotten-is that even possible?? The big question is what the institutions will pay given there is no dividend etc-I am hoping 50p but who knows. Perhaps CVR should speak to Woodford-he invests in all the rubbish companies ha
Re: RNS Hunter gone I would have thought a rights issue rather than an open offer or open offer/placing mix would be highly unlikely.Rights issues take a long time to organise & complete;firstly a detailed prospectus has to be produced giving detailed financial information on the company rather like an IPO document which has legal implications if proves incorrect;apart from the fact that I do not think the company can afford to wait a couple of months to get the money.I am not sure that there is any advantage in pricing the new shares at a very low price ie sub 50p assuming existing shareholders are taking up the offer.The eleven largest shareholders hold about 55% of the company according to public information,and I would guess another 20% is in the hands of the next couple of dozen largest holdings.Obviously if existing major shareholders are not prepared to support a funding & commit in advance take up the bulk of shares then I doubt if any offer is possible.
Re: RNS Hunter gone Thanks Meanbugger. It's sounds like you're knowledgeable about the situation.I think a rights issue would be preferable for PIs rather than an open offer. Unlike a rights issue, with an open offer you don't (usually) receive anything if you let your entitlement lapse. This means you have to take it up or lose out. Perhaps they can get an open offer done quicker? The ex date for an open offer is often the announcement date.
Re: RNS Hunter gone Poleaxe yes you are right about the company being desperately short of cash before disaster struck. I think they basically misjudged the cash needed to finance properly the Matthew Clark acquisition. The company grew massively in size but it didn't bring any smoothing benefits to cash flow so the peak cash requirement just got a lot bigger and harder to manage. To sort out the mess they need to repay some of the bank borrowings and lessen the dependence on invoice financing. Ironically they need money to pay dividends in future as many of their institutional shareholders have an income requirement. New shares at 10p with maybe a forecast 0.75p dividend could be quite attractive. Actually I don't think there will be a whole host of losses resulting from goodwill write-downs etc. This is a liquidity crisis not one of collapsing profitability in the operating businesses. At group level cheap debt will be replaced by more expensive equity so eps will fall dramatically especially with a billion new shares in issue.I'm hearing suggestions that the fund-raising is almost ready to be announced. Due to its size a circular and general meeting will be necessary with either an open offer or an underwritten rights issue so that all existing shareholders can participate if they wish. I think they need to give 3 weeks notice for the general meeting so with Easter getting in the way it will be mid-April at the earliest before they receive the cash and start paying their bills. Anyway it looks as if total disaster has been averted and the institutions might get their hands on some cheap shares.
Re: RNS Hunter gone "Poor Diana must rue the day she joined."Not so sure about that.. and whatever else she is, she ain't "poor".Salary £450k for FY17, up from £407k FY16 (maybe because the business was bigger - cos they made it bigger by spending money). Annual bonus £428k FY17 (vs £366k FY16)... total remuneration £966k FY17 (vs £844k). Okay, this all sounds like the start of a tabloid-style "executive excess" rant - but the point is, what have she and her fellow execs (three other exec directors on £500k-plus packages) actually done to earn this, and particularly the big bonus payments? Anyone can spend other people's money...I am sure some shareholders will be demanding claw-back of some of these bonuses, particularly if there is any suggestion of previous period figures having to be restated. They will also (hopefully) be watching closely to see what she gets by way of pay-off...