Company News

Co-Operative Bank Recapitalisation

Post Date: November 5, 2013

The Co-Operative Bank has announced details of their revised plans for “recapitalisation” of the bank, which is a euphemism for rescuing it from potential bankruptcy. In effect the previous capital of the bank has been wiped out by dodgy lending, by inept acquisitions such as that of the Britannia B.S. and write-offs of IT expenditure. The existing institutional debt holders will have their debt converted to equity, plus will subscribe additional capital. The Co-Operative Group will put in an additional £462m of ...

Bulletin boards and Globo

Post Date: October 30, 2013

I was at the Annual General Meeting of Ideagen yesterday (a full report is here), and happened to talk to one of the advisors present about recent events at Globo, another software company. We agreed there was a problem with bulletin boards that should be tackled. As mentioned in a previous blog entry, Globo has come under attack in the last few days on a number of bulletin boards and financial blogs for the quality of its business and its accounts (more ...

Globo, RM and Tesla Motors – What’s the connection?

Post Date: October 27, 2013

Globo, RM and Tesla – what’s the connection? You will see. Globo managed to get their name mentioned in the Financial Times yesterday as coming “under pressure after bloggers question cash flow”. This probably refers to comments from Paul Scott on Stockopedia where he writes a daily small cap report which covered Globo on the 17th October. Not only were those comments spread around on bulletin boards but he and other folks have said similar things in the past. In essence what he ...

Problem companies – Hibu, Vicorp and Avia Health Informatics

Post Date: October 23, 2013

News today on three companies in financial difficulties. Hibu (formerly Yell) have announced that they have received a requisition for a general meeting of the company, which they apparently intend to convene. They reiterate that shareholders will get nothing from their proposed restructuring where the debt holders will gain overall control and state that the board “is unanimously of the opinion that the proposed resolutions are not in the best interests of Hibu and its subsidiaries nor its key stakeholders including ...

What happens to bond prices if interest rates rise, and the latest Co-Op news.

Post Date: October 22, 2013

If interest rates rise, what will typically happen to bond prices? That was a question posed to 30,000 US adults according to a report in the FT today. I would hope readers of this blog know the answer because it is quite important now that QE might be tapering off and interest rates rising. Only 28% got the answer right, which is of course that bond prices will fall. People buy bonds in the belief that they are “safer” than equities. It ...

Royal Mail IPO – the wrong kind of encouragement

Post Date: October 19, 2013

There was a very intelligent letter in the FT today from a Dr Alex May. To quote: “I fear the sale will distort public perception of investing in shares”. It went on to suggest that it would mislead people into believing that making money in shares was easy, and implied it would encourage speculation rather than sound investment in a portfolio of shares. Even more astonishing was the revelation on the front page that some investment banks valued it at nearer the ...

Renishaw Profit Warning

Post Date: October 17, 2013

No sooner had I completed an article for the latest ShareSoc newsletter on the wisdom of fund manager Harry Nimmo, with whom I had discussed Renishaw at the Standard Life UK Smaller Companies AGM, than moments later the former company issued a profit warning. Yes Renishaw issued an Interim Management Statement this morning which indicated revenue for the 3 months ending 30th September would be down from £92.2m to £75.2m compared with the prior year. The Far East, specifically China, was particularly ...

Royal Mail flotation – private investors losing out both ways

Post Date: October 11, 2013

Some ShareSoc members are very disappointed that they will not get any shares in the Royal Mail flotation because they subscribed for more then £10,000 worth. These are my personal comments: This seems to be discrimination against the moderately wealthy and those who just happened to have some spare cash in the bank. Either everyone should have got the same allocation of £750 of shares, or there should have been a graduated scaling back. It's just illogical. What is being done is that ...

Abbey Protection – a lowball bid offer

Post Date: October 10, 2013

Abbey Protection (ABB) is an AIM listed insurance company with a current market cap of £115m. The shares have traded between 116p to 122p in the last two months, with a reasonable volume for an AIM company. But yesterday the directors announced a recommended cash offer of 115p per share for the company from Markel Corporation. This is a very unusual situation because usually there is a “bid premium” for control of a company. The market price was presumably what willing buyers ...

How to pick small cap stocks – just follow Harry Nimmo

Post Date: October 9, 2013

Yesterday was the Annual General Meeting of Standard Life UK Smaller Companies Trust and those who like investing in small cap stocks would have found it useful to go along and learn from the master – fund manager Harry Nimmo. Gordon Humphries said that the company is basically “Harry’s 50 best ideas”, i.e. it’s a conviction portfolio but with no individual holdings allowed to go above 5%. It has a fairly low yield at 1.4% currently but that has grown at a ...

City of London Investment Group (CLIG) – a confusing AGM today

Post Date: October 7, 2013

City of London Investment Group (CLIG) – a confusing AGM today I’ll try to tell you briefly “the way it was” to paraphrase the CEOs introduction to his section of the Annual Report. A full report is available here. Barry Olliff is the CEO and this company has succession problems just like Carpetright which was covered in my last blog post. Likewise, they are back at square one after losing a new CEO appointed at the end of 2012, but who departed with ...

Robert Peston goes shopping and Carpetright

Post Date: October 6, 2013

Last night a new series of TV programmes called “Robert Peston Goes Shopping” was launched on the BBC. It told the story of how a few individuals changed the nature of retailing in the UK in the 1950s and 60s. People such as Stanley Kalms of Dixons who was interviewed, Marcus Sieff of Marks and Spencer, Jack Cohen of Tesco and the Sainsburys. Typically these were dominant and self-driven personalities who adopted new methods to attract retail customers from their competitors. ...

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