600 Share Discussion Threads

[cjohn] 21/12/2015 12:28

The pension fund is for the pensioners. (The pension trustees are also paid for their work.) The company can't touch the pension funds.

There are many many companies who aren't that good at what they do, that nonetheless offer a decent return, if bought at the right price. That's the essence of value investing.

Some of SIXH's products are outstanding. That doesn't mean the company will make money. They are in a competitive field with tight margins and only modest visibility on future sales. Again this is true of many engineering companies.

Currently, SIXH break even, but need to generate positive cash flow. Modest increases in turnover elicit increases in working capital. The management are trying to restructure procedures and supply lines to reduce working capital.

[targatarga] 18/12/2015 10:55

rburtn - and the point is the markets a money pit. You can put a lot in and get a little out. I used to hold these but bailed at a big loss!

[rburtn] 18/12/2015 10:28

Just over 10 years ago, my then holding, 2200 shares, paid 5p dividend a share. I'm trying to figure out what this company is all about as it doesn't seem to be any good at engineering. What is the term for the opposite of a hundred bagger? I can only conclude that the pension fund is highly lucrative for someone, no need to ask how, and neither without the other could stand up. The only consolation is that if I popped my clogs tomorrow, I will not have lost as much as HMRC would have taken in IHT. Perhaps that is Mr Perloff's position?

[cjohn] 14/12/2015 10:46

Hi Coolen, I guess the critical question is why WOULD he want to get control of SIXH? As you've rightly pointed out yourself, many -though not all - of the crown jewels have already been sold off. From a property point of view, a takeover by Perloff makes little sense. So maybe we can breathe a sigh of relief.

That having been said, the company continue to talk of looking out for acqusitions. And they're unlikely to get bank finance for that. So we do need to keep a Sharp eye.

[coolen] 11/12/2015 18:37

I accept that, for once, maybe Mr Perloff has no corporate plans but is merely topping up on one of his long term investments. He has had shares in company for ages.

[cjohn] 11/12/2015 11:17

But his holding SO FAR doesn't place him in a position similar to a debenture holder.

I agree SIXH has had to resort to loan stock for obvious reasons. Rarely positive.

I notice the CEO has also bought some more shares in the last few days. Haddeo must be now over 25% I think.

[coolen] 08/12/2015 19:42

Perloff's tactics are to assist a company with its financing, but in such a manner that he places himself in a position similar to that of a debenture holder.

Nothing wrong with that in principle if a company needs cash, but look at what happened recently to minority shareholders in Beale, the retailer.

The 600 situation will become complicated, given that a group of fund managers are already loan stock holders.

[cjohn] 08/12/2015 12:06

Simon, it's a long time since I got "carried away" about anyone or anything. I don't understand why Perloff would be wanting to increase his stake here. Any sensible ideas?

[rburtn] 07/12/2015 07:52

There's certainly something weirdly wrong with a company worth less than 4 months turnover. I',m still waiting to see results from the PPIX investment - none so far for either sixh or ppix - other than the usual value destruction.

[coolen] 06/12/2015 23:52

Spot on Simon: In his 40 years or so in the City, Perloff has yet to do anything for minorities, so his continued interest here is a bit of a worry.

Worse still though, is the recent loan stock placing with institutions, one of which had only just struck a similar loan stock deal with peat merchants, William Sinclair, which was bust within weeks thereafter.

600 once had plenty of family jewels: now all sold, and still not enough left to pay even a token dividend.

[simon templar qc] 06/12/2015 18:00

Don't get carried away with AP being a shareholder he did nothing for EKT being a significant shareholder just watched it crash and worse still at Beale his brother took hold of the company for a pittance.

Sales up profits down!

[coolen] 06/12/2015 14:35

Yes, strange one for Perloff still to be targeting.

However, he has had a stake since the company was known as The Six Hundred Group and owned properties in West London, hence the original attraction I suspect.

[cjohn] 06/12/2015 11:25

I also note that Andrew Perloff - the prperty asset based activist investor and CEO of Panther Securities - now owns 7% of the company.

[cjohn] 06/12/2015 11:23

Hi Pugugly,

I think you have - understandably perhaps - over-simplified the pension situation.


In absolute terms, the pension assets and liabllities are very large compared to the present market size of the company. On the IAS 19 basis - used overwhelmingly to calculate the pesnion position of listed comapanies, SIXH has 230m sterling assets and 196m sterling liablities. Hence, the funds are in surplus and the company is not currently, nor is it expected to have to make pension contributions.

However, becasue of the large size of the various funds, it makes sense to calculate déficits on more pessmistic bases. On a technical provisions basis, the funds are very slightly in déficit compared to their large size. On a full buy-out basis, they are even more so.


The latter is important, as the company is working towards a buyout of the pension funds, to eliminate future risk. (Imagine a situation, for example, where there were collapses of stockamrkets in the US, UK. Then the pension funds would swing into déficit on an IAS 19 basis.

Moreover, there are still some liablity mitigation exercises to come which will further reduce implied future liabilities.


So large pension funds like these require careful management, but not contributions of cash for the foreseeable future.

[rburtn] 04/12/2015 10:00

Not sure I understand your remark on pensions, it seems to be in surplus and returning money to shareholders - well salaried staff, certainly not shareholders!

[pugugly] 04/12/2015 09:11

Anyone still following ? Mr Market reacting badly to the interims - Pension defict still a mill stone PLUS of course debt - Another old UK engineering coy working for the benefit of the pensioners and not shareholders (imo)

[loobrush] 01/7/2015 19:03

This has being tipped by Simon Thompson of IC with a current target price of 24p,
however this was before the results which were very good. Will be watching his next comments as he may well upgrade his view.

[cjohn] 18/5/2015 12:03

Yes, there I agree with you.

At what price would the warrant holders buy in? You'd have to suppose a belief in a sustainable improvemnet in SIXh's financial performance.

[coolen] 13/5/2015 20:46

Warrant holders enjoy the luxury of choosing to pay 20p only when profit has been assured.

[cjohn] 13/5/2015 11:43

Freebies? They have to pay 20p.

[coolen] 09/5/2015 22:15

Solid institutional support for the acquisition is a plus. The freebies of warrants and covertibles at 20p may prove a cap in due course.