Ambrian Capital Share Discussion Threads

[cerrito] 22/9/2010 23:13

Good spot fordtin
If the pension fund is selling shares it has to issue a RNS
I have no idea how the loan is being serviced but the pension fund will I assume be cash flow positive ie it will not have any people drawing a pension given it is a relatively young company and I imagine most employees are also pretty young.

[fordtin] 22/9/2010 11:18

Marty -

They would cause all sorts of trouble for their pension scheme if they dropped the divi.

Employee Benefit Trust

During 2007, in a series of market transactions, the EBT acquired a total of
7,798,710 Ambrian Capital plc ordinary shares for a total cash consideration of
�4.07 million and now owns a total of 11,092,043 Ambrian Capital plc ordinary
shares representing 9.96% of Ambrian Capital's outstanding share capital. These
purchases have been funded by the EBT with loans from Ambrian Capital plc.

As the pension scheme currently holds 8.4 million shares, I can only assume it's been dripping shares into the market to service the £4.07m loan and to pay it's pensioners.

Because the pension fund's share holding has diminished, it's total dividend will have subsequently reduced, thus making it harder for the fund to meet it's commitments. If the pension pot diminishes too far, the staff will have no choice but to call for an increase in the dividend, or increase their personal contributions.

[ohisay] 22/9/2010 11:03

The Group's own cash resources, net of amounts due to clients totalled GBP18.43 million at 30 June 2010 compared with GBP23.77 million at 31 December 2009.
The decrease in the Group's own cash resources was attributable to the payment of
2009 employee bonuses of GBP3.33 million, the 2009 second interim dividend of
GBP0.75 million and cash losses relating to Ambrian Partners

Current market cap is 22m£ so not exactly expensive but those bonuses look a tad juicy.

[martylangan] 22/9/2010 10:45

They must have some confidence if they are keeping the dividend! 7.3% yield!

[nickderby] 22/9/2010 08:30

Net asset value per share at 30th June is 32.4p!
Currently trading at a discount of around 37% to its NAV.

Interim dividend kept at .75p giving an annual yield of 7.3%

Excellent value and surely can only go up from here :)

[cerrito] 22/9/2010 08:14

Had been waiting for the publication of the interims to decide whether to buy or not.
Note decisive action they took to get out of non core natural resources so quickly and still at a substantial discount to NAV.
I guess all boils down to how much more exposure one wants to natural resources and the way my portfolio is I do not need more exposure. For those wanting more this is a reasonably efficient way to get it.
Main issue-as highlighted by recent posts- is that employees/directors get all the cream viz. the fact that despite loss making in the first semester they have made a provision of £0.75m for bonuses-presumably to people in the Principal investment Division who have had a good run- and that in the first half they paid cash bonuses of £3.3m despite last year's profit post bonus being £2.5m.
Note that the ratio of total remuneration expenses to income was 61.5% but then we find that this excludes one off recruitment fees and employment termination expenses.
Think I will pass for now

[gardenarc] 17/9/2010 22:17

Sounds a bit of a con to me,options for nodding DONKEYS...

[martylangan] 17/9/2010 15:12

Has the dividend date been announced on these yet?

[brad1] 13/9/2010 20:35

There should be a rule that options can only be granted at current share price or at best monthly average.

What better way to bankrupt a company than offer shares at such a discount!

[jfishy55] 13/9/2010 09:52

I would think the directors consider the corporate finance arm to have made a temporary loss. The corporate finance arm has made money in the past & therefore should return to profitability in the future. I think that is why they don't sell it.

The 10p options I hadn't noticed before...seems odd.

[adam] 12/9/2010 12:15

Where are the shareholders' Yachts?

I was looking at these as they came up on a filter, because of the cash.

I am badly put off by the options granted to directors. It's not the absolute worst case of snouts in trough that I have seen, but it is one of the front runners. The April and May 2008 options for instance were granted at 10p when the stock was trading over 40p. This sends a very bad signal. There are 10m options at 10p. That's 10% of the share capital granted at a massive discount to NAV.

Date granted Price Number of shares Period exercisable
29 May 2006 10p 166,250 Between 12 January 2007 and 12 January 2013
31 May 2006 10p 546,668 Between 29 June 2007 and 29 June 2016
13 November 2006 10p 100,000 Between 18 August 2007 and 18 August 2016
31 January 2007 10p 442,592 Between 31 January 2008 and 31 January 2017
23 May 2007 10p 1,000,001 Between 23 May 2008 and 23 May 2017
18 January 2008 10p 879,480 Between 18 January 2009 and 18 January 2018
3 April 2008 10p 1,486,067 Between 3 April 2009 and 3 April 2015
7 April 2008 10p 4,200,000 Between 2 January 2010 and 7 April 2015
23 July 2008 10p 75,000 Between 2 January 2009 and 23 July 2015
10 November 2008 10p 135,000 Between 2 February 2009 and 10 November 2015
29 March 2009 10p 300,000 Between 23 February 2010 and 20 March 2016
29 May 2009 10p 54,000 Between 5 June 2009 and 29 May 2016
1 July 2009 10p 1,200,000 Between 1 July 2010 and 1 July 2016
10,585,058

Directors emoluments were over £1m, with Gaffney's over £500k.

He comes with an impressive C.V, but the company only made a profit of £2.6m

Is this a value trap?

The loss making corporate finance arm, looks like it will wipe out all the other profits. What is the point?

The profits generated by Commodities and Principal Investments were offset by a loss incurred by Corporate Finance & Equities (Ambrian Partners Limited) which is likely to lead to the Group reporting a break-even result for the first half of the year.



Why don't they sell it and concentrate on their energy and metals trading business which looks quite interesting?

But seriously though, what is the justification for awarding the 10p options when the shares are 40p?

[fillipe] 10/9/2010 10:56

Cheap? They appear so, but who knows?

Bought a few today in anticipation of this 20p patch being the bottom. The mgt at MWB can't be much to go by, but they added 1.62m to their existing in early Aug, so they must have some positive vibes and the share price was around the 24p mark at that time. (MWB now 5.6%).

Funny old world i'nnit....the Masefield acquisition followed 10 days later.....

Int's are "expected" 16th Sept.

gl

f

[cerrito] 06/9/2010 19:46

Some people may be put off by the rapid increase in staffing costs and the dearth of news on new business being won; on Aug 31 they made two announcements on being awarded as Nomad for TEG and the Nautical Petrol deal but remember since March 1 this year that has been all except the early June Tiger deal.
Some(and I do not include myself in this bracket)may be asking themselves as to how much capital they will need to support their new lines of business and their consequent propensity to pay dividends when they are operating at breakeven.

[questar2000] 06/9/2010 15:24

Formation of Ambrian Energy
Commodities now represent the majority of Ambrian's revenues and profits. We
intend to continue growing our business as a supplier of physical commodities
and are pleased to announce the formation of Ambrian Energy, which will be
focused on the supply of crude oil, condensates and other energy products,
including biofuels. These commodities will complement our growing presence as asupplier of physical metals.

From their last trading statement. I guess the case for investment in AMBR is largely a punt on the new trading strategy and in the ability of Tom Gaffney to grow the company. In the meantime there is 25m of net cash and a fairly safe 7% yield (they have a good dividend record). I see their house broker has pencilled in 4.5p per share earnings for 2011.

[jfishy55] 06/9/2010 12:52

Perhaps it is because the last results were disappointing?

Personally I think it is perhaps a drip, drip of shares being sold by PIs that are disappointed by the performance in recent times.

I'm tempted to buy in again but I wonder if I can get better performance elsewhere. That said, there is plenty of cash to pay dividends...I might do some proper research later in order to make a firm decision!

[nickderby] 06/9/2010 12:24

Per the last set of accounts.......'The Group's own cash resources, net of amounts due to clients, totalled GBP23.97 million at 31 December 2009'

It is therefore trading at a discount to its 'own' cash. :)

[liarspoker] 06/9/2010 12:19

You have to take into account that some of the cash are deposits so not necessarily paid to shareholders should the company want to return excess cash.

Even so the shares are too cheap imo.

[nickderby] 06/9/2010 12:07

It is very strange. The latest net asset value per share was 31.18p.
It's even trading at a discount to its cash.

The dividend yield is over 7%. It really does seem a very good investment
at the current share price

Surely this will turn soon.

[questar2000] 06/9/2010 10:47

Liarspoker
I have trawled through their accounts and pretty informative website and can't for the life of me work out why the market has put such a low valuation on this company. Are we missing something?

[liarspoker] 03/9/2010 21:24

I recently purchased a few AMBR too, questar2000, for the same reasons that you did. I'm willing to buy more should the price fall lower.

[questar2000] 03/9/2010 19:58

Looks cracking value. Decided to buy a few for its prospects, divi and expansion into new areas of revenue. Rewarded with a rare upday today.

[maty] 01/9/2010 07:47

ouch this graph looks badddddd

[ohisay] 31/8/2010 22:21

Not sure anybodys posted this .



Must be a chance there's a hostile bid at 20p odd.

[martylangan] 26/8/2010 16:37

Worth buying just for the dividend!

[nickderby] 26/8/2010 11:24

Thats weird as I was just thinking the same thing.
Net asset value per share at 31/12 was 31.18p!
The last 6 months show around break-even so that can't have
changed the NA value much.
Seems a real bargain, valued at a discount to cash.