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|rodeogirl: Posted by dreddj on iii @ 21-59
Thought some may find interesting - goodluck and goodnight.
As I do not expect them to be answered I thought I would share with you the questions which have been sent to CTT via Computershare and direct:
QUESTIONS FOR AGM
1 Please say what the Groups Impairment Policies are in words which an ordinary shareholder can understand.
2 Please say how these policies have been incorrectly applied.
3 Which companies are affected by this incorrect application
4 At what levels of staff were the impairment policies applied.
5 When did knowledge of this incorrect application come to the knowledge of any director of the companies concerned
6 When did knowledge of the incorrect application come to the knowledge of Cattles plc
7 How did knowledge of the incorrect application come to the knowledge of Cattles plc
8 Please explain what was done in incorrect application of impairment policies and how this means that a provision in excess of £700million in excess of that originally anticipated
9 By firm how much was paid to internal auditors in the years ended 31.12.2006, 2007 and 2008?
10 By firm how much was paid to external auditors in the years ended 31.12 2006,2207 and 2008?
11 Were additional sums paid to any other accountancy firm in the years ended 31.12.2006, 2007 and 2008 and, if so, how much to whom?
12 Do any of the surviving directors associate themselves with any of the information published by the company since 01.01.2007 and available to its shareholders and in particular:
Interim management statement dated 23.10.2008
Statement re share price movement dated 11.12.2008
Pre close trading statement dated 18.12.2008
Cattles plans reduction in new lending and costs dated 7 January 2009
Cattles withdraws its application for permission to take retail deposits dated 26.01.2009
Cattles plc Annual Report and Financial statements 2007
Cattles plc Interim financial Report 2008
Cattles plc interim announcement for 6 months to 30 June 2008
Pre Close trading statement dated 19 June 2008
Interim Management Statement dated 9 May 2008
Prospectus for Rights Issue dated 23 April 2008
Trading statement dated 13 December 2007
13 If any of the directors associate themselves with any of those documents can each one of then say which, if any, of the statements contained in them are true or, if it is easier, which of the statements contained in the documents are untrue.
14 Were any changes made to the terms of reference of the Audit Committee during 2008?
15 How many times did it meet during 2008?
16 How many times has it met during 2009?
17 How effective has the Audit Committee beein during 2008 and 2009?
18 When were each of the documents mentioned in question12 reviewed by the Audit Committee?
19 When did the Audit Committee become aware of the breakdown in internal controls?
20 What steps had the audit committee previously taken, in the preceding 24 months from when it became aware, to test the relevant internal controls?
21 Were the internal controls in question part of the Group's overall risk management systems
22 How had these internal controls been tested by internal auditors since 01.01.2007?
23 How had these internal controls been tested by external auditors since 01.01.2007?
24 Have any of the members of the audit committee since 01.01.2007 ever been employed or engaged as a consultant by or been a partner or director of any of the firms engaged by the group as internal or external auditors and, if so which, when and in what capacity?
25 When did the audit committee last review its own performance and what was the outcome of that review?
26 Who is the present chairman of the audit committee?
27 What is the recent and relevant financial experience of the chairman of the audit committee?
28 Do the directors of the company acknowledge that the board of directors of the company as a whole are collectively responsible for the success of the company?
29 Has the company been a success, in financial terms for its shareholders, since 01.01.2007?
30 In relation to information made available to shareholders since 01.01.2008 have the directors satisfied themselves as to the integrity of the financial information and ensured that financial controls and systems of risk management are robust and defensible?
31 Please explain how it is necessary to consider making excess provisions for impairments of £700 million in 2009 if the group has financial controls and systems of risk management which are defensible?
32 Why are details of the bonus structures agreed with the directors not made available to the shareholders with the rest of the directors service contracts?
33 Please say what the bonus provisions are, and what bonuses have been paid, to any person who has held office as director of Cattles plc since 01.01.2007.
34 Please confirm that no bonus payments in cash or shares or otherwise have been or are to be paid to any of the employees of the group whose employment has been terminated in consequence of the findings of the internal review by Deloittes/Freshfields?
35 Why is James Drummond smith not contracted to the company in the same manner as other executive directors have been?
36 What explanations were required by the board of Ian Stephen Cummine; David Postings; Mark William Gerard Collins; James Joseph Corr in relation to their conduct in relation to the business of the Company after 01.09.2008?
37 When was the contract of employment of David Postings terminated?
38 What payments have been made or are proposed to be made to or in relation to ( such as pension funds contributions) David Postings after termination of his employment with the Company?
39 What, if any, steps have the board taken to prevent the former employees of the company who may have been responsible for loss to the company from dissipating their assets ?
40 Did any members of the board read the item published in Crains Manchester Business on 27th April 2009 relating to Cattles Invoice Finance?
41 How much of that article was true?
42 In particular:
Had the company entered into an exclusivity agreement in relation to Cattles Invoice Finance on or before 27th April 2009?
Had the Company engaged Ernst & Young in relation to the disposal of Cattles Invoice Finance Ltd before 27.04.09
Had the company engaged Ernst & Young in relation to the disposal of other businesses before 27.04.09
If the answer to either of the preceding 2 questions is Yes please give details of when they were instructed and in relation to which businesses
When was information in relation to the proposed disposal made known to the directors, bankers, stockbrokers, internal and external auditors, bondholders and shareholders?
43 What other options was the company exploring in relation to Cattles Invoice finance on 5th May 2009 when it informed the market of its consideration?
44 Why was such announcement not made before 5th May 2009?
45 Why is it necessary or advisable for the company to make the level of provision for impairment which is now proposed? Is it because loans which members of the group have made are not going to be repaid in full or for some other reason?
46 Will the effect of the provision proposed be to diminish the Total Shareholders Equity to a negative amount?
47 How many transactions are involved in the failure to apply the company's impairment policies correctly?
48 What were the expectations for the results of the company as at 7th January 2009?
49 What foundation was there for the statement by the former chief executive of the company on 26January2009 that "the Group continues to trade profitably" and what were the then expectations for the profitability of the Group for y/e 31.12.2008?
50 How much has the independent forensic examination by Freshfields/Deloitte's cost ?
51 Is the result of that investigation going to be shared with the shareholders ?
And The supplemental as to whether the questions and answers would be published on CTT website for the benefit of shareholders.|
|w.bramley: I noticed that before CTT was suspended, the share price kept pace with RBS, if RBS was up or down CTT seemed to follow. Unfortunately the RBS share price is again on the slide which may not bode well if CTT does soon start trading.
We are now getting the back lash from the perod of ridiculous lending, which is one reason for the shortage of cash and the static property market not helped by the stamp duty on purchase.|
|grahamburn: QP. I said I wouldn't respond... BUT please do not persist in selectively quoting other people to make your point. You imply that I said at the start of a sentence:
"The share price will make a determined move"
and then refer to that as "twaddle".
What I actually said was:
"the one thing that the stockmarket doesn't like is uncertainty, so until the funding issues are clarified, the share price will flounder or wander about aimlessly. Once these issues are clarified one way or the other, the share price will make a determined move."
You failed to admit that I was referring to a forward event - one way or the other, I hasten to add - rather than past events which is what you keep on about. Similarly, you quote (selectively) ONE analyst as if their view is gospel: other analysts and newspapers come to quite different conclusions. Are you really an objective investor or commentator?
We are where we are. You have some valid arguments about how the share price has arrived at this point. I do not dispute them, though we could discuss interpretations forever. I was simply referring to the possibilities now.
I still do wonder why you and Redd (who says he has no agenda and has 1000+ other investment opportunities!) spend so much time investigating/discussing Cattles when you could be making money elsewhere. I have interests in many other (not quite 1000) shares and really do not have time to discuss shares in which I have no interest. Cattles makes up a small part (even smaller now!!) of my overall portfolio, so do not spend THAT much time on it, except to know IMHO (as QP would say) that the risk/reward ratio is now tilted towards reward. I know, however, that neither of you will ever explain why you spend more time than is good for you on this bb. To what purpose?|
If you look back at QuePassa's previous posts, you will discover that he only appears when the CTT share price is in a downtrend. At times when the share price is in a strong or rising trend, you hear nothing from him for long periods of time.
I have in previous posts agreed with some of the very valid points that he makes, and that he also argues very lucidly, however, I have become very suspicious as too why someone would spend so much time on one share bulletin board when they profess to not have any financial interest at all.
As for his financial advice and stock picking suggestions, I refer to a previous post of his:-
QuePassa 25 Aug'08 09:36 1426 of 2070
"On balance, I would -without any recommendation on my behalf- place uninvested funds in a financial institution such as Lloyds TSB which is AAA-rated and offering a recently increased dividend rather than Cattles where the yield differential does not in my view in any way reflect the risk differential.
All imo. DYOR.
Remember, this is the AAA rated Lloyds Bank that was unable to raise its dividend at all from 2002 to 2007 and then had to go running to the Government to take a large stake and get them out of trouble, about one year after finally being able to raise the dividend. Admittedly the Lloyds share price history has been only slightly better that CTT's over the last year, but when you factor in the dilution caused by the Government stake and the fact that Lloyds are now under orders not to pay any further dividends until the taxpayer has been paid back, I know which share I would rather be holding. Cattles.
I think the above also shows how useful ratings are, Lloyds WAS AAA rated (as was I believe AIG, now owned by the US taxpayer) and got in big trouble, CTT is just above junk rating (according to QuePassa and Fitches) and still seems to be trading successfully.|
|djderry: Thanks Rocheberie for your comments.I understand where w.bramley is coming from as well.But it's like saying 'I'll buy low and sell high'.It sounds great in theory but,in practice,it can't be done.Ben Graham did some great analysis and showed that,over time, the investor would be stopped out of the market for long periods of time and,instead of getting back in when he/she felt 'safe',had to buy back at much higher rates.('The Intelligent Investor).Why am I so bullish? Well,compare the earnings line to the share price graph.Usually,there is a pretty close correlation:Earnings go up,the share price goes up.Of course,at times of 'irrational exhuberance',the share price can get ahead of itself.At times of pessimism,the share price will fall back.What we have here is clear.The share price has collapsed.Now look at the earnings line:healthy and powering ahead.Even if it fell 10,20,70%,it would not justify the current share price Any other consideration is immaterial.If you then say'I'll only buy when I see enough others buying',you become one of the herd,one of the many momentum traders who flit from stock to stock,never realising they are part owners of a company.Why do all the research,weigh the evidence and then not take advantage of it? Whether the share price goes up or down short term makes no difference.Picking up stock in a great company at giveaway prices is what matters.|
|stemis: Have you compared CTT to Provident Financial?
Trades on a forward P/E of 10.8, a forecast dividend yield of 8.5% and a premium to net tangible assets (I've thrown in Paragon for good measure). CTT PFG PAG
Net tangible assets £715m £263m £612m
Forecast 2008 PBT £177m £127m £62m
Market capitalisation £126m £985m £149m
Capital ratio* 22.3% 29.4% 5.6%
Forecast 2008 P/E 0.9 10.8 2.6
Forecast yield 74.2% 8.5% 6.8%[Tangible net assets as a % of customer loans]
Although PFG has a slightly stronger balance sheet, its valuation is way way way above CTT. Even PAG, which has a much weaker balance sheet than CTT (which is reflected in its comparative dividend payout) is rated above CTT. On the above basis, CTT share price should be 3 - 12 times its current price. What does the market think its knows about CTT?|
|djderry: Thank you for the clarification w.brambley.If you mean by a 'stop-loss',a system whereby you automatically sell when a share price rises to an uncomfortably high P.E. level,then I can see the merit in that.(I tend to only invest in oil stocks where I'm paying less for them than their proven reserves and discounted cashflow.)From my perspective,if I've bought a share in a company that is performing really well ( the co.,not necessarily the share price!),then I would be loath to sell even as the P.E. level rises to a heady height.( That is,if the empiracle evidence points to further gains).With a stop-loss in place,it makes it more difficult to get your two,four or ten bagger.On the downside,the share price can fall through one's stop loss on numerous occasions,only to rise above it thereafter.I tend to get much more comfortable with my holdings and would not sell because of the movement in a share price,the share price being about the least helpful piece of information regarding a share.Either way,I wish you every good luck with your investments.|
|quepassa: Two points:-
1. It remains a major conundrum in modern day investment with the plethora of new instruments and derivatives that many so-called experienced investors are still prepared only to make investments on the view that shares prices can only rise.
Yet the same experienced investors cannot make the mental leap and get their minds round the fact that share prices can fall AND BACK THEIR VIEW IN THE SAME WAY.
People call it shorting,ramping going short, going long or whatever current jargon you wish to choose.
But de facto it is investing. Investing that a share price goes up or investing that a share price falls.
Yet to some, the concept of TAKING A VIEW or MAKING AN INVESTMENT on the basis that a share price can fall is wholly alien, unacceptable and unfathomable.
They do not understand it.
This lack of understanding causes them perhaps to mistrust, distrust and think of legitimately capturing value by the fall in value of a share is in some way perverse or evil. This is clearly nonsense. Because they cannot bring themselves to act on a view that a share might fall, they believe that any modern-day investor who will is inherently bad for the market or a wrong-doer.
Yet the instruments are all there. CFD's, options, warrants and spread-trading. All the various financial regulators consider these to be wholly legitimate ways of investing, adding depth and liquidity to the markets. This is well-documented.
To the extent that investors have a view that a share will rise, they may buy it. But many, many traditional investors with the same conviction that a share price will fall, would never apply the same logic and invest in that conviction to capture the fall in value of a share.
2. In terms of hurting, well I hope that everybody does well all the time and no-one hurts ever.
However, the following cannot be ignored. The man who held £10,000 in Cattles in January 2007 would now find that his holding is now worth £2,890 in round terms, meaning a whopping capital loss on paper of 71% or £7,100.
The investor who sold forward Cattles on a spread-trade at £22per point ( equiv to a physical holding of £10,000) would now be sitting on a profit of £7,100.
Even with the recent bounce from 95p to 130p, it would be obvious - even to Rocherbie- which investor was hurting most. Presumably most of the active investors who called the share price movement right since 2007 have cashed in and are now sunning themselves over the holiday period in 5-star resorts in The Caribbean on the proceeds.
In terms of comments drying up, well a second thread was created here which djderry requested was purely a rampers' thread. This seems to me rather to miss the point of a well-rounded bulletin-board discussion as it discourages differing market views and becomes rather dreary, self-serving, wholly one-sided with everybody hearing what they want to hear without listening to the other view, however much they might not like the view.
All imo. DYOR
|bobsidian: The CTT share price once again is teetering on the edge of the move to fill the 1996 gap-up from 68p to 98p. The banking sector has a bad day, CTT has a bad day. Under what circumstances will CTT shoot down to fill the gap ?
The U.S. regional banks certainly took a hammering yesterday on the back of the failure of Indymac in California last Friday. As part of earnings season, major U.S. banks are reporting throughout this week. Further serious deterioration in their earnings combined with the second wave of substantial writedowns will doubtless influence the movement in the U.K. banking sector and may prove to be the trigger.
The share formation for CTT suggests that after a minor uptick, a significant move to the downside is in the offing. All imho.|
|quepassa: Less than two weeks ago, I forecast a near-term price target of 170p.
It is remarkable how rapidly the share price is coming off.
The Cattles share price has now breached 170p on three times in the last few sessions and is currently trading at c.165p.
There has been no resistance to the plummeting share price.
The share price graphs remain locked in a distinct downward trend.
The ex-rights theoretical price of 191p is now nowhere in sight.
The housing market deteriorates further. House prices are falling. Mortgage delinquencies are rising. This cannot be good for any subprime lender with an existing £400m+ loan book of secondary and third-ranking mortgages acting as security for sub-prime personal loans.
Sector sentiment is very adverse and seems again to be worsening further.
There seems little hope of respite from any interest rate cuts in the immediate future as inflation is now a great threat to the economy.
Sky-high fuel costs will continue to hurt subprime borrowers further.
The credit crunch makes the availability of funding less abundant and significantly increases the cost/credit spread of new money where it is available.
Industry-wide questions surround the sale of insurance products in connection with retail loans.
Cattles has £600m+ of debt becoming due beginning 2009.It would be interesting to know how much of this is now, or soon will be, classified as Current Debt. Refinancing this debt either through The City or retail deposits will in all likelihood be more expensive.
The back-drop to the current trading environment looks bleak.
I am therefore revising my short-term foreacst for Cattles share price to 130-140p.
All in my opinion only. DYOR.
Cattles share price data is direct from the London Stock Exchange