Chesnara Share Discussion Threads

[sogoesit] 05/12/2014 08:13

jonwig; sorry to be unclear.
I was commenting on "chairman20"'s comment that companies that make acquisitions fail in those acquisitions 80% of the time. My point being that CSN's sole business strategy is in fact to acquire other businesses and work them "to death" (so to speak). To date all their acquisitions appear to have worked!

[apad] 05/12/2014 07:48

jon…
Had a quick look at JD's CV and, although I prefer internal promotions, he looks to be in the right mould (not like Apple appointing a CEO from Coke, or Morrisons …).
However, given your quote, I suspect your view might be more informed than mine - what's your judgement about his appropriateness?
IC buy tip this week.
apad

[jonwig] 05/12/2014 07:23

Chairman - can't disagree with anything you say, as timely warning.
JD is an actuary, whilst GK is an accountant, I believe. ("Actuaries exist to make accountants look interesting.")

It will, of course, be harder to make any sort of acquisition so long as your own market value falls short of your EV, which has usually been the case here, hence the caution every time.

Sogoesit - I'm not sure what your point is, sorry. The price is everything, surely?

[sogoesit] 05/12/2014 04:52

Umm, forgive me for asking but what has CSN ever "created" from scratch?
Its be all and end all is to buy other "end-of-life" businesses. And, if its successor CEO can't, or won't, do that anymore then we investors will be in dire trouble unless he comes up with a radically different proposition... In which case the risk will be even greater.

The fact is that this company's strategy is to acquire! No point in considering it as an investment if you consider it to have an 80% chance of failure, chairman20.
(Your basic premise, in general, on failure of acquisitions, is correct, however)

[chairman20] 04/12/2014 19:24

no not speaking from knowledge.

just musing out loud - and reflecting
on the uncertainty and the way that
affects serious investors.

Hardest thing in the world is - guess what? -
yep "doing nothing".

Chesnara is strategically betwixt a steady as she
goes philosophy and a lets take advantage of our
capital and profit to expand by acquisition.

GK seems to me to have been the best form of
"stewardship" for the company - not doing anything
that destroys value and reaches beyond a very
restricted area of competence.

Nothing wrong with acquisitions except that the
stats over 50 years show that well north of 80%
of all acquisitions destroy value. So acquisitions
are hard. And worse acquiring in overseas markets
where the culture is different is even harder.

[jonwig] 04/12/2014 16:57

Chairman - you know that, or just musing?
Board will have chosen him to continue a successful strategy, I would think.
Mind, he might not be so good at it.

[chairman20] 04/12/2014 16:17

Departure of CEO
is a major change of strategy
- new CEO is not committed to the same path
or the same financial discipline

I expect a significant period of relatively
weak share price performance

[sogoesit] 04/12/2014 13:51

Thanks for that input speedsgh. Good to hear that about the dividend as I hold this for income.

[speedsgh] 04/12/2014 12:47

Part VII Transfer Approval -

...As a result of synergies arising as a direct result of the Transfer, which were not previously reflected in Chesnara's results, the completion of the Transfer is expected to have a positive effect on the cash flows (as previously restricted solvency capital can be released) and results of the Company for the financial period ending 31 December 2014.

Commenting on the Court clearance, Graham Kettleborough, Chief Executive of Chesnara plc, said:
'...Protection Life will be fully integrated in operational terms and we expect the additional synergies generated as a result of this successful transfer to assist us in maintaining an attractive dividend yield for our shareholders.'

[speedsgh] 03/12/2014 21:03

Yes, GK has done a pretty good job imo. It's also been fairly profitable following his lead when he has bought shares in the company which has tended to happen at low points.

[topvest] 03/12/2014 20:00

Looks a good deal to me. Shame the CEO is going, but probably not unexpected and looks like it has been on the cards for a while with a successor already lined-up.

[solarno lopez] 03/12/2014 12:06

Thanks Jonwig

[jonwig] 03/12/2014 10:25

The Placing Shares will, when issued, be credited as fully paid and will rank equally in all respects with the existing ordinary shares of 5 pence each in the share capital of Chesnara, including the right to receive all dividends and other distributions declared, made or paid after the date of issue of the Placing Shares.

Interesting that they might not complete the acquisition until June 2015 - after the next dividend!

They pay from free cash flows rather than IFRS earnings, so if the target company isn't generating enough, or hasn't been bought, the dividend could be affected.
But since they're buying at a hefty discount there shouldn't be a problem.
Could fall through, alas.

[solarno lopez] 03/12/2014 10:09

.How will the dividend be affected if at all ?

[loftus16] 03/12/2014 07:44

IMS referred to potential acquisitions so this ought not to be a surprise. Looks a good addition.

[lord gnome] 03/12/2014 07:37

Yes, today's announcement explains why the share price has come back this last couple of months. Once this is out of the way we should be able to regain lost ground plus a bit more. This looks to be a good acquisition and I think the market will like it.

[jonwig] 03/12/2014 07:16

I thought the share price would have been a bit stronger recently, with the AV. takeover of FLG at par to EV.

Today's announcement explains why: placing to increase size by about 15%.
Price of placing looks to be around 300p.

Quite a bit of leakage there!

[sogoesit] 20/11/2014 13:33

No problem, gents.
On a daily basis the chart is more worrying (or opportunistic if looking for an entry!) with possible move to support at 300'ish. (I am long term holder for yield).

[speedsgh] 20/11/2014 12:24

Sogoesit - thanks for your thoughts.

[retsius] 20/11/2014 11:59

Thanks for the chart Sogoesit.Have held this share in the past and always looking for a suitable re-entry price. Bigdazzler has pinpointed the double top formation on the graph which for me indicates a period of possible weakness in the share price
Results,despite EEV values ,were slightly disappointing.Might be able to pick up shares cheaper for the juicy divvy,we shall see.
R.

[bigdazzler] 20/11/2014 10:48

Sogoesit nice chart the bear factor for me is as you've stated the double top area which is accompanied by a large decline in your rate of change and RSI indicators on the second top.

This certainly could be an area of distribution.

[sogoesit] 20/11/2014 10:37

speedsgh: updated copy of my chart.
On my chart it broke through the longer term uptrend but bounced back today. Long term resistance to the upside is, as you say, 360p. But that has topped out twice.

[jonwig] 20/11/2014 08:39

Broker forecasts post-results:

price old TP new TP19 Nov Canaccord Genuity Hold 321.63 335.00 335.00 Reiterates19 Nov Panmure Gordon Buy 321.63 365.00 365.00 Retains

[jonwig] 19/11/2014 19:32

I actually paid very little attention to the Q3 results, and was surprised at the market reaction.
When they say such things as:

As a result of market performance the Group results are less positive when compared with the equivalent quarter in 2013, when investment market performance was particularly positive. In particular the S&P segment has been adversely impacted by reducing bond yields in the quarter, as indicated by the small IFRS loss in this segment.

... I think, "so what?".

As posted already (JoA, above), the EEV is rising ... but that's largely market conditions (reducing bond yields). So - good or bad?

Of course, dividends are governed by actual cash flows (they don't want to erode their solvency ratio), so maybe this will be a struggle, but I see Digital Look is forecasting 18.35p for the year (against 17.88p). Maybe their numbers not updated - we'll see.

[joan of arc] 19/11/2014 17:27

Well the EEV is going up and ultimately that is what matters. So I am happy.