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Real-Time news about Fayrewood (London Stock Exchange): 0 recent articles
|davidosh: My guess would be that if they are allowed to continue with the scheme then they will be allowed to pay out around £1.15 which is why the share price has dropped to reflect that. If they cannot go ahead there will be very long delays which is a problem if looking to take the cash offer.|
|etarip: Can someone explain why the company could not return cash of around 98p direct without having to introduce the new company. This in my opinion would have left the company with a share price of around 28p. Those wishing to sell would have received about 126p as under the proposed scheme. This would have saved all the expense of a new company and left shareholders in a quoted AIM company as long as possible.
I have glanced at the RNS and could not see if there was any guarantee that the new company would not start trading. Have I missed something?|
|swiftnick: Insightful comment, badtime.
Yes, indeed. Bice has been stake building for some time and I think this could have quite an impact on the direction of the share price.|
|stemis: I'm not sure I exactly understand your question.
I don't have any particular concern over working capital. My question related to valuation. Despite what some might believe I don't have any particular downer on FWY. I've owned the stock 3 times and I think I've made money each time. The only reason I would own it at the moment is on the basis of the takeover/cash distribution exit giving me a quick and low risk 20% or so. I was alerted to the possibility that this might exist by scburbs post of yesterday. I tried to work out what the proforma cash position might look like after the various sales but decided to what until the results today.
Although FWY claim in their narrative that the net cash is £33.1m (143p per share)it looks to me like that is gross cash and that net cash is £17.9m (77p per share). That makes a big difference to me because if it was the former then they could literally give Interface away and still return enough cash to shareholders to yield an easy 20% on the current share price. However if it is the latter then they need to get £9.5m (41p per share) for Interface just to justify the current share price.
Now we can argue about the possibility of selling Interface with its debt and the impact that might have on valuation. I don't think Interface is a particularly valuable asset and one might struggle to sell it with the debt. You probably disagree. Its pointless having the debate, especially if it involved the nature of debt which has been debated over and over again. However the two scenarios outlined are quite different which is why I was interested in what the net debt really is.
Hope that explains somewhat.|
|nil desperandum: There's no such thing as a sure thing in the share game, but this one is about as underwritten as you could hope for -- you have net assets, (all tangible, lots of cash) of about 136p per share. And you've got continuing earnings of 4.9p per share. And they are reducing overheads substantially.
So what's holding the share price back?
1. People are fed up waiting for cash back and think that they aren't going to get enough back (67p per share promised) - they have lost/are losing faith in management.
2. Perversely an MM told my broker that people were worried about the return of cash due to tax implications ... talk about looking on the black side!!!
It appears that the management have decided to continue to run the existing businesses as a going concern and the company will not be wound up ... although it could of course be bought.
My fear with these results was that the remaining business would be loss making ... it wasn't - it generated almost 5p per share and I suspect pro rata, it did a lot better than that in the second half - although I can't put my finger on the figures for that. Hence, these results were much better than I had feared.
So perhaps, instead of valuing FWY on a closure/returns basis we should start to look at it as a business again. For that I would suggest NAV (since all tangible) of 136p and your favourite multiple x continuing earnings. If we said 10x then we get a fair value of 185p. I certainly can't see any rationale for valuing this below NAV ... so let's say 136-185p ... and you can buy that today for 105p ... seems like a good deal to me!
Barring fraud/massive incompetence, I can't see any downside at that price ... but I can see a fair amount of upside ... that's my sort of gamble.
So if I were in management shoes, how would I look to extract shareholder value?
1. Given the share price well below NAV, I'd announce an intention to aggressively buyback and cancel shares as part of the 'return of cash' ... I would continue this until at least NAV (136p ... or whatever it is today). This will almost certainly have the effect of increasing the share price to, say 136p, in fairly short order - allowing some shareholders a nice exit at a 'reasonable' price.
But what if the share price didn't react I hear some say. Well, let's say that the company bought back and cancelled 32m shares at an average of say 110p (~£35m) ... then that would leave only 20m shares with a new NAV of 71-35=36m = 180p per share and a revised EPS of 12.7p ... WOW! How many investors would want to ignore that? (In reality the share price would rise! In fact if the company announced that it would aggressively buyback shares up to 136p ... the share price would rise to that in very short order!)
2. If the management choose to run the remaining business then I have no problem with that as long as it is viable as a business. If the latest results prove not to be a blip, then they may well have a very valuable one on their hands...
This looks like a belting gamble to me from here ... and is now my largest holding. Wish me luck!|
Assuming the transaction goes through the FWY share price is less than cash + Computerlinks shares.
Only by excluding a whole chunk of debt and pretending it doesn't exist.|
Not necessarily. Buying into FWY is effectively buying into Computerlinks at a discount. Assuming the transaction goes through the FWY share price is less than cash + Computerlinks shares. If you assume that cash is going to be returned then this is the same as acquiring Computerlinks at a discount (assuming you don't think the rest of FWY has negative value which is highly unlikely for a low margin low risk IT distributor with positive TNAV).
However, this does rely on FWY returning nearly all surplus cash which hasn't been confirmed.|
|bhoddhisattva: Computerlinks half year results tomorrow ... am looking forward to seeing a bounce upwards there in trading and hence the CPX.DE price ... and hence a knock-on to the FWY share price. Which probably means FWY will stay absolutely static of course based on past experience!|
|rkjones: Is the situation at Computacenter relevant to the position with FWY?
If so, what are the ramifications for FWY share price?|
|fusebox: Just seen a motley fool investor after he has seen the fwy share price...|
Fayrewood share price data is direct from the London Stock Exchange