Hayward Tyl Share Discussion Threads

[rhomboid] 09/3/2017 10:33

The company is living month to month on ad hoc facility rollovers from RBS, my assumption is that they (RBS)are doing so because they're being kept up to date on the progress of a lifeboat equity raise. Given how long this has dragged on it appears that they've hit one or more snags along the way. It's a ridiculous state of affairs and Ewan Lloyd Baker as the CEO needs to carry the can imho, I'll contemplate investment when an appropriate Capital structure is in place but until then it's just gambling.

[meijiman] 09/3/2017 09:48

Difficult to understand what has gone on here. Seems to be no support -does the market expect a funding round?

[p1nkfish] 01/3/2017 17:31

For some products/capabilities where else can you go?
That's the attraction.

[shanklin] 01/3/2017 14:36

Given the financial strain here, why would anybody place an order with HAYT currently unless they could really screw them on the associated terms/price?

[thorne3] 01/3/2017 12:13

One of the factors behind the delay in funding negotiations is probably the desire of the Directors to sign up some or all of the £30m of orders which we have been informed could take place in the short term.A favourable outcome in this respect would boost confidence all round.Interestingly the fact that RBS are happy to extend their £2.4m facility to the end of March is a clear indication that they have no intention of taking precipitate action and moreover see no need to do so.All this goes to show what a few jittery shareholders can achieve against a background of a slowing order intake and unsatisfactory funding arrangements.Let us hope that the Board has learnt its lesson and that this otherwise impressive company can power into the sunset once again without too much equity dilution.

[shanklin] 01/3/2017 12:07

Given their finances are not the greatest I wonder if customers are holding off from paying invoices. I certainly would not be too enthusiastic about making stage payments to a company that seems unable to obtain the finances need to assure its future.

[lignum] 01/3/2017 11:38

Pavey - 25m of year end debt would suggest something amiss. Perhaps that's what's holding things up - they just don't know what their debt / funding requirement is?

[shanklin] 01/3/2017 07:50

Paying any dividend in the current circumstances does rather suggest a lack of facing up to reality. IMHO.

[cerrito] 28/2/2017 23:36

lignum, Your points on balance sheet and LB not wishing to be diluted well taken.
I think you are correct that they do need fresh equity; that said interesting in the last FY the cash flow statement said they paid out more in dividends than interest..although with all the expensive debt that is not the situation as we speak. They could just about get by by abolishing dividends-£700kpa-and restructuring the RBS debt but it will be tight.
Two reasons why I am not buying more-but not selling. One is the issue of further equity. The second is more human-the Chairman and more pertinent-the imponderable as to how LB will react. Will he become more humble?I have no idea and indeed no idea how I will measure this so at the moment staying with what I have. Let’s hope he will really learn from this brush with cash constraint

[pavey ark] 28/2/2017 22:16

Lignum, there's quite a few unknowns and debt is certainly high on the list.
£18m at the interims and I see £20m -£25m even suggested at year end.
I've said that even a rise to £20m after an EBITDA of £4m -£5m in H2 would require some explanation but who knows?

I did say that after my initial toe dipping at under 40p I would consider a further more serious punt so I certainly feel rather uncomfortable commenting further as it's rather difficult to post objectively as the best outcome for me would be a falling share price.

I did look back at the previous posts here and the quality was excellent with the exception of one non holder posting constant and rather unbalanced negativity.
One should always question why a non holder posts frequently.

Still fancy this as a real turnround but in investing, as with comedy, timing is everything.

[lignum] 28/2/2017 11:28

Pavey - it would be useful to know what the current net debt is - H1 was 18m and they say H2 ebitda was 4-5m which should reduce the debt but there might also be additional capex and pay down of capex related liabilities in H2. I'm just assuming H2 debt is similar to H1.

[lignum] 28/2/2017 11:25

A few thoughts.
- they're working on a long term funding solution and as bank debt matures they've had to resort to 6.75% 1 year loan notes to try and plug the gap.
- this is nonsense; it's plain that a balance sheet showing long term assets of £36m, equity of £20m, short term net debt of £18m and other net assets of £2m needs a capital raise; it has probably needed a capital raise for quite some time.
- A capital raise of £10m (25m shares at 40p - roughly a 1 for 2 rights issue) would probably fix the issue and see the price rise. So why hasn't this been done?
- Well the directors own just under 10m shares & Harwood Capital 11m shares. Harwood would probably be very supportive of buying in at 40p but the directors would need to raise £2m to avoid dilution and this probably isn't in their plan - they want to retain their equity stake through the short term cash crisis without being diluted - hence the stand off and the attempts to get the price as high as possible prior to any rights issue announcement.
- The directors are already probably aggrieved that their LTIP based on TSR is unlikely to be successful and being diluted at a low price is doubly annoying.
Of course there could be other issues, cost overruns on the factory, trading worse than expected etc, but I can't think of any other reason why the company has not already announced a rights issue.
This is all hypothesis but if anyone else has other ideas I'd be glad to hear them.

[pavey ark] 28/2/2017 09:39

On the matter of raising cash I can't see this happening now and I expect they will arrange the current debt into a long term short term ratio that fits their desired model.
The debt at the end of H1 was £18.3m but the company expects an EBITDA of c. £4.5m in H2 so it is more likely that the debt decreases than increases to £20m (no guarantees from me, I'm just thinking aloud).
They have said that they want to operate on a net debt to EBITDA ratio of 2:1 and with the order book and noises from the company I expect a t/o of at least £80m next year and an EBITDA of c. £8m
From the above it seems the company is quite comfortable with a debt of £16m/£18m and all things considered this would make for a fairly efficient way to organise things.
The only reason the debt looks high is because of the low current market cap which is being depressed by this messy,short term, this date that date situation.(chicken/ egg ?)
If the share price returned to 80p then the debt would be c. 36% of market cap, which is a perfectly reasonable and efficient way to run a company like this.

Having shares in quite a few companies with a large cash pile I can say that the market gives them absolutely no credit for the cash.

I like what I see here but still digging into the figures/history.

[muckshifter] 28/2/2017 09:13

Agree with you there PUGUGLY. I've been watching hayt for some time and will wait for this situation to be resolved before deciding whether or not to jump in. Doing that might lose me a few pennies / share, but jumping the gun might offer a much worse outcome.
regards.

[pugugly] 28/2/2017 09:07

p1nkfish- So what do you think will be the solution to the debt problem ? A very discounted placement ? If so for how much and how dilutive ? (imo) They have to be seen to have a healthy balance sheet to give confidence to those thinking of placing orders. No confience that the coy will survive - even if taken over - would (imo) cause significant delays [as I have said above] in the minds of those considering placing an order.

Very much on the side until long term debt solution solved. The longer the can is kicked down the road ....... (fill in as you think )

Not kicking a man when he is down - I like the Coys position in the market - They appear to have market leading technologies and products so I would normally buy big but fear of being diluted to hell by a "vulture" placing keeps my finger off the buy trigger.

[p1nkfish] 28/2/2017 08:21

I can't see them raising < £10Mn if they want it to be a long term solution given the likely net debt at the next set of results of probably > £20Mn.

[cockerhoop] 28/2/2017 08:18

PA,

That was in part my point about the debt, they suggested that the £2.1m raised in December would be used to pay the £0.6m due on 31st Dec (it was) but also contribute to the £3m originally due 31st Jan. This £1.5m (£2.1m - £0.6m) appears to have been absorbed into working capital between 21st Dec and 31st Jan.

[p1nkfish] 28/2/2017 07:59

The market will react before PIs get wind.

As for dilution, what if the market has priced it in?

[shanklin] 28/2/2017 07:47

Is it not just safer to wait for a long-term solution on the financing front to be put in place? Unless there is a bid, it is otherwise difficult to see the share price moving upwards. All IMHO.

[pugugly] 28/2/2017 07:44

Yes but if a palacing - which (imo) is probably the most likely as quicker and cheaper than a rights issue it oculd well be at a significant discount to current share price and PI would not get a look in - A~s a result very significant dilution. (imo)

[p1nkfish] 28/2/2017 07:44

Problems, problems, problems, they're everywhere but doesn't mean they are unsurmountable or that the price hasn't already factored in a crash and burn scenario that I suspect is unlikely to occur.

HAYT has a great deal to aim for in new business once this issue is cleared.

I would like to see a British business like this turn and motor forward to its full potential. Pun intended.

[p1nkfish] 28/2/2017 07:40

Doesn't sound negative and the bank on side so they too must see this as a hurdle not a 100ft brick wall.

It's down to negotiating the funding route. Would have no surprise if the likes of Christopher Mills involved in any solution via some or other vehicle, offering etc.

I look at the potential of this business and it is well worth have a very close eye on. Quite a unique offering and not easy to copy without years of investment well in excess of the market cap.

Once a long term solution is in place the market can value accordingly, business can be won and the price react.

[escapetohome] 28/2/2017 07:21

That sounds positive to me, a long term structure is going to be put in place. Perhaps some sort of rights issue?

Shsres should rise on that!

Oversold!