Hercules Props. Share Discussion Threads

[simon gordon] 15/9/2004 11:30

I would be mildly surprised if it was ERG, as their rating is a forward p/e of 10.5.

If they had a p/e of 15 to 20 then I would be more confident it is them. ERG have such organic growth that they don't need Hercules. On the other hand ERG want to be a FTSE250 stock and if they take over HPS maybe they can jump straight to the Small Cap Index from AIM, be valued at around £120m and be closer to the 250. This is all speculation!

[acamas] 15/9/2004 11:23

Somebody likes what they see currently in HPS. But there has been no large build up of shares reported by the RNS service recently. So why a takeover approach right now. This is like a bolt of lightening out of the blue. All will be revealed eventually. It would not surprise me to find it is from a large Insurance Group wishing to move into commercial property for security.

[acamas] 15/9/2004 11:13

I am intrigued by who the mystery bidder might be? Do they have to have any connection with property or support services and just how high are they prepared to go to obtain HPS. Could a bidding war develop are there others in the wings who might now take an active cash interest in HPS or is that Roy of the Rovers stuff

[doobydave] 15/9/2004 11:13

Welcome to a new thread. Hope this is helpful. With today's announcement of bid talks on this undervalued company, the timing could hardly be better!

I am open to suggestions and very happy to make adjustments to the header.

[tiltonboy] 15/9/2004 11:12

It would be nice to think that both Erinaceous and Rok would be interested in acquiring HPS.

Let's hope a bit of a fight ensues, and that we receive fair value for our shares.

tiltonboy

[acamas] 15/9/2004 11:10

Thanks DoobyDave it seems A OK to me.

[doobydave] 15/9/2004 11:06

as promised: have a look. All comments welcome.

[doobydave] 15/9/2004 11:00

The Hercules Group comprises 12 registered companies operating principally in Property Insurance, but with sidelines in Property Auctions and Property Management.

The recent prelims to June announce:

• Profit before tax and amortisation up by 13% to £9.6m (2003:£8.4m)
• Profit before tax up 27% to £5.4m (2003: £4.3m)
• Basic earnings per share increased 38% to 13.4p (2003: 9.7p)
• Adjusted basic earnings per share 35.7p (2003: 32.6p)
• Final dividend 6.8p bringing the full-year dividend to 8.4p (2003: 8.0p)
• Loans reduced by £7.9m (2003: £4.5m)

The company is growing well, but the icing on the cake is today's (September 04) declaration of bid talks "at a premium to the current share price" – £2.80 at the time. Given strong fundamentals and growth, my guess would be a company valuation of £3.75.

Here is
And here are
Next annual report due 14 - Oct - 2004
Next AGM (IF we get that far) 23 - Nov - 2004

[rivaldo] 15/9/2004 10:31

BB, IMO it's likely to be either ROK or ERG - I see ERG's price reacted a bit today, presumably because they didn't like the potential dilution.

ERG have been on a higher rating than HPS (which is why I stuck with HPS - and I'm glad I did!), but they seem to be well regarded. And so are ROK. Both are on reasonable share price ratings. In either case I'd probably keep my shares unless something changed.

[britishb] 15/9/2004 10:27

I've added a fair few today on the basis that

a) seems to me the price was well supported for months even when smallcaps were having a hard time. Suggest someone very real was buying.

b) It's worth more.


So who might the bidder be?

[rivaldo] 15/9/2004 10:24

Ah...that 50,000 share buy at 307p seems to have done the trick - up 33p now. Don't see why there isn't another 20% in this for the bid, let alone the good results. The only downside is that the consideration is in shares, which may be why the initial rise wasn't that great.

Acamas, you may be able to upgrade to travel first class at thus rate!

[acamas] 15/9/2004 09:37

Rivaldo,

Earlier this year I said I was hoping to obtain a super 2005 summer holiday from HPS. If all goes well it looks as if that potential will now be fulfiled.
It seems quite ironic that I have to spend three weeks in Cyprus next year and it looks as if it will be paid for by a company called Hercules Property Services. How I stumbled upon this company in the first place I cannot explain but the word Fate may have some hand in the outcome.

Throughout the summer of 2004 I kept thinking how strange it would be to get to Cyprus thanks to a company with a Greek Hero's name.

[doobydave] 15/9/2004 08:53

(Edit: experimenting)

[acamas] 15/9/2004 08:44

Rivaldo,

The news sure brought a flush to my face this morning. All those dull motionless weeks we sat through during summer may now prove well worthwhile. The BB with its little snippits led me to believe something was happening in the background but I did not know what that was.

[britishb] 15/9/2004 08:41

Yes PE 8.6 and throwing off a lot of cash. 2.5 years more at this rate and all the debt is gone and then no interest payments. I can't pretend to have much feel for the markets or HPS position in them...but fancy it's worth more.

Nice pop this morning!

[rivaldo] 15/9/2004 08:11

The price has started at around 306p - surely this is far too low? I can't see the HPS board agreeing a bid at just 10% above yesterday's share price, when they've just produced above forecast results which would probably have sent the shares up anyway.

On a historic P/E of just 8.6 I'm happy to hold and see what happens, whether it's a bid or based on current trading the current price is cheap IMO.

[welsheagle] 15/9/2004 08:08

UK smallcap opening - Hercules Property jumps on bid talks

LONDON (AFX) - Hercules Property Services provided an early firm feature
among small-caps after the auctioneering, property management and property
insurance group revealed it is in talks regarding a potential offer.
Hercules, whose shares were 23 pence higher at 302-1/2 by 7.44 am, also
reported a 13 pct increase in its underlying full-year pretax profits to 9.6 mln
stg.

[sandbank] 15/9/2004 07:47

Whoever unloaded two parcels of 5000 shares apiece at lunchtime yesterday must be feelinjg a bit sick today. I'm just so glad it wasn't me - for once! (Wish I'd sold ANL yesterday though!)
TILTONBOY: Who do you deal with to get your orders placed before the 8.00 am open - if I may ask?

[tiltonboy] 15/9/2004 07:46

Just bought another 2500 at 305p.

tiltonboy

[topvest] 15/9/2004 07:36

Results ok. I'm a bit disappointed actually. I'm not sure that I want to sell out just yet. The insurance business looks worth £70-100m or so on its own on a debt free basis. Net debt was down to £15m so well under control. Non-insurance divisions less of a contributor this year, but that's the quality of the Hercules business model - they always have one/two of the divisions going great guns. It will be interesting to see where the share price ends up today.

[nurdin] 15/9/2004 07:34

I didnt stay the course doh! Well done guys for sticking with it.

[penpont] 15/9/2004 07:30

Excellent news, tho they say takeover will be 'predominately in shares' - who could the bidder be and how good are their shares?? All very tantalising.....

[rivaldo] 15/9/2004 07:26

Excellent! Here's the results:



Adjusted EPS at 35.7p are well above forecasts. And we have a bid as the icing on the cake!

What do peeps think of a possible take-out price? A historic P/E of just 10 would mean a price of 360p...

[tiltonboy] 15/9/2004 07:12

Good results and a possible offer for the company. Should open above £3, I would think.

tiltonboy