Hichens Harrison Share Discussion Threads

[the_pimp] 01/7/2007 12:14

£60m makt cap is probably enough for a company like Hitchens at the moment. Compare them with the exit valuation for Bridgewell who I would say have a better client list you could argue are slightly expensive. I always think WH Ireland look cheap but never bt them.

[stegrego] 29/6/2007 17:56

If anyones looking for a fairly good bet, perhaps you should research Cenkos, CNKS.

Unlike HICH (which im still in) they are doing about a float or 2 each month, continue to nick clients from other brokers and also raise new cash via secondary placings (the latest TAN 115 million one being the latest)

I think its on a current p/e of around 16 - which is average for the sector.

I dont have any forcasts, but judging by the amount of work coming their way, id expect it to be sustantially less than 16.

DYOR etc blah blah de blah

[niceguy665] 28/6/2007 09:20

Does anyone know why the company has raised 3.6 mil in the last month or so. If there was a genuine need for this "working capital", surely it would have been raised in one go, not every 4 weeks or so. Does anyone else feel the management is looking at the share price thinking that it can't possibly go higher (and may collapse), so they are issuing shares to make the best of it? Or is it just bad management that they've got no idea how much cash they need, and so we should expect this type of activity on a regular basis? I for one, would like an explanation from the management. There was certainly no mention earlier by management for the need for 3.6 mil for upcoming projects?! It all seems a bit suspect, and I think an explanation is called for.

[czar] 25/6/2007 08:23

Well done CR predictably it has knocked the price back a bit, as did the other placings, maybe good to buy back soon, mind you I would like to know what the plan is with this cash mountain.

[saraho] 24/6/2007 20:26

I doubt these shares were issued to bail out market makers.I suspect that there is more going on in the background.It is also interesting to note that the number of shares issued is just under the 3%-required to make disclosure.

[stegrego] 24/6/2007 16:16

All 5 recent Placing used the same wording of 'for general working capital purposes' although only 2 mentioned institutional support.

I still think that its just to get MMs out of trouble

Not sure its a sell signal though - nor that JIM is a better bet.....

[czar] 23/6/2007 14:47

Yup looks like they have an interesting new IPO which they are buying into.

[cockneyrebel] 23/6/2007 13:26

Making investments might be the reason Domestos, it was one thing that occured to me tho I'd have thought they could say that was the reason for the need for cash.

They do invest in start ups:

"it will also make investments in new start up companies which it will help develop, such as Asian Independent Power, African Wireless and Latin Biofuels.

I don't know at what point they are looked on as stockbrokers or an investment company investing is emerging market start ups. They may have done well out of these over the past year and hence their performance - might be worth bearing in mins should emerging markets turn down.

Would be good to have the genuine reason for raising the cash imo. Good luck tho, I'm just a tad less comfy with so many placings hence my sell but that's just my risk approach.

CR

[domestos] 23/6/2007 12:56

Doesn't Hichens invest in its client companies (for which it raises money)? Perhaps they've got some lucrative floatations coming up .....

Also, the company's got a very aggressive growth strategy, expanding globally into emerging markets. So maybe it needs money to open more offices. Though as the offices are all rented (to save costs), they wouldn't need that much money!

[cockneyrebel] 23/6/2007 12:52

Artifically holding it back Stergo, yep, it's only up 100% since March.

czar, yep, the only reason I can see for raising cash is for an acquisition as they seem to have decent cash and good cashflow - the accounts don't look like they need any cash.

So perhaps an acquisition with the cash - it's a bit strange claiming the cash is for working capital tho. Why they raised cash through share issues lower dow confuses me tho - it would have been better to have one placing up here in the £4 than do those lower down and get less for the shares - tho hindsight is a great thing and they might not have expected this rise.


CR

[stegrego] 23/6/2007 12:40

Seems they are maybe artificially keeping the share price back to allow a takeover?

'we do not like to see artificial spikes in the share price due to shortage of stock'

[jakleeds] 23/6/2007 12:35

CR you ramper :-)

[cockneyrebel] 23/6/2007 12:12

Sorry but I don't see that. Why do they ned to keep raising cash? They are a broker, they don't have to buy stuff in to sell, they don't have development costs - what 'working capital' does a stockbroker need?

Basically they have said 'hey, let's have a placing, at a discount and dilute shareholders holdings yet again.

Since the results they've issued 400K, 525K, 200K, 438K - nearly 1.6m shares in total, that's a 10% dilution. If they do double pre-tax profit this year they will do just over 20p eps. That's a PE of 20 for the current year.

They don't pay a divi either for a company that is 'the oldest stockbroker in the country' as they say - I don't know why it is that a company this old isn't paying a divi.

Quite a contrast to Jarvis (JIM) which are on a similar fwd PE but have said they are 'significantly ahead' of those forecasts, they are also growing profits at 100% p.a. In contrast tho they actually pay a div (2% paid before the interims are published) and they are actually buying their own shares back rather than issuing more and more. Jarvis have bought back 7% of their shares this year and continue to do so compared to HICH issuing 10% more shares. Add the divi to the shares JIM have bought back and they have returned over 10% to shareholder over the past year.

I was holding both JIM and HICH yesterday but sold HICH after this latest placing, it just doesn't add up for me. Previously they have said 'institutional demand' was the reason for the placing. Yesterday's placing wasn't institutional demand if it was done at a 7.5% discount to the market imo.

CR

[domestos] 23/6/2007 11:39

Whatever the reason for these placings, the fact that they're being done at such a small discount (6%), must help underpin the current shareprice.

[czar] 23/6/2007 08:33

Amazing, why have they raised more cash, they must have over £10m already. I don't think this is about market liquidity more likely letting a big institution get a stake in the business. What will they do with all this cash? The good thing is each placing has been done at a higher price so there must be terrific demand for these shares. Tadtech, not really a dilution because we should look at the pe ex cash. Something is going on, any ideas?

[stegrego] 22/6/2007 15:42

They dont need any money at all - they just keep feeding their MM pals and get them out of the sh1t.

[tadtech] 22/6/2007 15:39

How annoying these continued placings. Its like saying we do not want the share price to rise thank you! It immediately stops in its tracks any share price rise and only serves to make investors wary. I commented on this a while back. Annoying as it continually dilutes existing shareholders value.

[spangle93] 22/6/2007 15:36

What is this "general working capital" that they need all the funds for? What capital needs do they have?

[liarspoker] 22/6/2007 15:35

I wonder why they need all the cash ?

Their business model is based on commisions.

Institutional support ? To the detriment of existing shareholders ?

I don't hold anymore but will watch with interest.

[stegrego] 22/6/2007 15:25

Theyve done it again - i dont believe it

They going for some sort of record or something??

They must be great mates with the MMs....

[jakleeds] 22/6/2007 15:08

Another placing...

[badgerry] 22/6/2007 11:07

Todays article in the Daily Express "Stockbroker Hichens Harrison hit a 399.5p high up 7p - its market value has more than doubled during the past three months - fuelling speculation it may have attracted predatory interest"

I would expect that any deal would have to be done at considerably more than this price based on the growth which Questor expects over the next couple of years.