||EPS - Basic
||Market Cap (m)
|Software & Computer Services
Interbulk Investments News
|davydoo: Paul Scott's excellent small cap report covered INB today
he speculates about fundraising to repair the balance sheet which is reasonable, but as far as I am concerned that was already done by Sintotrans joining the party in 2011. The debt, repayment schedule and interest rates are all considerably improved since then, yet share price is at a similar level.|
|davydoo: Its that small amount of shares in public hands that can move the share price 10% on the back of just 4 small trades not even worth £5,000|
|davydoo: From the annual accounts
'On 30 September 2009, 15,144,600 warrants were granted to the Bank of Scotland with an exercise price of 10p. During the year ended 30 September
2011, 3,028,920 of these warrants were cancelled resulting in 12,115,680 remaining in issue. The warrants are exercisable at any time in the 5 years
beginning 30 September 2009'
So that's about £1.2m and just over 5% of the company.
With the price at half that, unlikely to be exercised in the next 3 months, and therefore lapse presumably.
edit. 5% of the company value now, but I guess only about 2.5% if the share price was equal to the warrant price.|
|emmandell: Yes you're quite right Davydoo, my brush with Interbulk was some time ago.
Incorporated as Interbulk Investments plc on 8/12/04 and admitted to the AIM market the same month with a Prospectus issued on 6th Jan, I purchased two tranches, each at 4.44p, in Jan and Feb 05 (with hindsight I paid over the odds).
In mid 2005 the share price ranged from 2.5p - 5.25p, after which the shares were suspended until March'06 when Interbulk raised more capital and simultaneously undertook a 1-for-10 consolidation of the shares. The consolidated share value should thus have been about 44.4p, but with dilution the price fell rapidly to below 30p.
[Rathkum please note you probably overlooked the share consolidation. The early discussion forums at the time highlight the general dissatisfaction among shareholders with this shell company's performance. For example see Forum discussion items 01/02/06 through March 06 re consolidation
Or later on the same forum:
By mid-2006 the share price was at 26p, falling to 21p in April'07, and 12p in Aug'07. I sold in Sep 07 at 11.78p (i.e. the drop from 44.44p to 11.78p is 73.5%).
I've taken only the occasional interest in Interbulk's performance since selling. The shares have a large spread and are illiquid with a very volatile price. Your approach davydoo suggests that you are managing to sell on the highs and rebuy on the lows, and with the right timing is the only way to make money from these shares, especially as there are no dividends. It seems very risky to me though, with decent price rises roughly a year apart and I can't see it paying off if you stay invested long-term. There are more reliable companies around with a high beta. Interbulk appear to be struggling at the moment as do Sinotrans. A bit of research on the directors of the company would reveal their track record, good for them perhaps but not their shareholders. As I recall I put my Interbulk sale proceeds towards Air Partner and Tate & Lyle, both of which have shown a total return equivalent to 12%pa compound interest. Had I stayed in Interbulk I'd be down to 5.5p at the moment, having further halved my 'get-out' price.|
|rathkum: I have a gut feeling there is a buy recommendation or a mention in some publication. The level of buy volume since the results announcement ,both small and large along with the rise in the share price has got me thinking.|
|davydoo: I attended the AGM on Tuesday, and thought i'd share my thoughts from the meeting.
Following the formalities and votes (which all passed) there was some time to talk to Scott Cunningham, FD and David Rolph, Chairman.
The following questions and topics came up, and these are my own interpretation of my understanding and my notes, and should be read that way.
-Prospect for dividends? (raised by a shareholder, not who wanted them, but wondered about the ability of the company to do so)
This has not been on the boards agenda now or in the past (partly i suspect because its unlikely to be required by major holders) The company is subject to banking covenants, and improving the capital structure is the priority, particularly towards lower borrowing costs, as the Sinotrans investment allowed.
-Prospects for Chinese business post Sinotrans deal?
Good, talked about the 'iso-silo,' now in place at Bayer, which is owned by Interbulk, with Sinotrans doing the onward delivery.
Described enormous opportunity to move polymer producers from producing 25kg bags, currently stacked up on wooden pallets (which all need opening at client site) to 25 ton containers that Interbulk can offer.
Highlighted the Alliance with Sinotrans is just that, but that they are free to pursue other opportunities or not partner with SInotrans if not right for Interbulk. Described Sinotrans itself as an Alliance only recently coming together to have a China wide offering.
Also described the ongoing expansion of Chinese railways as a good opportunity.
-Outstanding options and warrants?
I asked this in relation to Directors with options at 20p, are they still an incentive at 3x current price? And regarding Bank Of Scotland with Warrants at 10p, what was the background to them giving some up as part of the debt renegotiation?.
Scott confirmed that the 20p options would be unlikely to vest as they missed prior performance targets. No plans to give directors future options, there is long term cash incentive plan going forward detailed on page 20 of the annual report.
The warrants to Bank of Scotland were originally in relation to the mezzanine finance, which having been reduced by the placing proceeds suggested a reduction in the number of outstanding warrants, although there doesn't seem to be a direct correlation.
We had a general discussion about whether the Bank wanted to be a shareholder, as I suspected it was a legacy business activity of BoS, and not wanted by Lloyds now. Speculation that they're not valued highly by BoS, due to standard models, and so not giving up much, and would likely be sold by BoS if exercised anyway.
-Oil Price Rises?
Confirmed that they are impacted by rising prices, as tenders, bids etc, need to be repriced and existing contracts which have fuel price terms within them do not kick in immediately. Described a policy of 'dead-band' pricing, which suggests small moves within the band don't trigger a re-price.
Didn't seem overly concerned by this though, confirmed they benefit in reverse if prices fall, and that in the bigger picture a high oil price benefits the business in greater use of intermodal transport.
Other things that came up;
Nearing completion of using one software system across the business. 'Swift' which has been used for Dry Bulk will be used for Liquid too.
Refinancing in June 2013 is a major event. They have a £10m OD facility at the moment that they rarely use.
Euro issues in Q4 2011, did cause a slowdown in business, with reduced volume, but they don't feel it will impact profit forecasts, and implied 'no news, is good news'
Hoyer, who opposed the Sinotrans deal, are still a significant shareholder, and meet with management regularly. Unsure of their future plans.
Sinotrans deal was done on a basis of value, not current share price, and that a broad range of prices were discussed. I congratulated the board for this transformational deal and price achieved.
All in all, I left happy. The board seem energised about the business and its opportunities, particularly the Chairman. The refinancing in June next year seems to be the most significant event coming up, as it could really be a chance to improve things.
Hope that helps.|
I am sure all of us on this board would welcome any feedback you can take from the AGM. I have a couple of questions you can put to the board should you be presented with a opportunity.
1. What is the overall impact to margins on current high oil prices.
2. Is the penetration into China resulting in material growth since our tie up with Sinotrans.
3.What sort of growth can we expect going forward considering the slowdown in Europe. Analyst have reduced their revenue forecast by £10m and £15m for 2012 % 2013 respectively to the one a few months ago. Hence the weakness in the share price.
Thanks in advance|
|jeff h: The high oil price a reason for recent share price weakness perhaps?|
|davydoo: rathkum, not only were Sinotrans prepared to pay 11p, they also did so at a time when the share price was 3.875p, a premium of 184%
Apply the same premium now and we're talking 17.4p.
I realise thats a bit crude, but Sinotrans bought the company at a time it couldnt reduce its debt position, but only sustain it. Bizarrely, its their own investment that has changed the picture so fundamentally, reduced the debt, and put them in a position to continue to reducing it, partly by reclassifying some debt and reducing the interest costs.|
|kimball808: Just got round to reviewing the 2011 stats....silly me
Can not believe how under the radar this company is...
current share price is at a discount to the sector by 85% (sector in general has increased by 7.23% since the beginning of the year)...For 2013 its at a 134% discount at today's prices...
Book price of 17.8p per share...Cashflow per share 1.48p
reducing debt increasing cash...
safely tucked away in the SIPP...|
Interbulk Investments share price data is direct from the London Stock Exchange