Lighthouse Share Discussion Threads

[graham1ty] 26/7/2012 13:23

Yes, I am, traffic willing

[graham1ty] 26/7/2012 13:08

Would love it if enough of the big holders would write to the Board, prove it will be voted down and get the proposal withdrawn before we all have to get into London, via Olympic shutdown, for 9am start ( almost impossible for out of town shareholders). Save the faff.

However, will also be fun to attend and enjoy the brawl

[nigelsom] 26/7/2012 12:56

Are you going, then?

[graham1ty] 26/7/2012 12:54

Would be interested in talking to any small shareholder UNABLE to attend. If you can contact me very grateful. Thanks. Post an answer and will work out way of getting phone number

[nigelsom] 26/7/2012 12:44

From yesterday...



Rosengren is a rebel.

[graham1ty] 26/7/2012 12:36

Only just online.........and updates today ? Articles ? News ?

VOTE THE DELISTING DOWN

[nigelsom] 25/7/2012 21:18

Gengulphus - I wasn't at all advocating buying the company and shutting up shop (or, at least, that was not the intention), merely pointing out the madness of the market valuation right now (which was already bad, but recent management actions have somewhat exacerbated). You are, of course, quite correct. A far better way forward would be to let the earnings pay you back manyfold over many years, and that could be accelerated by a pruning some of the costs.

I've voted against too, by the way - the result of the meeting will be most interesting (as well, I hope, as the aftermath).

[cwa1] 25/7/2012 13:14

Also, looking a bit cheap IF this resolution is defeated. Time for a few more?

[cwa1] 25/7/2012 13:13

Assuming these people walk the talk then the gig's up for management.

This will be convincingly defeated by the looks of things.

Time for management to pack their bags after this and make way for someone more shareholder friendly.

[bisiboy] 25/7/2012 11:54

hopefully we will see the price go up now.

[bisiboy] 25/7/2012 11:53

rosengreen from his statement just published in money marketing would appear to
be firmly against if so this will definatlely not go through

[gengulphus] 25/7/2012 09:35

Here we are with a perfectly viable company - profitable, dividend-paying etc but the market has squashed the shares so hard that there is now more cash in the bank than the market cap. There must be a temptation to take advantage of that: right now you could more or less treble your money by buying the company and closing it down.

No, you couldn't, at least not easily and within the law. You cannot just take the cash out of a company you're closing down: you've got to settle all of its affairs first. And in Lighthouse's case, that's liable to consume most of the cash and a lot of time.

Specifically, take a look at the major balance sheet items in the last annual report besides the £11.895m cash and equivalents:

Receivables £7.316m and payables £9.671m: Should all settle reasonably quickly and at full value (though no guarantees aginst bad debts, of course), but expect the difference of £2.355m to come out of the cash.

Intangible assets £10.460m: About half goodwill, half acquired contracts, bits of other things. How much of these will survive the process of closing the company down? The value of goodwill will only survive if you sell the business operations on as a going concern and avoid any hint of a 'fire sale' situation - which will take a lot of time. The value of contracts will only survive if you fulfil those contracts, which again is likely to take a lot of time.

Provisions £8.165m: A whole load of expected costs with regard to clawbacks, complaints and other potential liabilities. Actual amounts will be uncertain, as usual for provisions - if a liability is certain, it's a straight liability, not a provision! Whatever the amount, it's likely to take a lot of time to settle them all - and the quicker you try to do it, the worse the deal you're likely to get.

For a quick acquire-the-company-and-close-it-down operation, my starting point would be that you'll get nothing for the intangibles and have to pay out the full value of the net payables and the provisions, leaving you with £11.895m - £2.355m - £8.165m = £1.375m of the cash left (plus whatever improvements there have been since the end of last year, and plus or minus the effects of the other, more minor balance sheet items I haven't looked at).

By taking longer over it, you could probably get something for the intangibles and reduce the payout for the provisions, both of which would improve the cash return. So it's certainly possible that you could get back more than the company's ~£3.8m market cap, but it's equally certainly not a no-brainer, and anyone trying to do so should expect to have to put some hard work in maximising the value of the company's assets and minimising the costs of its liabilities.

By the way, in case anyone gets the wrong impression from the above: I'm a shareholder and have voted my 225k shares against the delisting. I welcome good arguments against what the directors are doing - but I'm afraid the "they could close the company down and take the cash" argument doesn't hold water IMHO.

Gengulphus

[nigelsom] 25/7/2012 06:48

Lighthouse management are not really on the button over the claims of the lack of benefits of being listed. Yes, there is a big question mark over visibility of future earnings but that will be cleared up over the next few months. The likes of H-L aren't suffering the same share price pressure so that is not the whole story here. AIM itself presents investors (esp PIs) with a number of difficulties: there is a tax disincentive (you can't put them in an ISA) where there used to be generous tax breaks of offer. Then there is the small matter of a ridiculous set of rules re raising capital where the regulatory costs mean that discounted share placings are about the only viable route - so PIs get shafted by a set of rules which are supposed to be there for their protection (talk about unintended consequences). I could go on...

Here we are with a perfectly viable company - profitable, dividend-paying etc but the market has squashed the shares so hard that there is now more cash in the bank than the market cap. There must be a temptation to take advantage of that: right now you could more or less treble your money by buying the company and closing it down. LGT is not the only one either - just look at SEA where cash and investments are now worth almost double the share price (something of a special situation, granted).

A re-rating will come in the end - either the market gets back some level of confidence or there will be M&A activity to spark it.

As for LGT, with a reduction in boardroom pay and trimming in corporate costs etc one can see how a large % increase in profitability could be brought about quite easily (currently boardroom pay is roughly equal to profits, so who is getting the value here?) If that translated into higher shareholder returns LGT would have a higher perceived value. But the current boardroom doesn't own much % of the company they run so alignment of interests with the shareholders is a long way off. Meanwhile they can allot themselves plenty of share options etc and quietly dilute us over time at our expense.

Rant over!

[pwhite73] 24/7/2012 23:39

In a sense Lighthouse management are right. The AIM no longer fits the purpose for what it was designed for. Today its nothing but a charter for liars, thieves and robbers. But taking such draconian action shows the same high level of disregard for shareholders interests as the AIM and its actors have shown towards their company.

[trader2] 24/7/2012 14:09

Quick reply from Barclays Stockbrokers...

Thank you for your email advising you wish to vote against the cancellation of the listing of Lighthouse Group.

I'm pleased to confirm your vote will be logged with the registrars in time for the AGM on 31 July 2012 and no further action is required by you.

I hope this has been helpful and enjoy the rest of your day.

[toback] 24/7/2012 09:41

Methinks they are getting worried.

New board reqd pls.

[bisiboy] 24/7/2012 09:13

if the shares are so undervalued then the best use of our cash is to buy
our own shares in the market buy enough and the value will rise problem of
undervaluation solved.

[cwa1] 24/7/2012 09:09

Heard from all the brokers I use and all say they have registered my vote. Hope evryone else has done likewise and made sure their broker is up to speed on the matter.

Can't see anything in today's announcement at all to change my mind.

[graham1ty] 24/7/2012 08:43

Nigelsom

Unlikely to put hands in their pockets. Board paid £1m, but own less than £300,000 worth (after all these years). Divis received lasst year £46,000, salaries £1m.....

they are more interested in their contracts than the share price......

[nigelsom] 24/7/2012 08:37

Quite right - s/holders are being shafted here. But so is the value of the company: the share price may only be a conceived idea but if/when it comes to doing deals it is very much central to the equation as to whether a deal is worth doing (at least from s/holders point of view).

So mgt have now made it twice as difficult to expand using paper as currency. If they want to cut down overheads they should look to themselves first up. Cutting useless corporate overheads (like a duplication of brokers) and some boardroom restraint will save money. Whether this is enough to make up the costs of being on AIM is another matter - but there are alternatives such ax Plus or even some lego job like GXG.

But the fact remains that there is plenty of cash in the bank to make a decent offer to s/holders who want out - and, indeed, perhaps mgt could put their own hands in their pocket by buying out those who are unhappy with delisting.

Whatever the way forward is, what is being proposed is not going to be it IMHO, and I'll be very happy to see current mgt get their p45s, the cheeky, ignorant bar stewards.

[graham1ty] 24/7/2012 08:24

I am not against the delisting.....it might make sense. What I want is shareholders treated fairly. Best practice would have been for a partial tender for shares so that those who cannot ( yes there are some) or do not want to hold shares are offered an out ( see Parkwood as a model example of how to delist)

Patently, for those too ignorant to see it, Mr chairman, the shares as a listed company were valued at 5p. As an unlisted company they are valued at below 3p. You have destroyed half the value of the shares, when you yourself complain about them being undervalued