Litcomp Share Discussion Threads

[abc125] 01/10/2009 19:22

GHF

I also had a similar reply. I still feel the profit warning was unwarranted though. Putting out such statements is hardly going to convince bond holders to convert.

It will be interesting to see what Nigel Wray does. He could guarantee Litcomp's independant future by converting his holding.

[lbo] 01/10/2009 10:02

My advice is email Litcomp!

[e-mail]

[e-mail]

[lgpixels] 30/9/2009 20:42

Wow, great results!

A fair value of the shares should be at least £1!

I think there is little chance of the offer getting accepted at these levels, as it is way below what the company is actually worth. I am more than happy to sit tight and would personally reject any offer at these levels. I do no not what the board of directors are doing and how they could possibly recommend a takeover at anything less than £1.

I am only thinking this could be a related transaction or the interested party will come back with a much higher offer that could be recommended to shareholders. It may be possible that Nigel Wray is party of the bidding party for the company as he is one of the biggest shareholders and loan note holders. Even if this is the case I cannot see the company getting more than the required 90% to force the bid through.

I am more than happy sitting tight and would suggest that other shareholders compare the offer price with the underling value of the company.

10% of shareholders will be enough to block any deal!

[glasshalfull] 30/9/2009 19:23

I'm with Steg. Something doesn't smell right.
I'd always thought that delay related to the bond redemption. However LIN's excuse appears highly questionable.
Approach bond holders - acertain take up - look at finance options. Simple ???
The fact that they are considering a bid at 33p given these results - better than most of us anticipated - appears oppotunistic to the extreme. Perhaps it would be understandable if credit contions were still as tight.
But they're not !

Regards,
GHF

[supernumerary] 30/9/2009 16:45

egoi - I don't know, I'm just going by this statement in the interims: 'if the Company is forced to use internal cash resources to redeem the Loan Notes that will significantly reduce its trading capacity.' I presume they have to maintain adequate liquid assets to meet potential claims.

If the purpose of the placing is to get funds to pay off the bondholders and reject the bid, I doubt the 33p bid price is the floor. However I would have thought 25p should be obtainable.

[the big fella] 30/9/2009 16:31

Still perplexed.

[egoi] 30/9/2009 16:00

Why would it effect their ability to trade profitably? There might be a short term cashflow squeeze if they had to pay ALL the bondholders (nost unlikely imho), though they have enough as of March and it is likely to have strengthened since anyway given they are trading profitably and there's another six months interest on 2.6 million; however given the bid situation any placing would not be below the 33p offer price imho.

[supernumerary] 30/9/2009 14:05

I assume the bondholders want their cash (understandable in the current climate) and the company can't afford to pay it and continue trading profitably?

With these results I'd have thought a fund raising was a possibility?

[abc125] 30/9/2009 12:17

Don't really recognise any of the companies on that list.

[the big fella] 30/9/2009 11:34

Just read through and just don't understand why the company would agree a knock down sale when they don't know whether the loan note will be converted or extended. And EPS OF 10P!! Why did they issue a profit warning. Non of this stacks up in my book.

[abc125] 30/9/2009 10:18

I'm also amazed at the 10p diluted EPS.....was not expecting that !

What was that profit warning in june all about?

[egoi] 30/9/2009 10:12

Worst Case Scenario, they use the cash to pay out all bondholders, so you have a company with 17.15 million shares, at 30p market cap 5.15 million, making (almost 10p eps and on course for 12-15p over the next 12 months.

Although the cash is lower, (2.6 million is still above the undiluted market cap by itself!), overall the results are significantly ahead of the 7-8p I had expected.

33p? Someone's having a laugh! All imho.

[abc125] 30/9/2009 09:43

"The reduction in cash is principally attributable to the increased emphasis on deferred premium business within Elite Insurance Company Limited."


They forgot to add the £528k of loan note redemptions last november may also have pushed the cash balances lower; (on top of the £300k odd loan note interest)

[abc125] 30/9/2009 09:35

Historic PE now is 3.27. Forward PE has got to be less than 2.....lol. Anyone seen any updated forecasts?

It looks like they might extend the loan notes for another year.

[zangdook] 30/9/2009 09:34

"As announced on 24 September 2009 the Company is in advanced discussions with a
potential offeror regarding a possible offer for the Company at a price of 33p
per share in cash which includes arrangements for potential funding of the
redemption of the Loan Notes. If these discussions do not conclude successfully
Directors will ask Loan Note Holders to extend or convert their holdings"

Surely they've got this the wrong way round. They need to see if the Loan Notes can be converted or extended, and then if that fails go ahead and sell the company for a fraction of its value.

[abc125] 30/9/2009 09:08

Looks good:


"The Group has had a good year showing an increase in profit before taxation from GBP1.11m to GBP1.94m. This represents a strong performance in a difficult
environment

Elite has shown strong growth in the period under review, with the Medico Legal
trading companies showing a slight improvement over previous year.
Financial Summary


Group revenues have increased by 157% from GBP11.45m to GBP29.41m and adjusted
net profit pre tax * by 75% from GBP1.11m to GBP1.94m. Headline earnings per
share has increased by 77% from 12.80p to 22.62p and fully diluted earnings per
share by 70% from 5.83p to 9.92p."

[egoi] 30/9/2009 08:31

They quite often from memory make RNSs in the middle of the day.

Meantime, yawn..........