Lupus Capital Share Discussion Threads

[smicker] 12/2/2010 22:33

Not so nice

[randolph and mortimer] 12/2/2010 20:21

GT for sale - at the right price.

[sir brainy] 12/2/2010 19:40

The former. I'm sure any exit would be orderly.

[jeffian] 12/2/2010 19:31

I certainly hope he "throws in the towel" so far as these constant challenges and EGM's are concerned. It is clear from the voting numbers that sentiment has moved significantly against him. If you meant "throw in the towel" in respect of his own investment, one hopes he wouldn't do anything precipitate to damage his own or the company's interest.

Now that the smoke of battle has cleared, I'd like to hear from the Board what their long-term strategy is. The GH model was clearly planned to be the buying, growing and selling profitably of disparate businesses but we now appear to be stuck as a building products company with a small oil services 'tail' and no particular plans to grow either. On 2 separate occasions in the past, proposals have been made to realise the assets of LUP given the appropriate opportunity and return the cash to shareholders. In the absence of any better long-term ideas to take the company forward, this is one option which may be worth re-considering. As things stand, we have an expensive Head Office operation in Buckingham Gate (whose purpose under the GH strategy would have been to deal with strategy and the sales and acquisitions of the subsidiary businesses whilst those businesses largely managed themselves) which as things stand is just another layer of management above businesses which are perfectly capable of managing themselves. If LUP is just to be a 'Holding Company' for 3 or 4 subsidiaries, I'm not sure of the point of its existence.

[randolph and mortimer] 12/2/2010 14:46

He could always start again backed by supporters. Depends if he thinks Pike can get a better return than he can

One is only as good as one's last trade, is a stock market turn of phrase. It only takes one banana skin (Lssd) to undue much good work.

[sir brainy] 12/2/2010 13:52

Foreseeable but do you think he'll throw in the towel now?

[randolph and mortimer] 10/2/2010 08:48

He should merely have bought the seals business of LSSD, for there was the overlap. Lupus bought the whole because it was given the chance to do so in an era of very easy credit..

Timing is everything when it comes to buying an earnings stream with debt.

[newbold120] 08/2/2010 21:35

You may well be right - there are no perfect institutions - and there could be queues of people backing up to back Greg. However
- institutional investors of any kind don't like backing troublesome/colourful/high profile/"sun king" managers. Too unpredictable
- Greg buying LSS at the top of the market with debt was a serious error of judgement
- Despite his energy and ability to keep fit, some might wonder whether his best days are behind him.....

Don't kid yourself - the building products businesses are above average assets, but not stellar. They are not must have but arguably cheap vs their through the cycle potential and valuation

[itsnobigdeal] 06/2/2010 02:57

Newbold120 - I would have thought that it is not the end of the world for Greg to have made a principled criticism of our institutions and banks particularly when their record has itself merited such criticism, to say the least. Also surely an American institution or bank (or even a continental one) would relish financing a group like Lupus with its impressive Anglo American assets.

[randolph and mortimer] 03/2/2010 10:42

Blue chip institutions can never justify their actions, ie. their losses for their ignorant customers. No wonder sipps are all the rage.

Norcros - rights

renold - rights

wolseley - rights

heywood williams - 0p

CRH - share collapse also

Masco - share collapse also

travis perkins - rights

marshalls - rights

low & bonar - rights

[newbold120] 02/2/2010 15:08

A personal view....

The banks would have behaved even worse if Greg had stayed and shareholders would have probably been forced into a highly dilutive rights issue. Greg needs to face it that he possibly made the right acquisition at completely the wrong time, with too much leverage and destroyed millions of pounds of shareholder value. You can decide yourself whether Greg's judgement has been proven to be flawed by looking at the share price and the P&L. Many other companies geared up, overpaid buying the wrong things at the wrong time (sometimes the right things at the wrong time) and their Chairman/CEOs have largely "resigned" too and kept a low profile. How many of them are trying to get themselves reappointed through an EGM? None. Most are just too embarrassed and want to move on and achieve something else. Not Greg.

Building Tomkins was a different matter - 1) he never used gearing 2) had the cyclical wind on his back for 9 years. It was a bit like a pyramid business - run too hard (starved of capex and R&D), with all the manufacturing in the developed world, when he would never take a long term view, restructure and move manufacturing to lower cost areas. This is still a major achilles heal of the business. TOMK was always going to fall over at some stage given its main auto customers pretty much all went bust.

It galls me that he offers to "work for free" until the share price reaches 90p. How about 1) paying back what he has earned to date destroying shareholder value 2) being unpaid until the share price reaches 180p, the level at which he raised millions of pounds from private investors and institutions for the acquisition of LSS?

Attacking the major shareholders is a completely suicidal mission. Even if he were to get back in, which institution is going to want to own shares in a business run by a guy who openly despises and criticises the owners of >80% of the stock market (Lupus' existing and majority potential owners). Most blue chip institutions could never justify to their clients investing in a such a company. Lupus would become a pariah company, shares would be trashed, banks would become unwilling partners again, and Greg would probably try and buy it all on the cheap with a US PE house.

He just needs to move on. Given the number of shares he has purchased, he is probably one of the only investors to be in the black. If he wants control back, let him try and raise the money and buy the business at 180p. Only which institutions would back him given his public performance and criticism of fund managers? And Boards/leading shareholders do anything but sell to former CEOs/Chairman.

[tuning peg] 27/1/2010 19:29

My take on the long slog was more from the final outlook statement

"The Group remains cautious as we enter 2010, as trading conditions are not
expected to improve rapidly and, despite encouraging recent trading, our end
markets remain fragile. Lupus weathered a difficult and challenging 2009
trading climate and is now focussed on reinforcing its strong position in the
Group's markets"

[smicker] 26/1/2010 22:42

Tuning Peg,
I dont get that message at all from the trading statement. Like most other companies there is a cloudy outlook but i got the sense that things were starting to go rather well. I know i'm being selective but

"the Board is pleased that the Group is expected to deliver such
encouraging results"

"During the second half, the businesses stabilised and have benefitted
from higher levels of activity which have been sustained through to the
year-end. A number of businesses have now returned to full time working in order to meet increased demand"

"Gall Thomson Environmental continues to maintain its strong market position and has performed in line with management's expectations, producing excellent
results"

"In 2009 the Group generated strong free cash"

"Lupus weathered a difficult and challenging 2009 trading climate and is now focussed on reinforcing its strong position in the Group's markets."

What indicates a long slog?

[tuning peg] 26/1/2010 21:33

Jeffian, your post 3908 I think sums up the situation very well:

If GH left of his own volition because he couldn't work with the bank appointees how can he claim in his latest campaign that he is a team player who take orders as well as give them??

Agree with the majority of posters that we need to look forward now, not back. GH is now a chapter in Lupus history. His failure to persuade any of the big institutions to jump ship prior to this latest compaign leaves him dead in the water.

It looks pretty certain now given the sentiment on this board that more PIs will also vote against him having previously pledged support on his earlier campaign.

Whatever his strengths can we really forgive him for getting us all to buy in at 140p and 180p ...?

Sadly the underlying message in the trading statement this week is that it is going to be a long hard slog from this point on. Unlikely that we'll see 140p again anytime soon.

[randolph and mortimer] 26/1/2010 12:33

GT have a monopoly within their industry. Can't move much further than that.

[a1samu] 26/1/2010 11:16

Thanks jeffian, that is very good. These people, including GH have no vision. If GH was into an investing game, he could have started developing the oil services sector. It is massive & profitable. See Petrofac & others like it. It would not be too late to set up a vision to generate an oil services arm, over time, with a comparable turnover, to what is already achieved in the building sector.

[randolph and mortimer] 26/1/2010 11:16

The pre-agreed votes cast can certainly switch sides - as happened with a large holder with about a week before the last egm.

If these larger players don't want to see £2, then they deserve a rights issue. Fools.

[jeffian] 26/1/2010 11:05

Not quite true, a1samu, LUP bought a couple of bolt-on acquisitions for GT including the KLAW business which makes breakaway couplings for industrial (as opposed to GT's marine) use. The trouble with GT is that its strength is also its weakness - it makes the 'Gold Standard' marine breakaway coupling which is often specified by name and consequently it makes huge margin on sales. Whilst it is a niche business, the oil companies are prepared to put up with this but if it grew to a substantial level, competitors would be drawn into the field and margins would suffer. I think the 'low' values put on the business may reflect this belief that they make abnormally high profits on sales so if someone bid, say, 10x earnings for the business, that may turn into 20x if profit margins came down to more normal levels. Just my take on it, but it would explain why they have failed to obtain a Crown Jewel price for it despite having hawked it round the market on no less than 3 occasions.

[a1samu] 26/1/2010 10:29

What would be reassuring is, if they would bring in a CEO for oil services, set some money aside for investing & acquisistions on a small scale & attempted to develope this jewel in the crown aspect.

The strange thing is, that Lup has been happy to hang onto the oil services, but no one ever wanted to expand on it. Not the old Lup, not GH, not the current board. What is wrong with it, if it is such a self finncing cash cow?

The directors can pay themselves & GH, hundreds of thousands of pound, pay the bank millions, but they cannot set aside anything for expanding a profibale business.

[a0148009] 26/1/2010 10:16

Sadly, I think that could happen, the new guy is solely a building materials man
which is highly cyclical albeit a fair percentage angled at refurbishment in the USA.

AO

[sir brainy] 26/1/2010 10:14

GT is the jewel in the crown so it makes no sense whatsoever to sell it for anything but a jewel in the crown price. Which is what I would fear if the banks win the argument.

[jeffian] 26/1/2010 10:07

Maybe, SB, but whatever one may feel about that as a long-term investment, in the short-term there's a lot of recovery to come in that sector as we come out of recession.

As for Gall Thomson, whilst we may love this profitable little niche business, those of us shareholders who have been around rather longer than GH will remember that it was touted around by not one but two previous managements and on neither occasion found a buyer at a price which made sense to us. If you believe the recent reports, that happened again recently so we may just have to face up to the idea that it isn't worth what we think it is. To my mind, that makes a case for holding onto it and running it as a cashcow, which it has always been for LUP.