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Real-Time news about Lupus Capital (London Stock Exchange): 0 recent articles
|tuning peg: Today's trading statement hardly inspiring but I think the recent share price weakness has factored this in. On the plus side net debt continues to decline so I would expect to see an increased divi this year.|
|andrewbyles: Tayloy Wimpey have issued a positive trading statement this morning (their share price is up 6% this morning), following on from the positive statement from Bovis last week (whose share price is now at a seven month high). It bodes well for Friday.|
|andrewbyles: Lupus' website states that a pre-close statement will be given on January 21st (next Friday), followed by the annual results on March 23rd - see http://www.lupuscapital.co.uk/financial-calendar.aspx
It was a shame that share price fell 10p yesterday. About 900,000 share was sold and only about 13,500 purchased, so it looked as though people were taking their profits after a few days of substantial gains. Today seems fairly quiet.|
A profit's a profit so I can't knock your thinking, but I'm not sure I accept your rationale. I'm more persuaded by AB's post (4084) that there is still scope for growth on fundamentals. This isn't a direct play on the current housing market; if you look at the housebuilding/materials sector they are anticipating recovery down the road. Thus you have the likes of Persimmon etc. saying how they are opening up new sites for development and you have the likes of TPK/WOS etc. moving ahead on both actual and anticipated further recovery in sales. Actually, LUP isn't that reliant on new housebuilding anyway as the majority of its products are bought for the repair, maintenance and improvement ("RMI") sector rather than new build and, of course, it is slanted towards the US/worldwide market. After all, without wishing to make light of a serious problem, one imagines there's going to be a bit of rebuilding going on in Australia, which was highlighted in their last report as one of their high-growth regions.
I, too, am in the happy position of being back in profit after years of being underwater but I'm going to hold on for a while yet. As for the divi, although I love 'em, you have to admit that the loss of a couple if years' divi pales into insignificance in the face of a sixfold rise in the share price!|
|andrewbyles: Until this morning HSBC Investdirect had no forecasts for Lupus' 2012 earnings. They are now said to be 14.70p per share(13.20p for 2011). The dividend is forecast to be 1.62p per share (1.01p for 2011).
How high can the share price go? The FTSE All-Share is currently trading on a PE of 12.9. Lupus is forecast to earn 12p per share for 2010. Trading at the market PE would result in a share price of 154.8p, increasing to 170.28p if the 2011 results meet expectations and then 189.63p in 2012.|
|jeffian: I was here long before GH, but I certainly supported him and took up all my Rights in full. Since his departure, however, the 'policy' of the company has shifted from the conglomerate envisaged by GH (Tomkins Mk II?), with disparate companies acquired, grown and sold at a profit, to a more stable building-products group with a specialist engineering 'tail'. The management required for the former had a different skills set to the new team, but I'm surprised at your 'no confidence' statement. Jamie Pike has a terrific track record at RPC and has just pulled off the rather remarkable trick of announcing a deeply discounted Rights Issue in connection with an acquisition....and seeing his share price soar! I don't know a lot about Eperjesi, but his former company Kingspan did very well indeed until being caught out by the Irish collapse (as we were in US). GH would certainly have done a different job; whether it would have been a "better" job, we'll probably never know now. In the meantime, I believe we've got the right management for this type of business - but we won't be waking up one morning to find we own a gunsmith or bakery!|
|jeffian: Having read the LTIP document, one of the things that heartens me is that the performance criteria are linked to earnings per share rather than anything to do with the share price or 'Total Shareholder Return'. IMHO it is entirely correct that the Board should focus on eps - the one thing they can influence directly - rather than the share price which varies at the whim of the market. Boards should focus on revenue, profits, eps and divis and let the share price look after itself; if they get the first bit right, the rest will follow!
The only thing I'm not so sure about is that the eps target is 38-47p over 3 years (i.e. 12.66p-15.66p/year). Maybe OK compared to 2010 earnings but remember that underlying earnings in 2007 and 2008 were 14.2p! Back to the future?!|
|andrewbyles: One thing that the new management are doing particularly well is keeping us informed about the company's trading. Under GH the share price fell and fell and we didn't really know what was going on until he resigned (although it seems likely that some people knew what was going on and marked the share price down accordingly).
When the share price fell by 20% last week I was little concerned that we might find ourselves in the same position again, but this trading statement reassures me.|
|newbold120: 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.|
|andrewbyles: For those who don't receive it, here's the latest from GH (he's offering to work for £1, but only until the share price reaches 90p; and he's suggesting that the new CE wasn't everyone on the interview panel's favourite candidate):
23rd January, 2010
In order to allow you the opportunity to influence the future management, direction and success of Lupus, I requisitioned a General Meeting to vote for my appointment as CEO as well as to clarify through specific resolutions important issues surrounding the Company's lack of transparency on pay and communication with shareholders since I left.
The Board at the last General Meeting, summarised their plans for Lupus to manage what was there as best they could. This seemed to be the limit of their objectives. That is not good enough for shareholders. The group has always been dynamic and well managed and it has had clear leadership and vision. The turnaround directors discovered this and were quick to tell shareholders.
Lupus has recently announced a new CEO Louis Eperjesi. As a shareholder, like me, you should make enquiries whether he is the right man with the vision, international experience, reputation, track record, financial commitment and skills to develop Lupus. Was this choice made hurriedly to hinder my campaign? There were 3 or 4 candidates interviewed by a number of board members. Ask the Chairman, Jamie Pike, whether all members of the Board, including the turnaround directors, were always certain and convinced, having interviewed Mr. Eperjesi, that he was the right man for this job and not just a compromise candidate.
Shareholders should be dismayed that Mr. Pike has dismissed my candidacy.
* Research would show that I have always been a team player in both my business and sporting endeavours. I am able to either give or take directions.
* Institutional fund managers get varied, changing mandates from their investors and their shareholdings are often transient. Other shareholders, who invested their own money, savings and pensions, as I did, are much longer term. Most shareholders originally invested in Lupus because of me, my time and long term expectations for the Company and my track record.
* If Mr. Pike and the non-executive directors are a strong, active and involved board they should welcome me as a resolute, determined CEO reporting to them. Instead, the new independent directors have not even met me enabling them to make comparisons.
This is what I offer to shareholders:
1. I have £9m. of personal money invested in Lupus.
2. My experience successfully embraces acquisitions, integrations, operations, financing, media and shareholders.
3. My knowledge of, and track record with, the Lupus businesses, all of which I acquired, and the people, cannot be rivalled.
4. I effectively founded Lupus and regularly produced record results for shareholders showing proven ability at Lupus.
5. I have a relationship with staff and key management, all of whom I believe would prefer and want to work in a Group operated under my guidance.
6. There is none of the management risk associated with someone unproven.
7. I have been a successful, international FTSE 100 CEO (£5b.sales / £500 m. profits) for many years and thus easily able to run and develop a small business such as Lupus.
8. I have had building products sector experience in the US , UK and Internationally for over 20 years.
9. A third CEO in 8 months is disruptive.
I will further align with shareholders by working for £1 p.a. until the share price reaches 90p. Add my inside knowledge, passion and commitment for the Company and its people, it should be a compelling appointment to consider and make work for shareholders and stakeholders. My management team as well as most shareholders signed up for my vision for the group and the way we ran Lupus. I still own 11.3% of the Company and will scrutinize each decision the Board makes and their performance in detail as well as having the ability to requisition General Meetings.
Please remember that my stewardship of Lupus was praised by the old board and turnaround managers. Shareholders, however, are still paying a heavy price for the decisions made by the banking syndicate headed by the Bank of Scotland . They have cost your Company dearly both financially and in the loss of talented and motivated management. This is precisely what I stood up to for the sake of shareholders. The Bank of Scotland however was adamant that their turnaround men be appointed as CEO and CFO.
Shareholders know there was nothing to turnaround. The costs have been enormous. If ( as was my fear last year) the Company, at the behest of the banks, has indeed gone ahead to switch dollar debt into pounds to cover the banks' risk, I would estimate that the total cost to shareholders so far has been over £15m. This would include more than £7.5m initially, followed by interim management's daily rates and fixed fees, advisors such as stockbrokers, PR consultants, lawyers, extra non-profit-making paperwork and staff, ballooned head office costs, plus no doubt, fees to investigate an attempted unnecessary rights issue. Shareholders should be very concerned about these outgoings continuing. For £15m, BoS merely engineered a bank compliant board and lost all on-going continuity of successful Board level operating directors.
No matter what some large fund managers decide, I would ask you to continue our campaign and vote for all the resolutions. So far we have achieved much: The admission by turnaround men that Lupus was well managed with no black holes, the revelation of their costs, avoiding a dilutive unnecessary rights issue, increasing public awareness of directors' actions, mobilizing over 80% GM voting, greater transparency, and a complete change of board.
Lupus can be a great company. The requisition questions I am asking need to be addressed and not glossed over. I do not seek to remove any directors, but only that your Company should be run efficiently and effectively, with good governance and transparency and with a vision for the future.
For further information or voting assistance please contact me at www.gregegm.com, on firstname.lastname@example.org or write to me at Greg Hutchings, The Boathouse, Crabtree Lane , London SW6 6TY or leave a message on 07706108007.
Lupus Capital share price data is direct from the London Stock Exchange