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OBS Orbis

0.56
0.00 (0.00%)
Last Updated: 00:00:00
Delayed by 15 minutes
Share Name Share Symbol Market Type Share ISIN Share Description
Orbis LSE:OBS London Ordinary Share GB0033271601 ORD 10P
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  0.00 0.00% 0.56 - 0.00 00:00:00
Industry Sector Turnover Profit EPS - Basic PE Ratio Market Cap
0 0 N/A 0

Orbis Share Discussion Threads

Showing 1301 to 1322 of 1375 messages
Chat Pages: 55  54  53  52  51  50  49  48  47  46  45  44  Older
DateSubjectAuthorDiscuss
20/9/2007
12:02
I wish wins would push my penny stocks to the moon, but now it's Evo
on the bid, sitting here watching this at 1.5-1.75p and did not buy,
if i had bought it would have gone back down...sods law

dangerous brian
20/9/2007
10:08
maybe worth a top up?/
ibs7491
20/9/2007
10:03
Offer gone up now. It doesn't take much though. Up 27% now - LOL!
aleman
20/9/2007
09:44
Year end a couple of weeks away. Should have a good idea of numbers now which might help some kind of deal get concluded.
aleman
20/9/2007
09:30
Unless the news has leaked that capital restructuring is succesful....perhaps? But then it is already so low.....
davidlloyd
20/9/2007
09:30
Biggest riser on the market this morning. LOL! Haven't seen a trade for a while, though. Just MMs playing out of boredom I think.
aleman
11/9/2007
09:32
Bloody hell! The first uptick I've seen since I bought in! I wouldn't have expected without news coming.
aleman
03/7/2007
14:58
Oh dear. There's me thinking a bid at 9 x cashflow would put the shares into the money but the market seems to disagree.
aleman
30/6/2007
17:51
Interim turnover was £19.98m. Just for comparison these were the forecasts for adjusted profits. It will be interesting to see how they are adjusted.

30-Sep-07 40.50 1.97 9.89p 0.3 0.0 +14% n/a 0.0%
30-Sep-08 41.00 2.19 10.96p 0.3 0.0 +11% n/a 0.0%

aleman
30/6/2007
17:10
Operating cashflow was around £3.2m if you adjust for stock and creditor movements. It has been surprisingly stable in the past. I'll guess you can add back £200k for industrial action in France. Development costs for new contracts will have depressed cashflow in H2 but will add in the coming year. That is hard to guess but I think it is quite possible cashflow in the year ahead will hit between £7m and £8m. In fact this looks quite likely. At 8 times cashflow the ungeared company is worth £60m if we call it £7.5m.

Pref holders get 90.1% until they get their £15m back. This occurs at £16.65m after which they only get 1/3rd. A £60m purchase today assuming the £38m debt (after cash and prefs) would leave £22m so shareholders only get 2/3rd of (£22m - £16.65m) = £3.57m + the original £1.65m (9.9% of the £16.65m threshold)makes a total of £5.22m. The management entitlement of 6.4% of (£22m + £15m +£38m) = £4.8m leaves £0.44m to share between ordinary shareholders. I have ignored current liabilities of £5m (I offset the cash against long debt) but any increase in the offer price of a bid would soon knock this out. Basically shareholders come into the money when the possibly buy price hits £65m and this is reducing by the month. At 8 times cashflow, that would require operating cashflow of £8.125m.

It is conceivable that the company might look like making £9m in another year's time from £7.5m this year, and shareholders would get two thirds of the extra £7m purchase price over our breakeven. £4.67m is 11 times the current share price and I think shareholders should be prepared to vote down any deal that does not reflect this. I think the shares are undervalued and are effectively a good value option. My gut feeling is the shares should be 2 or 3 times the current price but are weighed down by disillusioned long term holders selling out in a trickle with no new buying interest.

I admit this is fairly optimisitic, but the upside is tremendous even if the shareholders are given a smaller stake in future and the shares represent a very risky option, but one that is underpriced. Everybody can win if negotiations are sensible.

aleman
29/6/2007
22:59
That is mostly just writing off goodwill and is not really relevant. The value in the shares is getting operational cashflow up so they can sell the business and pay off the debt, although there is more for everyone if they can roll over debt arrangements and carry on growing the business and pay the debt down.

The problem is the rewards after that accrue to stakeholders differently and the banks will be looking for more. If have suggested making the prefs convertible would be a good start. I could see that being simple and acceptable although I think the banks will still try for more, but perhaps not much more.

Shareholders get to vote on any deal so you can't offer them too little. Just who gets what is very hard to predict. I just want to see cashflow up next time and it seems reasonably positive in that regard. I still think there is more to be had for shareholders here than the shareprice suggests, but not much until the deal is done.

aleman
29/6/2007
22:50
Company now has a shareholders equity deficit of £4.4 million implying that it is well and truly bust. Not a situation lending banks will be happy with. But a debt for equity swap would solve that. However I doubt there will be much if anything at all for shareholders in the deal. Some very creative accounting is needed along the lines of Eurotunnel.
richardbonny
29/6/2007
22:35
Great spot sharw. It doesn't look too bad. Cashflow was a bit weaker but was hit by some temporary trouble in France.

Industrial action in France in October 2006 caused some reduction in turnover and profit. This issue has now been resolved and has resulted in better working
practices. Competition has continued in France and has resulted in the loss of
a few small projects as well as causing downward pressure on prices. However,
opportunities for future growth in France remain strong with more Agence
Nationale pour le Renovation Urbaine (ANRU) projects announced. The French
business has already been successful in winning ANRU tenders.

They have even invested a little to support new contracts so there could be some growth.

Major contracts were won in Sheffield, Nottingham and Lambeth, but these have
required the company to incur additional set-up and mobilisation costs in the
six months to 31 March 2007, prior to commencement of the contracts.

Czech and Polish closures may save on a few small costs. A few factrs held H1 back but H2 definitely looks more promising. There is a question over rising interest rates, though. The underlying business is still clearly sustainable if we can get a reasonable refinancing sorted. I don't think this one is as dead and buried as the shares suggest. Have we been poised for significant growth before?

The board believes that the group's management teams have repositioned the
business to take advantage of outsourcing and private sector opportunities.
They believe that the group is poised to achieve significant growth in the
future.

aleman
29/6/2007
22:19
In case anyone blinked and missed it, the Interim results were sneaked out after the market close today (link at head of page).

No news on the key item:

"As previously announced, the group is currently in discussions regarding a
capital restructuring prior to the expiry of the current finance arrangements in
July 2008. To date, Orbis has operated within its debt facilities and has
continued to receive support from its lenders to ensure that debt facilities are
matched to existing cash-flows".

sharw
17/5/2007
15:21
Share price moved! Wrong way, though.
aleman
03/4/2007
09:27
Thanks, rb. You now seem to be seeing a little of what I'm seeing, although I'm not really thinking of a takeover now so much as one in 5 years, but that means getting through next year's debt refinancing. The question is how the directors see their interests in comparison to shareholders. Do they want cash now or are they prepared to take a firm line with the banks and keep working hard for a multibagger? I was hoping a long term holder might talk to me, preferably one who had met the board. I'm guessing that the board would prefer a multibagger in 5 years after going through some hard times in the last few years. If they wanted to take the money and run, they could have taken something out of the bid approach a couple of years ago. I suspect it is in everyone's interest to come to a reasonable refinancing arrangement, but who knows what happens when there is money to be had. I tend to think the shares should be a couple of pence higher but are being held back a little by bored sellers relieved to be off the lows, and that that value is rising like share option coming into the money. .
aleman
03/4/2007
07:41
Sorry yes long term debts are £56m - I was looking at the company balance sheet not the consolidated balance sheet.

I agree with what you say that there is potential for a multi-bagger if a buyer could be found for the company in a debt free condition.

When the company was reconstructed a year or two ago I don't think the Board thought the share price would ever get as low as it is now. I think they thought its value would be at least around the £20 million level. But unfortunately the market (or possibly the market makers) didn't agree. It is frustrating for shareholders to see that in 2006 they were able to spend from cashflow £2.345 million in capital expenditure which is around 5 times the current market capitalisation. Why not just give shareholders the money instead!

Shareholders do have some power as the company cannot be reconstructed or sold without their agreement. Only the holders of ordinary shares are able to vote as I understand it. Therefore, shareholders can hold out for a reasonable slice of any deal otherwise they should reject it. However, any deal is likely to be presented as a fait accompli by the Board on the basis of 'accept it or we call in the administrators'. That is how Boards usually get what they want. However there could be something for everyone if they are smart enough.

richardbonny
02/4/2007
14:34
A response! Thanks, RB. The trading statement suggests business is picking up. Where do you get £69m from? Long term debt is £56m including £15m for preference shares, so the total is £41m as of last September. Short term assets are slightly negative to the tune of £2m, though, but cashflow since then probably takes care of that.
aleman
02/4/2007
14:07
Aleman - I doubt whether anyone would pay anything like £56 million for the stripped out business although cashflow is encouraging as you point out. The problem is it is still a declining market and cashflow is more likely to go down than up in my opinion. According to the last accounts net cash inflow from operating activities was £10 million (for 18 months) so that is running at £6.6 million per year. The year before it was £5.5 million. I would have thoguht £6 million was quite optimistic really so applying your factor of 8 gives a value of £48 million. However, the debts (amounts falling due after more than one year) are shown as £69 million. ie the company has a value of minus £21 million. Difficult to see how there can be anything for shareholders?
richardbonny
30/3/2007
14:52
Right I see from futher checks that the above is wrong. Pref holders get 90.1% until they get their £15m back. This occurs at £16.65m after which they only get 1/3rd. A £56m purchase today assuming the £39m debt would leave £17m so shareholders only get 2/3rd of (£17m - £16.65m=) £350k + the original £1.65m (9.9% of the £16.65m threshold) but the management entitlement of 6.4% of (£17m + £15m +£33m) = £4.54m would wipe it out.

If we assume the company pays off another £6m by July 2008 from Sept 2006, a £56m purchase is £23m + £33m debt. £23m - £16.65m = £6.35m less the management's £4.54m (£23m + £15m + £33m) leaves £1.81m of which shareholders will get £1.21m. Add back the £1.65m from the £16.65m threshold and joe punter shares £2.86m for a risky 6-bagger with lots of questions.

The main question is does everybody benefit if the debt is rolled over another 5 years. Suppose the company grow a bit and pays down all the debt. A sale in 2013 for maybe £64m (8 x £8m op cashflow) means shareholders get £1.65 of the first £16.65m and 2/3rds of £47.35m after management's cut which I make £2.08m. 2/3rds of £45.27m is £30.18m plus the £1.65m from the first £16.65m makes £31.83m to share amongst the ordinaries or 228p per share. Management make a load on their shares as well as the £2.08m. Banks get £15m plus (1/3rd of £45.27) £15.18m, so more than double their money.

Compared with my earlier incorrect example shareholders look set to get less now but a lot more if the debts are rolled over. The banks are slightly worse off than I thought. I suspect they will want to strengthen their hand and get a better grip of equity with things looking better in years ahead. Perhaps just making the prefs convertible to ordinaries at any time would do the trick. Current shareholders would then get £1.65 + (£45.27 x 10%) = £6.18m. The ordinaries would be a 14-bagger and the banks would nearly quadruple their money, being able to sell out ahead if they wanted.

The lesson from this exercise seems to be that the ordinary shares are worthless as of the last balance sheet, but are pretty quickly growing into the money, and have some pretty serious multibagger capacity, even if the banks push for a bit more, provided they don't get too greedy and business stays steady. This seems a real gamblers share but I think the odds are interesting. I think there could be more value now in the shares than is reflected in the price. Much depends on a potential takeout price of 8 x operational cashflow less debt. Comments, please, if anyone is there. I would like to know if I am again making a wrong assumption.

aleman
29/3/2007
10:28
Hello? Anybody here to discuss my analysis?
aleman
28/3/2007
09:39
I'm really interested in this one so would be obliged if an old hand would consider the assumptions I am making when looking at the company's prospects to see if they are correct. The underlying business seems unexciting but sound and may even have some growth to come after recent contract wins. Operating cashflow looks to be around £7m for the year ahead. If an outsider were to buy the stripped out business in the next year, they might pay 8 x cashflow which would be around £56m. If this happened the banks preference shares would convert so that existing shareholder would get 10%. The £15m converted prefs would come off the company long term debt leaving £39m. Short term debt would be pretty much covered by existing cash plus any generated in the months ahead. Shareholders would then have £17m to share between them, so current shareholders would get £1.7m - equivalent to 4 times the existing share price. The shares seem like an option based on the premium over long term debt, distorted by the politics of negotiation between interested parties in the year ahead. Whilst there could be winners and losers, it strikes me the best result would be to make everyone happy. The banks would like to have their money back and serviceable loans in future. They won't really want the equity I would have thought. The management will want to have a large stake in a cash generative business. It is conceivable they will just roll the loan over another 5 years and allow the banks to convert with a view to selling when appropriate. I think such a cash generative business could pay the £39m down in that time if it grew just a little. The underlying business would then be worth perhaps £60m, i.e. £6 to existing shareholders - 20 times its current value - and the banks' 90% would be £54m with their loans paid back, which would be 3.6 times the current prefs value. To me logic says the recapitalisation should be to balance interests out by making the prefs convertible at any time into 97% of the shares to give the banks £58.2m in 5 years and existing shareholders about £1.8m. This gives both a roughly 4 x return of about 30% per year and allows the banks to convert and sell early if they want. Perhaps tilting the balance a little to shareholders would motivate managment better and create good relations. Either a takeover or rolling over the debt suggests the shares are probably a decent investment at this price. The problem is if either side gets too greedy and can't reach a reasonable consensus. It suggests to me the shares are worth a small punt. They could do quite well from here although they are unlikely to be a 10-bagger anytime soon, and you could lose it all if relations turn sour. Am I making any wrong assumptions, please?
aleman
Chat Pages: 55  54  53  52  51  50  49  48  47  46  45  44  Older

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