||EPS - Basic
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Real-Time news about Orbis (London Stock Exchange): 0 recent articles
|sharw: In theory the company's listing will be suspended on 17/3 but I suspect it will be sorted before then with little value, if any, for ordinary shareholders.
You have to remember that the banks are in control of this followed by management. The banks would have pulled the plug in July 2003 but for the fact that the company had net tangible assets of minus £46m. Ordinary shareholders were stiched up at the time - vote for the new arrangements or the company will go into admin. and you will have nothing.
You also have to remember that:
1) if there is an offer for the company the banks can convert their preference shares and existing shareholders will be left with 9.9% of the enlarged equity.
2) Management will be rewarded on a sale of the company. The latest figure we have for net debt is £59.2m at 31/3/07. The enterprise value of the company is this plus market value of shares - currently about £0.1m. If the company were sold for EV £59.3m management would receive £1.704m (£320k less in the event of a MBO).
With these two huge vested interests it is no wonder that both non-execs., with their duty to ordinary shareholders, have found themselves in an impossible position and resigned.
The only reason I did not get out of this one years ago is that, following an earlier spectacular crash in share price, my holding is worth less than the cost of dealing.|
|frederico3: Orbis Stmnt re Share Price Movement
20 September 2007
20 September 2007
Orbis plc ('Orbis' and the 'Company')
Statement re: Share price movement
The Board of Orbis plc notes the recent share price movement and announces that
the Company is in discussions which may or may not lead to an offer for the
entire issued and to be issued share capital of the Company. There is no
certainty at this stage that these discussions will result in an offer for the
Company or that any such offer will result in value to the ordinary
|aleman: 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: Share price moved! Wrong way, though.|
|richardbonny: 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.|
|aleman: 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?|
|pylon: RNS Number:1767J
01 March 2005
ORBIS PLC ("ORBIS" OR THE "COMPANY")
SHARE PRICE MOVEMENT
The Board of Orbis has noted the recent rise in the Company's share price and
confirms that it is in preliminary discussions which may or may not lead to an
offer for all or part of the Orbis group. There is no certainty at this stage
that a formal offer will result from these discussions.
A further announcement will be made in due course as appropriate.
Orbis PLC Tel: 01895 465500
David Heppell, Chairman
Michael Holmes, Chief Executive
Close Brothers Corporate Finance Limited Tel: 020 7655 3100
The directors of Orbis PLC accept responsibility for the information contained
in this announcement. To the best of the knowledge and belief of the directors
of Orbis PLC (who have taken all reasonable care to ensure that such is the
case), the information contained in this announcement is in accordance with the
facts and does not omit anything likely to affect the import of such
Close Brothers Corporate Finance Limited which is regulated by the Financial
Services Authority in the United Kingdom, is acting for Orbis PLC and no one
else in connection with the matters described in this announcement and will not
be responsible to anyone other than Orbis PLC for providing the protections
afforded to customers of Close Brothers Corporate Finance Limited nor for
providing advice in relation to the matters referred to herein.|
|pylon: This company announced last month that it is in negotiations which may (or may not) lead to an offer. Not heard anything yet - in fact the share price has fallen back.
Any one any thoughts?|
|day_dreamer: The share price suggests it could well happen as well !
Lots of companies issue bid talks and nothing comes of it.
I've sold half and will let the other half which happen to
be free shares now as i bought right at the bottom, very very
lucky to have caught Obs so well but that's the perks of keeping
bombed out quiet penny shares on your monitor and keep checking
the online quotes for changes, every dog will have it's day and
you have to be there to catch it !
|day_dreamer: There should be a warning attached to all of your posts Stephen,
i really hope there's nobody out there that believes anything you
say, for now you are getting lucky but your going to push it too
far and find yourself holding a stock for a quick trade that suddenly
pulls the plug and gets suspended and then you will have nothing.
OBS share price is not dropping like a stone for no reason, they are upto
the hilt with debt and time is running out.
Another bull trap by the mm's methinks !
Orbis share price data is direct from the London Stock Exchange