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Real-Time news about Real Affinity (London Stock Exchange): 0 recent articles
|the_owl: They won't get loans at this valuation, a placing is a definite no no (even if as part of a consolidation). So what to do ...? IMO a low share price with lots of fund & Director interest above is actually quite a good motivator to sort the issues..but how?? They've left it very late, but at least are making an effort to do something ...and they still have a prestigious client base if only they can pull the right levers.
My solution FWIW:
1) They need an AIM shell company (or partner) to confidently invest in RAF to more quickly help them see at least some of the 1.20p value another company saw 2 years ago when an offer was made. Could they for example partner Banks Sadler if they cannot compete?
2) They need a portion of a major corp. hospitality venture e.g. the Olympics, 6 nations rugby, or other big event.
3) They need existing clients to expand ala WH Smith
4) They need to demonstrate what they say (i.e. profits post Mar 2008) suffcieint to cover costs and show the 50% margin they are supposed now to be making as said in previous RNS. Last year achieving 29% was quite commendable.
5) They need analysts to independently give a view and share price target. Is RAF cheap vs its peers? No one knows. A sub par share price is not necessarily cheap if one cannot see the future improving. Nothing RAF has said suggests the level of confidence & integrity they need to show even to get back to par value.
6) Finally they need to be accurate - specially on short announcements such as this. It does no one any favours when an events company cannot even get their web address correct. Sorry, am I the only one spotting that??
Johnmp - as you say its a waiting game now. I think (looking at volumes bought/sold in last year) there are few sellers left. But then not many buyers either.
|the_owl: So they see the share price as being just fine?
Looks like the market is correct again - everything know priced in and RAF worth no more than 0.015 for above NMS sells.
K123 - I agree. Only way forward now is a takeover as even if this is 'the last year of losses', I'm not sure they can afford day-to-day operations from profits they might raise, loans are out (current market climate) and placing would be disastrous.
Holding (for now) but no way buying more.|
|dusseldorf: I suspect any consolidation of share price will be joined with multiple placements to settle existing liabilities...in conjunction with frustrated shareholders selling I believe any price movement would be down post consolidation, however, the figures may help reverse that trend later in the year|
it's not the amounts - it's the liquidity, and the trend.
There's no point in taking big positions in small stocks (which one needs to do with micro-cap's) at non-competitive prices (large spreads).
Yes, it looks cheap & the sums involved are peanuts relatively - but it also did so at 0.3p.
The management are not sufficiently demonstrating the qualities we need to set a trend in the share price at these prices (which is why the price is where it is). I believe its (mainly) a communications issue possibly not so much a fundamental business issue.
If you look at Brent's & Bankside's other companies you'll see the same problems and the same non-addressing of them, leading to the same shaped share charts.
If they wnat to be business men, and not give 2 to the shareholders - then so be it. However, they cannot then blame investors for the low share price which ensues when they want, and need to raise cash & if investors sell early. In a way. a lower share price is safer as it avoids investors being exploited - too much - specially when Mr Ross & other bigger entities have share positions at a much higher share price as they do. We'd like to make some profits from our risk too please.
The best way forward maybe for another company to close the gaps that clearly exist in the communications, and then seek to tap the companies' potential.
RAF have said themselves the shares are not attractive (hence the reason for the steps they will take soon as per RNS). When they address this issue & show a clear & credible earnings path on their c£19m t/o, I'll be happy to be more reckless with my share purchases. Till then its a "scale in and buy the dips" strategy.
All comes down to confidence in the end, and the share price tell's it's own story so wise to be cautious (IMO)|
|the_owl: The share price is a reflection of how the company is run.
What they don't say is 'why' the shares are below par value - for which read prior poor management decisions & bad communication (which of course feeds thru' to adverse market sentiment).
The company management is responsible for how the company is run, and the share price, so if below par it reflects the market view/judgements on how well they are and will perform.
What we need to see is a clear statement the 'small profits' will translate into regular profits, and evidence of why this will happen rather than scam statements which raise the share price enough only for yet more shares to be issued via placings as has been the habit of some of managements other AIM companies.|
though i'm in here too & feel this is very undervalued, don't expect great share price movements.
It's all the same people running (or having in the past been involved) with RAF as ran Global Marine Energy - the Yorkshire lot. You can see by reading the RNS, and catching up on GME's BB, Langbar etc how they operate.
Good management is key to AIM co's so be careful, despite the turnover/prospects etc. We need to make the management, their advisers & everyone else connected with this co work really hard to prove their credibility before they can be allowed to gain from their own, or their institutional supporters shares. They need PI's to buy shares, however the current share price tells its own story, so they need to answer the question "why should we buy shares?".
This starts with meticulous communication (RAF are after all a comms/marketing co! - so should know what this means). Usual running of AIM companies does not apply - they need to be pristine. They do have the benefit of a very good website so that's a plus.
The first thing we all need is a pre-close statement regarding the date of vthe interims & how business is going. Until; then be careful about trusting these guys - they have a record, so check it. All IMO|
|johnmp: not certain why they had to take the shares at 0.3p. I am still waiting for a new rns saying it was 0.03p
The original deal was at 0.2p, with upto 200m defered shares (I would have thought at 0.2p too). If they are forced to take 0.3p then its good news for the current shareholders as we will not see any further dilution of RAF shares. If they have these shares at 0.3p, no doubt they will be ofsetting gains from the original sale against the losses. And its good for the current share price as we dont 150m shares hitting the market at 0.03p when we are currently at 0.05p. Have to assume both parties are happy with the deal.
|dusseldorf: k123 - you mean 0.1p not 1p....
anyway have read the posts from various posters after last few weeks but think a little enlightenment is needed here:
Things you should all be factoring in:
- The company is currently loss making.
- The recent disposal reduces costs, but only to enable break-even trading short-term. Longer term profitability seems on the cards...
- I would estimate after H2, that the company has approx £200k cash in bank, I would like to see more
- The share price face value looks silly, If I were them I would consolidate the nominal in such a way to result in 20 - 30p price
Historic news Dilution no.1
- If CHS is performing to plan, the company still 'owe' £950,000 Deferred share consideration of a maximum of #750,000 may be payable based on
the performance of CHS Ltd for the twelve month periods to 31 December 2007 and
31 December 2008. #250,000 will be payable if the audited Gross Margin (defined
as Gross Profit less Overheads, but excluding any additional overheads, charges
or costs specifically and additionally incurred by CHS Ltd at Real Affinity's
request) in respect of the twelve month period to 31 December 2007 is at least
#50,000 and a further #500,000 will be payable if the audited Gross Margin for
the twelve month period to 31 December 2008 is at least #150,000. The price at
which the deferred consideration shares are issued will be the average
mid-market price for the seven dealing days prior to the end of the respective
twelve month period ("the deferred shares issue price").
In addition, where deferred consideration shares are issued in respect of 2007
or 2008, the Company will in either case grant options to the Vendors over such
number of new Ordinary shares as is equivalent to #40,000 at the relevant
deferred shares issue price. These options will not be exercisable for at least
Deferred cash consideration of a maximum of #180,000 may be payable. In respect
of the twelve month period to 31 December 2007, a maximum of #60,000 will be
payable if audited Gross Margin of #200,000 is achieved, reducing pro rata such
that no cash consideration will be payable where audited Gross Margin of #50,000
or less is achieved. In respect of the twelve month period to 31 December 2008,
a maximum of #120,000 will be payable if audited Gross Margin of #450,000 is
achieved, reducing pro rata such that no cash consideration will be payable
where audited Gross Margin of #150,000 or less is achieved.
31 December 2007 is only approx 4 months away and at present I doubt they would want to a) issue shares in consideration or b) have the available cash.
Historic news - Dilution no.2
- Real Affinity plc, ("Real Affinity" or "the Company"), the AIM-listed marketing
services group, announces that it has conditionally agreed to acquire
Conferaccom Limited, a company which trades as Venues Unlimited ("Venues"), for
a maximum consideration of #2m ("the Acquisition").
The consideration comprises an initial payment of #750,000 to be satisfied as to
#500,000 in cash and the balance by the issue of 125m new Ordinary shares at
0.20p per share ("the Initial Consideration Shares"). Deferred consideration up
to a maximum of #1,250,000 (to be satisfied as to a maximum of #600,000 in cash
and up to an additional 200m new Ordinary shares) is payable in two tranches
conditional on the net profit after tax performance of Venues for the years
ending 31 March 2007 and 2008.
So in essence between now and end 2008 approx £2m in deferred consideration - maybe this explains why the price is where it is?
IMO the company will/may announce a consolidation of price and fundraising hence the reason the price is where its at. I don't know either way but makes sense doesn't it?
Do I think the co is going under? no....
Do I think there performance will get better? yes....
Do I think they will consolidate share price? yes
Do I think there will be further share issues? yes
Will I be buying in the near future? no
Will I be waiting for some of the above issues to be resolved? yes
Will I be buying in the medium term future? yes
Will the price go any lower? if consolidation and further issue occurs, who knows, safer to sit and watch
What do I think turnover will be? about £15m
What do I think trading result will be? Probably £600k operating loss with a further £0.5/£1m write down for something or other in 'Goodwill'
Will the management indicate profitability in 2008? yes, and they will probably be right this time.
..... and the above is just my opinion and I could be completely wrong and you all make 100% profit when results are released next week..Hope that helps remove some uncertainty
FYI I held a long time ago, but sold out given the length of time for recovery. I think the thread header would have been better titled '2008 the year for recovery'|
|johnmp: Was this the email knowing?
The company will not be making an announcement regarding the current share price because there is no apparent reason for its current level.
Not for or against, the share price as fallen due to uncertainty? If/when we get some results I hope to see the share price moving up again.
|bowlhead: Here's my thoughts on RAF (which I hold)
Valuation step 1:
LGB comes back with confirmation of current NAV £1-£2 depending on existence of assets, amount spent on due diligence, asset value obtained from selling the 2009 term deposits, etc.
Valuation step 2:
LGB share price to NAV ratio will after verification surely be improved from where it was shortly before suspension (i.e. 50%-75% discount on alleged NAV).
Perhaps it will improve to somthing like 25-40% discount to NAV. People thinking share price will suddenly equal NAV are dreaming (due to fact that all assets are either already, or shortly to be, long-term in nature (such as property portfolio or substantial positions in UK smallcap companies) - directors have confirmed intention to have no time-limits on investment period while attempting to provide gains, no current intention to liquidate assets to provide cash to shareholders, and the current collection of directors have no particular track record to imply they will maintain or improve NAV over the longer term by picking well in their investments. But I don't dispute a positive announcement on un-suspension will reduce the discount factor - from 50-75%, to 25-40%.
So, LGB NAV £1-2 = current LGB price £0.60-£1.50
Valuation step 3:
The offer of 1/200 of an LGB share for RAF = 1\200 times the £0.60-£1.50 LGB price gives RAF at 0.3-0.75p. However:
RAF shares need to be valued at a discount to LGB shares because the offer has not yet been confirmed and approved, hence they are not LGB shares yet, and if the offer does not complete, RAF holders will be left simply with RAF shares, RAF being a company whose core business loses money and has no future without access to LGB funding (as confirmed by RAF directors in the offer RNS).
Suggest 20-33% discount to 'safe' LGB shares, i.e. fair RAF price = 0.2-0.6p
My investment decision:
The offer price at the moment is bobbling aroung the 0.3p mark at the moment, i.e. somewhere towards the bottom of that range, with plenty of upside. However there's also downside (BIG downside if offer does not complete) and so whilst I wouldn't sell my holding under 0.5p at present, I wouldn't buy any more at 0.3p either. With the ridiculous spread the marketmakers offer, the mid-price would have to hit 0.2p or lower to allow me to buy at acceptable levels (ie. low 0.20s)|
Real Affinity share price data is direct from the London Stock Exchange