Record Share Discussion Threads

[hugepants] 08/3/2012 14:17

I don't think anyone is arguing this has been a hopeless investment and the directors are massively overpaid given the share price carnage they have presided over. They should probably all resign.

However its going to be pretty difficult for the share price to drop any lower given the balance sheet and the fact the company is still making money. Your 6.5p forecast looks a bit ridiculous.

The directors salaries have fallen roughly in line with the decrease in profits. OK they are still stupidly high but at least the company is still profitable. Also the cash has dropped because its all been paid out in dividends.

[davidosh] 08/3/2012 13:31

HugePants stated...

Bottom line is REC have 9.7p per share net cash plus a further 1.8p of investments in their own funds. That compares with current 11p share price. The balance sheet puts a floor on the share price IMO.

For NEXT year forecast earnings year of 1.3p (PER of 8.5) and forecast dividend of 1.5p (yield 13.5%)


HugePants,

You seem to feel comfortable that all the key metrics are falling. I guess you invested much higher and think that the dividend is great whilst losing such huge chunks of capital ?

Lets look at the cash you mention from the last three results...

H1 to Sept 2010....£27.1m (interims)
H2 to March2011....£24.7m (finals)
H1 to Sept 2011....£19.6m (interims)
H2 to March2012.... ???

We will not know until June but those cash reserves are depleting rapidly so your 9.7p of cash that was 14p of cash in 2009 is not quite the floor that you suggest hence the share price is following it downwards !!

As for that dividend ! In the last finals the company paid out 4.6p in dividends but had only 4p of earnings. The missing 0.6p has to come from somewhere and it certainly did nothing to support the share price other than sucker a few more very temporarily into the company thinking it was a great income stock forgetting it is also the markets worst capital appreciation stock !!

The company and the brokers look like suggesting the same trick again next time with an uncovered dividend payment if you look carefully....

'For NEXT year forecast earnings year of 1.3p (PER of 8.5) and forecast dividend of 1.5p (yield 13.5%)'

Is there a charity covering these extra payments or is that another notch downward for the cash reserves ??

Last five years eps and projection are horrific reading

2008..12.6p
2009...8.7p
2010...5.4p
2011...4.0p
2012...1.9p (forecast)
2013...1.3p (forecast)

Earnings are halving every year so that is why the share price is collapsing.

Meanwhile check out the directors remuneration and tell me how many millions have been paid out in that same period and at what point they are going to spend their loose change and take it off the market at 5p.

There needs to be major changes here as I highlighted and the best start would be the headline figures and remuneration policy. If the company is currently trading on a multiple of 5x eps whilst forecast to do 1.9p then it will probably trade at 6.5p when 1.3p becomes reality.

Why did this company ever float in the first place ? Only 25% are held by outsiders and they have been mugged from day one. If these are so cheap now surely Schroders would buy every share available to add to their 6% but NO !

If you were getting paid a million a year whether the company improves earnings or collapses them then would you want change ??

[chrisdgb] 08/3/2012 12:53

Cheers HP, I couldn't have put it better myself...!!

[hugepants] 08/3/2012 12:47

It needs an increase in clients and revenues then hopefully a turn in profit allied with a change in remuneration policy before investors will look sensibly here for an investment IMO.

By the time all these have happened the share price is 50%-100% higher.

Bottom line is REC have 9.7p per share net cash plus a further 1.8p of investments in their own funds. That compares with current 11p share price. The balance sheet puts a floor on the share price IMO.



Forecast earnings for this year is 2p and forecast dividend of 1.5p.

For NEXT year forecast earnings year of 1.3p (PER of 8.5) and forecast dividend of 1.5p (yield 13.5%)

[davidosh] 08/3/2012 08:38

Chrisdgb....What positives are you expecting ? Sadly for the last four years everything has gone south ... Client numbers, revenues, profits, cash reserves and even dividends collapsing now! There needs to be a bottom or this share price will keep falling.
Anyone who invested four years ago has lost 93% of their capital. If they invested just a year ago they have lost 50% and in just the last three months 25% of investment value has eroded.
It needs an increase in clients and revenues then hopefully a turn in profit allied with a change in remuneration policy before investors will look sensibly here for an investment IMO.

[chrisdgb] 08/3/2012 08:15

Volume dried up yesterday....really need some positive news here..

[pictureframe] 06/3/2012 14:57

Blue - no mean feat in todays market

[pictureframe] 06/3/2012 11:19

The volume has been building for some time now

[hugepants] 05/3/2012 22:07

1 million trade at 11.3p. Maybe there's no more and this mutt can rocket back up to the 20p level.

[pictureframe] 02/3/2012 13:18

This is being walked all over the place !

[chrisdgb] 02/3/2012 09:31

Here we go again on the volume, order book looks good, 550- on the bid at 11 and only 50- on the offer at 11.25.....

[chrisdgb] 02/3/2012 08:58

WINS did the business again yesterday, trading both sides as they reflect over 2m traded..

[contrarian2investor] 01/3/2012 21:42

HugePants, "My guess is one of the larger shareholders has sold a chunk of shares to the MMs at 11p and they are happy to shift them at 11.5p-12.5p". That is a very good point and not one I had considered.

Do you think there could be any (however minor) read across from EMG's results today?

[142minty] 01/3/2012 18:04

big volume buyer at 11.5p - when this going to get marked up?

[chrisdgb] 01/3/2012 13:40

Let us hope so, we desperately need a positive catalyst./..

[pictureframe] 01/3/2012 10:38

Final shake out today?

[hugepants] 29/2/2012 18:58

Well on a cursory glance each day it looks like it has been mainly buys here for months. Not in big volumes but over a considerable period of time. Im no expert but given the FTSE has bounced 20% I would have thought the market makers would have marked this up even on the modest buying that has occurred. My guess is one of the larger shareholders has sold a chunk of shares to the MMs at 11p and they are happy to shift them at 11.5p-12.5p. We shall see.

[contrarian2investor] 29/2/2012 18:39

HugePants if you look at the daily volumes over the last month you will see that volumes have been paltry. REC has not bounced yes because their has not been any significant buying. However value investors could be dipping their toes in now that it is trading near book value.

[chrisdgb] 28/2/2012 08:31

WINS traded over 400- shares yesterday, let us hope we can finally bounce of these depressed levels...

[142minty] 27/2/2012 12:05

if they took this company private it would make expansion much harder in the US - they need to be listed. Also there would be little point on current PT profits IMHO. I see the Apha Funds( see Bloomberg) have soared recently whcih may bode well for future AR customers/contracts if anyone still has the appetite to play the carry trade. I believe they will capture new mandates , esp in the US .very hard to buy in quantity.

[hugepants] 27/2/2012 09:27

If there wasn´t a large seller this would have bounced like everything else IMO

[contrarian2investor] 24/2/2012 18:59

Sorry to hear that P Bear.

REC is currently trading at book value and a derisory PE below 4. This is because AUM and share price have fallen nearly 50% and 93% respectively since IPO.
The recent volumes don't indicate a big seller, but I can't see any larger buyers either.
The share price flatline could continue until increases in AUM/Income & Profit are forthcoming. Otherwise the dividend will have to be slashed. Markets/investors/sentiment are fickle, as a reduction in dividends to a more sustantable level could actually be seen as a positive.
What about Neil Record's frustration with the share price performance since IPO? As anyone considered the possibility that he could just decide to take the company private again?

[hugepants] 24/2/2012 16:06

Obviously still a large seller. Everything else has bounced (especially high yielders).

[masurenguy] 24/2/2012 09:58

P Bear - 205: High director remuneration also leaves a bad taste in the month.

Well what else would you expect - these poor guys really have to compensate themselves from
the serial decline in their dividend income !

[p bear] 24/2/2012 09:10

I already took a punt here at a much higher price!

Many aspects still look solid here (balance sheet, yield, good revenue, model is proven and should work again), but nothing inspires me to buy more as (like you) I see no catalyst for change. When they pick up a new customer or improve fees - then I'll be very tempted at similar levels. High director remuneration also leaves a bad taste in the month.