Reed Health Share Discussion Threads

[jpmorgan] 08/3/2004 21:24

Gorilla,

Not sure about CSV, but Nestor have highlighted difficulties in NHS markets and are predicting flat growth for year.

Are you aiming to short this one based on research?

JPM

[happyjoe] 07/3/2004 09:55

I've got the interims through, look preety good to me. I think the Gorilla must have spoken to someone who just got fired.

[jpmorgan] 26/2/2004 21:44

Have reviewed the interim results this evening. I have tried to group quantative/qualatative analysis on three potential scenarios regarding RHG.

Summary thoughts are below:

(1)Reed Executive takes over RHG in next half year and takes advantage of scenario 2 buying an earning enhancing propostion.

(2)The increase in senior management, integrated IT, and increased branches is laying foundation for a solid £6m profits profile (with associated cash flow) from July 04 onwards. Current market value is c£30m with no long term debt. Issues related to PASA etc should have been mitigated by this point.

(3)A potential worst case scenario looking forward is that RHG is now in a commodity marketplace in 2 divisions. Thus RHG is currently unable to leverage profits effectively on large turnover due to intense competition and smarter working by the NHS. Thus profits will remain static under 5m for short to medium term.

Cannot clearly get a view on whether scenario 2 or 3 or mix is likely. With real cash inflow continuing and markets growing I will wait till full year results before choosing to sell or remain long term holder.

Any thoughts on RHG by BB?

JPM

[jpmorgan] 20/2/2004 12:24

Schober,

My research file shows:

Reed Family Interests Own: 38.3%
Schroders: 26%
Other: No major shareholders

This may have changed will check sources at interims. Due to relative small size of company there is limited coverage and knowledge by analysts/press which means could get RHG at a good price. As AR has such large holding it would be very difficult for any other company to bid.

Guess it would come down to current management at RHG who have basically been appointed by AReed.

Best wait for the results to assess the numbers to see if there is still value being added to the company.

JPM.

[schober] 20/2/2004 12:08

suspect that a reed might find it harder to buy back rhg than he did reed executive - do we know the % of instituional shareholders?

[jpmorgan] 20/2/2004 12:02

Andy,

Not sure how the abacus/director holdings work but see your point that the company is not flawed otherwise would not keep reinvesting.

If the numbers in results show the branch openings are adding value, and costs are held down in terms of new directors I will likely hold for long term and reinvest dividend into shares at current price.

Glad schroders have a significant holding (small in their portfolio) as they can counterbalance the Alec Reed influence to a certain extent.

Will await results to assess numbers. Nestor update due soon should provide wider context.

Cheers,
JPM.

[suahb] 20/2/2004 11:43

JPM - agree, they are driving the price down for thier own gains in the long term. Plenty of director purchases etc. recently which would be odd if something really fishy was wrong.

andy

[schober] 20/2/2004 09:35

those trades on the 18th look very susppicious - all sells between 4.00 and 4.30!!! dont think it was a tree shake
Oh well lets hope all those non compliant nurses can find those bits of paper , bring them in to reed and become compliant.

[swizz] 20/2/2004 08:36

Just bought for the first time, looks a touch overdone to me.

good luck.

[jpmorgan] 19/2/2004 17:57

Marketmakers shaken the tree yesterday from 103p to 90p, and got 27k shares. Got more today, and then guess what sold all to single buyer at 92p. Expect good news next week.

JPM.

[jpmorgan] 08/1/2004 17:50

Trades, and price up. More stakebuilding by Shroders possibly. Interims due at end Feb2003. Expect some negative news on NHS professionals effecting Nurse staffing areas of the business, but this is a very small percentage of overall profits. Expect continued growth in all areas and good set of results looking at the sectors the company operates in.

IMHO, DYOR, JPM:)

[sreddy] 07/11/2003 12:46

HappyJoe,

Can't see what you are posting, but have you noticed that CSV is now 11.625p mid. Re your performance challenge to us CSV'ers, RHG would have to be at 143p to be on a par. I don't think it is, is it?

Ah, there we go - RHG responding to good US employment numbers. I wonder if CSV has any US business?

[happyjoe] 07/11/2003 10:43

Welcome HJ
I do as I am told and look what happens!
If CSV has gone up, then it's a good time to sell.
You'll be able to buy the shares back for less within
2-3 weeks. (IMNVHO)
Can you do that whizzy tealeaves stuff for RHG and tell me what the prospects are?
I choose my own value for a share. This one is secure with upside. Sometimes right sometimes wrong. If the CSV price goes up it is (IMNVHO) because someone isn't aware of all that is happening with the company. So take advantage because you are!

[hughey7] 07/11/2003 10:31

h.j
csv up again today :-)

[hughey7] 07/11/2003 01:46

Hj
Buy csv
you know it makes sense :-)

[happyjoe] 07/11/2003 01:41

How do you value this company? 10 x profits would seem reasonable so the company shuld be valued at between 50 and 60m. I'm going to bed some in here for 6 months and see if the market agrees.

[jpmorgan] 05/11/2003 23:23

10% rise over last 2 days, with significant trades when overall market down. Similar scenario as Reed Personnel takeover, or further Schroder stakebuilding, either way nice to see some big buyers.

JPM.

[jpmorgan] 27/9/2003 10:53

Have reviewed the results. Overall am pleased. Some highlights include:

Positive
========
>Decent profit margin (6.8%) and net cash inflow of 8.8m
>Lord Sawyer remaining as non-exec director
>5.5 million operating profit
>Increasing dividend which can be sustained
>Health markets still active/growing (as opposed to IT recruitment!)

Neutral
=======
>The takeover of Locum by RHG has really become a reverse takeover with both Chairman, and Chief Exec from Locum. I do not consider this a pure negative currently, as results appear positive, and Locum had a good record of growth.

Negative
========
>NHS professionals looks like it will succeed, which in the long term could cap profit margins and growth for nursing. The concept in the longer run could be applied to all professionals though think this unlikely.
>Increasing net administrative costs, and lots of new director level staff which if cannot add value I consider a negative.

Prospects for next financial year appear positive as the marketplace for RHG sectors are still active. Nestor statements support this view also.

This marketplace should help support operating profits growth by 15-20% towards 6.5+ million no debt, and increased shareholder funds. Current market valuation of 36million.

A famous saying by Benjamin Graham, is "in the short run, the market is a voting machine, and in the long run a weighing machine". Sentiment is still against RHG due to poor practice by Alec Reed last year, but the business in the big picture is growing in a growing marketplace with experienced management.

If Alec Reed does not bag a bargain with takeover, results will rerate the share to a more respectable level over time.

All IMHO.
JPM.

[ok,yah] 24/9/2003 14:23

Just had a quick look at results and they're better than I expected in terms of the increases in both turnover and growth. The dividend is substantially up so glad to be holding. Encouraging that the new acquisition is doing well.

I would expect this to go up now but we shall see

[jpmorgan] 24/9/2003 08:24

OK,yah,
Will review results in detail this evening. What are your thoughts?

JPM