Romag Holdings Share Discussion Threads

[pugugly] 09/9/2010 12:21

Masurenguy and Vulgaris: Many thanks for your knowledgeble input - So it certainly seems as though the last tranch bought could fall into the IHT net.

An interesting situation Some falling knives stop BUT the risk (imo) is probably still to the downside untill the factors covered by other posters above are resolved.

Very much on an active watch list - FYO I do not hold but watching.

[masurenguy] 09/9/2010 12:05

mudbath - 9 Sep'10 - 962: Nothing like rubbing it in is there for some.

I'm not "rubbing it in" to anyone. I originally posted this comment last Monday and have absolutely no axe to grind since I sold my entire holding last December and have just been looking out for a potential re-entry point as I clearly stated at that time.

Masurenguy - 6 Sep'10 - 955: There are a number of issues that urgently need to be addressed here and until they are the share price is likely to continue to drift down. 1. Following the sad death of Lyn Miles in June they need to appoint a new CEO. The company needs strong leadership to tackle its current challenges ! 2. They need to announce the extent of the inventory write downs. 3. They need to look at their financial arrangements because it appears that they are getting close to the ceiling on their debt facilities. 4. They need to issue a further trading statement covering points 2 & 3 above plus a range indication of the likely year end loss. This cannot wait until the December results since markets hates uncertainty and the share price will be punished further until some tangible information is provided. We are now close to the all time share price low of 31.5p in March last year when directors bought 225K shares @31.75p. I took profits and sold out at 62p last December but would not consider buying back in until the above issues have been resolved.

Since then the share price has dropped by a further 22% in 4 days, from 34p to 28p. That does not make me either right or smart but it is illustrative of the concerns that I raised then. My comment to floppy hat was purely down to his dogmatic response that it was "Priced-in, baby. It's all priced in.". I don't know where the bottom is, neither does he or anyone else.

His view was probably more motivated by concerns emanating from his prior post just over two weeks ago rather than any current objective assessment since he is now down by 33% ! floppyhat - 22 Aug'10 - 950: I'm all-in again at 42p, and can't wait for the next steep incline. Bring it on, baby!

My comment on their debt facilities was only one of 4 issues that I raised. I don't know how close they are to their covenants but the public domain information suggests that they don't have much headroom to play with especially if cashflow is suffering from delayed orders and/or payments. In the current climate any small company that might be close to their debt limits makes investors naturally nervous !

[mudbath] 09/9/2010 11:37

Nothing like rubbing it in is there for some.
So nearly joined battlebus here a couple of years or three ago.
Masurenguy suggests that ROM have little or no headroom in their banking facilities.
If such a problem were to evidence itself,then we might see a particularly sharp sell off.
An opportunity awaits ??

[masurenguy] 09/9/2010 11:27

PUGUGLY - Romag is an AIM company which has no dual listing on any other overseas 'recognised stock exchange' so shares held by Lyn Miles pre-June 2008 will be excluded from IHT. The exemption certainly applies to shares purchased 'over the counter' since AIM admission. However I don't know if there are any qualifying IR regulations that apply to shares owned prior to the IPO or post IPO shares acquired via share options. You would need to ask a Tax Advisor to clarify whether they would be treated any differently from conventionally purchased shares.

floppyhat - 6 Sep'10 - 958: Nah. Priced-in, baby. It's all priced in.

Yeah right - "all priced in" but despite your assertion they are down another 12.5% today. It is foolish to express dogmatic views on issues such as this ! The continual fall is probably due to the issues that I raised in post #955 last Monday. The market really hates uncertainty and the shares are now priced at an all time low since their IPO some 7 years ago !

[vulgaris] 09/9/2010 11:12

Pugugly-- you have to hold for 2 years for IHT relief. I had an AIM IHT portfolio managed by Teather & Greenwood and they bought Romag in (if I recall) 2005---- so they certainly qualified then. I am unaware of any reason why they should no longer do so.

[pugugly] 09/9/2010 10:20

Masurenguy:> Are you in a position to clarify - As Romac is an Aim company are Lyn's shares excluded from IHT ? Also how long do you have to hold the shares as some purchases have been failrly recent

Director buys 24/3/09
Lyn Miles, CEO | 100,000 | 31.75p |1,000,000 | 2.00% |

Reason it could be relevant is that if not exempt IHT is due on the value at death and there could therefore be forced selling to pay the IHT due especially if the executors have had to borrow funds to obrtain probate.

I found this on the Revenue web site

"Unquoted"

Under s.105(1ZA), with effect from 1 April 1996, the definition of "unquoted" is "not listed on a recognised stock exchange". Shares dealt in on AIM are accordingly treated as "unquoted" for the purposes of business relief. If, however, shares dealt in on AIMare also listed on a recognised stock exchange overseas, they will not be"unquoted" and will not qualify for business relief. You should, therefore, check that AIM-listed shares are not listed elsewhere. If they do have another (overseas) listing, you should refer to SAV (Foreign) so that a "Foreign" valuer can consider whether they are listed on a recognised stock exchange.

[floppyhat] 06/9/2010 15:03

Nah. Priced-in, baby. It's all priced in. Romag are only going to make a technical loss for the year. They were barely a hundred grand up for the first six months, anyway, so any bottlenecks were bound to take them into the red. Customers with credit trouble will pay up eventually, the component suppliers will fulfill their obligations eventually, and the inventory write-down is a giant clue that the infant market for photovoltaic glass is getting more affordable by the day. As for Lynn's shares, in my view, what kind of ungrateful recipient of them would chuck the lot onto the market, and go live-it-up on the proceeds? And even if they did, the total number of shares she owned would not constitute an overhang. This share price is displaying all the classic signs of unwarranted panic.

[masurenguy] 06/9/2010 14:07

The price here will not rocket by 100% on any of the above news. I would rather buy back in again around the high thirties or low forties once some of the above issues have been clarified rather than just gamble in the dark. That's the way to lose your house since this could fall much further from here !

[floppyhat] 06/9/2010 14:04

Yeah, but once they've resolved these issues, the price'll be 62p again, and you'll be too bloomin' late. You buy during times of uncertainty, and you sell when all issues are resolved, and everything's fine. That philosophy bought me my house.

[masurenguy] 06/9/2010 13:52

There are a number of issues that urgently need to be addressed here and until they are the share price is likely to continue to drift down.

1. Following the sad death of Lyn Miles in June they need to appoint a new CEO. The company needs strong leadership to tackle its current challenges !

2. They need to announce the extent of the inventory write downs.

3. They need to look at their financial arrangements because it appears that they are getting close to the ceiling on their debt facilities.

4. They need to issue a further trading statement covering points 2 & 3 above plus a range indication of the likely year end loss. This cannot wait until the December results since markets hates uncertainty and the share price will be punished further until some tangible information is provided.

We are now close to the all time share price low of 31.5p in March last year when directors bought 225K shares @31.75p. I took profits and sold out at 62p last December but would not consider buying back in until the above issues have been resolved.

[pugugly] 03/9/2010 14:39

bimbo> what shareholders are wanting is called reasonable profit and dividends.

OK we have some but miniscule in relation to turnover PLUS we are saddled with a load of debt and a share overhnage from the estate of Lyn Miles.

Pice (imo) could continue to driftdown but I have no idea to what level.

[pugugly] 31/8/2010 15:44

Incline going down - Would make a nice slalom slope.

[pugugly] 22/8/2010 10:46

floppyhat:> Good luck in your call but remember an incline can be down as well as up -

[floppyhat] 22/8/2010 00:59

I'm lovin' this company. The share price and me seem so in tune. I buy it low, and I sell it high, exactly as I dream about doing with all my other stocks. Sadly, all my other stocks just don't seem on my wavelength, but this little beauty just keeps on giving. I'm all-in again at 42p, and can't wait for the next steep incline. Bring it on, baby!

[egoi] 19/8/2010 17:00

Yes sorry, typo, will amend, I did know she was a lady, my mistake.

However the point stands of course, it could easily create a (hopefully short term) overhang, until they are placed or whatever. Hopefully there will be an RNS to confirm what has been done with them before long, and then the share price might recover.

I like the stock and am a prospective small buyer at some stage.

[masurenguy] 19/8/2010 16:25

egoi - 19 Aug'10 - 16:14 - 946: Only a guess, I wonder if they're struggling to find a home for the late CEO's shares? Dunno how many he had - anyone?

egoi - Lyn Miles was female and she had 1m shares in the company, which is around 2%. I doubt that these would be sold piecemeal by her estate or beneficiaries if they wanted to turn them into cash. If that was the case, then the Nomad would probably be tasked to find one or more institutional buyers who would probably offer to take them at a discount to the Bid.

[pugugly] 19/8/2010 16:17

Masurenguy:> Too right - Has similarities to the dot.com or tech boom. Great for customers and some companies but on the whole very bad in the long term for investors . Look at coys such as Marconi & Volex to name but 2.

As you say the skill will bein determining which will be the winners.

[egoi] 19/8/2010 16:14

Only a guess, I wonder if they're struggling to find a home for the late CEO's shares? Dunno how many she had - anyone?

[masurenguy] 19/8/2010 14:53

PUGUGLY - you may be right where cells and modules are concerned at the moment but the evidence indicates that demand further upstream for ingots and wafers is increasing. Ultimately this will feed through to cells and modules too.

The UK has only just started a FIT programme and the indications are that demand is up more than tenfold since it started in April. Reductions in FIT within the German market appear to be offset by lower prices and demand is still up over the same time last year.

It is quite commom for new technology prices to quickly decline and while it may hit individual company profits in the short term the falling prices create a much larger market in the longer term.

Solar power is here to stay and the sector will continue to see rapid growth. The key here will be to back the right players who will successfully exploit this. Is Romag one of them ? I think they might be but then that is a judgement call we all have to make on an individual basis,

[pugugly] 19/8/2010 14:36

rup2 & masurenguy. Fellows, you may be right that volumes look promising, but (imo) the Sector is suffering from over capacity resulting from being seen as "the right thing - the next big thing" and too much investment in production facilities by too many companies resulting in over capacity and therefore falling prices and reduced margins.

PLUS more importanlty (in the short term at least) significantly reduced subsidies as a result of the mountain of sovereign debt that has to be paid down leaving very little in the green energy subsidy pot.

This in my view will give a very bad trading environment for companies to grow margin and hence profitability.

Over to you.

[masurenguy] 19/8/2010 10:07

sector is booming at the moment

Mmmm......well yes it is although profitability is still an issue with several companies due to falling prices over the past 12 months. PVCS - which I hold - is off by 10% this morning due to profit decline in H1 so the share price of different companies in this sector can be quite choppy on an individual basis. However the long term prospects still remain positive !

[tup2] 19/8/2010 09:51

sector is booming at the moment- not only due to the FITs but also increasing demand for larger renewable plants. Vestas have allways underperformed in a booming market. Small wind turbine manafacturers, proven etc , are snowed under with orders at the moment so Romag should also be in, at least, a positive position as solar power is reckoned to be the easiest and most popular way of accessing the FIT.
Reckoned this to be a sound investment- hope there is not a more serious internal problem.