Sivota Share Discussion Threads

[spob] 26/4/2016 08:16

probably is an over reaction

when you consider the 10 year history of the company

even if profits were wiped out for one year that would likely be a one off in my opinion

thinking about putting my toe in

just watching at the moment

[tsmith2] 26/4/2016 08:15

Looking at those numbers which I expect would be conservative, yesterday's fall well overdone

[diablo1967] 26/4/2016 08:10

Interesting to note that they expect ti maintain a dps of over 7p !!! Despite expected forecasts ???? Does this then Make the drop yesterday over cooked ?? Sorry about the Aim bit was a general statement given in wrong context however the few do communicate

[spob] 26/4/2016 08:04

FT Alphaville yesterday


11:32AM
PM

St Ives
PM

Sheesh
PM

hxxp://www.investe…1604250700081446W/
ST Ives PLC (SIV:LSE): Last: 124.50, down 100.75 (-44.73%), High: 160.00, Low: 120.00, Volume: 2.35m
BE

Nasty profit warning.
PM

FIgs to be materially below management’s current expectations
PM

materially = greater than 20%
PM

In Cityspeak
PM

A bit of Singer…
PM

Sorry, taht was old
PM

Ditched
BE

It’s a double headed warning. The books side’s bad, but it’s also this.
BE

………;… hxxps://www.st-ive…-solutions-detail/
BE

Tactical Solutions is a market leading field sales and field marketing organisation that drives the sale of products and raises customer awareness for brands in-store.

BE

Services: In-store Sales, Product Recall, Sampling & Experiential, Mysetry Shopping, Retail Audit
BE

“Mysetry”;
PM

is this another Brexit victim?
PM

Businesses of all shapes and sizes holding off
BE

Nope. It’s an entirely self powered warning, this.
PM

Oh, great
BE

Peel Hunt can walk us through it.
BE

The company led with a cautious statement at the interims. The
disruption to marketing booking patterns referred to then has
accelerated in the final part of the year. This has impacted both
the legacy business (not unexpected) but also the Strategic
Marketing operations (which the market will be disappointed to
see). This combined with a process of destocking in books results
in reductions in expectation across all three division. Forecasts
will reduce by 20% for this year and next. The speed at which
fortunes have reversed will disappoint the market, with an
assumption that more pressure will come. We place our target
price and recommendation under review.

BE

Books: The books division is seeing the headwinds of warehousing
reorganisation and a broader destocking. Moreover, the complexity of the PRH
work is greater than expected, and some export work is being lost. Whilst it is
logical to think these issues are one-off in nature and should work through, a level
of uncertainty will remain. There is considerable margin pressure as a result.
Marketing activation: The market will have expected ongoing pressure from the
UK grocery market. Forecasts here had been trimmed in recent months. There
have, however, been significant contract cancellations that have exacerbated the
trend. It is hard to see this issue as a one-off in the same way as the book
destocking.
Strategic marketing: Here the market will be more discomforted. The
previously very strong trends that had more than offset the issues in legacy
businesses have given way to some material contract cancellation. Whilst each
cancellation may have a specific cause, the coincidence of timing is disquieting.
The positive messages from November (clear evidence of collaboration and
benefit, so common ownership) will be tested in these more difficult
circumstance.
Impact on forecasts: The greatest pressure will be seen in Books (profit down a
third), with strategic marketing down just over 10%. Revenue for the full year
will be c£362m vs £372.4m current forecast. EBIT, however, will fall by £7m to
£33m, giving PBT of c£30m (from £37.2m). EPS of 16.8p vs 21.1p. In FY2017,
PBT will be nearer £32m from £41m, giving EPS of c17.3p.
Recommendation: We reduced our recommendation from Buy to Add when the
first cautious statement was issued in the interims. The subsequent fund raising at
215p, which was well supported, will not be forgotten. The broad-based nature
of the warning – with work lost across all divisions – will unsettle the market
more than a single one-off problem. As such, marginal buyers will now take some
time to be convinced this cycle has ended rather than just begun. The reasons we
liked the story before today remain intact, but we anticipate that the execution
will now take longer to validate. TP and recommendation under review.

BE

Numis also, if only for the new forecasts.
BE

Strategic Marketing. Although organic growth has been +15% ytd, the group has experienced greater caution in marketing budgets and has suffered the cancellation and deferral of a number of significant projects. We lower our EBITA forecasts by £3.6m to £20.2m in FY16 and £3.3m to £24.0m in 2017. We view the project deferrals to be a short term issue and expect the division to rebuild over the next 12-18m.
Marketing Activation. Trading conditions in the grocery retail sector have ‘worsened̵7; leading to revenue and margin pressure. We lower our EBITA forecasts by £2.0m to £8.0m for FY16 and £3.5m to £6.7m for 2017.
Books. Despite securing the PRH contract, St Ives has been impacted by destocking across the market following a reduction in warehouse capacity. We lower our EBITA forecasts by £2.2m to £5.0m for FY16 and by £3.4m to £4.5m in 2017.
Forecasts. We lower our PBT/EPS forecasts by -19% to £30.4m/17.5p (was £38.3m/21.6p) and by -22% to £32.4m/17.8p (£42.5m/23.0p) for 2017. We expect a maintained dividend of 7.80p. We forecast net debt/EBITDA of 2.0x for 2016 and 1.7x for 2017, compared with covenants of 2.50x and 2.25x.

11:38AM

[masurenguy] 26/4/2016 08:02

Why St Ives plc crashed 40% today

Shares in struggling media and print group St Ives (LSE: SIV) slumped by as much as 40% in early trade this morning after the company issued a dire profit warning. Specifically, the company announced today that due to deteriorating market conditions, management expects reported profit for the current financial year will be “materially below” current market expectations. What’s more, management believes that the current trading conditions will also impact the group’s next financial year, indicating that St Ives’ troubles are quite serious.

A severe deterioration in trading

According to today’s press release from the company, trading in the eight months to the beginning of April had been “broadly in line” with expectations with revenue up by 5%. However, trading has deteriorated significantly over the past few weeks and now St Ives’ outlook for the final quarter to end-July and following financial year has worsened. All three of the group’s main trading divisions have suffered during the first four months of 2016. Trading across the Strategic Marketing segment has been hammered by ”global economic uncertainty“, which is “resulting in greater caution in the allocation of marketing budgets“. Uncertainty has only “increased of late, resulting in significant projects being deferred or cancelled.“

Meanwhile, revenue at the group’s Marketing Activation arm is running approximately 11% below the prior year, “due in large part to the ongoing pressures within the UK grocery retail sector“. The Marketing Activation arm is also suffering from margin pressures. And lastly, sales at St Ives’ books business are running slightly behind (-1%) the prior year’s numbers as industry de-stocking has offset a new contract with Penguin Random House.

Gloomy outlook

Today’s profit warning couldn’t have come at a worse time for shareholders as, after nearly a decade of restructuring, the company’s underlying unadjusted profits were expected to stabilise this year. Indeed, City forecasts were up until this morning, predicting that St Ives would report a pre-tax profit of £37.4m for the year ending 31 July. Last year the company reported a pre-tax profit of £8.7m and over the five years between 2011 and 2015 the group only reported unadjusted cumulative pre-tax profits of £49.4m. This explains why the shares have fallen so heavily this morning. Many investors were pinning their hopes on a long-awaited recovery this year. Unfortunately, it now looks as if investors will have to wait another two years for the company’s recovery to gain traction.

Weak balance sheet

Whether or not the group can get back on the path of growth remains to be seen. Almost all of the three main divisions are facing structural headwinds, which is why the company has been trying to rebuild, and diversify its business since the financial crisis. But more importantly, St Ives’ weak balance sheet is going to be a problem for the company and its investors if trading continues to worsen. At the end of January 2016, St Ives had only £14m of cash supporting £96m of long-term debt related to the business and £21m in retirement obligations. Further, intangible assets on the balance sheet amounted to £200m and if you strip these assets out shareholder equity comes in at around -£70m. Put simply, the balance sheet isn’t robust enough to be able to survive a prolonged deterioration in trading without an additional cash infusion.

[spob] 26/4/2016 08:01

FT Alphaville yesterday


11:32AM
PM

St Ives
PM

Sheesh
PM

hxxp://www.investe…1604250700081446W/
ST Ives PLC (SIV:LSE): Last: 124.50, down 100.75 (-44.73%), High: 160.00, Low: 120.00, Volume: 2.35m
BE

Nasty profit warning.
PM

FIgs to be materially below management’s current expectations
PM

materially = greater than 20%
PM

In Cityspeak
PM

A bit of Singer…
PM

Sorry, taht was old
PM

Ditched
BE

It’s a double headed warning. The books side’s bad, but it’s also this.
BE

………;… hxxps://www.st-ive…-solutions-detail/
BE

Tactical Solutions is a market leading field sales and field marketing organisation that drives the sale of products and raises customer awareness for brands in-store.

BE

Services: In-store Sales, Product Recall, Sampling & Experiential, Mysetry Shopping, Retail Audit
BE

“Mysetry”;
PM

is this another Brexit victim?
PM

Businesses of all shapes and sizes holding off
BE

Nope. It’s an entirely self powered warning, this.
PM

Oh, great
BE

Peel Hunt can walk us through it.
BE

The company led with a cautious statement at the interims. The
disruption to marketing booking patterns referred to then has
accelerated in the final part of the year. This has impacted both
the legacy business (not unexpected) but also the Strategic
Marketing operations (which the market will be disappointed to
see). This combined with a process of destocking in books results
in reductions in expectation across all three division. Forecasts
will reduce by 20% for this year and next. The speed at which
fortunes have reversed will disappoint the market, with an
assumption that more pressure will come. We place our target
price and recommendation under review.

BE

Books: The books division is seeing the headwinds of warehousing
reorganisation and a broader destocking. Moreover, the complexity of the PRH
work is greater than expected, and some export work is being lost. Whilst it is
logical to think these issues are one-off in nature and should work through, a level
of uncertainty will remain. There is considerable margin pressure as a result.
Marketing activation: The market will have expected ongoing pressure from the
UK grocery market. Forecasts here had been trimmed in recent months. There
have, however, been significant contract cancellations that have exacerbated the
trend. It is hard to see this issue as a one-off in the same way as the book
destocking.
Strategic marketing: Here the market will be more discomforted. The
previously very strong trends that had more than offset the issues in legacy
businesses have given way to some material contract cancellation. Whilst each
cancellation may have a specific cause, the coincidence of timing is disquieting.
The positive messages from November (clear evidence of collaboration and
benefit, so common ownership) will be tested in these more difficult
circumstance.
Impact on forecasts: The greatest pressure will be seen in Books (profit down a
third), with strategic marketing down just over 10%. Revenue for the full year
will be c£362m vs £372.4m current forecast. EBIT, however, will fall by £7m to
£33m, giving PBT of c£30m (from £37.2m). EPS of 16.8p vs 21.1p. In FY2017,
PBT will be nearer £32m from £41m, giving EPS of c17.3p.
Recommendation: We reduced our recommendation from Buy to Add when the
first cautious statement was issued in the interims. The subsequent fund raising at
215p, which was well supported, will not be forgotten. The broad-based nature
of the warning – with work lost across all divisions – will unsettle the market
more than a single one-off problem. As such, marginal buyers will now take some
time to be convinced this cycle has ended rather than just begun. The reasons we
liked the story before today remain intact, but we anticipate that the execution
will now take longer to validate. TP and recommendation under review.

BE

Numis also, if only for the new forecasts.
BE

Strategic Marketing. Although organic growth has been +15% ytd, the group has experienced greater caution in marketing budgets and has suffered the cancellation and deferral of a number of significant projects. We lower our EBITA forecasts by £3.6m to £20.2m in FY16 and £3.3m to £24.0m in 2017. We view the project deferrals to be a short term issue and expect the division to rebuild over the next 12-18m.
Marketing Activation. Trading conditions in the grocery retail sector have ‘worsened̵7; leading to revenue and margin pressure. We lower our EBITA forecasts by £2.0m to £8.0m for FY16 and £3.5m to £6.7m for 2017.
Books. Despite securing the PRH contract, St Ives has been impacted by destocking across the market following a reduction in warehouse capacity. We lower our EBITA forecasts by £2.2m to £5.0m for FY16 and by £3.4m to £4.5m in 2017.
Forecasts. We lower our PBT/EPS forecasts by -19% to £30.4m/17.5p (was £38.3m/21.6p) and by -22% to £32.4m/17.8p (£42.5m/23.0p) for 2017. We expect a maintained dividend of 7.80p. We forecast net debt/EBITDA of 2.0x for 2016 and 1.7x for 2017, compared with covenants of 2.50x and 2.25x.

11:38AM

[masurenguy] 26/4/2016 07:55

"Who knows just shows private investors have little to no chance in the aim casino ...no share is safe from the few with power who without doubt communicate with each other"

What on earth are you talking about? This is not an AIM share!

[diablo1967] 26/4/2016 07:29

Three years gains wiped out in one day ....that's three years of solid results ignored on a forecast reduction of approximately 25% in earnings per share !! Even though the first three quarters have shown a 5% increase in revenue ?? Overvalued and correction ? Or are some taking advantage ?Very strange to see this size of drop on a company like this with its track record . Maybe over expansion by careless chairman and board ?Who knows just shows private investors have little to no chance in the aim casino ...no share is safe from the few with power who without doubt communicate with each other (fsa are you aware ?) . Good luck all and understand the game.

[red army] 26/4/2016 07:27

Don't understand why the board felt that £2 a share was worth buying back if they knew that customers were a little shaky.

[squire007] 26/4/2016 01:28

Might just bolt out of the traps early doors ....... be careful ..;-)

[diku] 25/4/2016 22:05

Its a PLC casino out there...

[bad robot] 25/4/2016 17:19

I think mms itching to whack 100p, loads of stop losses behind 100p I suspect. No figures given and they have hammered it. Nevertheless, this will become bargain territory for a technical bounce.

[diablo1967] 25/4/2016 16:53

Eps would indicate the drop overdone and £1-40 to £1-50 is market value ...at the moment lol

[isis] 25/4/2016 16:50

These were on A HIGH p/e so the fall may well be inline and back to sector averages.

[tsmith2] 25/4/2016 16:08

Broker forecasts - I've just seen one broker update, which reduces EPS forecast for 2015/16 from 21.0p to 16.8pUndemanding multiple now.. Just taken some

[deanroberthunt] 25/4/2016 16:06

might be worth a tickle at 80-90p

[masurenguy] 25/4/2016 16:05

"edmundshaw - 1405 of 1409: Paul Scott is always worth a read, because he has some good ideas and a reasonable background in finance (which is where he is worth listening to more carefully). But his research on companies tends to be rather superficial when he is not intrested, as here, so best to do your own research there. One thing he said struck a chord with me. There is no no clear idea of what earnings will be. It is unacceptable to say materially below expectations and then leave it at that."

I concur with the view expressed by ES above. PS does not have much sector knowledge here but his comments (shown below) are still valid in a more general context.

"The big question in my mind, is whether this slowdown is something company-specific, or due to broader macroeconomic factors? The company of course blames macro factors, as companies always do, but that may not necessarily be true. Competitors may be eating their lunch, who knows? So I'll be keeping my eyes peeled for what other marketing companies are saying about current trading, to determine whether there is a general slowdown happening. Although it's not a sector where I currently hold any positions, so doesn't interest me that much.

Conclusion from the company: Despite a strong performance overall in the year to date, the combination of factors outlined above lead the Board to conclude that the Group's underlying profit before tax for the current financial year is likely to be materially below management's current expectations. Whilst it is too early to judge with accuracy at this stage, it is expected that these factors will impact the outturn for the next financial year also. I'm perplexed by this. So the group has performed well for 8 months, but seems to now have hit a brick wall, such that its performance for the 12 months will be "materially below". That seems to imply that the last 4 months of the year (Apr-Jul 2016) are set to be very bad.

My opinion - I can see why the shares are down 45% today. This announcement puts a serious question mark over what visibility the company has over its future earnings? Worse still, the company hasn't quantified anything. Does "materially below" mean 10% below, or 50% below, or (more likely) somewhere in between. So how on earth can we value the shares? With the information given, and its vagueness, valuation is now impossible! All we can do now, is wait for revised broker notes to come out, as the brokers will have been given a more accurate steer by the company. This is totally unacceptable. What the company should have done, is to tell the market specifically what profit it now envisages being likely for y/e 31 Jul 2016. If it's not able to give a precise figure, then a range will suffice. Plenty of companies do this, and everyone should. Where there's uncertainty, the market assumes the worst, and sells off the shares brutally, as it has done with SIV this morning. The company, and its advisers, are to blame for this. They could, and should have given proper guidance today, as to what profit they anticipate achieving. Instead we got a lot of vague text, and no guidance at all. Absolutely hopeless.

Broker forecasts - I've just seen one broker update, which reduces EPS forecast for 2015/16 from 21.0p to 16.8p. More worryingly, this broker is forecasting that y/e net debt will be c.£85m, up considerably from its previous estimate of £67m.

Balance sheet - I've repeatedly pointed out before that SIV has a weak balance sheet, e.g. in my last report here on 6 Oct 2015. With trading now deteriorating, and an uncertain outlook, the weak balance sheet suddenly becomes much more of an issue. There's no downside protection, where a company has a weak, highly indebted balance sheet.

Dividends may possibly now be under threat, if performance continues to deteriorate. I would never rely on the dividend yield at any highly indebted company, because if bank covenants are under threat (as they might be here, next year), then the divi is usually cut, or passed altogether. A decent divi yield is only of sustainable value at soundly financed companies, in my view.

Overall - I'd be more inclined to go short, than go long. Although in practice, I'll do neither. There's no question of me wanting to catch this falling knife though, even if it drops another 45%. There are too many uncertainties now - both in terms of performance, and in terms of the financial stability of the group. How much read-across there is to other companies, and sectors, I don't know. I'll be giving this share a wide berth. I've never liked the weak balance sheet, and now it's trading badly too, there's nothing to tempt me in, even at a 45% lower price.

See more at:

I have no position here but after todays fall it is on my watchlist as a potential recovery stock. However, I would like further transparency on the year end figures and the following years outlook before seriously considering taking any position here.

[davr0s] 25/4/2016 16:04

I'm out - held these for 4 years so today a real car crash of an RNS. Bought around £1 so still made money and divis too. RNS was a real kitchen sink job and they haven't given any steer as to how bad just that it is going to be materially bad and last for at least 5quarters. Business seems to have hit a wall. Seems little point holding in these circumstances so regrettably moving on. Was waiting for any bounce but it doesn't seem to be coming either. Bad start to the week

[isis] 25/4/2016 15:40

Nigh on 50% down on a bit of a muddled statement with no figures to speak of.

Best to wit for now I spose.

[andysand] 25/4/2016 15:32

Oh dear. Negative net asset (excluding intangibles). It's a barge pole for now until the fog has been lifted.

[andysand] 25/4/2016 15:30

I am surprised at the size of the fall. I don't hold, just watching.Technically, it could fall an awful lot further. But the fundamentals are interesting for sure since we have no idea what earnings could be at all. That makes it NAV play (unless you want to guess). I am going to research this right now:)

[bad robot] 25/4/2016 15:28

I think it's next year negative impact that's killing it. No point buying now when there will be bad news in the pipeline. I am envisaging that MMS will be tapping 100p tomorrow morning triggering the stop losses. Careful.

I bought for day trade only and knew by 11.30 I should be running for exit.

[thomasthetank1] 25/4/2016 15:15

Read Arden Partners's note on ST IVES, out this morning, by visiting hxxps://www.research-tree.com/company/GB0007689002
"The sensitivity to global marketing budgets combined with the negative headwinds in Marketing Activation and contracting returns within Books have resulted in a 20% cut in our FY17 earnings forecast. We anticipate the group will look to maintain DPS at 7.9p which still affords a reasonable cover above 2x. Whilst the yield may, therefore provide some support, the shock value of a revision to the Strategic Marketing business has undermined confidence in the investment case. Consequently we anticipate the shares will remain subdued short term and feel the price reaction this morning is justified. ..."

[edmundshaw] 25/4/2016 15:12

Paul Scott is always worth a read, because he has some good ideas and a reasonable background in finance (which is where he is worth listening to more carefully). But his research on companies tends to be rather superficial when he is not intrested, as here, so best to do your own research there.

One thing he said struck a chord with me. There is no no clear idea of what earnings will be. It is unacceptable to say materially below expectations and then leave it at that. Materially below is anything from 10% to, well, a lot. 10% would imply the markdown is way overdone. A lot would not. Cue uncertainty, cue fear, cue panic selling... or is it?

On balance the fall looks overdone, but a severe drop in profits would hurt a lot given the balance sheet. Dividends are not so high, but still might be under some threat. It is all a bit unknown.

I bought a few on the balance of probabilities today (not a gamble, I am a mathematician, I understand probabilities and risk spreading rather well, trust me). But I would not invest big here at the moment.

[bad robot] 25/4/2016 14:04

Good luck chaps. Closed 6 derivatives position over OTC. 4 very small profit and 1 B/E & one loss, dumped at 24.25p.