Telford Homes Share Discussion Threads

[skyracer] 04/11/2015 15:57

How is it that Restore (RST) managed to make their placing around their recent market average price but Telford conceded such a large discount ?

[gargleblaster] 04/11/2015 14:47

These statements come out periodically from brokers (housebuilders to tumble etc). The mystery is that anyone pays them any attention since they are consistently wrong!

[lurker] 04/11/2015 14:44

Me too - I'm in!

[riskblue] 04/11/2015 13:50

Expected a retrace towards placing price. May go further, but enough for me. I'm in.

[taffee] 03/11/2015 06:43

Did heavy weight brokers predict the credit crunch or any bubbles beforehand?

Jpg Morgan downgraded psn yesterday btw

[rikaughty] 02/11/2015 15:02

The UK housebuilders are on solid foundations, says Emily BiddulphIf there is a housing market downturn on the cards, broker heavyweight JP Morgan Cazenove certainly doesn't see it.It expects 2016 to be another year of improved profitability and strong operating conditions for the UK's biggest housebuilders.

[muscletrade] 29/10/2015 08:18

dlku...tht would most certainly be the case in a 'normal
issue, and the share price would be all over the place while short term holders try to maximise profit.....which is perhaps why they re going down institutions only.maybe with a lock in.....

[dlku] 29/10/2015 07:33

those who bought at 360p will be selling in coming weeks
always the way, christmas money

[qs99] 29/10/2015 07:28

wonder whether cost of a rights issue was prohibitive and they needed to move relatively quickly to take advantage of existing opportunities? Not justifying it as would have liked to have stood my ground at £3.60 but if they want to raise more money, they will have IMO / DYOR used up their ability to avoid existing shareholders.....and hope a few bought in anyway to try and stand their ground via a purchase or two in the market, albeit at a higher price!

[1gw] 29/10/2015 07:19

I don't think the idea is rubbish - if you have a group of existing institutional investors in a share then I think it is credible that one or more of them will be prepared to increase at the then-current price to allow another institution to exit - more credible than hoping a new institution comes in in such a scenario.

However, I don't think it is worth offering such a big discount on the placing in order to get some more institutions in, and it is certainly true that having made a paper killing on the placing, the new institutions might actually be motivated to sell and take some profit.

[shanklin] 29/10/2015 06:56

The liquidity argument is clearly rubbish unless some of the placees intend to make a quick turn on the £3.60 shares. So, in that case, just the people the placing should not have targeted.

Still, I would tend to blame the advisors, who do this sort of stuff all the time, rather than TEF for the negative aspects of the placing. No doubt, in time, it will be good for EPS and hence the share proce. All IMHO.

[1gw] 28/10/2015 21:33

I guess Telford mean that if they have more institutional shareholders then there is more chance of one of them stepping up to buy if another wants to sell?

[pj 1] 28/10/2015 21:09

If the Institutions are genuine long term holders hoew on earth does it improve liquidity?#
Unless they sell for a quick 10/20% profit? (10% so far if selling)

Liquidity works both ways

[chessman2] 28/10/2015 21:04

I suspect it was the Schroder and Slater sales which knocked the share price from 490 to the 400 level over a 4 month period so more shares should in theory give more liquidity. However I do not see increasing from 61 million to 74 million shares will provide much of a greater benefit but we will see. The bottom line is that this is an AIM stock which means that MMs really whack it when there are more sells than buys

At least we are nearly back to square one [Monday's price] and we will have more money in the bank. Telford should be a rising star from here and I wonder how long it will take to hit the 500 figure. 6 months at most is my guess as the United deal should prove most advantageous.

I suspect the United deal meant more money was needed thus the quick fix of a placing.

[1gw] 28/10/2015 18:18

I've listened to that and I now wonder if this is all about Schroders.

The only bit relevant to placing vs rights issue that I could hear is:

"we've gone for a placing to institutional shareholders because, apart from anything else, it means we will have much greater liquidity now going forward in terms of our shareholder base which I think will be very helpful for all shareholders one way or the other..."

Now Schroders held 14.1% as of 5th August 2014, but then reduced to 9.9% by 22nd January 2015 (issuing 5 TR-1 holdings reduction notices in the process) and are listed on the Telford Homes website as holding only 5.2% as of 17th July 2015.

So to me, the reference to "greater liquidity" and "very helpful for all shareholders" may well be a reference to the time it took Schroders to reduce and the impact this may have had on the share price during that process.

But to me that still doesn't explain why they wouldn't try a rights issue given the big discount that was needed to get the placing away. I can imagine that Schroders may not have wanted to participate in the rights issue but I don't see that that by itself should have prevented the company trying.

So I'm not convinced that the shareholder votes will be a formality.

[1gw] 28/10/2015 17:49

thanks - I need to catch up on that.

[muscletrade] 28/10/2015 17:48

1gw.....in the interview posted earlier today ceo indicated reduction in debt in the future and this funding will assist that goal.

[1gw] 28/10/2015 17:38

Placing terms.

While waiting to see the circular for the current placing I had a look at the one for the placing in June 2013 (available on the company website).

That seems to have been structured as a placing with pre-emption rights disallowed, to raise £20million (before commissions and expenses).

However, the price was a marginal discount to the then-current share price:

"The Placing Price represents a discount of approximately 0.8 per cent. to the closing middle market price on 11 June 2013, being the last practicable date prior to the announcement of the Placing."

It also seems to have been done in conjunction with an increase in debt facilities to maintain what presumably was thought to be an optimal capital structure:

"The Company has already secured an increased debt facility of £120 million from its banking partners and therefore the finance is already in place to be drawn down alongside the equity raised. The Company expects that debt finance will represent 60 per cent. of any expenditure on new development opportunities."

So key questions are:
o Why such a big discount compared to last time (especially given the fall in share price this time in the days prior to the announcement)?
o Have they secured an increased debt facility in a similar way to last time so that the new equity is a relatively small part of total financing raised?

Given the 0.8% discount, I can understand why shareholders would have been relatively happy to forego pre-emption rights. I cannot at the moment see why they would be happy to do so this time round.

[rhubarbcrumble] 28/10/2015 15:00

Very cynical. PIs find themselves with diluted shareholdings. Favoured few scoop the pool.

Shameful.

[rhubarbcrumble] 28/10/2015 15:00

Very cynical. PIs find themselves with diluted shareholdings. Favoured few scoop the pool.

Shameful.

[dlku] 28/10/2015 13:49

nice scalp opp forthe £50m places at 360p :(

[dlku] 28/10/2015 13:35

Wonderfully pretty

[opodio] 28/10/2015 11:36

bet slater has filled his boots in the placing