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Real-Time news about Twenty (London Stock Exchange): 0 recent articles
There are 57m shares in the company and directors Ian Lancaster and Grant Newton appear to own 15m of them. As they are part of the concert party wishing to buy the assets of TWE they should not be able to vote (anyone able to confirm that ?). That leaves 42m shares so TWE needs 31.5m shares to carry the vote to leave AIM and they won't be getting my vote.
The directors want to sell all TWE's companies assets to Ian Lancaster and Grant Newton, both Directors of Twenty.for £1, but TWE will pay them £112,500 toward working capital. In addition TWE will waive the inter-company debt owed by TwentyCi and Moveme to the Company in the sum of GBP561,050, so basically TWE will be paying over £673,000 to TWE company directors to take the assets from the company.
TWE also want to cancel their AIM listing to save £50,000 a year, basically throwing away a shell company. Losing the AIM listing will also mean that the directors will be able to do whatever they please with any funds the company has or will have. With the company NAV around £600,000 in cash at 31st December 2012 how much would TWE be worth as a cash shell.
How much do you trust the current directors to do the right thing for shareholders? This is very like the situation in DXR (now WASG) before the directors there got ousted, and the share price then increased considerably.|
|marab: Induna123 - I am still trying to translate the RNS but the rest of the market is reacting to EEC news so it will have to wait. I would not be surprised if the directors hoover up a bit of stock now to make sure the deals go ahead, but that could just be the cynic in me. The recent drop in share price is explained though. It's almost as if some people knew what was coming :(|
|marab: UKMassy - I sent an email off to the company asking if they intended to comment on the share price via RNS or otherwise offer a view. If they respond I will let people know. This is one of those times when you don't know whether to buy or not, and which ever one you do is wrong. That could just be me of course. The MC of this company is peanuts now which might make it more interesting as a future shell company.|
|marab: eaaxs06, I think this company has potential. Am I happy with the share price, no. Would I be happier buying in now, yes. Will just sit and wait for developments. I do have certain mug like qualities, but have learned the hard way that when a share price plummets it is sometimes better to hold on. Followed Tara into CMG last week and made a few quid which will help alleviate the pain here.|
My Cheapest Stock in a Long Time
Marketing services group Twenty Plc (TWE.L) is listed on the Alternative Investment Market in London. Its market capitalisation is a tiny GBP 1.7m at 3 Pence offer and the shares are somewhat illiquid, as expected, with trade amounts possible of up to GBP 3,000 (approximately $ 5,000).
The company's flotation took place in 2006 at a post-split price of 2.55p and the shares shot up to 6 Pence from just under 2 Pence upon news that a division was sold. This sale has eradicated TWE's debt and currently the company has, as per last interim results, net cash of GBP 1.55m.
Since April, 2010 when the shares hit 6p, the stock price has languished first due to traders taking profits followed by demoralised investors selling out.
The great news is that this May, Twenty will receive GBP 1.89m from the disposal as well as another GBP 1.06m in May, 2012.
Ignoring the money due in 2012 we can see that Twenty will have approximately GBP 3.44m once the money is received in May. The market capitalisation is only half of the net cash figure at GBP 1.7m. This discount is too large.
There are 57.2m shares in issue, ignoring options and warrants which only start vesting after 9p, which gives a per share value on the GBP 3.44m of 6p per share. Add in the remaining GBP 1.06m and we calculate a net cash value of 7.86p per share.
The great unknown, of course, is that no one knows for what purpose the company has earmarked the cash. A special dividend would not be shareholder friendly due to taxation, perhaps a return of capital would suit all parties. The fear is that the company will make a rushed acquisition and delete value to the business as opposed to adding value.
Past earnings have been lumpy with deficits recorded for year ending December, 2005 and 2008. Historically no dividend has been paid.
Director remuneration is broadly in-line with other microcap companies.
The share register is nicely spread. The CEO owns just over 20% whilst the FD owns just under 5%.
There are no other real assets apart from the usual office equipment and furniture. There is around GBP 4m goodwill on the balance sheet. Liabilities come to GBP 2.42 of which GBP 2.22m are payables.
I wish that this stock could be included in the monthly value competition but no foreign stocks are allowed hence this is only a short article to generally inform those interested in these types of companies. Further research should obviously be done before investing. However there is a large valuation discrepancy here as well as a catalyst to move the share price (when the news is released in May that the money has been received).
The company website is here: http://www.twentyplc.com/
Disclosure: Long TWE.L|
|mrkournikova: It's difficult to ascertain a fair value right now, but Interact, the division being sold, is estimated by the directors to have made a pre-tax profit for the 6 months ended 30 June 2009 of £877,000.
Therefore, annualised over 12 months would suggest a pre-tax profit of £1,754,000. Let's assume corporation tax of 28% (ignoring marginal relief) would take the post-tax profit to £1,262,880. This would suggest that Interact is being bought an historic earnings multiple of between 7 and 8.
At the interim stage the Group had an invoice financing facility with the Bank of Scotland, which had a drawn down balance of £1.04 at the balance sheet date. This facility must have moved to Lloyds TSB Commercial Finance, as per the announcement.
Not all of this sum would be applicable to Interact, but being disingenuous assume it is, therefore subtract this from the up front consideration of £7,239,610, would reduce this to £6,199,610.
I think net debt will have reduced from the £2,460,000 reported at the interim stage, as repayments of £430,000 were due over the ensuing 12 months. Therefore, net debt today could be around the £2,110,000 mark taking into account repayments to be made.
Subtracting net debt from the initial consideration less the invoice finance facility would take the figure to £4,089,000.
Therefore, hopefully my conservative sums should ensure that Twenty has c.£4,000,000 of cash on the balance sheet when Group debt has been paid off. Deferred consideration of £2,953,500 will be due over the ensuing 2 years.
So, in terms of valuation, £4m/57,480,000 (shares in issue) = 6.95p
+ deferred consideration of £2.953/57,480,000 = 5.14p
Ongoing businesses (Moveme/Ominor/eMaginating) say £750k = 1.3p
Potential share price = 13.39p
Keen for others thoughts on this.
Twenty Plc share price data is direct from the London Stock Exchange