Watermark Share Discussion Threads

[hmt] 07/7/2007 11:46

Any more views or thoughts on this as a recovery play...anyone?

[chicken] 29/6/2007 10:57

Watermark AGM Statement


RNS Number:2745Z
Watermark Group PLC
29 June 2007


FINAL embargoed until Friday 29th June 2007 at 07:00 BST.



WATERMARK GROUP PLC

AGM Statement


Watermark Group Plc, a leading provider of in-flight products, catering and
cabin management services to the airline and travel industry, announces that at
the Annual General Meeting to be held at noon today, Stephen Yapp, Executive
Chairman will make the following statement.


New management team and structure

Following shareholder approval for the issue of #8 million Convertible Bonds on
4 June, I joined the Board as Executive Chairman. The refinancing has provided a
necessary degree of stability to the business and we can now focus on restoring
value for shareholders. Under my direction, the group's range of in-flight
products and services will be managed through two discrete trading divisions,
each led by a Managing Director. The clear structure will significantly improve
accountability within the group and enable us to implement more effective
performance management processes. Over time, I believe this will improve the
operational efficiency of the organisation.


Nick Scott, previously the group's Commercial Director, was appointed MD
Services on 8 May and the Board is actively seeking to fill the position of MD
Products. The Board's other executive director is Peter Fitzwilliam, who was
appointed as Chief Financial Officer on 8 May.


Alongside the executive directors, we have two non-executive directors. Danny
Bernstein, who has extensive experience in the airline industry, is Senior
Independent Non-Executive Director, and Graham Bird is representative of SVG
Investment Managers, the group's largest shareholder. To further strengthen the
Board, we intend to make an additional non-executive appointment and are
currently undertaking a search for an individual with complementary skills and
experience.


Key tasks

The past year has seen change in senior management, a decline in profitability,
a significant increase in debt and, recently, the resultant focus on refinancing
the group. After this difficult period, the initial task for the new management
team is to stabilise the business by establishing clear organisational
structures, setting short-term objectives and providing support for
customer-facing and operational staff.


Looking beyond this initial period, the Board will focus on the following key
objectives for the business:


*restoring underlying profitability
*resuming growth
*focusing on cash management



Profitability

Restoring profitability will be achieved through a number of steps. First, by
improving the organisational structure and accountability, we will be able to
improve performance through better monitoring and management using key
performance indicators. Secondly, by giving ownership of processes to key
operational staff, we will benefit from the motivation and entrepreneurialism of
our staff. Thirdly, by focusing on specific bottlenecks in our processes and on
areas of high spend, we will be able to improve the way we operate.


Initial areas of opportunity for improvements in profitability have been
identified in both divisions. Within Services, these are through improved
operational efficiency at our Heston facility close to Heathrow; within
Products, they are in improved international logistics and purchasing. Reviews
have begun in both areas to establish the scale and timing of the opportunities
available. The Board will provide an update of progress at the time of our
interim results.


Growth

Whilst the immediate focus for the management team will be on stabilising the
business and restoring underlying profitability, the Board believes that
excellent long-term growth prospects exist in both Divisions. By way of example,
the changes brought about by the open skies agreements will create new
opportunities which we believe will be positive for Watermark. The Encompass
contract with Air Canada has also established a platform which should provide
further options for the group in future. Over the coming six months, the Board
will examine these prospects and report its findings at the full year results.


Cash management

The recent refinancing has established a stronger financial base for the group.
Long term financing has been obtained through the issue of Convertible Bonds and
the group's bank debt has been reduced to a more comfortable level. The Board
will remain focused on improving the cash-generation characteristics of the
group so as to strengthen the balance sheet and provide the financial base to
fund the group's profit improvement and expansion ambitions over the coming
months and years.


Trading outlook

Watermark operates with a high level of contracted turnover, and this provides a
stable base from which to effect the proposed improvements. We have a base of
high quality customers, who have been supportive throughout our refinancing and
we look forward to working with them and offering continual improvements in the
services we offer.


Under the new management, a comprehensive review of the group's financial
performance and position is currently being undertaken and the Board anticipates
being able to provide guidance for the year when the company announces its
interim results in September.



Enquiries:

Stephen Yapp
Executive Chairman
Watermark Group plc
Tel: [phone]


Jeremy Carey/Andrew Dunn
Tavistock Communications
Tel: [phone]



This information is provided by RNS
The company news service from the London Stock Exchange

END

[chicken] 22/6/2007 11:55

Chasser thanks i dont think its particuarly clear as it only seems to mention a reduction in voting rights?

thanks

[chasser] 21/6/2007 20:10

Chicken

The RNS is reporting a reduction of a holding (crossing the 3% threshold to 2.971%) - it even gives the holding prior to, and after, the triggering transaction.
Therefore, to answer your question: no, it is not a new holding, but a reduction in an existing holding.
The clues are in the announcement.......

[chicken] 21/6/2007 08:40

Is this a new holding?

Watermark Holding(s) in Company


RNS Number:7529Y
Watermark Group PLC
20 June 2007



TR-1: NOTIFICATION OF MAJOR INTEREST IN SHARES

1. Identity of the issuer or the underlying issuer of existing shares to
which voting rights are attached
WATERMARK GROUP PLC

2. Reason for the notification (please tick the appropriate box or boxes)

An acquisition or disposal of voting rights (X )

An acquisition or disposal of financial instruments which may ( )
result in the acquisition of shares already issued to which
voting rights are attached

An event changing the breakdown of voting rights ( )

Other (specify): ( )

3. Full name of person(s) subject to the notification obligation:
Universities Superannuation Scheme Ltd

4. Full name of shareholder(s) (if different from 3.)

5. Date of the transaction (and date on which the threshold is crossed
or reached if different):
15 June 2007

6. Date on which issuer notified:
19 June 2007

7. Threshold(s) that is/are crossed or reached:
3%

8. Notified details:

A. Voting rights attached to shares

Class/type of shares (if possible using the Ordinary (GB0009422097)
ISIN code)

Situation previous to Resulting situation after the triggering transaction
the triggering
transaction
Number of Number of Number of Number of voting % of voting rights
Shares Voting shares rights
Rights
Direct Direct Indirect Direct Indirect
1,688,498 1,688,498 1,388,498 1,388,498 2.971%


B. Financial Instruments


Resulting situation after the triggering transaction
Type of Expiration Exercise/ Number of voting % of voting
financial date Conversion Period/ rights that may rights
instrument Date be acquired if
the instrument is
exercised/
converted




Total (A+B)
Number of voting rights % of voting rights
1,388,498 2.971%

9. Chain of controlled undertakings through which the voting rights and/or
the financial instruments are effectively held, if applicable:

Proxy Voting:
10. Name of the proxy holder:

11. Number of voting rights proxy
holder will cease to hold:

12. Date on which proxy holder
will cease to hold voting
rights:

13. Additional information:

14: Contact name: Philip Brayne

15. Contact telephone number: 0151 227 4711

[chicken] 15/6/2007 11:22

Thanks, interesting as HSBC have 16% Rensburg 9% anybody know who other major shreholders are and %?

thanks

[chasser] 14/6/2007 19:44

Rensburg previously held 5%, as announced in March this year.

[chicken] 14/6/2007 17:20

volumes building today looks like big buys and a mm buy

[chicken] 14/6/2007 16:32

Whats this all about? who are Rensburg Sheppards Investment Management Limited?
have they obtained 9%?


Watermark Holding(s) in Company


RNS Number:2252Y
Watermark Group PLC
12 June 2007


TR-1: NOTIFICATION OF MAJOR INTEREST IN SHARES

1. Identity of the issuer or the underlying issuer of existing shares to
which voting rights are attached
WATERMARK GROUP PLC

2. Reason for the notification (please tick the appropriate box or boxes)

An acquisition or disposal of voting rights ( )

An acquisition or disposal of financial instruments which may ( )
result in the acquisition of shares already issued to which
voting rights are attached

An event changing the breakdown of voting rights ( )

Other (specify): Transfer (X)

3. Full name of person(s) subject to the notification obligation:
Rensburg Sheppards Investment Management Limited

4. Full name of shareholder(s) (if different from 3.)
n/a

5. Date of the transaction (and date on which the threshold is crossed
or reached if different):
8 June 2007

6. Date on which issuer notified:
11 June 2007

7. Threshold(s) that is/are crossed or reached:
9%

8. Notified details: Nominee holdings

A. Voting rights attached to shares

Class/type of shares (if possible using the ISIN code) Ordinary (GB0009422097)

Situation previous to Resulting situation after the triggering transaction
the triggering
transaction
Number of Number of Number of Number of voting % of voting rights
Shares Voting shares rights
Rights
Direct Direct Indirect Direct Indirect
2,303,137 2,303,137 4,221,412 9.03%

B. Financial Instruments

Resulting situation after the triggering transaction
Type of Expiration Exercise/ Number of voting % of voting
financial date Conversion Period/ rights that may rights
instrument Date be acquired if
the instrument is
exercised/
converted
Total (A+B)
Number of voting rights % of voting rights
4,221,412 9.03%

9. Chain of controlled undertakings through which the voting rights and/or
the financial instruments are effectively held, if applicable:

Client holdings registered in the name of Nominee companies 100%
owned by Rensburg Sheppards Investmemt Management Limited

Proxy Voting:
10. Name of the proxy holder: n/a

11. Number of voting rights proxy n/a
holder will cease to hold:

12. Date on which proxy holder n/a
will cease to hold voting
rights:

13. Additional information: n/a

14: Contact name: n/a

15. Contact telephone number: n/a







This information is provided by RNS
The company news service from the London Stock Exchange

[stemis] 10/5/2007 17:07

You need to read the summary of bond terms at the end of



Unfortunately the 'interest' on the convertibles (at a fairly penal 15.5%) is payable by delivery of Further Bonds. My reading of the terms of conversion mean that it seems unlikely that the bonds would be redeemed before conversion. Consequently

On conversion, the principal element of the Bonds will convert into 40,000,000 Ordinary Shares and the additional Bonds issued to the Bondholders if the interest is paid by delivery of Further Bonds for the full term of the Bond shall convert into 22,598,450 Ordinary Shares.

[dennis russell] 10/5/2007 16:39

SteMis -I can't quite follow your arithmetic. There are currently 44.6M shares, giving a capitalisation of around £11M In 3 years' time the bond-holders will get their cash back, or meantime be able to convert their 8M bonds into 40M shares, so there will be a total of 84.6M shares. Assuming £5M earnings and a p/e of 10, wmk will be valued @ £50M, or 59p per share. Might be worth hanging in for the ride? That little word 'assuming' of course...

[nickcduk] 01/5/2007 16:50

That pretty much sums it up SteMis. My sale today wasn't because I dont believe in the recovery prospects. I just felt that the turnaround will take quite a while yet. The dilution didn't help either. I just think its dead money until we see tangible improvements. I like my capital to sweat and feel I could get a much better return elsewhere.

I can't grumble too much because I have actually made a profit on Watermark over the last few months. I will keep an eye on and re-enter if it spikes lower or if we start to see tangible signs of recovery.

[stemis] 01/5/2007 15:54

All our holdings are small, now!

The bond issue is basically a deep discounted placing in drag for institutions. Bond holders will receive 62,598,450 shares in 2010 for putting up £8M now. That's 12.8p per share (with the added security of a second charge until 2010). They've managed to exclude small PI's by setting a £35,000 minimum. Existing shareholders will end up with just 41.6% of the company. Even the advisors have taken their cut with £1.2M of the £8M convertible funds going to them.

The initial feeling is one of having been stuffed. However the question is whether its all in the price.

Whether there is value here will depend on future trading. The company has a turnover approaching £100M. If it can make 5% and attract a P/E of 10 then its value will be £35M. Divide by diluted shares (post conversion) of 107M gives a share price of 33p. If they can make 10% and attract a P/E of 12 then its 78p.

What the refinancing has done is remove the uncertainty over the survival of the company and got the bank off its back, which is why the price is moving upwards.

Its all about delivery from here on in. Previous management have paid the price with their jobs (although no doubt will be well compensated). New management will probably get a raft of options at around the current price.

[rivaldo] 01/5/2007 15:19

Hi nick, good luck to you too. As I said before I've still got a small holding (as they say). I can appreciate everything you say, but I'm not sure I agree, as it sems to me the recovery is well under way, even if there will still be a bit more turmoil this year. I might even top up in my ISA, undecided as yet.

This is an always entertaining blog, and their perception of WMK today is also what I'm seeing:



"NH: Ok. time to look at some small cap stocks

PM: Yes, anything caught your eye?

NH: I am told to keep an eye on Watermark Group

PM: interesting - this is the firm that supplies in flight kit and cabin management

NH: it has been refinanced this morning

PM: Underwritten placing and open offer of convertibles

NH: and a new banking facility has been put in place

PM: £8m of bonds

NH: also some interesting changes in the boardroom

PM: Ah, yes chief executive seems to be off - Maurice Ostro

NH: guy called Stephen Yapp being brought in as exec chairman

PM: Also a new FD

NH: a little bird tells me that we should expect some high profile nonn exec appointments in the near future

PM: Just pulling the chart up ....

PM: Not a pretty site

PM: They were trading at 126p in July last year

PM: And the current quote is 25.25 - up a penny this morning

PM: There was a big fall in Jan - takeover talks collapsed

NH: some activist shareholders with a good record have big positions in Watermark

NH: SVG have a 16.1% stake and North Attlanic Value control 6.7%

PM: Grown up investors

NH: yeah. i would back this lot to turn things around"

[nickcduk] 01/5/2007 08:11

It wasn't really worth the wait. The shysters at SVG have shafted shareholders by issuing a convertible bond instead of a placing and then having the cheek to price the convertible at 20p instead of a healthy premium. The kitchen sink job we were all hoping for hasn't been done. They are still going to be restructuring in 2007. What have these muppets been doing for the last 6 months. Ive sold out my positions today as the recovery is not likely to happen this year. Good luck to all those still holding.

[stemis] 30/4/2007 18:34

What this company needs is a half decent FD.

[mrphil] 30/4/2007 18:00

They must be running short of tippex!

[nickcduk] 30/4/2007 16:15

Its never really a good sign when results are out late in the day. I put a call into the PR people and they said results will be out today, although Im not convinced. He said they would be out before market closed but its cutting it very fine. I would guess there will be another announcement alongside the results which has caused the delay. Hopefully it will be good news.

[stemis] 30/4/2007 11:32

Price seems to be moving upwards. One can only hope some good news is coming our way.

[jhoebloggs] 30/4/2007 07:19

Obviously too embarrassed to publish the results today

[stemis] 16/4/2007 12:16

The year end position is pretty well known - a loss before tax of £2.2M and net debt of £8M.

Current market capitalisation is £10M.

To support an enterprise value of £18M at, say, 10 x earnings would require an EBIT of £2.6M. That's not too far away from current levels [forecast PBT = 1.4 - 1.9M + interest of say £0.8m), despite the impact of non exceptional restructuring and reorganisation costs.

Watermark don't seem to have a problem getting business (as evidenced by the Air Canada contract) although making money out of it is a different matter. Their annualised turnover must be over £100M now. At one time they made an EBIT margin of 10%. Even half of that would see a significant share price increase from here.

Like most I expect (hope) that Watermark will have taken the opportunity to clear the decks. Past management clearly took their eye off the ball and were maybe squeezing profits to the limits to maintain their track record. New management can start their records afresh. Once Watermark looks back on an even keel I can imagine one or two in the industry will come sniffing around.

[nickcduk] 16/4/2007 11:44

Hi Rivaldo,

The recent selling to new lows was probably end of year tax losses being taken by private investors. I agree the final results will be awful but I expect a kitchen sink job will put the company on a much firmer footing. The recent buying is probably down to some pre-result positions being taken up. If we get an ok trading statement with the results I would expect a re-rating to take place pretty quickly. Their are a few institutions who have upped their stakes and I would guess are waiting for the results before moving more aggressively into WMK. My only concern is that I think they may issue some equity which will dilute existing holders. Hopefully it won't be too big a dilution.

[rivaldo] 16/4/2007 11:29

I'm wondering whether to pick up a few here again - was that the bottom? The results are obviously going to be terrible on a headline basis, but the core business should still be doing OK.

What's behind today's rise? Is it anything to do with all the weekend news about Ryanair and other airlines promising new services to the USA? Maybe there's an expansion of WMK's markets here - I'd have thought their services would be required for cross-Atlantic flights, even if some of them would be on a request-only basis. Any thoughts?

[hmt] 07/4/2007 12:07

Does any one have any views on the pending results and on the prospects of a recovery for share price?

[dennis russell] 29/3/2007 17:15

Open Skies etc - is that likely to be good or bad news for WMK?