Work Service Share Discussion Threads

[smithie6] 17/11/2014 15:17

A new thread just to discuss the pros and cons of the 2014 AGM resolutions.

I urge shareholders to consider to vote NO to all resolutions, except a 'withold vote' for E.Beale re-election vote.

Especially imo the resolution to allow the issuing of 12M new shares is very negative for shareholders and shareholder rights.
imo Western has no need to issue 12M new shares....

Western has 3M cash, can raise 1-3M more by selling some NBI shares and could raise 3M from loans secured against all assets, giving 9M cash. Hence the co. would have enough cash to do whatever it wanted....with no need to issue new shares.

Western issued 5M new shares (40p nom. value) in Jan 1996 at 64p. It is now 2014, almost 20 years later ! and the market mid price is 65p !. No change in 20 years !
When Western issued the warrant units in 2007 it resulted in around 6M new shares, the share price fell because of the large reduction in NAV/share due to the issue of the new shares.

2) The resolutions also appear to call for the new shares to be issued NOT pro rata. I strongly oppose that.

3) if the co. wishes to propose some investment or corporate action that it can not fund from existing resources (I do not believe that is the case)
then
imo the dirs. should propose a specific deal with specific data at the time and allow shareholders to vote on it at the time.....and not give agreement in advance to any deal where we do not know any details

4) I do not have much confidence in the Marshalls and am concenred that LFI/Western perhaps operates for their benefit rather than the benefit of shareholders, that is another reason to vote no.

(by increasing the amount of capital under the control of dirs. then they can increase their dirs. fees, expenses, bonuses and also perhaps employee more members of the Marshall family (1 son has been a director for years at City Group, where western owns 48%.....there are 2 other sons)

[smithie6] 15/11/2014 18:49

tax avoidance....

perhaps copying David C.Marshall is the way to do it !?


"Mr. D.C. Marshall ceded US$22,000 of his fees for the year (2012 – US$22,000) to an overseas company which supplies his services and in which none of the Directors is interested, save that the directors of that company are two Jersey registered corporate entities and Mr. M.A. Pesco and Mr B.C.B. Newman are a director of each of them."

(fees from FIF, NBI, etc are I assume paid to this same co.)

(Pesco and Newman are directors at Monteagle ...strange to put trust specialists on to the board of a company that has nothing to do with trusts !)

"directors of that company are two Jersey registered corporate entities"

...which are perhaps owned by entities registered in ....Panama ?, Cayman Is. ?!

...I guess the tax inspector would struggle to get any answers !, noting the directors are not human but a companies
(Western and LFI also do not have 1 exec. dir. !)

----

90% of renumeration to L.Marshalls and D.Marshall is not paid as salary but paid as 'other'
..I assume to avoid paying tax on it.

if only Joe Public could play the same games !

-----

(the trust is imo an on-going family trust....on-going from generation to generation...
which grows over time as money is paid in from dirs. fees at cos. where LFI/Western invest...and divis from shares held in LFI and Monteagle...and pension payments and co. bonus schemes etc

(while shareholders havent seen any/much return over last 15-20 yrs)

[smithie6] 15/11/2014 18:36

Topvest
btw
I think you posted about Halogen...where Monteagle owns half

looks like another DC Marshall clanger perhaps

loss making in last 2 years...and had a rescue cash raising in 2013 by the looks of it...

(DCM, what a track record imo, if add to Hartim losing 3M pnds 1-2 yrs ago)

----

"Held by Marshall Monteagle PLC
Halogen Holdings P.L.C. 46.9% 46.9%
Incorporated and operating in England, unlisted.
Activity – Holding company
The Company subscribed for preference shares in Halogen, issued as part of a fundraising by that company
for its associate, Heartstone in the previous year. The Company’s interest in Halogen has not changed
following the additional investment.
There are no restrictions on this investment.
The company had no revenue in 2013 (2012 – nil).
Unaudited consolidated loss for year ended 30th September 2013 £236,000 (2012 - £264,000).
Total assets at 30th September 2013 – £2,035,000 (2012 - £2,271,000).
Total liabilities at 30th September 2013 – £540,000 (2012 - £525,000).
Unaudited consolidated reserves at 30th September 2013 £1,510,000 (2012 - £1,746,000)"

[smithie6] 12/11/2014 18:12

Competing investment cos.

have excellent performance over 15-20 yrs...whereas Western/LFI do NOT !

shows imo that the competing funds have not had
"bad timing or bad judgement or both. " 'Or been just unlucky'


the difference is strategy....
the Western/LFI strategy performs badly compared with normal strategy of buying/selling shares in listed small cos. as deemed best.

Solution for Western sharesholders ?
Vote NO to all resolutions and force a change in strategy for all new investments except for follow-on investments in existing investments. And bring in inv. mgr./resp. with track record, or offload fund mngmt to Blackrock, Artemis, Liontrust or similar....or return assets to shareholders when investments are sold in future without starting any new investments.


----

1) BRSC



2) ASL

[smithie6] 12/11/2014 18:08

"topvest 10 Nov'14 - 20:32 - 80 of 85 0 0

See Industrial & Commercial Holdings PLC are about to raise some more funds to keep trying to get planning permission on their site near Glasgow. Not sure I will invest any more in this, but one day maybe it will come good."


They have used up over 1/4 M pnds over 14 yrs.....with imo little to show for it....
...instead of spending money every year on applications and presentations perhaps they should just sat back a bit and watch/wait....until building expansion makes the land to be the next one to get permission..they can not force/push imo to get building permission imho.....

population only grows slowly each year imo !

I hope the large number of acres they sold back in 2000 was not built on ! (making a contact of the dirs. rich (who the land was sold to by ICH) and not the shareholders !)

[smithie6] 12/11/2014 18:00

according to latest accounts....
the Employ. Trust has awarded shares to some employees...

personally not happy about that...

I paid around 64p to convert warrants to shares around 2006
and share price is now 63p to sell...8 yrs later....

ie. bad performance

I did not invest new money expecting 4% of my investment money to be given to employees/dirs. for poor share performance !
====

Update
The accounts are WRONG !
(the Employ. Benefit Trust still holds all the shares, approx. 645k......they have just managed to remove it from the list of holders of > 3%....it should be listed)

perhaps not too much of a surprise for Western !

[smithie6] 12/11/2014 17:55

Russman
Was Halogen not already rolled in to Monteagle ?
...I recall that one co. was about 1-3 yrs ago.....via a share offer I think I recall.

Halogen/Heartstone have no link to Western so I dont expect them to be moved in to Western.....

they had a rescue cash raising via a share issue I think I recall

around breakeven or loss making I recall.....not of any interest to me personally

in any case....the pub sector should be avoided at all costs imo....tough sector, lots of pubs closing in recent yrs
----

Hartim would surely be a higher possibility....and a lot easier to do I would assume since Western already owns half of it...

[smithie6] 12/11/2014 17:50

"Russman 10 Nov'14 - 23:23 - 81 of 82 0 0

I was reading some back Annual Reports of Marshall Monteagle Plc. The Marshalls appear to have bad timing or bad judgement or both. Or maybe they are just unlucky."

whichever it is......
...if any other inv. mgr produced similar perf. over 15-20 yrs they would have been replaced a long time ago

(I am of the opinion that they are perhaps academically challenged ! since neither of the 2 that are on LFI/Wsetern bods have any qualifications listed against their names, none !....while most dirs. of listed cos. have at least a univ. degree or an accountancy qualification

and since they only got the job 'cause of 'papa'....DC Marshall even got the job from his dad !
rather than being chosen as the best candidate from say 10 applicants...all with good track records and CVs)

[russman] 11/11/2014 17:37

Maybe the Marshalls are looking to roll Halogen into WSE. Heartstone Inns is on the road.

[russman] 10/11/2014 23:23

I was reading some back Annual Reports of Marshall Monteagle Plc. The Marshalls appear to have bad timing or bad judgement or both. Or maybe they are just unlucky.

[topvest] 10/11/2014 20:32

See Industrial & Commercial Holdings PLC are about to raise some more funds to keep trying to get planning permission on their site near Glasgow. Not sure I will invest any more in this, but one day maybe it will come good.

[smithie6] 10/11/2014 17:20

Anyone else interested in voting against anything ?

ANyone agree with my overall point....that the strategy of investing in small cos. and putting a Marshall on the bod to turn the co. into a superstar

has a bad track record

and is blown in to the weeds by the std. inv. strategy (Blackrock (BRSC) , Artemis, Liontrust etc)...which is to invest in small/medium cos. ....and buy/sell as suited, without anyone on the board limiting or stopping your buy/sell decisions.


The following have failed as investments for Western/LFI

- Creston (after the 3% Western running cost, this has shows a loss imo wrt inflation)
- Swallowbridge .
-
- MWB. Bust
- Doctors Direct. Delisted/sold. 0 return to shareholders.


with 1 recent success, Northbridge

that is a very poor (and imo unacceptable) success rate
----

The NAV is around what it was 15-20 yrs ago.

----
That is failure.

Although in the short term, Hartim could give a lift to the NAV/sp., perhaps.
But that small input is not enough to justify the inv. strategy.

and imho a change in strategy is needed....
but a block of shareholders is needed in order to make any changes

[russman] 05/11/2014 19:18

I will be voting against 6,7 & 8. LFI/WSE is a two-headed dinosaur.

[smithie6] 05/11/2014 16:24

relevant notes on dirs. benefits

noting that LFI + Western cost 700k/ year to run
and over recent years there are also 4% of assets given to dirs/key employees at LFI and at Western

P.Scott has written some notes on dir. pay/benefits....and that it results from shareholders NOT VOTING !

(hope that all Western readers will be sure to read and understand the resolutions and use their votes)

-----

P.Scott
"There seem to be significant concerns with Creston shareholders about excessive Director remuneration packages, and in particular overly generous share options schemes. The disclosures on share options in their Annual Report were so complicated & confusing, that in the end I gave up trying to understand the full picture.

This is a much wider issue - in my view the managerial class draw far too much in remuneration out of most companies, and this situation has arisen largely because so much of the shareholder base is non-voting. What I mean by that is that Directors have cottoned on to the fact that many, even most shares will not be voted at general meetings, because those shares are held in Nominee accounts - not just private shareholders who usually hold shares in this way, but also the CFD & Spread Bet holdings will almost always be held in a non-voting form too.

This effectively leaves many management teams in complete control, able to do whatever they like, including setting their own pay (through the thin veil of supposedly independent Non-Execs). The only brake on them are the Institutional shareholders, who are part of the same managerial class! So what we have seen over the past couple of decades is a ratcheting up of executive remuneration to levels that cannot possibly be justified, especially with some smaller caps where Directors are being paid £400k+ packages in some cases, which can be wildly out of kilter with their ability, and the value they add".

- See more at: hxxp://www.-.com/content/small-cap-value-report-10-jan-2014-chh-pmp-cre-ttg-xpp-80434/#sthash.O5ltfSsq.dpuf

[smithie6] 05/11/2014 15:41

oooof

"At LFI they are looking at a maximum amount of £189,626.00 ( being 3792521 shares ) which is hugely less than the £4,820,000.00 for WSE.
Possible the WSE annual report is an error and should be the share amount, not the £ amount ?"

If your numbers for LFI are true...
then...

we all need to be cautious imo about the Marshalls and their true intentions.

If they bloat up Western selection via cash raisings......then it costs them 0 since they do not own 1 share

whereas at LFI any new share issues would require them to cough up cash...

and from Western being bigger then they can maybe get more income via directors fees at investee companies

(a strategy that imo ...shareholders should fight to stop...since not in out best interests over medium term.....strategy of BRSC, Artemis, Liontrust is much better.....invest and buy/sell as you wish...no director on to boards)

----

as I understand it....

by Law

...the dirs. of Western must operate Western for the benefit of Western shareholders
and not for the major shareholder at LFI.
----

if anyone has similar views to me....then you need to speak up...and/or join together to make a group...

the ISDX regulator/FCA wont take much notice of one person..about any possible rule or law breaking..but if it is 5 or 10 then they might.

----

to be clear, I am not suggesting sell the shares.....since large discount to NAV...but I personally would like to see some changes.....to avoid the poor long term perf. being allowed to go on for ever....and the Marshalls perhaps using it for own reasons...

[smithie6] 05/11/2014 14:49

oooof

"At LFI they are looking at a maximum amount of £189,626.00 ( being 3792521 shares ) which is hugely less than the £4,820,000.00 for WSE.
Possible the WSE annual report is an error and should be the share amount, not the £ amount ?"

imho the Western accounts are correct (but badly written) for new shares

it is 12M new shares, 4.8M nominal value (nom. share value is 40p/share, 12M= 4.8/ 0.4)


(the accounts do make a mistake in 1 part where it gives the nom. share value as 10p......(the share consolidation of 1: 4 was 7 or so years ago.....
the dirs. are over 70 yrs old.....we need to give them a few more years before they get the accounts in to line !)

(a disgraceful image to give imo....when City Grp. advertises to provide accounting and co. services)

[smithie6] 05/11/2014 14:46

but in any case....important to note that the dirs. do not, most of the time, do ANYTHING at all

the co. is run by City Grp......where D.Marshall and E.Beale are also dirs...and perhaps Mr Robotham as well

by running from a subsidiary/associate
- they can hide from the PLC shareholders the real dirs. fees (they dont run Western for only 56k dirs. fees I can assure you !, eg. E.B dir. fee at City Grp must be 90-100k without expenses/extras
- they can avoid having to meet mkt rules for the subsidiary/associate


As part of costs.....around 300k spread over recent yrs for co. shares given to dirs. and managers.....even though the co. has not achieved perf. targets and perf. over 15-20 yrs is less than inflation imo.
----

Dirs.
DC Marshall is resident in South Africa
The Swiss banking dir. is I assume resident in.....Switzerland. (I assume he is there since Marshall family trusts are perhaps in Switzerland or similar tax haven).


Frank Lucas runs a Jewish broking co. (and might have been born in Germany)
EB was I believe bron in ctr Europe.


Sometimes it looks like the only UK part is us shareholders !......with blood suckers stuck to us that we cant shake off !

----
Just after the warrant units were issued (a scam in some ways, shareholders were effectively forced to take them, or get shafted....while seeing the share price collapse at the same time due to the scheme, and F.Lucas co. charged 200k to do it ! (raising 800k before costs and 600k after, 200k over 600k is a cost of 33% !



If the co. were to issue 12M new shares, as will be allowed to do if shareholders vote yes, then....perhaps again the co. will award 4% of the co. to dirs. and managers. Making 8% in recent yrs. of shareholder assets going to mgrs and dirs. And then again the same in 5 yrs time ?!
---

And also dissapointed that the accounts say NOTHING of future plans.

----

Perf. of the Gen. Portfolio was also a disagrace imo. And imo perhaps part of the reason they have ended it. When big shareholders say 'what the fxxx, dont you know what you are doing' they can reply 'we dont have a GEn. Portf. anymore, water under the bridge, no point to discuss it '

[topvest] 04/11/2014 21:12

I haven't checked, but the directors fees point is probably just changing the upper limit in the articles from the existing limit to £250k. I don't think they are suggesting putting the fees up to that level. That having been said, £100k is more than adequate for this company given they are currently only £56k.

[oooff] 04/11/2014 21:07

I had a look at the LFI annual report and it has similar allot share resolutions as WSE for their AGM.
At LFI they are looking at a maximum amount of £189,626.00 ( being 3792521 shares ) which is hugely less than the £4,820,000.00 for WSE.
Possible the WSE annual report is an error and should be the share amount, not the £ amount ?
LFI also have a resolution for directors fees up to to a maximum of £250,000.00.
So that would be up to a maximum of half a million £ for directors fees between the two companies.

[topvest] 04/11/2014 21:01

OK, fair enough. I will vote. Haven't voted historically as it's not postage paid...maybe they don't want shareholders voting!!

I will vote no on 6, 7 and 8 and yes, on the rest.

Looking at the accounts, I agree that costs are too high. In my view the £240k on page 17 is too high and after deducting expected costs (such as the City Group) I struggle to see why they are so high. I think costs should be at least c£70-100k lower than they are. You'd expect PLUS fees, Registrar fees, Corporate Advisor fees and other sundry costs to be only about £50k. They have no property related costs and no employees so what is the £100k lurking within that number? One guess is travel and subsistence costs for Mr Marshall which could be very significant if he flies back and forth to South Africa.

Directors' fees - this resolution is just changing the upper limit in the articles of association (rather than the actual fees). I'm not absolutely against the first increase for 15 years that they put through in 2013/14. That being said, I will still vote no. They should be keeping ongoing costs down. They don't like that ratio though and no longer report it specifically as a KPI as they did a few years back.

Given their past record on share issues, I also do not think they should issue ANY new shares unless they are at a price exceeding NAV. Indeed, they should be buying shares in when opportunities arise and they could help shareholders by having a tighter spread on the shares.

My biggest concern with Western Selection is that we end up with shares in an unlisted holding company (just look at Halogen Holdings PLC). I made a comment about the annual report changing. This looks a cost cutting measure; cheaper paper, less pages. If I was being cynical, maybe this is one step closer to being a private company the way they are going. PLUS won't be around for ever. It doesn't seem to attract any interest. What happens when PLUS closes? I can't see them floating on AIM unless they have some very successful investments over the next few years and the directors would only underline their stupidity from moving off AIM in the first place. They don't seem to want to merge with Lonfin, but that might still happen at some point. It's the only logical way to go really.

What's your view on Lonfin? Apart from buying 1m shares in Finsbury Food, in the recent reverse takeover, it doesn't seem to be doing anything these days. Then again, what investments have WSE made in the last few years; virtually none!

Anyway, ramble over. LFI and WSE are both deep value investments giving an adequate, but hardly inspiring, return. Something needs to happen to be a catalyst for change, either on the quality of the investments made or in someone shaking up the status quo. In the meantime, I will hold on and await the Hartim float.

The strategy change in WSE is probably sensible as the general portfolio is never going to create the kind of returns that are needed. If this is the best strategy for WSE though, why carry on with the same strategy in Lonfin? The big short-term hope has to be Hartim and it's good that the directors recognise this also. There could be a very very big uplift in value on a successful IPO. This could happen in 2015, but more likely 2016 or 2017 in my view.

[smithie6] 04/11/2014 17:36

Topvest
you plan to vote yes or no to allowing the issuing of 12M new shares ?

"to such persons ....as they see fit "

(Im voting no)

[smithie6] 04/11/2014 17:32

"coolen 2 Nov'14 - 21:03 - 65 of 68 0 0(premium)

Error within the Resolution explanations, if I'm correct ?"

they often get the nom. share value wrong (and have put 10p ) and also the date of the AGM.....giving the impression of not caring...

[oooff] 03/11/2014 22:39

They should include a resolution about whether the current company name sounds like a dvd box set.