Watchstone Share Discussion Threads

[lydnem] 01/5/2017 05:41

I presume you bought before the recent falls?

[rogthepodge] 30/4/2017 23:08

PURP

hope you make lots shorting it, ElCap/Lydnem

[lydnem] 29/4/2017 09:55

numb nuts. Are you buying anything at the moment.....im looking for a good short, and you longs are nailed on short

[henchard] 28/4/2017 23:16

Worst case scenario starting from net assets of £126m (including escrow cash):
WTG doesn't get the escrow cash - NAV down to £75.9m.
Your Legal Friend indicative initial £9.4m compensation claim (rumoured to be a quarter of total claims) all successful - NAV down to £38.3m.
Serious Fraud Office takes the rest in fines - NAV down to £0 (0p per share)

Best case scenario starting from net assets of £75.9m (excluding escrow cash):
WTG gets the escrow cash - NAV up to £126m.
Your Legal Friend doesn't pursue claims or all claims fail - NAV £126m.
Rob Terry is jailed and has his assets confiscated as a result of the SFO investigation but there's no financial penalty for WTG - NAV £126m
Ingenie and Healthcare Services sold at 2 x sales - NAV £159.6m (347p per share).

Or somewhere in between :)

[henchard] 28/4/2017 22:33

Looking at the results, I think the valuations of Ingenie and ptHealth (which is actually now 'Healthcare Services' consisting of ptHealth and InnoCare) can be ugraded.

The results give Q1 revenue numbers, so I'll annualise those.

The results also state that "Ingenie is now profitable and generating cash" and that despite required investment in InnoCare's products and associated marketing, "we still expect [Healthcare Services] to be profitable and cash generative in 2017." As Q1 sales have shown decent growth and as Ingenie is now generating cash and Healthcare Services is on the brink, I think a valuation of 1.25 times sales is now merited.

Revisions to earlier valuations below (in bold)

ptHEALTH
Dec 2016: £36.5m (79p per share) valued at 1.25 Q1 2017 annualised sales
Dec 2016: £28.1m (61p per share) valued at 1 x ttm sales
Jun 2016: £27.2m (59p per share) valued at 1 x H1 2016 annualised sales
Dec 2015: £26.4m (58p per share) valued at 1 x Q1 2016 annualised sales

INGENIE
Dec 2016: £19.5m (42p per share) valued at 1.25 Q1 2017 annualised sales
Dec 2016: £13.9m (30p per share) valued at 1 x ttm sales
Jun 2016: £14.0m (30p per share) valued at 1 x H1 2016 annualised sales
Dec 2015: £14.0m (31p per share) valued at 1 x Q1 2016 annualised sales

Leading to revised NET ASSETS of
Dec 2016: £75.9m (165p per share) [£126.0m, 274p per share if WTG gets escrow cash]
Dec 2016: £61.9m (134p per share) [£112.0m, 243p per share if WTG gets escrow cash]

[rogthepodge] 28/4/2017 21:46

so not much downside, but quite a bit of upside IF any escrow monies are recovered

[henchard] 28/4/2017 21:19

Just for interest I've done some alternative net asset calculations for the last three balance sheet dates. Total liabilities are as per the balance sheets but total assets are: cash, cash in escrow, my valuation of what might be realised from a sale of ptHealth and Ingenie, and zero value for everything else.

SHARES IN ISSUE
Dec 2016: 46,038,333
Jun 2016: 46,038,333
Dec 2015: 45,822,708

CASH
Dec 2016: £81.2m (176p per share)
Jun 2016: £93.8m (204p per share)
Dec 2015: £103.2m (225p per share)

CASH IN ESCROW
Dec 2016: £0 [£50.1m, 109p per share if WTG gets escrow cash]
Jun 2016: £50.1m (109p per share)
Dec 2015: £55m (120p per share)

ptHEALTH
Dec 2016: £28.1m (61p per share) valued at 1 x ttm sales
Jun 2016: £27.2m (59p per share) valued at 1 x H1 2016 annualised sales
Dec 2015: £26.4m (58p per share) valued at 1 x Q1 2016 annualised sales

INGENIE
Dec 2016: £13.9m (30p per share) valued at 1 x ttm sales
Jun 2016: £14.0m (30p per share) valued at 1 x H1 2016 annualised sales
Dec 2015: £14.0m (31p per share) valued at 1 x Q1 2016 annualised sales

TOTAL ASSETS
Dec 2016: £123.2m (267p per share) [£173.3m, 376p per share if WTG gets escrow cash]
Jun 2016: £185.1m (402p per share)
Dec 2015: £198.6m (433p per share)

TOTAL LIABILITIES
Dec 2016: £61.3m (133p per share)
Jun 2016: £72.8m (158p per share)
Dec 2015: £88.1m (192p per share)

NET ASSETS
Dec 2016: £61.9m (134p per share) [£112.0m, 243p per share if WTG gets escrow cash]
Jun 2016: £112.3m (244p per share)
Dec 2015: £110.5m (241p per share)

Current market cap: £68.6m (149p per share)

I'll leave it at that for now and go away and ponder.

[rogthepodge] 28/4/2017 20:56

funky

on tiny volume

don't panic Mr Mainwaring

[lydnem] 28/4/2017 08:38

thats not a bad day for Slaters......numb nuts will be frothing at his gash

[funkmasterp12] 28/4/2017 06:21

Yes, such good news for SGH shareholders that the price... dropped 4% overnight.

[geoffreen] 27/4/2017 19:02

Whilst Watchstone's view as to the lack of merits of the purported claim has not changed, on the basis of the Opinion, we consider it appropriate that a provision for impairment be established in respect of the Warranty Escrow and have determined that the appropriate amount should be to fully impair the Warranty Escrow. This reflects the inherent uncertainty in valuation of the purported claim and is in no way a reflection of the Group's view on ultimate resolution, which is uncertain in both time and quantum (if any).

As yet no proceedings have been brought and the Group will defend such claim robustly if commenced.

[kendonagasaki] 27/4/2017 18:47

That money has long gone!

[rogthepodge] 27/4/2017 17:30

good news for SGH shareholders

no expectation of £50m escrow monies

[kendonagasaki] 27/4/2017 17:00

Its all downhill from here!

[geoffreen] 27/4/2017 14:38

An orderly disposal of remaining assets, WTG's stock market career will be coming to an end.

[bbmsionlypostafter] 27/4/2017 12:48

NIHL. Now there's a surprise.

Said nobody.

Ever.

We remain in active dialogue with S&G on a number of other matters including the performance of the noise induced hearing loss ("NIHL") cases to which deferred consideration is due when, and if, such cases are profitable. To date, no deferred consideration has been paid.

[funkmasterp12] 27/4/2017 12:45

Er, no. As of last Sept:"Operationally, we have some exciting opportunities to create value in our remaining businesses through a more focussed and realistic approach and particularly via organic growth and new product launches. We remain determined to deploy resources and energy to maximise such potential."Not exactly the case now, is it?

[rogthepodge] 27/4/2017 12:33

what is new?

the company made it clear maybe a year ago, or even more, that the value was in selling off the bits

the board was awarded options at the same time to benefit from this, weren't they?

interesting thing will be how much they get for the bits

[funkmasterp12] 27/4/2017 09:54

Well, the business is basically now valued at cash + assets so there's a floor under the share price They've written off the monies due from S&G, which is no surprise.

It now all comes down to whether they can monetize the rabble of businesses they have left. I will say it appears Indro has done a good job in reducing cash bleed, but that doesn't mean the resulting businesses are any good. In fact, you could happily argue he wouldn't be leaving if what was left had any promise.

I can't see the share price going up or down from here - there's obviously now no investment case, but there's only limited downside risk. The only possible Black Swan is the SFO investigation.

Basically the excitement is largely now over until they start selling off the businesses. Let's see who stumps up. Rob Terry himself perhaps?

[kendonagasaki] 27/4/2017 09:21

Results here are shocking.No recovery here....?Much further to fall here too.

[funkmasterp12] 27/4/2017 06:13

Indro's had enough already then! What a sorry state of affairs this is for holders. I don't think Cawkwell will be getting his target, ever.

[rogthepodge] 26/4/2017 16:41

here is some for you ElCap

find something better to do