-3x Short China Discussion Threads

[bc4] 15/4/2011 14:28

the 100000 sell at 9.9 was a buy i know it was mine

[gdasinv2] 15/4/2011 14:00

5 FOLD Anytime.......I am telling this in another JJB....

[mavverick] 15/4/2011 08:54

Despite a headline grabbing circa 1bn income (but income is falling) SC is now trading at a loss.. and virtually without cash reserves or capital assets...rent reductions alone will not enable them to trade profitably...getting rid asap of loss making part of portfolio might/or ultimatum to some councils....We give back the keys or You increase the fees.

[gdasinv2] 15/4/2011 08:29

By PE Value it is still 50p....SCHE will agree with landlord and drive the price by 35-40p to attract the investor and then may raise some right of issue to attract investor. At these stage they will not do anything until they have good successful ground for right issue. In my opinion target is still 35p a min. Remember the turn over is 1 Bn

[mavverick] 14/4/2011 22:21

lol! there is not much downside left for some existing shareholders. As you say rights issue a possibility...landlords as you say are in different places...seem to remember one was in administration themselves! LL's may well take a slice of SC for contractual concessions. The turnaround team will have a business plan(s) based on different negotiated assumptions that will enable SC to get through this IF the right concessions are made, not least getting out of unprofitable poorly occupied care homes/care homes where fee levels are below average. In England fee levels vary considerably. In Scotland there is a national care home contract which at least guarantees a certain level of funding...but not occupancy levels.

[lej2] 14/4/2011 20:22

mavv, I agree with your views on short term trading and occupancy rates, and particularly in the need to cull the poorest performing homes. However, I am not as optimistic as you over the chances of landlords acting cohesively and sympathetically. The landlords will have different portfolio mixes (between good and bad) and differing internal pressures (banks, shareholders etc).

That said, administration is not something that the landlords would welcome. Interested parties will buy the best homes leaving the poorly performing homes stuck in a company with cash in the bank but heading for liquidation. This is why there is some hope in landlords reaching some sort of agreement.

Any solution will require cash which would suggest a rights issue, heavily diluting current shareholdings for non participants. Banks will not be interested. I can't see much upside for existing shareholders. All IMHO of course, and thankfully I am usually wrong as I am still holding!

[mavverick] 14/4/2011 18:47

LEJ2 Medium term as you say the critical question, which presumably is one of the 'series of proposals,' is what will it cost to get out of the contractual 25 year leases. With occupancy levels accelerating to make SC loss making and SC having few assets there is nothing to be gained by landlords not acting cohesively and sympathetically, as a tenant renting some properties if not all (albeit at a reduced and no longer inflation proofed/fixed increase rent), must be better than a tenant in collapse paying rent for none of them! Thats the rational bit but LL's need to 'get it' quickly because SC are on the brink.

SC can then serve their appropriate notice as operator to regulatory bodies where councils are not willing to negotiate raised fees to sustainable levels for certain care homes.

It will be interesting to know if SC have a backer in the background medium term who would countenance SC buying back some freeholds to avoid having to pay a 20%+ of income as rent. LL's may well offer at a discount in prevailing market as will not find an alternative operator at current rent levels for most of the portfolio.

Short term SC need this sorted by June to aid cash flow/cost reductions.

The central issue remains dropping occupancy levels in a significant part of the portfolio/combined with unaffordable rents (as JB says) that cut the profit margins to the bone and give no future asset.

If SC are more decisive than they have been and go for the major surgery (as trading conditions will likely get worse over the next few years)then imho a much reduced downsized SC could return similar profit levels of a few years ago and the share price will respond accordingly.
Not for the faint hearted.

These LL discussions are pivotal. imho/dyor

[gdasinv2] 14/4/2011 13:21

This is another JJB...1£ Billion Revenue, 30% margin, Lucrative and cheap share price , RNS all positive.

[selkirk69] 14/4/2011 13:09

Sport
Thank you for putting me straight, I didn't know that.

[5hakey] 14/4/2011 12:30

land lords filling up their boots with stock hahaha can not buy any online

[sportbilly1976] 14/4/2011 12:14

selkirk,

auctions triggered each time the price moves 10% from the previous UT trade...irrespective of volume traded

[stevespi] 14/4/2011 11:32

Great news.... Should see a steady rise upto 15p, until further meetings with the landlord and further positive news.

[selkirk69] 14/4/2011 11:23

What's there to say.
Keeps going into auction so the mm's don't appear to know what to make of it, however, going into auction more than once on low volume makes me think there's not a lot of stock. Just imo.

[sportbilly1976] 14/4/2011 11:17

news & 30% up, yet the BB is quiet?

[selkirk69] 14/4/2011 10:34

RNS out
Very very positive and well done to them for informing us so quickly.

[topinfo] 14/4/2011 10:34

Meeting with Principal Landlords

TIDMSCHE

RNS Number : 9018E

Southern Cross Healthcare Grp PLC

14 April 2011

Thursday 14 April 2011

Southern Cross Healthcare Group PLC

('Southern Cross', 'the Company' or 'the Group')

Meeting with Principal Landlords

Southern Cross, the UK's largest care home operator, announces that it has held a meeting with its principal landlords today to discuss the financial restructuring of the business. A series of proposals were outlined at the meeting which landlords are now considering.

The meeting, attended by 20 of the Company's landlords, representing 92% of its homes, clearly outlined all of the options available to landlords. No decisions were made at this meeting but there is a general recognition of the value to all parties of moving forward to a solution in an orderly fashion.

Southern Cross reaffirmed that the provision of care remains the priority for all parties and that the negotiation process has not, and will not, compromise the quality of care Southern Cross provides to its 31,000 residents.

Jamie Buchan, Chief Executive commented:

"I wish to thank our landlords for attending today's meeting and I look forward to discussing the proposals further, in the weeks ahead. Southern Cross firmly believes that it is in our mutual interests to reach an equitable agreement with landlords. I am encouraged by the constructive nature of negotiations to date and I am confident that we will continue in that vein."

Enquiries:


Southern Cross Healthcare Group PLC [phone]
Jamie Buchan, Chief Executive
David Smith, Group Finance Director
Amy Kroviak, Director of Communications


Financial Dynamics [phone]
John Waples/ Ben Brewerton

[lej2] 14/4/2011 10:26

mavvericks posts over the past few months have been pretty much on the mark. My own thoughts have been on similar line - if SCHE could get rid of the dross they would be an extremely profitable company, and this is one of the key areas of focus for the restructuring team.

My concern now is how can this be done. I have recently seen valuations given in support of bank loan restructuring, whereby the market value of a 46 bed home was set at £2,050,000. The value of the home if closed was set at £955,000. The home was purchased 3 years ago for £3.2 million. Some of the 'dross' at SCHE will be in a similar position - except it is the landlord who has the ultimate loss if the home is closed.

I cannot see any landlord accepting this without a substantial payment to terminate the lease and SCHE has no surplus funding available. Any thoughts any one?

[selkirk69] 14/4/2011 10:18

Mav
If they turn it around (that's a big IF) and get a result partial or otherwise, in simple terms considering the share price not too long ago was £6, where do you think it may end up? Seems to me that there's plenty of potential upside here on known facts just need a few things to fall into place and that's what we basically try to do with shares, spot the potential and gamble, nothing comes without risk but that's the bit you can manage.
They've turned away bidders which does add confidence.

[swordfish7] 14/4/2011 09:49

They don't wear sandwich boards any more. They post in CAPS on bb's.
The end is nigh!!

[mavverick] 14/4/2011 09:42

no guarantes here but many SC care homes ARE profitable...so turnaround team have smething to work with if they can divest themselves of the dead wood. This is harsh on some of the old people, but an economic reality that there will be some care home closures.

[selkirk69] 14/4/2011 09:23

Seems like a sensible chap

[greater things are yet to come] 14/4/2011 08:53

lol


TOLD YOU SO... WHAT FOOLS FALLING FOR THE MM PUMP AND DUMP UP TO
14p RECENTLY...

BACK BELOW THE INEVITABLE 10p AND HEADED FOR 0p LIKE ALL OTHER
CORRUPT SHARE DOGS. HMV, GMG AND OTHERS ON COURSE TO 0p TOO...

DOUBLE DIP RECESSION WILL BE CONFIRMED WITHIN 4 MONTHS AS WILL
150.9p AVERAGE UK UNLEADED COST AND RISING...

GOLD CONTINUES TO HIT RECORD HIGHS FROM $1100 TO $1460 PER OZ IN
RECENT MONTHS. CASH HELD IN CASH NOT BANKRUPT NATIONALISED BANKS
REMAINS KING.

GAMBLING ON ANY SHARES IS ONLY FOR FOOLS WAITING TO BE PARTED FROM
THEIR MONEY.




;)