African Battery Metals Share Discussion Threads

[dell1234] 22/4/2013 11:36

Shares Magazine article - illustrating the company vs gold price over the years

[elmfield] 22/4/2013 11:25

They get what they deserve for a Friday evening profit warning, IMv,

[buywell2] 22/4/2013 11:16

GOLD price drop is used as an excuse

Director sells were the true performance guide

[hvs] 22/4/2013 11:03

I am a lender to anyone pawning their shares with me.

Please reply if you need ready cash.

[bobsidian] 22/4/2013 10:30

In a world where people seem now to know "the price of everything but the value of nothing", the current "race to the bottom" dangerously undermines retail in all its forms. Much of what is produced now lacks quality and it is that lack of quality which undermines any sense of value. However, it is interesting to see an increasing appreciation of goods made before the consumer boom and its subsequent bust, goods made during a time when there was a lesser desire to cheat the end consumer.

[quepassa] 22/4/2013 10:26

Agreed.

Having already guesstimated a 20-30% fall, I now hate to say it but could see this going sub £1 in short order.

ALL IMO. DYOR.

QP

[rcturner2] 22/4/2013 10:19

Having briefly scanned the last few RNS statements, I have to say that this could fall a lot further from here. I can see sub 100p.

[rob the slob] 22/4/2013 10:10

IMHO, sentiment is only like to recover if global economic outlook turns towards the catastrophic side again. E.g super-inflation, house price collapse, gold- hoarding, unemployment, starvation etc.All of a sudden, a used but working freeview box or printer starts becoming more attractive to the man on the street than one for 50 quid more from Currys. IMHO, the current share price (along with gold) offers some insurance against that scenario.

[bulltradept] 22/4/2013 10:06

Agree with all of the above, market pricing in ex growth, although there could be profit for the brave, is the risk worth it?

For me no.

[bobsidian] 22/4/2013 09:58

It looks as though ABM has long since had its day in the sun. ABM benefited when its customer base had some gold to sell. That source of revenue was inevitably going to have its limitations. Now ABM are back to their core business and their core revenue stream. There is little point in management operating in a state of denial.

It would be of interest to know just what the consultants were suggesting. Perhaps they were suggesting a scaling back of the business to a level that ensured survival and viability. And perhaps that stark realisation of the end of the good times was a bit too much for the current management to accept.

[pugugly] 22/4/2013 09:15

Teh part from the rns that suggests to me that the company has totaly lost its way is

"Since the half year, the Board has engaged with consultants to review opportunities for profit improvement and new products. In the current financial year, however, the costs of these initiatives and consultancy will exceed the benefits by circa GBP1m."

From my experience the use of consultants is usually because managment - who ought ot have their fingers on the grass roots pulses of the business have been secluded in their ivory tower and have not visited the coal face for too long.

There may still be value but with £50 million of debt at the half year I guess that the final dividend is at risk.

Maybe value but at what price point? Or is the high street model broken? Trading at 124p as I write.

Further reseach - Directors sales should have been a warning

Albemarle & Bond Holdings Director Deals
Date Director Type Volume / Price Trade Value
03 Apr 2013 Greville Nicholls Sell 13,000 @ 213.00p £27,690.00
22 Nov 2012 Greville Nicholls Sell 15,000 @ 220.00p £33,000.00
09 Dec 2011 Greville Nicholls Sell 400 @ 331.15p £1,324.60
14 Nov 2011 John Farrell Sell 5,250 @ 321.00p £16,852.50

[grahamite2] 22/4/2013 08:26

This price action is more the sort of thing you'd expect from a BB darling type stock, with lots of dole money gamblers.

[quepassa] 22/4/2013 08:19

Now down 30%.

And looks like falling further today to me.

ALL IMO. DYOR.

QP

[quepassa] 22/4/2013 08:02

Down c.25% at open.

Let's see where from here.

ALL IMO. DYOR

QP

[elmfield] 21/4/2013 19:19

If you are not brave enough to give your profit warning inthe morning pre open and opt for the after cllose on a Friday then up yours.

[bench2] 21/4/2013 19:14

Re HAT , I think they will probably be encouraged to make a statement by their brokers to clear the air .. even if to say trading is currently in line with expectations etc . ABM vulnerable to a bid from Private Equity if it falls too far .

[pugugly] 21/4/2013 14:11

scotches:> Good find. The article clarifies the very high level of competition (which maybe why ABM appear to be in trouble) and (imo) the high risk of further regulation and the law of unintended consequences leading to a potential collapse of manyof the operators of pay day loans.

[scotches] 21/4/2013 12:50

Unless we are just about to get similar warnings from HAT their most recent report saw increase in pledge book and reduction in debt.

Is there a specific problem at ABM rather than a malaise throughout the sector?

ABM have made some unlucky decisions recently hedging gold on the way up and not on the way down.

Perhaps ABM problems will revive the merger discussions which came to nothing a few years ago. The sector does seem to need some consolidation to remove duplication of services

[hectorp] 20/4/2013 17:56

Have they been too clever, launching into gold buying and not concentrating on the pawn broking.
In the present time pawn broking should be a great biz.. yet they have fallen strongly from highs.
Perhaps they are a buy.

[markrogers88] 20/4/2013 17:33

QP - That's what makes a market, all sorts of different approaches and timeframes to trading or investment :-)

With that in mind though, the word of caution remains valid to anyone who views their holding here as a long-term business commitment (investment). If you do, then you should take Friday's update as bad news, and should factor that into how the business is progressing in 2013.

But don't take your cues from whether the stock is going to open 10%, 20%, 30% up or down on any given day - I'd say just focus on the cash flows you feel the business will be able to produce over the next several years.

If you're a trader or speculator, then the reverse is also true, don't base things on how "cheap" anyone will tell you the stock is as it goes down - you're there to take advantage of psychology, momentum and the short-term outlook.

The clash between the two makes this stock more interesting to follow by the week! :-)

[essentialinvestor] 20/4/2013 14:17

QP, great call, well done.

[quepassa] 20/4/2013 12:11

By the way, as an active investor, that is precisely my business to try to second guess share price movements. I do try and get caught up in that. Intentionally. All the time. The market is sentiment/emotion based after all.

ALL IMO. DYOR.

QP

[quepassa] 20/4/2013 12:08

Personally I believe that my estimate of 20-30% fall in share price in my view only is erring on the conservative side.

It is not so much at the departure of a CEO - which sometimes can be very good news for a company but at the very alarming trading update.

Especially if the "materially below current market expectations" translates in due course ( as it will most likely do in my opinion)to a cut in, or even cut of, dividend.

ALL IMO. DYOR.

QP

[markrogers88] 20/4/2013 12:02

I wouldn't try to second guess what the price is going to do personally, better to focus on how the underlying business is going to progress from here, compared to whatever the price turns out to be.

One thing to avoid getting caught up in, is that how ever the market values the business on Monday morning, a lot of human emotion and short-term focus is going to play out in the price. If I owned any shares, I'd avoid letting the panic take over and just focus on whether this is a business you want to own for the long run.

I don't think we can really blame the company for exploiting the gold buying boom, which was always going to be temporary, in order to fund the traditional business. The extent to which the market has priced in that temporary effect as permanent, is more of a mistake of the market rather than the company in my view.

Only in the long term will it really be possible to see the effects of how the company has allocated its "golden goose" money. It could prove to be a disaster or a blessing - but if shareholders didn't want funds flowing into expanding the traditional business, you'd have to question what attracted them to the core business to begin with?

As ever, it remains up in the air - the gold buying segment is deteriorating quicker than the company expected, so how long will it take for the pawnbroking arm to fill the gap in earning power?

If we discounted gold buying profits to 20% of their current level, what would we pay for the business?

[grahamite2] 20/4/2013 10:34

Yes, the abrupt departure of a CEO is normally cause for considerable concern, but in this case I think it only positive. Stevenson was Mr Rapid Growth Retail and it's probably down to him that what turns out to be a temporary gold boom was translated into long-term expansion commitments.

A 30% fall from the present, already reduced price would seem a gross overreaction to me.