Airea Share Discussion Threads

[bda3490] 02/8/2019 15:03

I agree the EBT is not a pension issue. But The £2 million loan was to buy the £2 million of shares. Now they are worth £800K less that loan write off surely has to go via the P & L !

The pension issue to me is that the company used most of its cash to buy the CEO shares and is paying a dividend - the trustees could well get questioned. At £3.5 mill deficit its 71% ahead of last year at this stage

As for Brexit - Halstead didn't mention it and they are up 7% in the UK. Headlam said on commercial flooring they see 5.7% up

July - August must represent 20-25% of annual turnover - wish the HT announcement gave some clue on July

That said if they get to 30-32 a buy is on for me. Though my shareholding at the moment aint worth seliing after the spread and fees

[shanklin] 02/8/2019 14:59

Thank you Rhomboid

[rhomboid] 02/8/2019 13:47

The EBT loan receivable is in that total...normal receivables..are pro rata to normal

They certainly could have explained that better & I checked with the company to make sure

[shanklin] 02/8/2019 13:32

Hi rhomboid

Did you get an explanation for why the "Trade and other receivables" are up so much please? 2.87m a year ago; 2.33m at year end and then £4.62m at end-Jun-19.

I could only presume July trading was at least as weak as Q2? Did management have anything to say about this please?

Thank you, Martin

[rhomboid] 02/8/2019 12:14

Gross margins are not declining..net margins are as they invest for the future..eg extra sales people

The EBT transaction needs to be backed out of the numbers...& is nothing to do with pensioners!

I’ve updated myself by talking to the company...& I’m absolutely clear that the softness in the last period was utterly a Brexit phenomenon...as widely confirmed by the rest of the construction industry

I’m a buyer at these levels..as funds arrive.

[fugwit] 02/8/2019 12:07

Westcountryboy: I see only a 6.4% increase in inventories, wouldn't all increases be reflected here or is it only completed stock? I will relook at cashflow again, still learning. Ta.

[illiswilgig] 02/8/2019 11:53

Hi WCB - I agree, the cashflow statement is clear. In conjunction with the balance sheet it agrees with the management statement.

Shareprice probably overdue a tumble as it loses its recent hot-stock label.

Taken the opportunity to add some more this morning to my long term holding. I'd been waiting for below 50p - just as well I was.

cheers

[bda3490] 02/8/2019 11:44

I have calculated the trading operating margin for the last three half years—by splitting last years figures between the 1st and 2nd half. The trading margin seems to be reducing—
Half year to June 18 =14.7%, Half year to December 18 =12.6% and Half year to June 19 =10.6%. This could be in part due to lower turnover ,and steady or increasing overheads.

rhomboid noted on 27 Jun 19 that he had spoken to the company and one point he realted was "margins are not declining". Odd

[westcountryboy] 02/8/2019 10:54

fugwit - they're there. See also the 800k reduction in cash flow owing to working capital.

[fugwit] 02/8/2019 10:21

"This affected the timing of customer call offs within the order book and the Group's decision to increase inventory to prepare for potential Brexit challenges, had the UK left the EU on 31 March 2019, had a significant financial impact on operating profit and cash flow."

Am I missing something here, where are the increases in inventory on the BS?

[westcountryboy] 02/8/2019 10:20

bda - the eps figure last year before the Ryalux adjustment is stated perfectly clearly in the accounts - 3.18p.

[bda3490] 02/8/2019 10:01

Presumably the 72 p the employee trust paid for the CEO shares will have to be written down at the year end

Or the loan to the ebt to pay for it

Would that £576 k loss be an exceptional cost

I see that the £2 mill increase in debtors is the loan !

It sort of feels like the company has bought its own shares - which hasn’t really work out well

[bda3490] 02/8/2019 09:53

Scandalous

Quoting eps against a low with discontinued activities

What they should say is that the £350 k of losses last year really show that we’ve made no progress

The pension trustees had let cash go out as well

The nominated advisor should realise this smoke and mirrors ain’t right

[bda3490] 02/8/2019 09:49

Scandal
Earnings per share 2.26 vs 2.31
Net profit 935 vs 955
But last year had 359 of looses from the discontinued Rylux

The comparison should be on like for like on going earnings - basically the measure they talked about last year when they were ramping up expectations.

How the pension regulator let’s this happen I don’t know cash gone!

The nominated advisor must be just happy to get his fee.

[multibagger] 02/8/2019 09:45

I expect small bounces in share price to be met with some more offloading....this is an ill liquid share to make matters worse. Though there will be some initial buying in an attempt to create a floor/prop up the share price, possibly by large holders (who appear to have inherited large tranches of the equity, this is unlikely to be sustained. The cut in dividend will also make it more difficult for asset rich, cash poor large holders to buy a huge lot more.

Once today's figures sink in and buying fatigue sets in this is on course to get back to the early 30s/late 20s sadly....which could interestingly attract some predatory takeover interest.

I held a decent chunk of AIEA a few years ago and even attended an AGM - but sold out when I could not raise a meaningful stake (on my terms), as buying kept pushing up the share price beyond its financial fundamentals.

This story has further to unfold/unravel....good luck all.

[bda3490] 02/8/2019 09:39

And stock has grown but debtors are up by near 2 million -61% when Turnover is down 3%????

Given the recent talk on commercial property values I hope that investment property is a good one

And not even a whisper about July trading which can’t be good.

Personally I can’t see what Brexit has to do with it! Six months ago Airea were talking about great export growth and the £ has dropped 15% so their exports should be mushroomed!

At least borrowing means they can pay an interim - but I’m sure it’s not the way it should done

[bda3490] 02/8/2019 09:28

Just read the release
£2million loan to the employees trust to buy ceo shares at 72 p but the share price is now 40p so that’s a write off
And £1.7 million of new debt to finance it
Scandalous

[shanklin] 02/8/2019 08:58

Yep, unwise of me not to sell my entire holding after the TS or when the CEO sold his entire holding at 72p.

[multibagger] 02/8/2019 08:42

True Shanklin..."strategic" being one of the most misused words in business to give an aura of credibility....and gives a veneer of respectability. The CEO fulling selling out did raise my concerns...surely no one is that altruistic ?

Common sense/reality trumps strategy in real life...

[cisk] 02/8/2019 08:41

new site storage to store all that bloody inventory they build up ahead of brexit maybe?!

finance and operating systems? OMG if travis perkins write off £100m because they can't get it right, what hope is there for these clowns :-)

[shanklin] 02/8/2019 08:37

Sold my holding first thing this morning.

I realise they don't normally comment on trading since the half-year in the H1 results but I think that not doing so today was a big mistake. They talk about all their additional investment as per

"These challenges have not held back our strategic development with further strengthening of the sales and design teams. In addition the Group has taken the opportunity to invest in the infrastructure of the business with new on site storage facilities and a new finance and operating system to be put in place by the fourth quarter increasing our operational capabilities.

but give no indication that they are managing their declining cash in a sensible manner.

[multibagger] 02/8/2019 08:35

I expect every small bounce from these levels to be met with more selling...low 30s/late 20s on the cards in the next few weeks...if not earlier.

A lot of unhappy large holders with AIEA share inheritances in the Wakefield area I would imagine....

[gripfit] 02/8/2019 08:30

yes I agree ,, that was not the best of practises,,, the pension scheme is well down now......

[cisk] 02/8/2019 08:20

I'm out. The CEO selling his entire holding - to the company - was a warning sign and I should have bailed then.

This lot don't know what they're doing, I think there's more too it and they are so small I'd rather invest something bigger. Maybe they'll come good, but the MMs wills haft you whatever with this company, simply not worth the risk.

All too convenient for companies to blame brexit or the weather... sometime you've got to take note that maybe they are inept!

Good luck to any remaining holders.