Avanti Capital Share Discussion Threads

[arthur_lame_stocks] 06/9/2004 13:31

I'm still thinking it might be worth having a small punt on AVA.

As far as I can see the market cap is about 15.2m. They had 11.75m cash at the end of Dec 03. Since then they've been paid 4.2m more fron Barvest and were still owed another 700k + interest.

So total 16m + 700k + interest.

Since then they've also bought in all the warrants at 50p each which has cost about 1.16m. They've also taken part in the mBlox financing which raised $10m so I guess to maintain their stake at 7.7% they had to put in about 400k.

So these two together come to about 1.5m which would leave them with about 14.5m + 700k + interest or roughly the current market cap in cash.

Avanti Capital itself seems to be at just about breakeven before exceptionals but I understand they were in failed negotiations to buy the Slug & lettuce chain which might have led to more exceptionals.

Their two main investments as I understand it are a 60% stake in Barvest and a 7.7% stake in mBlox.

These appear to be included in the price for next to nothing.

O.K. I take on board all the comments about the management's previous and the prospects for Barvest in dificult market conditions but I also wonder whether Laxeys will be using the influence their 20% gives them to stop AVA making any more investments. As far as I can see AVA's website is down and I wonder if this has anything to do with Laxeys forcing them to cut costs.

I was hoping to check major shareholdings (which is why I wanted to look at the website) to see if the management have any clout or whether Laxeys are in control because I can only think that Laxeys will be interested in delivering shareholder value.

I think there's also a load of dilutive share options but they're all a long way out of the money so are not really a problem.

Just a few thoughts. Has anybody else got any figures or ideas on AVA.

Arthur

[jeffian] 03/9/2004 23:29

Laxeys are on the right track but I fear they're too late. Look back at my post 199. Wetherspoons have again warned today - (and they're good at what they do!) - whereas Poo Naa Naa had to be rescued from the receivers. Please don't be surprised if the next trading statement tells you that things are tough in the late-nite-bar/niteclub market and they need a bit more capital to keep them going. Don't fall for it! Shareholders, tell your company to cut its losses, realise its 'investments' and return cash to you - it's the best you can hope for.

Regards, Ian

[growbag] 02/9/2004 15:41

That 75,000 seems to have taken them over the 20% threshold. Any significance to that? How much do you need to launch a takeover. Laxey could well be looking to buy out the remaining shares -- which currently trade at a discount to NAV. This would be consistent with the previous strategies - apparently.

[mangal] 02/9/2004 13:41

Laxey has now owns over one-fifth of this Co..

[growbag] 01/9/2004 12:28

It seems that Laxey have bought another 75,000 shares. No signs of them losing interest - which is encouraging.

[mr gary curtis] 01/9/2004 12:28

Laxey Partners have purchased a further 75,000 shares, these showed up last night and the price moved up slightly. Todays rise is on the back of the RNS confirming this purchase. They now hold over 2m shares..........they are no fools either so something is bubbling under the surface.

G.

[lodgey1973] 01/9/2004 08:33

Howdy,

Anyone know why the rise this morning?

[growbag] 04/8/2004 13:32

The increase in the book value of Mblox should help the balance sheet but I can't see how it will help the shareholders. The Directors just haven't produced any shareholder value whatsoever over the last four years -- they probably haven't heard of the concept of returns on capital invested -- which is a bit worrying given the type of business they are (now) in.

Still think Laxey should force the Board to wind-up the company and return the remaining assets to shareholders -- only way any of us are going to get anything back IMO.

[adam] 15/7/2004 16:27

and mblox? This is not an insubstantial business, and seems to have something of a dominant position in some markets as far as i can gather... the book value given recent funding may not be too far off the mark. Either mblox or barvest could float/trade sale, and must have some value. I would back a partial cash-back too however, especially if one of the above businesses sold. There is an overhang there of stock which i have been buying at 140p, so your caution noted.

[jeffian] 15/7/2004 14:24

Hmmm....! We'll see, adam. The bar/club market is a difficult one to be in at the moment and as for "cherry-picking" - well on past performance this lot would come back with a basket of figs! Mind you, wish I was a dog-breeder; it would certainly be easy enough to sell 'em a pup!

8-)

Regards, Ian

[adam] 15/7/2004 13:58

Ian,
Good points, but PoNaNa was cherry picked from admin and now refinanced by the banks, hence most of the AVA loan repaid with equity "for free". I doubt the banks would refinance without sufficiently predictable cash flows which implies they have cherry picked well. Being private quity AVA should be in a position to get more information on current trading than if the company were public. Hence the buyback of warrants implies trading OK. If not, then you have a point!

[jeffian] 15/7/2004 12:57

I'm sure you're right, mangal. When I was a shareholder myself I suggested the same thing to Dan Taylor (then Chairman) at one AGM when he had the current equivalent of about 325p/share in cash swilling around his bank account but, oh no, they had this brilliant new investment strategy and I knew nothing. (Question:"OK, Dan, if you're so good, why have all your past investments turned to dust and why should it be any different this time?!"). How much have they got now?

Whilst Laxey's will undoubtedly turn up the heat if this latest venture falters (where were they when I needed them?!), I fear that the cash pile will be eroded further before the Directors of AVA are forced to loosen their grip on it. In the meantime if, as I suspect, Poo Na Na comes back cap-in-hand for more money, I strongly recommend shareholders to resist.

Regards, Ian

[mangal] 15/7/2004 11:55

Ian,
I agree with your take on the Company's investment fiascos. However I think AVA is going to be forced by the big guys[Laxely are well known in the industry for forcing these situations] to return most of its cash pile to the share holders.

[jeffian] 15/7/2004 09:52

Those of you agonising over the warrants are taking your eye off the ball IMHO. What's going to happen to the value of the underlying shares? As I've pointed out in several posts above, as Cambury, ECI and now Avanti, this share has ALWAYS traded at a significant discount to its cash reserves for the simple reason that it keeps blowing them on investments it often doesn't appear to understand and almost always at the wrong time in the investment cycle.

I do know something about pubs/bars and this is what I had to say in post 175 about their last 'change of direction':


For those who can't be bothered to read the whole thing, this was the conclusion:
"Traditional community pubs are timeless, but late night bars, comedy venues, discos, 'theme pubs' etc. come and go like the night. And that's what will happen to this lot. They didn't know anything about being an 'internet incubator', they didn't know anything about 'value investing' and I bet the know damn-all about bars except the time the playboy Directors spend on the 'customer' side.

It's a stinker. Always has been, always will be. (IMHO!)"

Today's trading statement from Regent Inns and that a few days ago from Wetherspoons are confirming to you what I said. Stand by for some of the same from Poo Na Na with, no doubt, a request for more of that cashpile to shore things up. So it gets a bit smaller. So now you understand why it trades at a discount to its cash!

Regards, Ian

[mangal] 15/7/2004 09:17

touch,
The point is I want to maintain a stake in the Company - because I think the shares are going to rise soon after all warrants have been "bought" out; However, the Company is forcing me out by taking away my right to exercise the warrants.
[edit: BTW, the Co's offer of 50p per warrant is no longer available]

To maintain a stake in the Co, I could sell the warrants(43p) & then buy, with the proceeds, the same no of shares(148p) but that would incur additional charges which I wouldnt incur if I still had the right to exercise in Aug 2004. [edit: Note, the difference between the warrant price & share price is 105p, exactly the same as exercise price]. Why take away this right when the exercise date is so near? I think the Co is trying to get rid of the small holders so that it can then return the "excess" cash to the BIG boys - eg Laxey.

[touch2002] 15/7/2004 08:40

mangal.

absolute rubbish. They are getting 50p per share when excercising the warrants and selling in the market at the current price (140p) would net just 35p. As an equity holder it is scandalous that a whole bunch of warrant holders who probably wouldn't notice the August deadline are being led to the trough.

Why would the company want the additional cash when they have a pile on their balance sheet earning next to nowt?

sound fairer to you?

touch!

[mangal] 14/7/2004 16:45

Anyone holding the warrants?
It's scandalous that the remaining holders' right to exercise the warrants is being taken away & the warrants are going to be forcibly bought out by the Co!

[touch2002] 14/7/2004 14:45

er. look at the reaction! The make or break for this is Po Na Na and the value creating/destroying use they find for the cash pile

touch

[sanilav] 14/7/2004 11:52

Is todays news of any real significance for future growth?

[adam] 07/6/2004 17:14

Arthur.
I suspect it is as much to do with not wanting a myriad of small shareholders again. Depending on who the warrant holders are it is also feasible that some of them lapse.

[arthur_lame_stocks] 07/6/2004 16:43

The board are offering to buy out the warrant holders. Is anything to be read into this? I guess it could suggest that they are upbeat about the company's prospects if they would prefer to shell out cash than see the exisitng shares diluted.

I still haven't bought any of these.

Arthur

[loinerscum] 20/5/2004 00:29

Touchy

You're not alone, I still look in but have nothing to add. I've had my hands full firefighting with my rather large Bioprogress holding, a look at the charts for the last month will tell you why but never fear, I think the worst is over and that some radical pruning at the right time has left me in an ok position with bags of upside.

I still hold my AVA shares & warrants and just wanted you to know that someone out there loves you!

Keep the faith
Andy

[touch2002] 19/5/2004 12:34

back to level pegging on underlying shares after the last couple of days. 7500 online buy/sell limits, 141-144 effective spread. Still overhang on warrants, given nearing expiry, 38.25-44 for 1,500/15000 shares.

touch

[touch2002] 11/5/2004 08:43

Seems the persistent small recent selling has caught up with the shares - online limits now 1000 vs 15000 (warrants) and 2000 vs 15000 (stock). Interesting to see where this find a floor?

touch