Problem is with any trading update is when does it become news? Sure you have the post period planned updates, but for warnings like this they would have known they were behind weeks ago. At what point do you have to fess up? It’s not been a single event, it’s been death by 1000 unplaced orders.
Will wait before it stops falling before I think about taking a position (and probably won’t) |
Fair point re share price reaction 74Tom. Who knows. this has been on my watch list and remains there. Entry price in the mid 30s feels reasonble - 12x-15 PE in 2025 of say 5p-6p so buying at 35p gives 100% upside in 2 years, which feels an appropriate target given the risk |
Bit of a shocker then if this only turns in 20m turnover for the year.
Prior to the recent 'late'in the day issue TU, this company was IMO overvalued anyway, and now with this business uncertainty and questionable sale from a director, it's an avoid for now. |
Maybe. It's schoolboy either way. I'd also add that the share price behaviour on the day shows no sign of any leak, with average activity levels and a static share price around 94/95p.
Should the broker should be receiving the information before the market?
"An AIM company must issue notification without delay of any new developments which are not public knowledge which, if made public, would be likely to lead to a significant movement in the price of its AIM securities"
IMO it's a hard no, as it vastly increases the chance of a leak & the creation of a disorderly market. |
My guess on the timing was that it leaked somehow/somewhere and the company needed to scramble. Perhaps they told Cavendish in the morning and had planned to announce the day after, with the Cavendish note to follow...but then something happened and forced then to announce asap. Hence why Cavendish where so quick off the mark
Might be other explanations but can't think that anyone would intentionally aim to announce intra-day |
Switched to WJG |
Just to update - I received a reply from Tommy Cook this evening, which I appreciated.
His comments were v much as one would expect - and may well have come from broker/nomad. |
If people who should respond are "out of office", it shows the extend of what they probably know. If one sticks this to massive share sells, then no need to understand any further. |
Its a shame to see this fall so far - I was in here, but sold some time ago. I've invested in a few IPOs in the last few years and most have been rubbish - ProCook, MTEC,KITW (rare success)- lots seemed to be on the back of the covid wave or just one or two good years. This seemed to be doing well, but there is little they can do if their market has collapsed. Spirent of course was huge red flag, but as always it seems the PI is last to know.
I don't understand the mid afternoon RNS yesterday either - perhaps they were planning to release it this morning but the info may have leaked out somewhere? Feel for those left in. Not sure how much of a hit 5G has been with the telcos, I haven't bothered to upgrade as 4G does everything I need.
This will stay on my watchlist, but as stated above it'll be some time before it will return to growth |
 Agree with the comments on the broker note being a really ugly part of this saga, it tells you that Cavendish (Cenkos + Finncap) were in possession of this information long before the RNS was released. I've no idea why that would ever be the case & I certainly haven't seen it before. The RNS should have been released at 7am and the broker note in the days after, otherwise it just looks ridiculous.
Regarding a return to 'normality', I think it's worth consulting the 15 year Spirent chart for clues. They did very well from 2009-13, went nowhere for 5 years & then did well from 2019-22, before the recent crash back to earth. It very much feels like a 4/5 year cycle of investment then pull back. High interest rates will certainly put downward pressure on telecoms CAPEX, new projects will be deferred in favour of paying down debt etc etc.
I don't see a recovery for at least 12 months and as such feel this has a lot further to fall, SPT trades on an EV/SALES of <1x, so the 2x that Calnex is trading on right now (54p) still seems generous. Bottom line, this looks like dead money for a good while. |
According to the header, Tommy Cook has 21.0% of the share capital.
No idea what the carrying cost is after options etc, but he must be smarting at this point in time.
The only comfort that I have is the cash in the bank.
It wasn't so long ago that they hired more staff, so any discussions with partners and industry experts didn't indicate an eartquake and landslide on the immediate horizon.
The forecast indicates a recovery in 2025 but a lot of water has to flow under the bridge before then.
A number of questions now arise for Clx and the industry.
1. What will happen to R&D?
2. Will capacity be semi-permanently withdrawn from the market place as businesses retrench?
3. When 'normality' returns, how fast will demand pick up, and to what extent?
4. What will happen to prices, margins and therefore profitability going forward?
5. Will/should the players reduce staff numbers in the immediate short-term if there are no orders and no work. Staff are an expensive commodity and a drain on cash reserves if significantly under-utilised.
Maybe Tommy & Ashleigh should fess up in front of the cameras and explain what, how, why and when things happened and how they plan to move forward to recover the situation that they are in control of, relative to the industry problem that has arisen.
Consolidation of businesses from a position of weakness all around may not be an answer that anyone would wish to happen.
red |
Hard to argue that it was a decision made during the day if a broker had time to analyse the results sufficiently to have a research note out before 4pm....... |
Especially those who WFH lying in bed. |
So might I but regulators have notoriously poor vision.
red |
Well timed director sale six weeks ago.
Sold 110,000 @ 122.5p on 25th August 23 = £122,500
Current share price 56.5p
I would expect the regulator to be asking a few questions here. |
This is what they said on 16 August:
"The Company's ability to source the components required for its products continues to improve and, whilst not yet resolved, the financial performance of the Company in FY24 is not expected to be impacted by procurement issues."
2 months later they changed their mind and now talking about possible growth in 2025. So if in between, they downgrade again, the share price could halve from here. The question now for any future statement is: Is it really reliable ? And when a company starts to through doubts in the air, I don't feel comfortable to invest in it. The competence of those who led to such situation must be questioned. |
Presumably they contacted their house broker who approved release of the RNS.
A futher question is when and how the results were competed if the CEO is absent from the office, if the out of office email reply is correct?
red |
I think the triggering event was Spirent's profits warning. But no excuse to put it out at 15.17 |
I'd be asking questions about that rather well timed director's recent substantial sale..... It stinks. |
...and so soon after an rns that emphasised 'caution' & 'cautious'.
Must have been a triggering event.
apad |
Obviously felt forced into it. |
Not the best time to put out an armageddon financial downgrade RNS with the CFO absent from the steering wheel.
red |
And I got a read receipt about half an hour later, so let's see what the response is.....
Clearly, my guess at her email address was correct, not so sure about Tommy's.
My email was v polite...... |
Well, got an instant reply...... An out of office until 20th reply from Ashleigh! |
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