Calnex Solutions Share Discussion Threads

[74tom] 11/10/2023 10:58

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.

[redartbmud] 11/10/2023 10:08

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 Will capacity be semi-permanently withdrawn from the market place as businesses retrench?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

[garbetklb] 11/10/2023 10:07

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.......

[eeza] 11/10/2023 10:04

Especially those who WFH lying in bed.

[redartbmud] 11/10/2023 09:51

So might I but regulators have notoriously poor vision.

red

[eagle eye] 11/10/2023 09:45

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.

[fuji99] 11/10/2023 09:39

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.

[redartbmud] 11/10/2023 09:35

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?

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[garbetklb] 11/10/2023 08:38

I think the triggering event was Spirent's profits warning. But no excuse to put it out at 15.17

[owenski] 11/10/2023 08:36

I'd be asking questions about that rather well timed director's recent substantial sale..... It stinks.

[apad] 11/10/2023 07:56

...and so soon after an rns that emphasised 'caution' & 'cautious'.
Must have been a triggering event.
apad

[eeza] 11/10/2023 07:40

Obviously felt forced into it.

[redartbmud] 11/10/2023 07:34

Not the best time to put out an armageddon financial downgrade RNS with the CFO absent from the steering wheel.

red

[garbetklb] 11/10/2023 07:17

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......

[garbetklb] 10/10/2023 18:34

Well, got an instant reply...... An out of office until 20th reply from Ashleigh!

[garbetklb] 10/10/2023 18:31

I've emailed Tommy Cook & Ashleigh Greenan (guessing at their email addresses)asking :
- Why did the announcement come out at 15.17, rather than 07.00
- Why didn't they include updated estimates as these were clearly available if a broker note appeared before 4pm
I'll let you know if there's a reply........

[johndoe23] 10/10/2023 16:58

Also the business development VP selling shares

[fozzie] 10/10/2023 16:51

The marker last Wednesday with Spirents profit warning, it was a direct read across.

[fuji99] 10/10/2023 15:42

Such catastrophic timing is a proof of panic to probably correct their recent update. This means the market and PI's will never believe any news coming out from them in the future until they see it in flesh and bones.

[jombaston] 10/10/2023 15:23

I can't believe their adviser's would have suggested such timing. Unbelievable. Either underhand, stupid or both

[fuji99] 10/10/2023 15:18

"revenues for FY24 will be in the region of 20-30 per cent below current market expectations, depending on the timing of orders." Dropped 30% as per revenues drop. Difficult to anticipate when the drop settles as their previous update was bullish. So there will be caution in getting in until after the results and even then 2025 is far away. Easy to see the share price back to 50p level i the next few months.

[johndoe23] 10/10/2023 15:17

Sly sneaking an update at 1517

[hastings] 10/10/2023 15:16

It was flagged via Spirent's recent news.