Carclo Share Discussion Threads

[charo] 15/12/2022 15:35

The equity value is in effect zero.The company is uninvestable until serious committed management take control. Shareholders need stop shakedown by pension and secured creditors. But is hassle worth it or just let it be broken up and leave shareholders nothing.

[wigwammer] 15/12/2022 12:26

And no one has suggested in any way that the wider context should not be considered. The wider context may include valuation - £8m.

[wigwammer] 15/12/2022 12:23

Ok. Like the ones they bought at 15p that rose to 68p.

[bombast1] 15/12/2022 12:15

wigwammer - fair enough, but the wider context needs to be considered also. I'd suggest looking at the past history of share purchases by Carclo Directors as a guide

[wigwammer] 15/12/2022 10:45

Director purchases are regularly perceived as a signal. This shouldn't come as a surprise to anyone.

[bombast1] 15/12/2022 10:35

I'm surprised at how hung up some people are getting about Director purchases. I suspect that, like most public companies there are blackout periods and therefore likely pre-arranged Director purchases to avoid accusations of insider trading. Furthermore, the annual accounts point to the fact that there is a requirement that Directors will build up a shareholding equivalent to a year's annual salary. I suspect that these are the driving forces behind the purchases rather than any attempt at signaling.

[wigwammer] 15/12/2022 09:38

Good points, tradertrev. The last management call emphasised move from investment phase to cash generation phase, so I'm hoping that the cash performance is better going forward. This would explain why - as they state - the bank remains supportive.

[tradertrev] 15/12/2022 09:33

The statement just referred to H2 profit being materially lower than previously expected. Some of their tooling expenditure will have been capitalised, which will now have to be written off. This would drive a material non-cash charge, without much effect on the underlying picture. Just an opinion, but it fits with the situation and the wording. If correct, I suspect there will be more management purchases today.

[wigwammer] 15/12/2022 09:27

The shares went from 6p to 70p in around one year, despite the pension deficit. I'd say that was a good investment. This is a growing industry - and with current ops at least capable of funding the pension and debt, all of that future growth should land in the laps of shareholders.

[poacher45] 15/12/2022 09:20

The pension scheme was closed at least 10 years ago. However every year they seem to pay more into it. Have Carclo pensioners found the secret of eternal life? Until this is sorted Carclo will never be a good investment.

[wigwammer] 15/12/2022 09:10

I don't think they will fund raise, dm. They didn't do it when they were in a materially worse position two years ago, so it would be strange to do it now.

[charo] 15/12/2022 09:05

The company is unlikely to have any institutional support for a find raise.
Simply improves position of secured creditors and pension fund.

[dougmachin] 15/12/2022 09:03

ww - without the director's purchase though, maybe the drop would have been even further...?

And maybe they've done all their financial checking and aren't planning for a fund raise...?

Either that or they've stuffed up and are going to look like amateurs.

[creditcrunchies] 15/12/2022 08:51

He did mention one positive they hold significant freehold property which is probably why it hasn't gone bust already if that helps at all. I could ask him that question I'd be interested on the view of why as well

[wigwammer] 15/12/2022 08:44

Try asking him a difficult question CC... like, if they are planning a dilutive equity fund raise then why have management been buying shares?

[creditcrunchies] 15/12/2022 08:42

Paul S has done another review of this one today repeating the same warnings as before. Says - Very high risk of a dilutive equity fundraise

[wigwammer] 15/12/2022 08:41

"And they're using their buying price to say this should be the limit of the downside."... but it wasn't!

[wigwammer] 15/12/2022 08:38

I think the best thing to do is not trade at all.

[dougmachin] 15/12/2022 08:38

I'm not too fussed about CAR, a smaller position that I'm just letting run.

But I think the directors buying shares when they know there's an issue (aka they bought shares after the contraction cancellation announcement), surely this could be seen as a positive.

They're aligning themselves with their shareholders.

And they're using their buying price to say this should be the limit of the downside.

[1gw] 15/12/2022 08:37

Much better than selling shares and then warning, though, isn't it :)

[charo] 15/12/2022 08:36

Many customers with significant exposure will be considering their position. As said before no ambitious managers will commit to this potentially great company until the pension problem is solved.
Shareholders need to take action. Lenders only concerned, rightly, with their security over assets.

[wigwammer] 15/12/2022 08:25

Unimpressive start by new management. 1) why buy the shares and indicate the bad stuff is out, then warn... 2) they are blaming the cancelled contract which was only due to start ramp up in the final quarter, so only likely to make £1-2m sales... it was never going to contribute much to profit..... on the more positive side they are in constructive talks about settlement, which I guess could be material. And profit is not cash flow - they may be able to materially degear, especially in the absence of new product ramp up..... but yeah - buying shares and then warning is a big no no.

[castleford tiger] 15/12/2022 08:16

10/11p ouch

[terminator101] 15/12/2022 07:47

Wish I'd spotted this sooner so I could have put a big short position on it.

[1gw] 09/12/2022 11:12

At 14p bid we're now higher on the bid than we were (13.55p)on the afternoon of 6th Dec, before the contract cancellation news.

Good on the directors for helping sentiment with their buys.