Carter & Carter Share Discussion Threads

[gta5] 20/9/2007 17:54

I'd like to know what people think of this company's outlook....

as far as I can tell there are basicly 3 options;

1.
a full 12£+ share price recovery within a year or two after and if the CEO is anounced on the 15th of next month, the banks are supportive and it's buissiness as usual...including winning new and profitable contracts in the near future....

Is this a likely scenario?
Recent acquisition seems to suggest that banks are reasonably supportive?


2.
As Saifon suggests..
Downward spiral started by panic selling and a danger of D4E.....
The latest RNS as released under pressure mentions a "equity issue":

"....renegotiation of its banking facilities in conjunction with an equity issue"

Sounds scary to me...What is that suggesting?? Why are they not being more specific?

3. A swift takeover by a major player... ?

Thoughts?

whatever happens...

best of luck to all!!

GTA

[saifon] 20/9/2007 17:52

meaning D4E in my book, either directly or indirectly.

FACTS are CART holders are going 2 be diluted - can't see the share price heading anywhere but south until mid oct with 50p likely

[drjudywood] 20/9/2007 17:47

DOESN' T SAY D4E...JUST conjunction with an equity issue.

[saifon] 20/9/2007 17:42

Pointless holding CART now - the dreaded D4E statement has been made, it's like a death spiral until the announcement comes.

The shorters move in, which lowers the price, which makes PI's sell, which encourages more shorting.............then on top of all this everyone worrys about how heavily discounted the shares will be and before you know it, CART are sub 50p.

[apppp] 20/9/2007 17:34

You guys who dabble in this one must have balls of steel - short or long.

Good luck to one and all!

[v01101999] 20/9/2007 17:08

richardbonny - 20 Sep'07 - 16:57 - 5875 of 5877

So we agree that D4E is not a preferred route for the banks i.e. it is a last resort kind of thing. D4E is same as mortgage repossession. Banks would not move in on you as long as they have reasonable expectation if you will pay up the interest and capital, even if you end up in negative equity. Because banks do not want to own the equity unless that is the last option. And in company like CART they cannot get much by D4E as there are hardly any "tangible" assets like a plant/machinary/free hold property etc. The safe option for banks to get their debt paid is to allow the business to continue and help it grow (which is demonstrated by their "no objection" to the 1 MM acquisition) as long as pressure the company to raise more equity to bring down debt equity ratio to some reasonable level. I do not think banks would be too worried if they reach debt as 3 - 4 times EBITDA afterall the same banks are loaning private equity on 6 - 8 times EBITDA.

Which means the gap between what banks want and where the company is not very far and would be clear once the results are announced.

[v01101999] 20/9/2007 17:00

I would think they are done in the last 1 hour of market so seem to be buys. The drop started at 11:09 possibly by this trade.

46
A20017EKVL
100.25 100000 O
101.5/103.0
11:09:22 100,000
32,832 199,857

[drjudywood] 20/9/2007 16:58

another 50k buy at 101p

[richardbonny] 20/9/2007 16:57

v011- debt for equity does happen in profitable companies. Whether they are making a profit is not the point, the real issue is they have too much debt. I am afraid my experience with debt for equity is shareholders end up getting very little. Banks will take as much as they can get away with. The problem is they do not want equity and will not take it unless they are virtually guaranteed not to lose.

[jane seymour] 20/9/2007 16:56

Just a little guess or intuition shall we say though Id be glad obviously if I was wrong !

[drjudywood] 20/9/2007 16:54

it was a buy...up 10% at open tomoro

[risk investor] 20/9/2007 16:52

any views on the trade of 312k at 90p..


is a buy or a sell?

or did that trigger todays fall?

[v01101999] 20/9/2007 16:32

jane seymour - 20 Sep'07 - 16:21 - 5867 of 5869

An excellent well explained post Mr V

Just BTW and side line question. Why the implicit assumption on "Mr V" .. I know that general City trading world is dominated by guys but I would think girls make better trading decisions and do not get rushed by adrenaline and testosterones.

[v01101999] 20/9/2007 16:29

we would know after 5 days unless someone wants to pay for the subscription service by CREST/EUROCLEAR.

[gta5] 20/9/2007 16:27

mmm....

Does any one know if the amount of shares on loan have gone down at all after the recent shakes?

Cheers,

GTA

[jane seymour] 20/9/2007 16:21

An excellent well explained post Mr V

[v01101999] 20/9/2007 16:11

debt for equity does not happen for a profitable company and banks do not take ages to do that if they have any risk for their money. One share well I watched debt for equity closely (but unfortunately could not take advantage as I was bit late to short) was BFC which was acquired by Barclays. The company was bleeding money and Barclays had no option to get their money back let alone interest payments. CART is not in that situation. I am not saying that CART is in very comfortable situation, in fact quite the opposite. They had their over exuberance with debt and acquisition filled frenzy and they were aptly punished for that by a drop from 1200 - 52. Company is now getting its acts together and doing all the right things i.e.

a) reduce cost.
b) focus on cash flow and
c) negotiate a proper deal with the banks on banking covenants.

Bankers would have put the company in a corner and got a good deal on D4E if they wanted to do that when the price was 52. After all, why would you wait for the price to rise to 130 before converting your debt for equity when you can get 2.5 times more shares for the same money at 52? The question banks have to ask is would they have a good chance of getting their debt back with interest if the company remains under current management and the management gets the opportunity to get its acts together OR the banks can make a better owner/management of the company.


It is quite clear with the length of discussions so far that banks still have faith in the management of the company and they are giving them a lee way to get their acts together.

I for one am certain that D4E is not on cards, at least not in the current environment. The only thing which will force D4E is if banks have doubts about receiving their interest payments.

[huge2] 20/9/2007 16:08

If only a tree shake exercise then is it fair assumption share price will revert back to 100p level in short term where it has been steady for while now...

[fxdealer3] 20/9/2007 16:01

Re financing ...bad news .Debt for Equity on the cards .


No value to shareholders .Banks will see to that .

You gotta laugh at RNS .

[risk investor] 20/9/2007 16:00

CAN SOMEBODY test the theory...

[risk investor] 20/9/2007 15:59

todays was a classic TREE shake..

FOR NO REASON..

THE BIG BOYS SHORTING AND BUYING BACK ON THE CHEAP..

the NMS:is only 2000 shares..

somebody wants to test the theory..

see how much they quote you on a 50k buy and a 50k sell..

[v01101999] 20/9/2007 15:52

I do not think they need to go as far a 1 for 3 or 1 for 2 right issue if at all and these are already in the price and I think they will not go for the right issue until the results are announced and share price has stabilized (and possibly increased). 1 for 2 right issue would raise about 20MM if it is done at price of 100 p. I am not aware of the banking covenants but that is nearly 3 times the cover on interest rate by equity alone. If company was under any desperation or if the banks were playing any dirty tricks, the company would have been forced to announce a right issue when the price dropped to 52p. The fact that banks are not threatening to force a right issue seems to clearly indicate that they are supportive and right issue would come only when it is in the best interest of the company.

More detailed answer after I do some number crunching. I am still happy to hold as todays news was already in the prices and possibly that was keeping the price rising above 130 but it certainly does not deserve to be at 80p.

[powwow] 20/9/2007 15:48

you gorra laugh.. RNS re share price fall from £1.00 to 70p... What about the one from £12 to 70p.

[risk investor] 20/9/2007 15:47

may not even get that far if..it gets takenover.