Clipper Ventures Share Discussion Threads

[deswalker] 08/3/2009 19:16

Thks tyran - 944,500 so far or just shy or 2.5%. When one considers that around 13.5% would be required to stop any delisting then half a dozen people here are already nearly 20% of the way there. Then there's the other large shareholders on the website and all the other unknowns.

[tyranosaurus] 08/3/2009 17:44

For +what it` worth I have 19,500 shares.

[deswalker] 08/3/2009 12:16

Thks Joan. 925k now. Anybody else willing to divulge ?

I can't deny that what you say could happen if management were determined to be so devious. But with only circa 13% of votes required to stop it then I see any delisting as unlikely even assuming it is management's desire which it very well may not be. RNJ and the event has a reputation to protect.

I think a full MBO at a derisory price (but still a long way north of here) is more likely than an attempted delisting. They could probably get the lot for 15p.

I've been following developments on the website. Places are now nearly full from what they say.

[joan of arc] 07/3/2009 11:53

I have 100k at an average price of 23p!(So all of you who paid less think yourselves lucky). Incidentally Des I don't agree with you regarding taking the company private. Instead of throwing off big divis, with no controls, they might just take it out as salary or fees to other comnpanies, in fact various tricks to ensure that they get all the payout and not the remaining PIs.

[deswalker] 06/3/2009 21:47

Cheers scburbs. Hopefully some others will be along in due course. If we can get up to 3% (circa 1.2 mill shares) then I'd set up a thread as a means of keeping track. So far 825k.

Following a 60k purchase at 4.5p a few weeks ago my average is 9.39p incl costs fwiw.

[scburbs] 06/3/2009 20:55

Des,

I have 75,000 at an average of 15p. Luckily I haven't done much averaging down as we have fallen, although now is potentially a great time (subject to the going private concern).

[deswalker] 06/3/2009 18:00

Just out of interest I'd be curious to know how many shares people on this thread own. Not because I'm nosey (we're all strangers with pseudonyms anyway) but because it just might be advantageous to us all if we have a sufficient number.

If there turns out to be a decent number then I might create another thread with an updated header (CR's not here anymore I'm sure) and a fully transparent record of holdings.

So far between me (150k) and patdunk (600k) we have 750k. That's already approaching 2% of the company. Is anyone else willing to divulge ? Don't be shy, it might just work to your advantage.

Rgds,

Des

[deswalker] 06/3/2009 17:24

scburbs,

I get 39.88%.

I think they would need further support else it would only take 13.3% to stop any delisting. Currently the other four shareholders listed on the website hold 19.61% (assuming none of them were sellers to the CEO). This then leaves 40.5% held elsewhere.

To me it doesn't feel like there is sufficient control to achieve a delisting should they so wish. That said, it clearly can't be discounted and neither can a relatively cheap MBO.

I'd hold these if they went private. At some point this share will start throwing off big divis and will be bought out for a big profit.

IMO, DYOR ...

Des

[scburbs] 06/3/2009 17:00

Directors continuing to add.

Normally this would be a screaming buy signal. However, small AIM companies seem to have lost the understanding of how to behave responsibly to their shareholders.

Two simple rules in relation to being listed.

Rule 1: Shareholders do not want a share in a private company even if it cuts running costs slightly.

Rule 2: It is not in anyway ethical to buy enough shares so you can pass a resolution to take a company private. If you want to take a company private the only honourably action is to make an offer to the shareholders. If you don't have the funding to do this then don't do it!

I am not saying CLV intend to do this, but the increasing number of companies that have done this mean I will not buy anymore despite the share price. Currently the Chairman and CEO are accounting for around 39%. I believe 75% is needed, but if they got the support of a couple of institutions who were happy to hold private investments then it wouldn't take much to get to 75% given the low market cap.

One rather sneaky trick employed by GKR was to undertake a tender offer to buyback some of the shares. Essentially this was done to use cash in the company to buyback enough shares to be able to pass the going private resolution. As they announced their intention to seek to go private they guaranteed a high take up of the tender offer other than from the institutions that were supporting them! The tender offer was scaled back massively (due to the large take up and the company's cash restraints) leaving shareholders with unwanted investments in a private company. This is probably not the worst example as some have just delisted, but it is the worst in a company where I have been a shareholder!

[pat dunk] 04/3/2009 15:03

Des

thanks for your ramblings, you seem to have a good handle on the stock, I agree completely with your comments although I would not be able to put it so elequently! Pat

[deswalker] 03/3/2009 12:51

pat - I guess you're referring to the Mainsail Pension Trust. I don't know anything about this but I must do some digging. The two main shareholders should not have a beneficial holding in this as they have not declared it. If they have then there are some serious questions to ask IMO.

Re RNS's ... notification is required when an investor goes above or below 3%, 4%, 5%, 6% ... ie whole percentages of 3% and over. This gives some flexibility within these bands without notifying anybody. Then the issue is speed of notification. There is a set timeframe but some more secretive investors put this off until the very last minute and occasionally one sees stakes being notified to the company several weeks after they were acquired. This is very poor form and may well be cause for alarm bells. However, the companies themselves generally RNS as soon as they get notification from the investor.

Personally I think this stock is worth way more than 12p. If we have any sort of return to the good times then it ought to fly.

The things to look at are the Balance Sheets for April 07, October 07, April 08, October 08 and April 09 (in the next few months). Prior to that there was the Placing etc so earlier numbers aren't comparable. The growth of the Balance Sheet across those four dates (soon to be five) is very impressive. They are growing NTAV and also rapidly converting NTAV into NCA. Precisely what you want to see.

One possible scenario runs as follows ...

The boats have a useful life of 5 races. The second one is about to start. Who knows, maybe they'll run these boats to the end of their useful lives, sell them for what they can get, close the business down and return the proceeds to shareholders. By then the NTAV should be entirely NCA and may well be close to 30p per share. Any subsequent races would require major capex in the form of new boats so maybe RNJ will decide to cash his stake in for his retirement ??

Alternatively maybe they'll want to keep going for the long term. The brand and know-how is worth a lot on its own so maybe they'd be silly to wind things up. Either way it has to be profitable for shareholders even from a price a long way north of here IMO.

I also think that a large or mid-cap corporation or private equity firm ought to be interested in buying this company for relative peanuts as a cornerstone to its marketing strategy. The prestige and marketing possibilities would be very attractive as well as being profitable.

Nobody else in the world can do what they do. That's got to be worth rather more than £2 mill !!

Ramblings over.

Des

[pat dunk] 03/3/2009 12:14

Thanks Des, you are clearly a lot more knowledgable than I am!! I have slightly more than your 150k shares, i'm in for 600k at a significantly higher price but I would probably be happy to take 12p and call it a day, if it were on offer!!

I believe the management have more than it appears because I seem to recollect that one of them have some shares in a trust, but I may be wrong?

Something I never understand is, how is it that large chunks of shares can change hands and yet there is no RNS to announce shareholding. I thought one was required to notify anything more than a 3% holding?

I have held this share for many years and I continue to be stumped by the lack of interest in the stock, especially when there is so much forward vision with the revenues.

I guess we will just have to wait and see what is going on behind the scenes!?

[deswalker] 02/3/2009 19:15

pat - I'm not an expert on MBO strategies but it's not as easy to achieve as one might think. In particular the shares of the Directors themselves are not usually counted in any vote so they would need to pitch any deal high enough to get the necessary percentage from other shareholders. Obviously this requires a sufficiently high bid to be attractive and so nothing is really achieved by hoovering up a few shares beforehand. Yes they would have fewer shares to buy once any bid was accepted but it doesn't give them any increased likelihood of a bid being accepted because they can't vote if you see what I mean. The decision is purely up to the other shareholders, and the percentages required vary depending upon which method of MBO they choose. For instance a Scheme of Arrangement requires 75% of votes cast (excl management shares) to vote in favour.

I don't think there's any likelihood of an MBO. But if there was I'm guessing that it would be pitched at 12p at the very least.

One possibility is a delisting to save the costs of being on AIM. This requires 75% of all votes cast (including management) to vote in favour. If this was a plan then it would clearly make sense for management to buy up further shares to increase the likelihood of a delisting being achieved. Currently it is not clear that they would be able to manage it even if they wanted. Between them the two main players own 36% of the share capital so if more than 12% of the share capital voted against delisting then it wouldn't pass. Right now I think there's sufficient interest to muster the 12% and prevent this so I don't think a delisting is a possibility right now.

It's just a very cheap share due to the economic meltdown and a seller (for whatever reason).

But just think, if they can achieve the necessary interest for this race then the next race is not until Sept 2011 when hopefully things will be looking up in the global economy. It's not like they've got to keep selling widgets day-in-day-out to make a living. The lumpy revenue stream actually works in their favour. Prospective crew can only do it every two years so there is a rarity value which forces participation if people have a "window" in their life. And also the company doesn't have to worry about the next one until hopefully better times arrive.

If I was a bit braver I'd be using the current liquidity in the share to build a pretty chunky position. Over the last couple of weeks it has probably been possible to buy 1% of the company at these levels. Over the long term that would prove to be a very profitable investment IMO. As it is we're all scared stiff and so I'll stick with my 150k shares for the time being.

Des

[pat dunk] 02/3/2009 18:26

Des, I agree with you regarding the price, I am not surprised that someone is building a position, if I had any spare cash I would be doing the same! If the directors are increasing their position, does that mean that they might take it private? if so, do you know how they would do that? Would the price go up as they try to purchase all the shares, or is that not how it works?

[deswalker] 02/3/2009 14:44

They are providing pretty regular updates on the website (one a week at least). From those it certainly sounds like they are doing very well with crew recruitment. They have always said that they've done reasonably well in previous recessions and it appears to me that this one is no exception.

I'm hoping for news of an Australian boat but nothing so far.

There has been a seller these last few weeks but it looks like the stock is being taken up. I'm waiting for a couple of RNS's.

It looks like a crazy price to me.

[pat dunk] 02/3/2009 14:15

If the directors are building their positions, they must be confident of the future?? Also in a recession isn't it the case that a lot people use this time to do things they always meant to but didn't have the time, especially if they have funds in the banks earning them nothing, so go on a round the world trip? I am sure the last recession Clipper did well with the crew takeup, can anyone else remember?

[deswalker] 23/2/2009 10:57

Well that's three 250k's showing since Friday. Difficult to know if any should be netted off against each other.

There's still 100k available online at 4.5p so it appears that the seller hasn't finished yet.

It seems unlikely that RNJ is the buyer as I guess he'd just take the lot in one block. Maybe he's not allowed due to an imminent corporate action like the sale of Zapcat ??

Anyway, my estimate is for NCA = 6.6p and NTAV = 13.6p come the next results, with a continuing rapid conversion of non-current assets into current assets.

The issue with the divi is a fair one but I'm guessing that they are intending on trading up the cash balance to such a degree that they don't need bank loans going forward. Once they've achieved this then any subsequent cash will be distributed as divis. That's my guess anyway.

[scburbs] 23/2/2009 10:26

It will be interesting to see whether there are any more director purchases at this level.

[joan of arc] 23/2/2009 09:27

The problem with these is even at the best of times they are incredibly illiquid. There is always the danger that their fair value may never be realised as the management might just get fed up and either delist or go for a rock bottem price buy out. I know I would do the latter if I could.
They will never gain any interest from other PIs nor indeed have any practical value until they reinstate the dividend and a meaningful one at that.
However at this stupid price I am not prepared to sell either.

[deswalker] 23/2/2009 08:57

Yes, the valuation is crazy.

There's been a seller around for a few weeks hence the drop from the flatline at 5p. Either he's sold 500k since Friday or the 250k's are matched buy and sell. We'll see how much more he has to do.

I've been following progress on the website and the news there is consistently good. They've got Cork as a boat and are currently in Western Oz trying to sort them out too. Crew interest appears to be very strong globally too.

I value this on assets. At the last results it had net-current assets of 4.7p per share, NTAV of 11.6p per share and is forecast to do a further £500k of Operating Profit since then up to April.

My estimate is for eps of 2.1p to April 09. That's a PE of 2 and trading at roughly a third of NTAV. Either something is wrong or it is simply the wrong price by about a factor of 3 or 4.

I bought a further 60k on Friday and may well add more.

[tyranosaurus] 23/2/2009 08:31

The clipper appears to be taking on water.

Fundamentals show PE ratio 1.37 but investors are still selling.

[deswalker] 09/1/2009 17:23

Well here's my honest opinions ...

Pros:
- Way too cheap on NTAV, NCA generation, brand, know-how and general concept.
- Confidence in company due to large Director buying.

Cons:
- Difficult to value due to cyclicality of races and lumpiness of revenues.
- Never going to be a traditional growth share as its revenues are capped each year (it's more a plodding cash machine).
- Management intentions are becoming questionable. They either seem to actively want the share price lower or they are naive with the wording and tone used in their RNSs.
- Appear to be leaky. A big big question needs asking about the seller of 45k shares this morning. Infact I may just contact the company about this issue. What do you guys think ?

My thoughts are that the Pros comfortably outweigh the Cons. If they are thinking MBO then they're going to have to pay quite a bit more than the current share price It may not be a buy at 15p like my early purchases but that's not the same as it not being a buy at 6p. I estimate that NTAV will be approx 12.5p per share come April which must underpin the current share price at half this number ? They'll also have a hard time trying a de-listing due to the institutional holdings blocking the 75% of votes that are required.

That's where I am with my investment. I'm long quite a few at 12.5p average so it hasn't been very successful so far. However, I currently have no intention of selling and will look to buy some more on any further weakness.

It's difficult to disagree that it isn't going up in the short term without a bid but I'm an LTBH investor. I'm lousy at anticipating when shares will move and so switching isn't my style. Maybe it should be ?

I'd appreciate any thoughts.

[scburbs] 09/1/2009 16:29

Tyranosaurus, There has been a lot of director buying of late so ....

[tyranosaurus] 09/1/2009 16:04

It`s almost as if they want the share price to go down.
RNS is all bad news and no attempt made to soften the news.

[its the oxman] 09/1/2009 15:32

for good reason given newsflow - this is not going up in a hurry - sad to say but might be best to sell and move on - there are probably better bombed out stocks to get into