Cabot Energy Share Discussion Threads

[holdcroft] 01/2/2002 22:50

wrangler501

What you say makes sense. It would seem that asset sales of something approaching £10m are intended. With assets of about £65m only a small percentage change in their value makes a large difference to the company's net asset value of about £10m.

When they say "Trading has been difficult mainly due to the financial circumstances of the Group..." and "the UK banks are expected to share in the proceeds from the sales of certain assets above certain pre-defined levels" this presumably means that the banks are very concerned about the level of debt and are "breathing down the company's neck", scrutinsing closely any items of expenditure. This can have a negative effect on investment for long term profitability.

[wrangler501] 01/2/2002 20:31

NAV,Holdcroft, floy et al
We have to wait for a fully detailed statement to be better sure of the real action. I mainly agree with Holdcroft's figures but the debt is interesting!
I would not expect trading for this last half year to be any better than the first half. After all I don't think there have been any positive statements to this effect except that Dorfner continues to perform well. How much does Dorfner contribute?
A 2m bung for working capital out of the 3m raised by Union is pretty hefty and may indicate that the pension surplus isn't there any more perhaps. The remnants of the 3m (1m) seem to be a long way from the 10.4m current debt - which may indicate vast asset sales to come. If the assets are currently undervalued then this will be a better story but who knows.
Then - some of the finance is convertible loan. Do I take it that this will create more shares and dilute shareholder value. These shares presumably to belong to the establishment! PG is doing an excercise in creating more shares at MPL currently but for different reasons - net result however is he gets a bigger pc of the company although in this case the company not diluted.
Am I talking rubbish?

[daddy warbucks] 01/2/2002 16:09

fevs

I think you are right. a 40,000 trade reported late from 14.04 hours. Funny how a smallish buy can affect the price whilst the last few days when there have been more sells than buys have not afected it.

Is someone buying up the shares? Those with more than 3% holding have up to 7 days to report an increase/decrease in their holdings if I am not mistaken. Will we see another RNS showing this? Looks interesting!

[fevs] 01/2/2002 14:07

Offer just ticked up to 5.25p, a buyer perhaps?

[fevs] 01/2/2002 14:06

It's all gone a bit quiet on here, no thoughts anybody??

FEVS

[graceyfields] 01/2/2002 13:40

This maybe true gallonomoney started a good thread on here some time ago and he/she was right

I really hope so

[graceyfields] 01/2/2002 13:39

Well theres a ramp!

Wouldnt be surprised tho

Good luck anyway

[gallonomoney] 01/2/2002 13:26

do not ask any questions and you wont receive any lies!!!

cab tipped in the express this weekend

[graceyfields] 01/2/2002 09:21

Nice post holdcroft

keep up the good work!

[floy] 01/2/2002 08:33

The Group Refinancing announcement on 29th January states that shareholder approval will be required. Presumabley this will involve sending out a more detailed document (which will put some meat on the bones of the announcement) prior to the holding of an EGM.

It will be interesting to see how the UK part of the Group will go from £10.4M debt to a debt free situation by the end of the year. Including the initial £1.0M and procceds from the property sales how much of their £10.4M will the banks end up getting.

Peter Gylenhammar owns 13.8%. Is this through Silverslaggan (who owned 13.8%) at the last annual report) or GNI who also own 13.8%. Is GNI Peter Gyllenhammar or someone else? Or in other words are the Silverslaggan and GNI stakes 2 separate holdings or one and the same? This question has not been answered by anyone so far.

[holdcroft] 01/2/2002 07:41

See my new thread:

[justjim37] 01/2/2002 02:22

Hi Gracey,

Have just come back from a very nice meal with the Chief Executive
of Carbo (Lobster & champagne).

He told me (in absolute confidence) to BUY, BUY, BUY !!!! cos he'd heard
a rumour, a +ive one, (spread by a ramper called graceyfields).

Or did he say SELL, SELL, SELL !!!!

I can't remember !!!!!!!

I sincerely hope you keep loosing money on this share even though the CAB share registersays you only own 1,000 shares = circa £45.

ZZZZZZZZZZZzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzz

[holdcroft] 31/1/2002 22:47

I think that the recent hype of Carbo has ultimately been based on the apparent high asset value per share relative to the share price and the possibility of a take-over bid as indicated in the press announcement of 28th September 2001:

"The Company notes the fall in the share price today. The Company wishes to
confirm that it remains in discussions with several interested parties
regarding a sale of all or part of the Group. The Company's bankers remain
supportive and discussions are also continuing with regard to a potential
refinancing. Trading remains challenging, although the UK bonded business now
appears to have stabilised and the plant at Dorfner continues to perform
strongly. The net asset value of the business at the last balance sheet date
was 17p per share."

Clearly, since then, the management have been progressing in line with these stated intentions. Nothing in the is inconsistent with that. Some will be disappointed that a complete Gyllenhammar take-over is now apparently ruled out. Ultimately, what the board are doing is ensuring that the core business is returned to operating profitability and that borrowing is reduced to a serviceable level. This task has been not started just in the last few months but has been ongoing for a good deal longer.

The current share price is low because the company is still losing money at a rate which will quickly erode the net assets down to nothing. Hence, a large discount to the net asset value. It is the thought of this together with the scuppering of take-over bid hopes that is causing the current fall.

With the likely (IMHO) return to operating profitability and reduced debt servicing costs in the forseeable future, I see a future with the share price at a premium to the then net asset value.

A bit of history taken from the last :

Net assets at end July 2000 were 15.883m, or 20.07p per share.
Net assets at end Jan 2001 were 12.458m, or 15.74p per share.
Net assets at end July 2001 were 10.162m, or 12.84p per share.

If you draw a graph and extrapolate to today, you might reach 10p per share. With possible future dividends approaching some substantial fraction of 1p per share (it has been 1.3p), a good premium would be deserved and 15p per share would not seem unreasonable.

Please offer opinions, counter-opinions, etc. Please correct me where I'm wrong, misguided, or over-optimistic etc.

I think it would be nice for a change if everybody could avoid ramping, de-ramping, and personal slanging matches etc.

[graceyfields] 31/1/2002 16:24

ABSOLUTELY BUT NOT THIS WEEK!

But you can bet your bottom dollar when they start to jump again they will jump

soon imho

[hacoates] 31/1/2002 16:21

Anybody think they will still make 15p

[holdcroft] 31/1/2002 16:14

Even as I speak...

[holdcroft] 31/1/2002 16:12

Hyper Al

If they really wanted to sell them, wouldn't they just keep marking down the bid and offer until that started to happen? Perhaps this is already happening, albeit at a rather slow pace.

[hyper al] 31/1/2002 16:07

Holdcroft

Or maybe they just can't sell them!

[holdcroft] 31/1/2002 15:59

If the wave of selling continues, it means that the MMs must be stocking up. This could either be because they are expecting a rise soon, or perhaps that they are just balancing against last week's flurry of buying.

[bloakey] 31/1/2002 15:14

I binned the lot yesterday, as the excitement was starting to give me palpitations and the fact that the amount sold was having no effect on the price was ringing alarm bells.

[nav_mike] 31/1/2002 13:37

Gracey - didnt have time to grill him on speculation just fact. That part of your post still needs to be ratified by someone..... Jim? U out there mate? Your turn to pick up the phone