Connect Share Discussion Threads

[cwa1] 01/2/2018 07:49

Disappointing, if unsurprising:-

Update on the Disposal of the Books division to Aurelius Equity Opportunities

We refer to our announcement of 21 December 2017 that we had signed an agreement ("SPA") to dispose of our Books Division (the "transaction") to the listed pan-European mid-market investor Aurelius Equity Opportunities SE & Co. KGaA (together with its subsidiaries and affiliates, "Aurelius") and our subsequent announcement of 22 January 2018.

Connect Group announces that Aurelius failed to complete the transaction before the agreed deadline of midnight on 31 January 2018, as it was obligated to do under the terms of the SPA. As a result, Connect Group is considering with its advisers what action it will now take in light of this development.

The Books division continues to be classified as 'held for sale' for accounting purposes, and it remains 'business as usual' for its staff and management team as it focusses on delivering great service to meet customers' and publishers' needs and requirements, supported in the meantime by the Group's strengths and capabilities.

[ls24] 31/1/2018 23:50

The shrinking core market was to be offset by the opportunities in distribution, then a business with no experience in this area then removed the experienced and successful Tuffnells owners replacing them with sector inexperience.

[mister md] 30/1/2018 11:20

Someone needs to switch the AT Sell robot off and turn the AT Buy one on again ;)

[cc2014] 30/1/2018 10:57

Good find Speedsgh.

I never trust a word these advisers write but for one I think that article gets to the core of the issues pretty well, although I don't think the delivery is as bad as they suggest.

In summary things aren't going great but the share price is so bashed about it's too low. I'd add the 13% dividend also supports the price

[elpirata] 30/1/2018 10:48

...and the confirmed dividend

[speedsgh] 30/1/2018 10:23

Connect still a ‘buy’ despite profit warning, say Shore Capital -

Investors in parcel delivery business Connect Group (CNCT) have been hit by a profit warning after a long list of failures but Shore Capital still believes the share price is justified.

Analyst Martin Brown reiterated his ‘buy’ recommendation on the shares, which were trading at 74.5p yesterday, down 29% after last week’s warning.

He said the recent profit warning and ‘stumbling block’ in the sale of Connect Books were ‘yet another blow to investors’. Connect had been due to sell its books division to Aurelius, but announced last week the German investors had pulled out of the deal.

‘We recently commented that while we agreed with the new strategy of focusing on early distribution and mixed freight, the long list of strategic failures over the years meant we believed investors should wait to see some delivery first,’ he said.

‘A cut to profit before tax guidance was not the delivery we or investors were looking for. Connect’s diversification strategy has now failed to deliver on all fronts.’

However, he added that ‘in terms of the share price, the reality is that the current price can be justified by the core news and media business alone’.

[turbocharge] 29/1/2018 16:49

Short-Term Bullish signal generated on Jan 26 2018

Volume 6,464,095
Close Price 75.50
Pattern Duration 1 day

Overstretched trading means prices may soon turn around; watch for signs of reversal.

[cc2014] 29/1/2018 11:25

Price seems to be wandering around the 75-77 area. Bit surprised another chance at 75 has appeared.

[turbocharge] 28/1/2018 23:48

Another positive is that Connect has secured contracts to 2019 for 93% of its News distribution capacity, and a further 70% contracts are secured until 2021.

[mister md] 26/1/2018 14:24

a lot of AT buys at 77p. Anyone have Level 2 to see what next price levels are ?

[mister md] 26/1/2018 14:04

Turbo - lets hope so. Wonder if the whole lot is now at an attractive price / potential target for private equity/asset stripper ?

[turbocharge] 26/1/2018 13:50

Mister, I'm sure another buyer will be found if the current sale falls through. Some positives:

- The integration of Tuffnells, once completed, should lead to higher profits as this business grows

- bank debt has fallen from £153m (Aug 2015) to £82m (Aug 2017) and should fall further when the Books division is sold.

- The company made profits in the year to end August 2017

[elpirata] 26/1/2018 12:54

just bought my final tranche, share price now consolidating at 75p+

[mister md] 26/1/2018 10:33

Surely due a bit of a recovery from these lows ?!

[mister md] 26/1/2018 09:32

needs a bit more volume and the spread to close a little

[billy5] 26/1/2018 09:06

Agree, two Directors buy 50k between them, nice to hear.

[rcturner2] 26/1/2018 08:39

Well I have taken a stake here. Director purchases give me confidence.

[nigelpm] 24/1/2018 15:48

Order book looks strong - should start moving up on a few buys now.

[baracuda2] 24/1/2018 12:20

Added yesterday, great dividend at this level but I don't think it will be here for long

[mister md] 24/1/2018 11:32

another director buy RNS

[mister carpetman] 24/1/2018 10:33

Also added this morning and showing as sell

[mister md] 24/1/2018 08:28

Added a few. All showing as sells

[edmundshaw] 23/1/2018 22:15

When I bought this at 78p 6 years ago, the situation was not dissimilar. But the negativity turned and the price more than doubled. 60.9p in dividends since... and a bit of selling when the price is toppy is always sensible.

Is it start again or is it different this time? There is still a news cash cow, slowly declining. And some of the new businesses are not quite firing yet. But I maintain that the loss-making PMP business is either going to turn positive in which case this is vastly undervalued, or be dropped in some way thus cutting the fairly hefty losses there. It seems to be gaining traction, but obviously at some point the online customers will have to fork out a bit more for those returns to be paid for. Presumably when they have got so idle/obese/disabled/old that the thought of going to an actual shopping centre is just too much bother. We seem to be headed in the right direction...