Connect Share Discussion Threads

[gfrae] 29/3/2018 16:33

Gorm. I think the share price is suggesting it is very cheap.
Margins are not thin. Free cash flow £35m. Debt reduced last year by £80m and it has a pension fund surplus of £150m !

[ls24] 29/3/2018 15:28

Tuffnells should have had a huge positive impact on CNCT with its consistent pre acquisition ebitda, just shows how people make things happen

[smithless] 29/3/2018 15:07

The margins are wafer thin; it has negative net current assets; management seems incapable of turning the business around; throw in debt and pension issues. If the management even thinks about paying a dividend they should be shot. It's got many of the components Conviviality had. No wonder the share price is sinking

[cs44] 29/3/2018 15:05

The share price is suggesting that something is very wrong with this company. The board of directors have a duty to inform the market if trading is markedly different from what is expected. I anticipate an announcement soonest.

[kazoom] 29/3/2018 08:45

A cunning plan indeed Colonel A, but with some potential pitfalls when to try to apply a model that involves sending your vans out on exactly the same route every morning to a business that has unique routes everyday depending customers.

Hence why I was wondering what has changed so far and what it is that doesn't seem to be working.

[danieldruff2] 29/3/2018 08:38

Seen plenty of Tuffnells vans near me recently - gosh they do need a good clean. Both the logo and putrid green colour of the vans could also do with an update as they look very tired, surprised nobody has changed it.

[rcturner2] 29/3/2018 08:19

wllmherk, yes I loaded up at 60p, I have held them in the past.

We will see if this turns out well or not.

[colonel a] 29/3/2018 08:12

Connect are trying to leverage the synergy between the different businesses.
Economies of scale of you like.
As a cunning plan it seems very plausible but so far ....

[kazoom] 28/3/2018 23:14

Yes valuable input CV, but I'm curious what has actually change since Connect has taken over?

[riverman77] 28/3/2018 21:34

Interesting to hear the inside perspective. This goes along with my view that they should just focus on the core newspaper business, which is actually chugging along quite nicely even if it is in a steady decline. All the problems are coming from the new areas - pass my parcel clearly having major teething problems too.

[chickenvindaloo] 28/3/2018 18:53

I don't have access to facts and figures but can only go by what I see daily. We (Tuffnells) seem to be down quite a lot last few months compared to equivalent periods in recent years. Senior managers are being seconded to depots 100s of miles away to try to sort problems. Lorries full of parcels sitting at depots with no one to drive them. It's hit and miss whether you get consignments into your depot on time to deliver them. Customers losing confidence? I know I am.
We were told when we were taken over that Connect were knocking on the door of the FTSE250! It was going to be a new dawn. Well those of us that have been there years and have given it their all are wishing we'd never heard of Connect.

[wllmherk] 28/3/2018 16:07

Do you hold these RCT ?

I've been topping up also, but, must admit I hit the buy button with some trepidation due to the share price fall. Cash flow seems good and they have steadily reduced borrowings which is also good. At this price there is also a slight chance that they could be bought by a predator for a knock down price.

wllm

[rcturner2] 28/3/2018 14:50

My understanding is that directors cannot buy in the time between the end of the reporting period and the results announcement.

[elpirata] 28/3/2018 14:34

Interims are due 1 May so not that long to wait, seems to me that a 50% divi cut is already in the price so accumulating at this level

[fahads] 28/3/2018 13:55

Why do you think directors cant buy? They should be able to unless there is a pending corporate action?

In my view, if management stops burning cash in new adventures, the existing business is generating enough cash to maintain dividend. Free cash flow yield post pension payments is around 17%. So unless operational performance deteriorates drastically, I dont see cause for a dividend cut.

However, agree with you that there is unlikely to be a trigger for share price performance till there is a positive trading update. I've continued to buy more - as scary as it is right now!

[colonel a] 28/3/2018 08:19

Suspect that directors can't buy at this time.
I don't think that they will "have" to cut the dividend at this stage but they probably should. It will give them more leeway to fund changes to the business and the share price would probably respond positively as there's currently complete disconnect.
But share price is likely to flounder until the results on May 1st, so even somebody seeing this as a bargain can wait ...

[zimbtrader] 27/3/2018 18:59

I suspect further bad news is now expected by the City and unless I am mistaken, directors aren't exactly falling over themselves to buy at this "bargain" level. I personally expect a dividend cut and a pretty stiff one at that.I did sell some at 70 but am still not tempted...

[cc2014] 27/3/2018 10:27

I'm rather surprised at this stock. The dividend even if cut should be giving it some support.

I see last night 60 was breached and I expected a few buyers to come in if this happened. Sadly nothing. Maybe we will get a few buyers nibbling away later on

[patience a virtue] 20/3/2018 16:30

I have just added a few more today, loving stocks like this, unloved but undervalued.

[aleman] 19/3/2018 15:51

What the hell was all that lot? About 150 trades x 100 shares all sold at 62.0p in the same second. Not seen that before.

[aleman] 19/3/2018 08:08

Share price up a bit. 20-day average down slightly. Looks to have broken through so should be good for meeting 50-day around low 70s. After an arguably higher low, you'd guess at a recovery of 75p without even seeing the moving averages. Short-term, it looks promising.

[aleman] 15/3/2018 15:41

We're back up to the 20-day average. Would be nice to get above 65p as that would tend to suggest a fairly quick rise to the 50-day which is around 77p and falling. (Actually, the 20-day should fall slightly more in the next few days. If CNCT just hold where it is, it might break above it.) However, it did spend the second half of February trying to break through and failed. The bounce off 60p again since then makes things look a bit more positive, though.

[colonel a] 14/3/2018 11:06

Must have been slow to get into print as the 70+ share price is almost a month gone.

[edmundshaw] 14/3/2018 11:04

Thanks elpirata. That is a pretty good summary of Connect and its history in most respects.

The only thing I would hasten to add (which he missed from his tale) is that at present Pass My Parcel is significantly loss-making. As that hits break-even and (hopefully) moves into profit - or even in the worst case is discontinued - there will be a significant uptick in profits. Last year the loss in PMP was £6.3m; apparently losses are not expected to fall this year because much of the business is returns which is lower margin. But if we imagine this loss removed ore reversed, then the expected PBT of £42-45m gets upgraded at least 15% (after exceptional costs).