Conviviality Share Discussion Threads

[1pvh] 08/3/2018 19:34

Rights issue at the very least I would have thought. Sold out after the interims. I had quite a large number of them. Just didn't like the increasing debt level and promises of better things to come, once again.

[lucicavi] 08/3/2018 19:33

breach bank covenants soon

[bullet ant] 08/3/2018 19:31

Bouncing ?

It will be red days for many days. Careful punters, supply has to be absorbed and forced sellers need to head to exit first.

BA
Stealing is Good.

[kcr69] 08/3/2018 18:58

Typo56

N+1 Singer had FY 2018 adjusted EBITDA at £70.0m, so potentially will come in at around 56m which at 2.5x would give acceptable debt of £140m. On face value that black and white equation would suggest a 'potential' breach of covenants, however it is pretty tight so a couple of % points swing to the upside on either of the variables would avoid any breach. And that is before any relaxation debate is entered into which clearly the company would have already had or are having right now.

On balance, and given the above, it looks like quite an overreaction to me which I would expect to bounce fairly substantially at some point in the coming weeks, albeit I agree with many that the detail needs to come out on how such a poor forecast can be made and amended within 6 weeks. At best it smacks of appalling management reporting systems, at worst, well it is not a very pretty thought. Would be stunned if no senior management resignations are not forthcoming in the coming days.

[pastybap] 08/3/2018 18:56

Tipped in this evening's Investors Chronicle @305p. You couldn't make it up!

[mctmct] 08/3/2018 18:18

@doghouser. No, I never short. Too risky for me. I apologise if this thread is supposed to be just opinions or ramping/deramping.

[typo56] 08/3/2018 18:12

Just edited. Were current market adjusted EBITDA expectations greater than £75m? I'd suggest they'd need to have been at least £80m if you can have any sort of confidence that they won't breach the leverage covenant.

[thedoghouser] 08/3/2018 18:07

So what are you saying? Are they in breach or not? Is the drop over done or not?

[typo56] 08/3/2018 17:57

From H1 results:-

"The bank facilities include a leverage and an interest cover covenant. The leverage covenant requires debt (excluding any amounts drawn down under the Group's invoice discounting facility) to be less than 2.5 times the last 12 months adjusted EBITDA(2). The interest cover covenant requires adjusted EBITDA(2) to be at least four times net finance charges. At the measurement date of 29 October 2017 leverage was 1.5x and interest cover was 13x."

Therefore to meet the leverage covenant they need adjusted EBITDA to exceed £60m this year, which means current market expectations (before this warning) needed to be more than £75m. What were they?

[thedoghouser] 08/3/2018 17:42

You shorting by any chance? Why decry any PIs a small bump of a bonus if this bounces at some point?

[mctmct] 08/3/2018 17:31

Research says "sell immediately on a profit warning". It's rare to make a profit by topping up or assuming that the market has overreacted, except when the company has a very strong balance sheet, net cash, and the warning has happened because of something that is easily fixed and won't recur.

[masurenguy] 08/3/2018 17:14

Wow - glad that I got out @378p in December !



However, I could not have forseen such a drastic update in the pipeline and a disgraceful £5.2m "material error in the financial forecasts" should really see some senior management heads roll here. Management credibility is shot now and it could take some time for a recovery here.

[lucicavi] 08/3/2018 16:54

carillion mk 2

[mammyoko] 08/3/2018 16:52

Guessing that they're in default on their bank covenant of net debt to EBITDA now. EBITDA. Looking like a multiple of around 5 when normal covenant is 3. Debt up, EBITDA 20% down

[timothyjones2010] 08/3/2018 16:38

Another RNS tomorrow a few board members must be on way out. Let's wait and see

[drsous] 08/3/2018 16:31

He convinced me to buy 7000 this morning

[hooboo1] 08/3/2018 16:21

Matthew Clarke have got cashflow problems

[castleford tiger] 08/3/2018 16:07

math cl;arke is worth 200/250m so debt is not that bad.

tiger

[eastbourne1982] 08/3/2018 16:04

It's the debt pile, 150 million, the market hates anything with debt when it goes wrong.

[timothyjones2010] 08/3/2018 15:59

Ffs still dropping - every time I top up a few thinking it's bottomed out, it drops again

[buoycat] 08/3/2018 15:58

Still too early by the looks of things

[buoycat] 08/3/2018 15:55

I paid 146.93! Sold out a few months ago at nearly 400.

[5chipper] 08/3/2018 15:54

Got some at 156p - seems like an over reaction.

Rough trading updates seem to be followed by 50 - 60% drops these days!