Conviviality Share Discussion Threads

[russell250] 17/3/2018 04:32

100m at 10p does seem upper value at 1/10th but better than admin

the headroom should eliminate the current trading concerns - which hopefully a new ceo can take the company forward and rebuild confidence.

The new share price should bottom out at 20-30p - but hopefully recover overtime with decent operational management -- costs and margin focus

a loss of 70%plus is awful but better than 100%

[richj5000] 16/3/2018 23:19

75p-80p. I'm afraid that's just wishful thinking. More likely that existing shareholders will be all but wiped out.Maybe 10p with a bit of luck.Btw, I'm not saying there isn't a decent business here. It just needs to be operated competently by people who are paid sensibly and probably not on the stock market.This is a business where continual acquisitions to grow the share price leads to management problems.

[typo56] 16/3/2018 22:08

£30-40m at 75-80p. Are you serious? I guess we'll find out soon.

[tsmith2] 16/3/2018 21:51

is £50mn anywhere £100mn?because you put one media snippet which says £50mn the other says £100mn..It's pure speculation..sells papers you missed the bit about the company being a fundamentally sound business..It's throwing of a decent amount of cash at an operational level.£30-40mn at 75-80p.The company would be v v significantly de-risked too. what happened PFG recently?

[typo56] 16/3/2018 21:44

tsmith2, if it doesn't need anywhere near £100m, how much do you think it needs?

A big fund raising would still be better than administration, which would likely zero shareholders. And if they are properly funded, the shares might actually recover a bit longer term.

[tsmith2] 16/3/2018 21:21

"This is a fundamentally good business, and there's plenty of appetite to back it - but at the right price," said one investor.from same Sky article..

[tsmith2] 16/3/2018 21:15

The company's shares were suspended on Wednesday at 101p, but INVESTORS SPECULATED that the emergency placing could be undertaken at as little as 10p..BB talk would amount to investors speculating..if they are going to raise £100mn (which I v v much doubt) it would only be if there was v healthy demand and besides the company doesn't need anywhere near that..

[typo56] 16/3/2018 20:30

1,000m new shares @ 10p. 183m existing shares. There's something for the spreadsheet!

[kemche] 16/3/2018 20:28

"The company's shares were suspended on Wednesday at 101p, but investors speculated that the emergency placing could be undertaken at as little as 10p."

Gulp!

So much for a premium WJ!

[typo56] 16/3/2018 20:26

Sky saying placing may exceed £100m.

The Guardian saying at least £50m.

Evil derampers!

[funkmasterp12] 16/3/2018 20:22

hTTps://news.sky.com/story/amp/last-orders-for-bargain-booze-boss-11292840#click=https://t.co/SawfBR4UcnPotentially off. But probably off.

[funkmasterp12] 16/3/2018 20:22

Sky (Kleinman) reporting that Diana is off.

[typo56] 16/3/2018 20:17

russell250, I took a look at what happened at HUR.

By 'earlier this year' do you mean financial year? If you mean the fund raising last July, it looks like they were able to get out of the pre-emptive offer to all shareholders because the share price in the open market had fallen below the 32p offer price. I'm not sure that's unreasonable as it wouldn't have been a productive use of time or money.

Have you read Resolutions 14 and 15 from the CVR 2017 AGM that I posted earlier? I've been told that my comprehension skills are poor, but it reads to me like CVR would have to make a pre-emptive offer to all shareholders. Given the urgency they might try and do it the same way as HUR, doing the placing first and promising to look after the other shareholders later. As with HUR, it might not happen if the price in the open market ends up lower than the placing price, but if that happens the placees have been stuffed haven't they, rather than the ordinary PIs?

[typo56] 16/3/2018 18:18

I don't think that at all.

JDW seem to be able to make money on selling cheap(ish) booze. They also seem to be able to do food cheaper and more profitably than the chains in the overcrowded and failing Italian sytle restaurant chain market, where their rents are too high because they didn't negotiate hard enough with landlords (don't get me going there!).

Perhaps some of the big supermarkets manage to make a few quid on alcohol too!

Management is the key.

[w1ndjammer] 16/3/2018 18:12

Typo & the other fella

well someone has got to supply £1.7 Billion of booze

we are heading into a hot dry summer and the world cup

the way you are talking no UK company can make money on booze

or maybe we are all going tea total


WJ.

[typo56] 16/3/2018 17:56

Deramping? What a strange suggestion. For what benefit?

I thought I was being more positive, suggesting that, in the absence of further uncomfortable revelations, it might be possible to get a fund raising away and PIs might have pre-emption rights (no-one seems to have commented further on that).

It's the absence of further uncomfortable revelations that's the thing though. You can be all smart and clever with cash flows and balance sheets and swallow all the latest bull management speak, but would you have known about the current cash crisis and £30m HMRC bill? No, because according to your wonder spreadsheets the company is 'throwing off' cash. Or was that a typo and you meant 'throwing away'?

Funny how you guys always blame the shorters and the deramping bogeymen for destroying companies, not the incompetent management. Deramping isn't the reason they can't pay HMRC!

I really hope it survives, and there's something left for PIs.

Oh, and if you were TSmith1 (Terry Smith from 'Accounting for Growth'), you'd have bargepoled this!

[richj5000] 16/3/2018 17:40

This is company is pretty much finished imho. Should never have been on the stock market in the first place.I bought and luckily sold out on Monday having made a few pounds but having taken a closer look I just don't think the business is viable and certainly can't sustain these ridiculous management salaries.Not sure if the CEO and CFO will survive another week.

[tsmith2] 16/3/2018 16:52

*remarkably

[tsmith2] 16/3/2018 16:29

typo you've remarkable changed your tune...carry on mindlessly deramping..

[w1ndjammer] 16/3/2018 16:25

russell

yep CEO spent to much time riding around in the porsche

CFO been asleep at the desk, he has been here 5 months, should have got a grip
within a month.

Then they all go into panic mode

As to the placing price may as well put 100 balls in a bag and pull one out

i have funds to double up, depending how the RNS reads..

best of luck


WJ.

[masurenguy] 16/3/2018 16:10

Graham Neary's view today

Conviviality (LON:CVR) (suspended)

"Conviviality has confirmed that it is working on "the possibility" of an equity fundraising, to fund its VAT payment. Given that its existing lenders were already maxed out, and probably unimpressed by the company's ability to make cash flow projections, this has seemed the most likely outcome. To its credit, it did succeed in cancelling today's dividend payment, saving £8m. That relieves some of the pressure - I was penciling in a 50p placing price, but that is looking a bit pessimistic now. Of course, this is purely speculation on my part: it all depends on the hunger of existing shareholders, and the demand for new shares. It's impossible to tell where the demand for more shares will find equilibrium against forthcoming supply (this is why dilution is so risky for existing shareholders - you have no idea how bad the dilution is going to be). Funding could happen at almost any level.

The irony is that Conviviality paid out nearly £20m in dividends last year, and is now scrambling to find £22m from somewhere. Even before this VAT débâcle, I thought Conviviality's dividend payments were questionable. Over the last three financial years, including this one, it has raised over £190m (gross) from shareholders to fund acquisitions, paying significant fees. At the same time, it has distributed £27m in dividends, triggering tax liabilities for shareholders. Given all the frictional costs involved, why raise funds and return funds at the same time? Not paying a dividend this week was the right thing to do, but not paying a dividend for the previous two years would also have been sensible, in my opinion.

Hopefully, trading will continue as normal with suppliers and customers, and the problems will not become any more serious. As the company itself said regarding this year's forecasts. To the extent that the current situation creates operational difficulties, this may negatively impact the adjusted EBITDA range. If and when the shares resume trading, I would remain very cautious about getting involved. I've been a sceptic for quite some time not just on Conviviality's valuation but also on its strategy. The former is likely to be reset at a more realistic level, but we still don't have any evidence that a more prudent strategy will be pursued in future.

[typo56] 16/3/2018 16:09

To me that reads like there should be pre-emption rights but, given they did that £30m placing back in December without any pre-emption, I must be reading it wrong. Ah, but that was 'in connection with an acquisition'.