Conviviality Share Discussion Threads

[w1ndjammer] 09/4/2018 09:37

Wallbrock

None of the hedge funds had notifiable shorts out on this stock, where as
carillion had somthing like 25% short, that must tell you somthing.
If the demise of CVR was so easy to spot, the hedge funds would have been allover it
for some very easy money.

As i have said hind sight is wonderful......


WJ.

[walbrock82] 09/4/2018 09:17

People (like myself) talk about learning lessons from this debacle, but most don't want to confront the reasons for why people got sucked into Conviviality.

One big reason is the fast earning growth via acquisitions. To learn another six reasons why investors got sucked into Conviviality

[edmondj] 09/4/2018 08:48

More likely enough alcohol has not been delivered because of producer concerns, whether it would be paid for:

It is with regret that the Board notes that the companies are not expected to have sufficient assets to satisfy all their liabilities. PricewaterhouseCoopers will be in contact with creditors of Wine Rack Limited, Bargain Booze Limited and Conviviality Retail Logistics Limited. The Board also understand that the realisations will be insufficient to provide any return to shareholders.

[r ball] 08/4/2018 15:18

License problem?

[kcr69] 08/4/2018 14:34

Fiasco continues here even after CVR have gone into Administration. Just walked past my local Wine Rack in Henley on Thames and it is closed with a notice on the door explaining “....we are temporarily closed as we are unable to sell alcoholic products...we hope to resume business as soon as possible....”

Closed because it cannot sell alcohol? True or misinterpretation of local franchisee? If true is it because it has no license? Certainly in contradiction to last Fridays RNS whatever the truth?

There just has to be a thorough investigation into this debacle.

[anderson3] 08/4/2018 10:21

W1 , fevertree , spire healthcare , united utilities and national grid are cheap at the moment, speculative punt optibiotix.

[w1ndjammer] 08/4/2018 07:53

Tradejunkie

BT. is on my watch list but huge pension deficit. a friend who has been
a longterm holder has lost 50% on it. i suggested he flip into RDSB Jan 2016
but he was having non of it. I think CNA is now a better stock than BT. holding
a fair wedge.

VED not sure about that one looks like a buy at 600p had you bought in January
this year you would already be 30% down. big debt and spreading itself thin dabbling
in too many areas. Again may as well buy more BP.


WJ.

[tradejunkie2] 07/4/2018 19:46

W1NDJAMMER, l have two well established companies (FTSE100 & FTSE250 ) that will make 40% appreciation and currently pay over 6.0%.

It's easy when you pick good quality companies....

AIM stocks are for punters and punters usually get shafted most of the time because they enjoy it l guess.

Look at:

BT.A
&
VED

[kangaroo joe] 07/4/2018 12:47

Majority (or large minority) owned family businesses that happen to be listed are often cleaner in terms of accounts since they have no need or desire to fool themselves. Renishaw (RNW) being an example but even these come unstuck - Talk Talk for example, when Dunstone took his eye off the ball. Not sure I like Sports Direct either, but if you are looking at options, sometimes it's worth thinking about whether the directors have enough skin in the game, or are they just looking after their own interests? Record (REC) disappointed too from flotation but has since steadied and is a sensible dividend paying niche company.

[w1ndjammer] 07/4/2018 12:15

topvest

thanks for that, had a quick scan and nothing really floating my boat
while yes they will all be around this time next year. The direction of travel
for the share price is anyone`s guess. I would probably go for SLA but i may as
well buy more BP. instead.

i would also say a good punt, for anyone trying to make their loses back
from this fiasco could possibly be. Put 5% of your over all loss into IMM its
high risk, but if topline results out mid April are good, you can just leave it there and forget it, until the big cheque lands on your door mat.

do your own research, the down side is 95% loss, but not out...

I am in circa average 60p so one of my better decisions.


WJ.

[topvest] 07/4/2018 10:32

WJ. You can get lots of high quality companies on a yield of 5-6%. PGH, CLIG, SLA, POLR are a few. Over 6% it gets higher risk. I particularly like PGH at the moment, but do your own research. None of these are indebted (with the exception of SLA but that won't be soon either).

[castleford tiger] 07/4/2018 07:51

Lots been said but its not all black and white.

We had a business making a net profit of circa 30m which as debt was paid down would have gone up.
M Clark had a unique position in the market and I feel the potential was fabulous.
Was it worth 200m.........clearly now not ,but t/o of 1 billion and a major player gave it critical mass.

As I said a few posts ago ,controls at MC were weak and order picking very poor.
This can wipe out a thin margin.

I keep hearing about debt.
I don't think 150m was a great deal for a company this size.

For an example of a business that has taken on a huge number of other companies and lots of debt look at VICTORIA CARPETS.

Whats the difference?
VCP always seems to pay a low multiple. They don't overpay.

So what should of happened.
Had I been a NED I would have
1) Not paid BOD especially DH so much but based it upon the growth of EPS via a JSOP.
2)Not paid a dividend until debts was no more than 2.5 times annual profits.
3)Had a rights issue when price was riding high )( on a p/e basis) to fund streamlining the operations.
4) Clearly the BOD controls were no better than a market trader ( probably worse)

Now I think at the very least a full detailed report on KPMG who clearly sent a team of new graduates and failed to AUDIT properly.

I think the report will highlight SERIOUS management failures.

This business had a perfect model in a highly regulated market and critical mass greater than any supermarket.
The retail arm should have kept the cash flow to allow credit in the wholesale trade.
Clearly much hindsight here but I jumped in on the first RNS and I thought market had over reacted. That statement was misleading and it was then impossible to get out.

I took a gamble and failed.
A big lesson has been learned.

Tiger

[w1ndjammer] 07/4/2018 07:40

hindsight is wonderful, lets have a little competition. Can you guys now recommend

two very safe stocks that you expect to gain 40% in the next 6 months and

pay at least a 6% dividend.

come on guys its easy isn`t it !!!!


WJ.

[topvest] 07/4/2018 07:32

I disagree. Financial statements can be relied upon generally but only if management are trustworthy. Its quite easy to separate quality companies from low quality companies. This wasn't a quality company and so it was always going to be a higher risk investment. Avoid acquisitive debt fuelled growth, high net debt, low return on assets employed and very low margins. Stockopedia helps. I prefer value and quality rather than just value. There is no margin of safety in a value play that has no quality.

[my retirement fund] 07/4/2018 07:00

It's also worth watching the directors, these are the people whom are critical. They are increasingly using cut throat techniques to enrich themselves.When this lot bought Mathew Clark, it was fairly obvious they were overpaying if one had taken the trouble to do a few hours research. The problem seems to be no one did. This is a good case in point.One cannot rely on the opinions and research of others, if one had followed say Investors Chronicle for example, the would have been given equally false views based on sloppy research.The acquisition of Mathew Clark appears to have been soley used as a vehicle for directors to quadruple their salaries. If one takes a look at the accounts prior and later this can be seen. This explains why they would have pretty much paid whatever it took to get it!Lessons to be learnt are:1. Never trust directors2. Never trust other peoples research.

[augustusgloop] 06/4/2018 21:25

Kingston, agree with nearly everything you said.

When I first invested in shares - circa 1984, you could basically rely on the accounts produced by a serious company. Now you can't trust them at all.

At some stage, the level of deceit (frequency of occurrence) makes value investing an impossibility.
If you were to pick 10 mid cap growth companies, how many would have seriously massaged accounts (in a way that you could not detect)?

A knowledge of reading accounts used to be an essential tool for investing.
Now its just a gamble, what's the point in understanding a set of lies if you can't tell that they are lies.

Investing in cvr, was not a stupid investment choice - based on the supposedly audited information that was available. [I wasn't invested.]

[topvest] 06/4/2018 21:18

Wise words. I didn't invest here as it was a low margin business with lots of debt, but I did have it on my longer watch list.

I'm absolutely amazed though at 1. How quickly this went down; and 2. How the two businesses that were previously worth hundreds of millions have been sold for virtually nothing.

Investors that bought this clearly made a mistake, but I do think they have also been very unfortunate and a little unlucky to lose everything so quickly. Just shows how dangerous investing can be when real businesses are involved with slim margins and lots of debt.

[r ball] 06/4/2018 18:57

This is the job of the administrators.

[tradejunkie2] 06/4/2018 16:08

UK chains Bargain Booze and Wine Rack sold to Bestway

[mtdkellie] 06/4/2018 13:41

Is it really worth getting involved with the possible legal action against the BOD?
I lost a lot (to me) but some here lost what can only be described as a fortune.

Would we actually get anything other than satisfaction of the directors being barred? and more than likely having to pay out (again) for said legal action.

[typo56] 06/4/2018 11:03

"As administrators from PricewaterhouseCoopers (PwC) start to pick through the remains, they are understood to be severely hampered by poor record-keeping"

"Poor record-keeping". Is that what it's called these days?

[d1nga] 05/4/2018 17:50

Russels one of the few genuine guys on these boards IMO , had a run of bad luck , sure he'll bounce back in time