Darwen Share Discussion Threads

[topvest] 27/6/2008 19:15

Tanfield is being shorted to death like many other companies at the moment. The FSA need to sort out this volatility caused by rampant shorters. I would be very surprised if there is any major bad news on Tanfield next week, but we will have to wait and see. I was looking for an opportunity to get into Tanfield and so I will consider buying their when the drop stabilises and the situation becomes clearer. Given he had such a massive stake that had 100 bagged or something you can't really blame him for selling; he would have had to have been an idiot not to have top-sliced to be honest... He only sold 5m out of 25m and so I suspect he is just as unhappy with the share price developments as anyone else involved!

[sharethelovearound] 27/6/2008 18:50

rather surprised at the lack of comment on the link between the erstwhile Mr Stanley and his previous creation, Tanfield. He sold a ton of shares at 160p last year at the same time as their last acquisition was announced (although you had to look hard to find it as they hid it in the documentation rather than announcing it as a Director Dealing in a separate RNS) and the price today closed at sub-30p. My only thought is that while you may see some impressive share price performance with Darwen, don't be greedy because there is clearly potential for this vehicle also to prove to be a house of cards. Take profits along the way and watch carefully for Director Dealings as they may not always be disclosed in a transparent fashion.

[m.t.glass] 24/6/2008 09:11

From those SMMT stats (fwtaw) Optare sales were up in 2007 from 2006, gaining market share while others mostly fell. But fulfilment of one single order can easily account for a percentage point or two of market share within any single year, so I imagine those year/year comparisons are pretty volatile.

[bearraider] 24/6/2008 08:39

MTG - not sure I can see where the orders for Darwen buses are suddenly going to come from, they said historically 3 a week, now 6 a week (doubled production) and aiming for 10 a week by the end 2008. Unless the market place has suddenly expanded then Darwen seems to expect to take almost 10% of the existing total of the 4000 market on top of what it was already doing before, by the year end. Will the other UK bus companies (and the EU ones) just surrender mkt share that easily?

The other side to this is why was Optare available for sale - unprofitable? low profits? falling sales, cash flow problems.

The share price seems to be heading down to the placement price, it will provide opp for the PI to get in on similar terms as the bigger boys - (hope that works out better than at TAN). Wonder if DHP is going to worry about how the city sees it like TAN seems to, I would have thought it's small size and Mkt cap would not make that necessary, at present anyway.

[m.t.glass] 24/6/2008 07:11

If the combined group is expecting to take a quarter of the market (a quarter of which market? The overall 4000 bus/coach total? Or the big-bus total? Or the big/small bus total?), I suppose we should expect to see orders averaging somewhere between 40 and 85 vehicles a month?

Or somewhere between 33 and 67 a month if taking 20%?

As Darwen alone, without Optare, they were talking of averaging 43 a month by the end of 2008 - so presumably the biggest of those targets is achievable.

[mrx9000] 23/6/2008 22:25

Darwen Holdings plc is proposing to change its name to Optare plc subject to shareholder approval at EGM to be held on 14 July 2008.

[topvest] 21/6/2008 15:54

Aim admission document has arrived today; that was quick, given they are dated 20 June. Jamesstan bought the Optare shares for £10.5m, as well as taking on debt of £2.8m (i.e. it cost £13.3m).

Darwen is buying Jamesstan for £16m (i.e. £5m cash, £1.75m shares and £9.2m of assumed debt).

It's a bit difficult to follow all the transactions through, but goodwill arising from the Jamesstan acquisition is £1.75m and so I would assume that is the risk premium taken by Roy Stanley.

From what I can see Roy invested £5m of equity in Jamesstan and he has had this repaid. The premium has been taken in shares. Not what you would call legging-over shareholders at all for investing £5m of your own cash to get a deal for Darwen that couldn't have been achieved by the end of the tax year otherwise!

The combined group has net assets of c£20m including goodwill of £9m and net cash of c£1m (cash of £12m less borrowings of £11m).

The group looks to have an exciting future. I have turned bullish on buses...they are definitely back on the growth track at US$140 oil.

[stud69] 21/6/2008 15:41

Beef

Thanks for that bottom line is two things:

Firstly Stanleys companys RNS's are notoriously ambiguous he needs to do himself and all shareholders a favour and make sure that the optics are very clear. When this announcement was made he should have been explicit about how much he paid and what his expenses and mark up were. This is after all a public company not a private fiefdom no matter what his shareholding

Secondly people don't forget they remember quite clearly and my guys down here who have all invested heavily in TAN invested on the back of forecast profits for late year of £17.5m plus(???) acquisition profits. The £17.5m was not achieved and the price tanked, lost more than 50% of its value from memory from £1.65 to 65p. I agree that shorting on AIM and illiquidity of stocks have been a big issue but Stanley and his mates had a big wedge away on the back of clearlly communicated forecasts and they weren't achieved

I too support people doing well out of building businesses but not when they do it on the back of misinformation

So caveat emptor is the word of the day or don't beleive a word the TWGC has to say until it is delivered

Lets cut his some slack though in the short term and see what he delivers this time

[m.t.glass] 21/6/2008 14:22

Thanks for that clarification beef.

"..The combined group of Darwen/Optare will have about 25% of the market.."

That will instantly make them UK market leader then?

I'm still curious to know where WrightBus slot into the rankings.
Admittedly if their very recent order from FirstBus is one they describe as their biggest ever, and if delivery is spread over several years(?), they may be a bit smaller than the impression I had. I had previously thought of them as a close rival to Darwen - but presumably the Darwen/Optare deal leaves WB behind.

[the beef] 21/6/2008 13:40

Stud: My understanding is that all docs will be made available and that the admission doc which goes to shareholders contains all the details of the deal. There are no "Smoke and mirrors".
I understand that it is a simple strategy of putting both businesses together to drive out synergies and to radically change the method of manufacture which I know Stanley believes is inefficient throughout the industry.
As regards Stanley taking £8 million last year people forget that the business was brought to the market with a 10p share price and that subsequent to the placing at £1.63p the price of the shares went to over £2. Lots of people have made money on this stock both as it rose and as it has fallen in price. I also know that what was left of the money after tax has been used for significant charitable work and to invest in and continue to fund a number of start ups such as Darwen. I suggest you look at examples such as LB Holdings, DataSMS, TYI, etc

MT: 2007 was a bad year for bus manufacturers because of the lack of availability of Euro 4 compliant engines. This resulted in a reduction in registrations. I would be sceptical of stats related to the market particularly from SMMT as they are notoriously inaccurate. The UK Bus market runs at an average of about 4000 buses per year. Of this total about 1000 are double deck and about 2000 single deck or midi buses. The combined group of Darwen/Optare will have about 25% of the market.

[m.t.glass] 21/6/2008 12:02

European Bus and Coach Sales

Below is the bus and coach registrations for Jan to Nov 2007. The figures, published by ACEA for vehicles over 3.5t, show a ten per cent fall compared to the same period the previous year. The data for 'Others' includes minibus producers.


Company .. 2007 Sales .. Share % .. 2006 Sales .. Share % .. +/-
EvoBus ..... 7,763 ...... 25 ...... 8,317 ..... 24.2 .. DOWN
Irisbus .... 5,839 ...... 19 ...... 6,127 ..... 19.2 .. DOWN
MAN ........ 2,793 ....... 9 ...... 3,149 ...... 9.2 .. DOWN
Scania ..... 1,746 ....... 6 ...... 2,021 ...... 5.9 .. DOWN
Volvo ...... 2,756 ....... 9 ...... 2,860 ...... 8.3 .. DOWN
Others .... 10,447 ..... 33.3 ..... 9,404 ..... 28.6 ... UP
Total ..... 31,344 ..... 100 ..... 31,859 ..... 100 .. -1.6%


Source: ACEA
Data for EU and EFTA countries

Last Updated: 19/12/2007


EDIT: Anyone know if these Europe totals include or exclude the UK ones?

And why is WrightBus (UK's biggest independent busmaker) not listed in the UK stats? (they won a £125m bus order from FirstBus a few weeks ago and describe themselves as market leader in hybrids)

[m.t.glass] 21/6/2008 11:46

One thing that catches my attention in those stats (apart from Optare being one of very few risers) is how low the overall totals are. Fewer than 4000 vehicles altogether. That kinda makes every order for every bus worth winning - and makes the latest 10 bus order from Ensign sound good.

[m.t.glass] 21/6/2008 11:01

UK Bus and Coach Sales

Figures below show UK registrations for the period Jan to Dec 2007.

Registrations of new big buses in 2007 were at their lowest level for five years at just under 2,400, but new coach registrations were up 13 per cent to 1,041, the best result this century.


Company ......... 2007 Sales .. Share % ... 2006 Sales .. Share % .. +/-
Alexander Dennis ... 701 ...... 17.6 ......... 876 ....... 20.7 ... DOWN
BMC ................. 81 ....... 2.0 ......... 123 ........ 2.9 ... DOWN
Bova ................ 62 ....... 1.6 ...........75 ........ 1.8 ... DOWN
MAN ................ 223 ....... 5.6 ......... 219 ........ 5.2 ... DOWN
Scania ............. 452 .......11.3 ......... 547 ....... 12.9 ... DOWN
Irisbus ............ 415 ...... 10.4 ......... 307 ........ 7.3 .... UP
EvoBus ............. 143 ....... 3.6 ......... 154 ........ 3.6 ... DOWN
Optare ............. 466 ...... 11.7 ......... 453 ....... 10.7 .... UP
Van Hool ............. 6 ....... 0.2 ........... 8 ........ 0.2 ... DOWN
VDL ................ 175 ....... 4.4 ......... 224 ........ 5.3 ... DOWN
Volvo Bus .........1,020 ...... 22.5 ....... 1,059 ....... 25.0 ... DOWN
Other Imports ...... 249 ....... 6.3 ..........187 ........ 4.5 .... UP
Total ............ 3,993 ...... 100 ........ 4,232 ........ 100 .. -5.65%


Source: SMMT
Last Updated: 17/01/2008

[m.t.glass] 21/6/2008 10:50

Darwen/Optare deal is today's top story at Bus & Coach magazine website, and at the Omnibuses Blogspot (links in header)

[m.t.glass] 21/6/2008 08:46

"..Those involved in the placing will have seen the pathfinder. The rest of us will see the document imminently when it lands on our doormats. I repeat; this is a transformational deal and Roy Stanley has done a superb job in putting this business together from scratch for a very reasonable price in a few months. Personally, if he makes some money out of the process I say good luck to him as he certainly deserves it. However, the comments above seem misguided..."


I agree.

[topvest] 21/6/2008 07:56

Those involved in the placing will have seen the pathfinder. The rest of us will see the document imminently when it lands on our doormats. I repeat; this is a transformational deal and Roy Stanley has done a superb job in putting this business together from scratch for a very reasonable price in a few months. Personally, if he makes some money out of the process I say good luck to him as he certainly deserves it. However, the comments above seem misguided.

Tanfield is doing great, but has been hit by the shorters. I fully agree that the FSA should get heavy on shorters and disclosure of short positions as they are causing no end of problems in the market place. I have never shorted anything and intend to stay investing for the good, not the bad.

[stud69] 20/6/2008 22:45

beef

interesting clarification

Whether or not TWGC "legs people over" or not is a matter of perception

How is it that you "have seen the documents" and are these same documents going to be available at the meeting to approve this

I have a number of mates down here who are still pretty sore about the £8m he took in cash last year on Tanfield at £1.65 only to see the price "soar" to 65p this on the back of forecasts which were not achieved

I think TWGC needs to come clean with all of the original docs at the meeting to approve this

Don't get me wrong I am not a dog in the manger about this its probaably a good deal all 'round as I said earlier its just the optics of it all.......too much smoke and mirrors

I agree TWGC looks like a good enterpreneur and deseerves a bit of slack ...........but we lowly shareholders also deserve more clarity

[topvest] 20/6/2008 20:41

Great deal. Great future.

Thanks for the clarification The Beef - that makes sense. Roy Stanley is a very good entrepeneur imo and has big support in the city after the fantastic job he has done at Tanfield.

[bearraider] 20/6/2008 20:26

Beef

Thanks for the clarification

bear

[the beef] 20/6/2008 19:44

The enterprise value that Jamesstan investments paid for Optare in the original deal was £15.185 million. Stanley put in £5 million of cash and HBOS put up £10.2 million of debt. In this deal Stanley is getting £5 million back plus an uplift of £1.75 million to cover costs, loss of interest and CGT. . Stanley is taking this in the form of Darwen shares. He is putting £600,000 into the placement( this is in addition to the original £2.5 million he put into Darwen).HBOS are leaving the debt. Stanley did the deal privately because the vendors of Optare wanted the deal done before 5th April to avoid increase in CGT. Darwen could not do the deal in time. After dilution he will have about 33% of the business. The remaining £10 million of placement funds after fees and Stanleys sum will be used for new assembly facilities and paying down debt.

This guy does not "Leg people over"

I know all this because I have seen the documents

[stud69] 20/6/2008 18:49

Bear

Thanks

I suspect that he and his fellow directors have put in £650k at the placing price and I have now had time to look at the announcement, (but it won't be really clear until we receive the full document) I think that Darwen have agreed to buy Optare for £15.95m in shares, AND in addition the enlarged group has agreed to raise £16m in cash to inject into the business (the fact that the two figures are so colse adds to the confusion addmitedly)

"The worlds Greatest Comedian" will own around 50% of the new shares issued plus whatever part of the £650k he put in cash in association with his directors at 40P

I really can't believe that he would get away with flogging a company that he should have acquired in Darwen in the first place for cash 5 minutes after he bought it "for an undisclosed sum" if he has good luck to him but he will have taken us all for suckers

However even if he has accepted £15.95m in shares for the company I think that we need to be told how much he actually paid for Optare in the first place as I got the distinct impression that he paid very little, under £5m for it and most of that in a promise

I don't think it very fair on shareholders if the Chairman of our company goes off and buys a company for next to nothing then flogs it to us for three times what he paid for it only 5 minutes later even if he did take payment in shares

I will be coming to the Shareholders meeting to ensure we get to the bottom of this little issue

Too much smoke and mirrors for my liking and whilst I fully support what looks like a good deal I don't like being legged over by our Chairman even if he is The worlds greatest comedian (WGC)

[bearraider] 20/6/2008 17:47

stud

The weather has been great here for last 20 days but supposed to rain tommorrow!

have pasted relevant bit

The Directors believe that this is a transformational deal, and the Executive Directors have subscribed to Placing Shares worth £650,000 at the Placing Price, alongside the institutional investors.

It seems very much seems like Roy has taken the cash, not sure if he is included in the execs mentioned in the RNS or not.

Being charitable it may be he had to act quickly to procure Optare, to quick for DHP to raise the finance so he did it via jameston and then just sold it on at cost + expenses to DHP.

[stud69] 20/6/2008 17:28

I didn't either unless it refers to the £8m he had a way last year at what was it £1.65 a share in Tanfield (TAN) before the price soared to 60p

But I thought it quite funny someone has gone to a lot of trouble over it

Bear I am in Monaco so haven't studied the document yet it is sunny here for the first time in 20+ days so i am enjoying it whilst it is here

Has Stanley not taken stock in the new the enlarged company for his shares in the old optare? and put some cash in too

I can't believe that even he would have had shareholders cash away selling a business he bought only 5 minutes ago

I think this needs clarification

has he taken cash off the table for his shares in optare or shares at 40P in the enlarged group

EXTREMELY important question for us ordinary punters in this

[m.t.glass] 20/6/2008 15:28

Nah, stud. Can't see the relevance of the £8m figure in that cartoon to Darwen.