Dewhurst Share Discussion Threads

[patviera] 27/2/2013 09:38

Thx Coolen
Wow todays announcement was a shock.Nice to have all that cash on balance sheet!

[coolen] 26/2/2013 13:36

I'll just deal with one point at this stage, viz.the reason that an institution may have to buy the Dewhurst voters as opposed to the "A"s.

The following quote comes from a company similarly affected, although I confess that I do not know the extent which this incident may affect Dewhurst:

"The FTSE recently reviewed the All Share Index and decided that shares which did not have voting rights would not retain a Premium rating. As a result the "A" non-voting Ordinary shares along with those of a number of other companies have been removed from the index.

As a consequence index tracker funds have been divesting themselves of the "A" non-voting Ordinary shares which caused the share price to fall.

Despite this change, both shares classes continue to share in the same portfolio and are entitled to the same level of dividends."

[patviera] 26/2/2013 11:25

Mark
If you hold the As Im sure you can eat the canapies and be at the AGM!!

[markrogers88] 26/2/2013 11:11

Pat - Ah okay that's interesting! If the institution wasn't allowed to buy non-voters for some reason, that would explain the situation in a fairly harmless way - but also would represent an opportunity in the A's.

While the A's should never be priced above the Voters, I think the differential is mostly arbitrary - nobody outside the Dewhurst family can get a controlling stake, so it's just a matter of how much of the business' profits a buyer wants to earn - 11.5% or 8% on investment. At the very least, the canopies at the AGM surely aren't worth paying £47m vs £32m for the same share of the profits!

This is an interesting situation. I'll be keeping track of it, in the event I can buy more, especially for the ISA.

Thanks for the help Pat and Coolen.

[patviera] 26/2/2013 10:27

Mark..Coolen
The other share I like is Mcks..I hold some and will be looking to top up on a market correction at 130 ish if they get there.
The NAV IS 225ish..they have an interst rate swap that will disappear when rates go up and yield is 6pct.

[coolen] 25/2/2013 23:14

The differential has been as low as 50p in the past.

Two things have happened recently:

First, the guy who bet heavily and won on Cakebread did buy a 5% stake in the Dewhurst voters a few years ago. He has been selling since, so I guess he has given up, perhaps in view of Patviera's positive views on the management.

Second, I believe a respected fund management company has been buying the voters.

Bottom line, going on past experience, is that if any deal is proposed to merge the two classes, then AMP (average market price) over the preceding "period" is quoted as the basis. Which could be anything, especially if an arb is operating.

[patviera] 25/2/2013 22:47

Mark
The gutter was I had to take my dwha stock out of isa when we went onto Aim..what a killer as I started buying these at 60p!!

[patviera] 25/2/2013 22:46

Coolen
So what do you think the right differential should be...If I knew there was no chance of being bought in vs I would sell the ords to lock my A turn in!!

[patviera] 25/2/2013 22:45

Thanks very much Markrogers(you have a good memory!)..ive had plenty of losers but this is my biggest holding and what I love about DWHA is the management.They are so honest and treat each penny spent as if it their own.There is no way they would screw the non voters(esp as they hold them) and for that reason 2 pounds is a crazy differential.I unluckily bought the wrong class but I think the Ords should trade at 475p and the As at 425p.
Even though I eventually see these going to 7 or 8 pounds I have to sell early as I have far too many in an illiquid situation.
70P eps with 15m cash wouldnt be inconcievable in 2 years time.

[markrogers88] 25/2/2013 21:57

Coolen - thanks for that, it sounds like the Cakebread Non-Voters got a terrible deal, had never come across that sort of arrangement before.

All the same, while it's worth keeping examples like that in mind, I'm inclined to be doubtful that Dewhurst would act with such a lack of integrity - although it always pays to be cautious. I've gotten the impression that Dewhurst is operated as a matter of pride in the family - and the large portion of A's in the hands of the Dewhurst family may provide sufficient interest to avoid that kind of behaviour. I think there's enough logic and precedent to suggest it's not necessarily optimistic to expect the company to act responsibly for all classes of shareholders, although I'd always prefer to be realistic and err on the side of caution.

Personally I'm very glad to see the A's go under the radar. No sense in shouting about this from my point of view, I'm even reluctant to post on the board in honesty. Especially between now and the new tax year, if those new AIM rules come in for ISAs.

Thanks again for your help and insight.


Pat - just wanted to say congratulations, I saw you posting as long as 10+ years ago on other websites in regards to the opportunities here. The business track record has vindicated that loyalty, and may continue to. Well done mate.

[markrogers88] 25/2/2013 16:51

Coolen - While I understand the non-voters would have no say in the matter of a takeover, is it really true that a bidder would not have to offer a price for all the share capital, at an equal price no less?

I looked into the Cakebread Robey case, the only terms I can find suggest that all shares were purchased for 62.0 pence? Was that not the outcome for the non-voting stock?



In the case of Dewhurst, surely the chances of a takeover are especially remote? Both the Non-Voting and Voting stock are held in the majority by the Dewhurst family itself. Would the largest beneficiaries of the non-voting stock really "vote for Christmas" with their voting portion of stock, if the price was unfavourable for the non-voting?

Thanks in advance, sorry if the questions are obvious to anyone else!

P.S did Cakebread really sell in the takeover at £7.7m when net assets were £7.9m? For less than 40% a year's turnover, at only 7 times pre-tax profits?

[coolen] 25/2/2013 15:44

In the old days, several companies had both Voting Ords and Non-Voting "A" Shares. Ords were more highly rated because a bidder would not be required to bid for the Non-Voters.

What the takeover panel may have to say is anybodys guess. For instance, they do not required bidders to make an offer for non-voting preference shares, but they do require it for voting prefs.

If you want to do some research, look at the final outcome for builders merchants Cakebread Robey some years ago. I think the Ords got TEN times the value offered for the "A" shares.

[patviera] 25/2/2013 13:58

Why is there crazy 2pound spread between the As and the ORDS?!!!
SAME COMPANY SAME YIELD AND NO CHANCE OF takeover
Doesnt make sense does it??!!!

[patviera] 16/2/2013 18:40

gotta love em

[patviera] 16/2/2013 18:39

gotta love em

[cockerhoop] 01/2/2013 08:17

Coolen - I've done a quick analysis - It may shave a few minutes off my journey time from Sheffield should I choose to attend the AGM................in 2032 :-)

[patviera] 31/1/2013 22:53

coolen...what do you mean?

[coolen] 29/1/2013 14:22

proposed high speed rail link....any implications ?

[patviera] 18/12/2012 20:04

Love this stock...so cheap

[patviera] 12/12/2012 09:31

these look very cheap vs dwht now.

[patviera] 06/12/2012 13:43

Best management on AIM
Cheapest stock on AIM
Best asset value on AIM
mkt cap 30m cash 11m freehold prop 5m pbt 5.5m
20 years of rising dividends
Special dividend this year
Pension deficit only negative

My price target is 500p for DWHA