Seneca Growth Capital Vct Share Discussion Threads

[edmondj] 25/11/2004 20:52

The more I reflect on it, the only logical conclusion is some kind of accounting shortcoming(s) in addition to what was announced the other day.

I went to see Swaylands and that project seems fine for the medium term. It is not a luxury development that currently needs selling into a declining market (although prices are only down about 10% in this sector). It awaits development as a two to three-year project. Even assuming a substantial write-down on Swaylands (which I don't recognise as appropriate) this does not explain a take-out value of less than £10 million, even after recognising debt. Something is awry, somewhere, in the accounts.

Unfortunately, by the time one is likely to find out via Oakdene's accounts, Honeygrove's directors and auditors will have long flown. At least Oakdene ought to be able to unlock medium-term potential in Swaylands + other projects.

I can only treat this as a hard lesson in the nature of smaller companies: the City may not know the true values of what it promotes; management presentations can be high risk indeed; and small housebuilders trade on derisory p/e's for proven reasons.

Those caveats aside, I am likely to hold to see what Oakdene can make of Honeygrove's assets. The bid must be motivated to a key extent by Swaylands. One has to hope, as an impending Oakdene shareholder, management's shrewdness extends wider.

[davidosh] 25/11/2004 19:47

The biggest issue for me at present is that forecast earnings for the 2004 year already two months past year end is 3p and 5p for this year .......

We have had absolutely no warning that the company cannot or will not meet expectations but we have been told that some accounting has been questioned during due diligence clearly by Oakdene but it has had no material effect.....

So either Oakdene have the steal of the century or there has been selective reporting to shareholders.

I want to stick with Honeygrove for my 3p and more if it is coming.....not share it out with newcomers after three years of holding Propan then Honeygrove through (better) and for worse...

[ukhawk] 25/11/2004 19:23

hybrasil, myself, and everybody else on this thread apart from from you it would seem, were under the impression that HYG had been "turned 'round" and were about to report a profit. Which then led me to believe that there would be a premium if a deal took place. I would be interested to hear what is now so bad that they have to sell at such a discount.

[hybrasil] 25/11/2004 18:13

ukhawk
they certainly did not mislead me. How do you feel they mislead the market?

[muddy waters] 25/11/2004 17:44

and I sold tescos three days ago!!!

[muddy waters] 25/11/2004 17:41

davidosh
Unfinished development is in Faversham, Kent

[ejudge] 25/11/2004 17:13

Just an observation:

In an RNS in August on the 'approach' which might lead to a bid, the directors said at the time

'The shareholders are advised to take no further action.'

I don't expect them to say 'Sell!!' or 'Buy!!' but 'no further action' is just as misleading.

[ccraig69] 25/11/2004 17:05

Hybrasil,
I think we all know the risks with AIM stocks, its just that we feel a bit stitched up by managment, and if it comes to transcribe that information has not been passed on that is price sensative then we have a real grevence.

Muddy Waters, sorry you house is not completed and has faults, and I for one are thankful you brought it up. I dont mind negative comments made about stocks I own, however you where never going to make friends on a BB if you say anything negative about a stock, I am afriad its just one of those things.

We should of known if they can not sell houses we should of known they could not sell a company

[ukhawk] 25/11/2004 17:00

hybrasil, continuing to mis-lead the market right up to the bitter end is not "commerce pure and simple". If all directors acted in this manner nobody would have the confidence to invest.
I've been reading your "high and mighty" posts on both threads today and can't quite work out your motives.

[hybrasil] 25/11/2004 16:43

Lord Buffett
This is nothing but commerce pure and simple. The company did not havethe wherewhithal to go forward. This happens in the building world. They had been trying to shore up the balance sheet to the extent the directors put their hands into their own pockets to buy properties from the company that it could not sell.
You seem to think that because a price falls that there is something afoot.
They just were not up to it that is all.
Its hard to see how anyone would become a director of a plc with that sort of reaction.
If you want a guarantee put your money in a bank

[lord buffett] 25/11/2004 16:31

I'd give the regulator a ring if I were you, simple as that.

This smells of a serious stitch-up involving director negligence/corruption.

[davidosh] 25/11/2004 14:50

Hi Muddy

Just out of interest....where is the development that is unfinished?

[muddy waters] 25/11/2004 14:47

Really sorry for all of you who lost out. i got somewhat nastily shouted down when I explained that I had foolishly bought one of the houses and that there were very big problems. Take comfort that you didn't buy a house on a private development that has never been completed. I did try to say that they should not be trusted and nothing has happened that changes my mind. Sorry folks

[shanklin] 25/11/2004 14:26

Davidosh

Assuming the OKD directors is good for their company, it will be interesting to hear how their directors plan to enhance the shareprice... ...and what justified the apparently ridiculously low price.

I guess we'll eventually find out whether the HYG directors got a much better deal than the rest of us. One could allege that they are at least one of (a)incompetent, (b) corrupt, and/or (c) very poor indeed at updating the market about the current state of trading. I guess (c) is what can happen when investing in AIM stocks.

Regards, Martin

[davidosh] 25/11/2004 14:08

Who can you trust among smaller housebuilders?



Hi Edmund

Well you can certainly look at Ben Bailey for one .....excellent track record and very clean easy to read accounts.....no fun and games there just solid growth and eps ahead of forecast. Motley Fool board will give you lots of background info.

As for Honeygrove

It would be nice to see the latest accounts to September before making a decision as I suspect the forecasts must be dodgy so why no management guidance before now?

The offer...allegedly previously received for Swaylands would surely have been a better outcome for shareholders!!! ?

If the forecasts are to be believed it would have been better to press on with the development of the sites so are there financial problems that the shareholding minority are not privvy to ???

With a holding in Oakdene are we jumping out of the frying pan into the fire .....just my thoughts

[ukhawk] 25/11/2004 14:01

Ed, trust is something I'm a bit short of today !

Notice there's some buyers coming in now though.....somebody tell me we've all missed something !

[edmondj] 25/11/2004 13:41

RAB's break-even?

Otherwise trust Oakdene to get on with the job.

Who can you trust among smaller housebuilders?

I speculate.

[john106] 25/11/2004 13:19

Thanks for the comments, but why a premium of 40% for other bidders? any ideas
JD

[ukhawk] 25/11/2004 13:17

I'm still under the mis-guided belief that directors have withheld information as to the trading position of the company. Just because they're in bid talks can they mis-lead the market ? I would think the answer is no.
As I mentioned here last night, I topped up y'day on what I took to be a positive statement last week. I now believe the wording was totally inaccurate.

[hybrasil] 25/11/2004 13:04

john106
Nothing uncommon about it.
It merely releaes RAB to deal if there is a substially higher bid.
In answer to the other posts clearly all was not as it seemed though it is always difficult to value a vacant site such as swaylands in an up market its worth a lot in a down market it isnt.

[edmondj] 25/11/2004 13:04

Maybe RAB sees the best chance of recouping its loss via the Oakdene management taking control of the assets. I speculate but this seems rational. It effectively seems a wholesale change of management, but Oakdene is exacting a low price for its effort. No one else seems to want to take the company on. Doubtless a chain of financial people feel misled!

[john106] 25/11/2004 12:52

Could someone explain why an alternative bid has to be at 11p or better.

"The irrevocable undertakings given by RAB Capital plc and its related parties will cease to be binding in the event that the Offer lapses or is withdrawn or in the event that an announcement is made by a third party of a firm intention to make a competing offer of not less than 11 pence per Honeygrove Share".

Surely anything higher than the current offer should be explored as it should be in everyones interest.
This whole scenario smells, pressure re take the offer or be delisted, 40% premium for other bidders, no announcement to LSE of trading dificulties to suggest a problem with the accounts etc.

JD

[charlie] 25/11/2004 12:49

I hasten to add that I am a holder of the shares. But I was taking a chance on the positive directorspeak. Last Friday's statement looked so positive I even thought about buying more, which is why I was looking at the accounts last weekend. Fortunately I didn't buy any more.

[charlie] 25/11/2004 12:47

Doesn't the value of the offer suggest that all was not as it seemed with regard to HYG's accounts?

Actually the accounts gave some clues, as I posted at the weekend:

charlie - 20 Nov'04 - 13:08 - 436 of 459 edit

Not so unbelievable for a south-eastern housebuilder at this point.

The negative goodwill restatement has prompted me to have a closer look at the accounts. It is actually quite difficult to work out what this company is worth. For starters, £5.2m of capitalised interest in work-in-progress? That's more than half the book value of the equity.

I'm not saying there's necessarily anything wrong. Just that it is difficult to tell. The net worth is the small difference between large debt and large assets. If the assets include significant amounts of items like capitalised interest, you need to be very careful.

[d8raider] 25/11/2004 12:30

What get's up my nose is the threat of delisting if they don't get their way!
Accept the offer or lose the lot.