Seneca Growth Capital Vct Share Discussion Threads

[hybrasil] 17/5/2004 20:49

Until they tell us what is happening to swaylands this is a share to be avoided. It is the companies principal asset and it seems to be constraining them

[hybrasil] 12/5/2004 16:02

What is happening to Sway lands

[hybrasil] 04/5/2004 07:53

Swaylands?

[aderemi] 29/4/2004 16:07

the gearing is about 500%

[george19] 28/3/2004 17:58

mostyn - saw the article myself and other relative aspects I noted was that having looked at Honeygrove's website Jackson stated that other projects in which the company was engaged were included in the shareprice for free. His concluding statement was that "few people recognise the potential in Honeygrove but I think its shares are useful to tuck away."

I think it is significant to add that Jackson,himself, has bought the shares.

My own rather simplistic view ( see my post no.50)is that the shares are somewhat undervalued.

Jackson's column appears to confirm that.

[mostyn] 28/3/2004 13:11

Honeygrove written up today in the Sunday Telegraph by Edmond Jackson. Describes the shares as "useful to tuck away". Cites the house broker forecast for profits:

"£5.4m for the year to end-September and £8.8m in 2004/05, giving earnings per share of 3.1p and 8.8p respectively."

(Based on George19's post no 50 above, I would put a question mark on the 8.8p earnings figure for 2004/5 as this seems too high given the profit figure of 8.8 million, but it should still be a useful increase)

These shares are not without risk, but if the house broker is anywhere near accurate the share price is unlikely to stay at these levels for too long. On the basis that prices advance in anticipation of the events we could be looking at a healthy increase in the price by the time of the 2004 interims which should be around June/July time.

If the economic environment remains favourable for housebuilders for the next 18 months this looks like an interesting situation.

Like any stock situation everything hinges on the accuracy of the broker forecast and the overall economic environment for the sector.

[george19] 25/3/2004 23:24

Don't see why not. Fingers crossed.

[mostyn] 25/3/2004 22:12

Looks like the big seller has finished for the moment. No large sales today. If this is the case the price should move forward now if we get a few decent buys.

[george19] 23/3/2004 22:15

mostyn - I can't disagree with your comments. In a previous post I listed some details from Growth Company Investor as follows -

2004 (E) T/O £33.4m PTP £5.4m EPS 3.1p P/E 3.4

2005 (E) T/O £36.9m PTP £8.8m EPS 5.0p P/E 2.1

The company has a lot going for it and, looking at those projected P/Es - how cheap does it have to become to attract investors? Market Cap can't be more than £15m. I suppose being small and AIM listed its good value appears to have escaped attention.

[mostyn] 23/3/2004 15:37

The Deputy Chairman has sold around 1,000,000 shares over the last week or so, and this has held the price back. The market seems to have absorbed the sales reasonably well so far, but it will not help the share price progress until the selling stops.

He still holds by far the largest holding of all the board members at around 11.75% of the company. If the selling is now complete, the price should move ahead, but there still seem to be the odd 100,000 going through.

These look good value on a 3 - 6 month view. This is one where I think I can lock these away and still sleep at night. Hopefully I am right.

[mel rose] 23/3/2004 09:04

dawntrader 44
I agree with you, I sold these at a small profit a little while ago,bought back in yesterday for exactly those reasons.

[dawntrader] 23/3/2004 08:24

Yes true, could be that stock being sold off to put some in market?, if share price moves up then does not matter to them, plus would this put some more liquidity into the market?, the way the property market is still performing then should be a good hold.

[george19] 22/3/2004 23:48

dawntrader - possibly but I understand directors hold approx 25% shares. Mind you that means they do not hold 75%!!

[dawntrader] 22/3/2004 09:20

Director selling seems to be on the up.....

[dawntrader] 21/3/2004 18:11

With recent bullish comments on how sector consolidation may take place, could be worth hanging on for a while, with amount of land available to build on could be worthwhile bid target for one of other larger home builders...... anyone else have a view.....??

regards

[george19] 10/3/2004 22:42

I've just bought in on the back of the report in Growth Co. Inv. which pawsnjaws posted yesterday. With significant estimated increases in profits for years 2004 and 2005 and with prospective P/Es of 3.4 and 2.1 for the respective years the shares do look cheap.

[pawsnjaws] 10/3/2004 09:42

Yes Hybrasil, I totally agree with you. As soon as I can get my portfolio in profit, then I too am seriously thinking about doing something else for the Summer. Ideally I would like to cash in and invest in just one very safe co.. and leave them alone for a few months.

Joining Advfn has made sharedealing addictive, lol, you are quite right though,when it is going well, it is a fantastic buzz.

The tips I generally ignore, I have set up a seperate portfolio to watch the perfomrance and the majority of them don't do very well.. However, shares that are anything upto 70p tend to get a very good initial response, and I have bought very quickly on occasions and sold after an hour or so' making £200. I have managed to do this twice, on the other hand, I also now hold two that are making a loss far greater than £200..

I would have bought here though.

Other shares are bought on my own decision, and sometimes even they don't perform too good.. They wait for me to sell then triple immediately.

I am happy again today, but I am going to try and break the advfn addiction.

Good Luck to holders here, sorry to hijack your thread with my drunken ramblings.

[hybrasil] 10/3/2004 07:35

Paws- you sound totally disillusioned.
Things could not be that bad.
I suggest you give it a break.
I am seriously condsidering selling everything (bar ADVFN) and coming back in October. Like you I spend a lot of time on ADVFN, but you do enjoy it when it is going well.
Try the Atkins diet. Did you see the article in IC on the companies most likely to benefit.Top of the list was Yates where I had a holding and of course have sold out.
You'll have changed your mind next week. I also suggest you totally disregard tips and do your own research. That way you'll only have yourself to blame.
It is amazing though the effect a tip like that has on the share price.

[mo123] 09/3/2004 22:32

Just looked at the broker forecast Insinger de Beaufort (whoever they are) are estimating that in the year ending September 2005, T/O will be £37M, pre-tax profit £8.8M and an EPS of 5p.
Will be interesting to see if their forecast of 3p this year and 5p next year turns out to be correct.
Quite a good risk/reward scenario.

[stevemarkus] 09/3/2004 18:37

Don't know where you get a P/E of 11 - the average for the building sector is roughly 6, with the smaller and more 'erratic' companies trading below that. P/E of 11 seems wildly optimistic...

[ejudge] 09/3/2004 17:57

With P/E of 11 at earnings of 3.5p per share...

Looking good

[tonytaxi] 09/3/2004 16:51

B P
Thanks for the post,I was beginning to doubt my judgement.I am in the property business in a small way.It is my main income and have been looking at the value of their plots for a while and wondering why their share price was so low.Seems i was right after all....Making a good profit now.Should move to a forward PE of about 11 now that attention has been drawn to them.

[barnetpeter] 09/3/2004 13:52

Buy Honeygrove
argues Growth Company Investor

Kent-based property developer Honeygrove may not look impressive on paper. It recently reported a loss for the 18 months to September 2003 compared with a profit before. But looks can be deceptive and Honeygrove has a lot going for it.

Formerly known as Propan Homes, the company had spent much of its listed life as a profitable developer of mid-sector and starter homes in the South East. After purchasing property company Sitemaster in March 2002 for 1.1 million pounds, Honeygrove began a canny acquisition strategy of buying companies at huge discounts to their net assets. At the time of the purchase, Sitemaster was slated to have property assets of 19.6 million pounds, although Honeygrove also assumed its debts of 15.9 million pounds.

The next big acquisition came along in June 2003, when it snapped up loss-making luxury house builder Honeygrove (whose name Propan then assumed as it was the better brand). For the year ended 30 September 2001, the old Honeygrove had reported a pre-tax loss of 627,000 pounds compared with a profit of 1.07 million pounds a year earlier.

'We drew a lot of criticism for purchasing a loss-making company,' says chief executive Christopher Johnson, who has been involved in residential property development for over 34 years. 'But considering we bought the company for million while it held property assets of illion, I would say it was a very good deal,' he adds.

The deal was funded by 2 million pounds of cash and the issue of two million shares. It came at a 54% discount to net asset value - this at a time when the sector as a whole trades at a premium of over 30%. Alongside, two smaller property companies, Latchfield Investments and Pinemount Trading, were acquired. They have since been integrated into the Propan subsidiary.

Losses...But!

After absorbing these acquisitions, the enlarged Honeygrove reported a loss before tax of 1.7 million pounds for the 18 months to end-September. That compares with a profit of 1.4 million pounds in the year to end-March 2002. Turnover was up 50 per cent at 13 million pounds.

There were a number of mitigating factors behind the losses. The group incurred exceptional reorganisation costs and had to cancel a lot of goodwill. And it changed its accounting policy to recognise sales only after completion - a policy Johnson is convinced 'will become the norm'.

While Honeygrove owns over 210 plots with planning consent, the real jewel in the crown is its Swaylands site in Penhurst, Kent, for which it raised 3 million pounds to assist development through a placing in October. It will cost approximately 20 million pounds to develop but two independent assessors have estimated the gross development profit at between 15 million pounds and 20 million pounds.

Honeygrove has already received offers to purchase the site for 14 million pounds, which would allow it to realise a 7 million pounds profit over the 7 million pounds book value. It has so far indicated it wants to develop the site itself.

As an outsourcer of the physical development of its sites, the company benefits from low operating costs. Historically, it has enjoyed operating margins of 19 per cent, ahead of the UK house building average of 13 per cent. Having transformed the acquired Honeygrove, which was an 'in-house builder', further savings will be made as staff numbers have reduced from 63 to nine.

Broker Insinger de Beaufort forecasts that profits before tax for the year to end-September 2004 will hit 5.4 million pounds on turnover of 33.4 million pounds. With estimated earnings per share at 3.1p and a current share price of 11p, the prospective price earnings ratio of 3.5 appears very cheap

Key Data

EPIC HYG
Spread: 10.5-11.5p
Market Cap: 14.4 million pounds
Market: AIM
NMS: 3,000

[munsterman] 10/2/2004 12:12

With a NAV of 14p,development land banks, and Nigel Wray one of the largest independent shareholders I wouldn't underestimate where this is going.