Leeds Share Discussion Threads

[arthur_lame_stocks] 31/10/2005 15:28

Sale of Leeds Leasing now completed after shareholder approval.



Might tempt in some buyers.

[cockneyrebel] 26/10/2005 22:11

yes, I did get the relevance of the German economy doing well. Was just making a general comment on the market and how people hide under a boulder because the US is boobing around while ignoring what's going on everywhere else.

Agree on the cash side of things - a pound is definitely worth a pound.

CR

[arthur_lame_stocks] 26/10/2005 15:52

Hugepants

I think you're overstating the cash post disposal a bit. I think it will be nearer to 5.5m. Made up of 3.7m for Leasing + 1.35m intercompany loan repaid + holding company cash of 500k.

The last full set of figures showed the holding company to have cash of 1m but also showed intercompany debt of 850k. So it looks as though the holding company lent another 500k to Leasing in the meantime. It's still something like 15p a share in cash and Hemmers is definitely worth more than 2p a share I think.

I'm not buying more, I have all the Leeds I want but i'm convinced that we're going to get back 25p+ now. I'm not worried about the short term price, this stock is all going to be turned into cash soon and I think the cash will be returned to shareholders. You can't argue with cash; a pound is worth a pound.

[hugepants] 26/10/2005 12:48

Yes the state of the German economy is very relevant to Hemmers. From the interims;

"Pre-tax profit in our fabric trading division fell to £167,000 (2004: £472,000) primarily as a result of the continued low level of consumer confidence and demand in Germany that was highlighted in our AGM statement...."

This is a bit of a banker for me and hopefully the shares will rise on Monday when we should get news of the disposal being voted through. Is it worth buying more at this price though. Im definetly looking for 20p plus. The question is how much more than 20p is likely. 20p values the business at 7.6M but after disposal cash should be around 6M, liquid assets (including cash) of 10M and NAV of 11M. And ongoing business profitable. But the market is so depressed just now Im wary of buying more.

[arthur_lame_stocks] 26/10/2005 12:09

I was thinking a bit more specifically, CR. Hemmers is based in Germany and I think most of their sales are there so an improvement in the German economy or even just business confidence might help us get a better price for the business than was on offer before.

[cockneyrebel] 25/10/2005 19:22

Yes Arthur, I saw that too about Germany. China, India, far east and now Europe's biggest economy heating up - seems to me too many 'investors and analysts' are looking to the US as has been the past lead indicator for the rest of the world but the strong growth in these new giant tiger economies seems to be keeping the world spinning nicely.

I defintely think there's more action here soon. Very bullish performance too - that bounce from the low straight up to make a breakout and then no retracement at all. My guess is the bulk of the holders of this stock are long suffering and are not going to sell now that they see the big pay day just around the corner.

CR

[arthur_lame_stocks] 25/10/2005 16:45

I've just noticed this news too:



It looks like Peter Gyllenhammar has sold his stake in Potential Finance. So perhaps he was looking for a merger of POT and Leeds Leasing but doesn't need to bother now.

[arthur_lame_stocks] 25/10/2005 16:36

I've just been looking at the announcement of the sale of Leeds Leasing and note that they say:

"Following the Disposal, the Company's only operating business will be
Hemmers-Itex, the textile business selling, throughout Europe, fabric that has
been mainly imported from the Far East. The Board intends to review its options
for the future strategy of the group and will make a further announcement in due course."

That makes me wonder whether they aren't also in talks to sell Hemmers and perhaps an announcement on that front might not be too far away?

EGM is next Monday. I'm not sure when the deal is due to complete, but I think sharholder approval is a certainty.

Also saw this on the Beeb.



Improving German business confidence can't be bad for us.

[arthur_lame_stocks] 18/10/2005 11:41

I'm not too fussed about the price in the short term, they're turning their assets into cash and I reckon we'll comfortably see 25-30p when it's finally done. If the price stays at these levels then I hope the management use some of that cash to buy back more share in the market as I think these are too cheap.

[cockneyrebel] 17/10/2005 19:52

Nice breakout by the close.

CR

[cockneyrebel] 17/10/2005 15:01

Making a bit more progress today ane good size buys for this one too it seems

CR

[cockneyrebel] 14/10/2005 15:25

wish I'd bought more before going out for lunch :-(

Oh well, must not be greedy.

CR

[langland] 14/10/2005 14:56

HP
As far as your last point is concerned I would imagine that they will put a post disposal pro forma balance sheet in the disposal document.

[hugepants] 14/10/2005 14:46

Its not all that clear whether the 100K is exceptional. I hope so. Separately however they imply moving to a single facility will reduce future costs and the outlook is fairly positive.

The new balance sheet will more or less all be net liquid assets of about 10M I think. Say cash around 5M and working capital (stocks+debtors-creditors) of 5M?

[arthur_lame_stocks] 14/10/2005 12:05

CR see post 235. cg1953 was trying to sell some stock but the market wouldn't take it at 13p so I suggested he approach the company directly and apparantly his brokers did approach theirs but they couldn't buy the stock because of the close period.

I wonder if he did get that stock away in the end, he's probably going to be a bit gutted if he did!!!

He hasn't posted yet anyway.

[langland] 14/10/2005 11:48

Been trying to buy online all AM without success. Limit down to 2500 shares now!

[cockneyrebel] 14/10/2005 11:34

Not sure they are in the closed period Arthur. Can't buy after the year end or 8 weeks prior to the results whichever is the shorter period I think. With results in mid Feb I think they can do buy backs up to mid Dec?

CR

[cockneyrebel] 14/10/2005 11:27

Haven't they reduced head office costs? Also said that £100K exceptional costs were to apoint new sales agents in certain European markets - looks like that could come to fruition in H2 and further still in 2006.

Might not be unrealistic for these to achieve 900K pbt next year, perhaps around 700K after tax and a forward PE of less than 8 before this years share buy backs or even any others start to reduce the PE further.

CR

[arthur_lame_stocks] 14/10/2005 11:15

I would guess it's 15% of the shares in issue for the share buy backs, but apparantly they can't buy back any at the moment as they are in a close period. If the price stays at this level I would be delighted for them to keep buying in the market with some of that cash as I think the shares are now seriously undervalued if that disposal goes through.

[cockneyrebel] 14/10/2005 11:10

Cheers Arthur. I've looked at these several times but it's one of those that needs the catalytic event to get the value out of it - I think this may be it and so bought.

Looking at it now there seems to be a business with a lot of cash on the balance sheet, a £5.5m market cap. They look like the remaining business is making something like £600K per annum pre-tax? If so the business trades on a PE of around 11 and a very solid balance sheet.

I see they have been authorised to buy back shares - any idea how many? They could seriously reduce the PE by buying back shares with the cash they have, the buy backs also look like underpinning the share price from here on too I suspect.

CR

[belize1970] 14/10/2005 11:01

This is what the IC had to say in April

"Although takeover talks were ended last September, it's seems only a matter of time before Leeds Group is split up - and that's according to management. Until 2003-04, most of its problems and losses were in textiles, led by an aptly-named Italian business called Nemesis. Last year, however, and before unallocated central costs, the remaining textile subsidiary performed well. It imports printed cotton fabric from the Far East into Germany and reported a profit of GBP882,000 (from GBP608,000 in 2003).

In contrast, the expected profit driver - Leeds Leasing - turned a small loss of GBP45,000 into a much larger one of GBP661,000. Its problem is that, under previous management, it veered away from supplying so-called "business critical assets" to leasing products such as coffee machines and big television screens in tenanted pubs. The result was a high level of customer default, compounded by financing catering equipment backed by agreements with suppliers - not good news when the supplier goes bust. This division's 2003-04 loss also included an extra bad-debt provision of GBP600,000. It followed a change in the way that Leeds recognises bad debts. Formerly, it was a largely subjective view. Now, it increases the size of bad-debt provision the longer the lessee is in arrears. It's also opting for safer (but likely to be lower-margin) leasing contracts with bigger and better financed businesses.

Leeds Leasing has now made a "satisfactory" start to 2004-05, and textile imports should, in time, benefit from the end to import quotas on Far East suppliers. Two Swedish entrepreneurs, Messrs Johan Claesson (a director since September) and Peter Gyllenhammar, own 40 per cent of the shares between them. The main asset is finance lease debtors.
Leeds has not proved to be a good invest-ment for the dynamic duo."

No doubt 'the dynamic duo' will be syphoning off the cream but, hopefully, they'll leave a little red top for the rest of us!

[langland] 14/10/2005 10:54

Good summary, Arthur.