Leeds Share Discussion Threads

[jonak] 13/10/2008 17:41

Thanks for posting your reply Diviner.

[hugepants] 13/10/2008 12:20

I had quite a lot of these up until a few months ago. I sold out because I though better value elsewhere. As things have turned out I wish Id stayed invested here because LDSG have definetly performed better than most AIM shares the last 6 months.
I agree with previous comments on EET and DWSN. These are just speculative punts and it looks like EET will go bust soon - not surprised there are rumblings of discontent.

[deswalker] 13/10/2008 11:58

TD,

Thanks for sharing the email. I have a couple of comments.

Regarding 2) and the MBO. Were you really meaning that putting funds into Hemmers increased the possibility of a Hemmers MBO or increased the chances of an LDSG MBO ? I suspect you meant the latter and that Mr Wigley has chosen to interpret it as the former ? Whilst the wording in brackets is a bit unclear I think it is clear enough that he should have seen what you were getting at. I really hope that it was a natural mistake on his part and not an attempt to avoid the issue.

Regarding 3) his claim that the share price bumbling along and a possible concert party "just does not make sense" is rubbish. It makes perfect sense.

The accusation is simple, they are working in concert, stringing things out and buying back as many shares as cheaply as possible from bored shareholders to increase their control either as a precursor to a bid or in order to use the assets for their own ends. It is this premise that needs to be put to Mr Wigley and I shall do so today.

However this comment gives unambiguous cause for optimism ...

Thank you for your mail, and we do appreciate hearing our shareholder's views - I have shared your views with my colleagues. I can assure you that the Board of Leeds is seeking to maximise shareholder value for all shareholders, small and large.

Now that is as clear as it could be that they are seeking to maximise value for all shareholders. Consequently anything that attempts to low ball the small shareholders would constitute deception and fraud. Please keep this on record.

I shall report back when I hear something from Mr Wigley. I agree that a more active interest in this share is the way forward.

Des

[cg1953] 13/10/2008 10:24

i have enjoyed reading these most recent posts only in so much as its clear to me that all outside shareholders are now beginning to wake up to the fact that the directors of LDSG maybe on the threshold of criminal dereliction of duty or indeed maybe already are.

WHAT ARE WE GOING TO DO ABOUT IT !!!!! ????

[the diviner] 13/10/2008 00:39

I have received a reply to the email that I sent and I have reproduced the gist of it below with the questions that I sent in italics between the replies.



Dear Mr TD,

Thank you for your e-mail and I also apologise for the delay in picking it up and responding to you.

Addressing the points you make, I would respond as follows:

I asked
(1). No dividend has been paid to shareholders. We are very unhappy with the lack of a dividend and we would like to know when a dividend will be paid to LDSG shareholders. The LDSG share price has just drifted lower and lower and part of the reason for that is the lack of a dividend. (The unenthusiastic and half hearted share buybacks have done little to improve the LDSG share price).

And he answered

· Since the sale of Leeds Leasing, which led to the positive cash position at Group level, the Board of Leeds Group has been consistent in its message that it would seek to reinvest the funds to generate long-term capital growth. In the light of that policy the Company has stated that it would not be paying a dividend but seek to reinvest the funds. That remains the policy of the Company today. Alongside this we proposed a share buy-back programme because it benefited both those shareholders who decided they wanted to sell their shares and take their cash, and the remaining shareholders.

· You refer to the share buyback programme being "unenthusiastic and half hearted". The Company has bought almost 19% of its shares back since the first authority was granted, all to the benefit of remaining shareholders. The company has been an active buyer whenever the regulatory and legal rules permit. The Board shares your disappointment that the share price has not responded more positively, but is of the view that without the buy backs, the share price would have been much lower.

I asked
(2). Shareholder money may have been wasted. Instead of returning the spare cash to shareholders, (which is what most shareholders would have preferred had we been asked), the directors decided to buy stuff and to continue to pump money into Hemmers. (A concern is that some of the money may have been spent on items that are interconnected with the directors which is unusual. Also, the money that is being pumped into Hemmers may just enable a low price management buyout that is of no benefit to smaller shareholders).

And he answered

· The Board does not share your view that the investments we have made are wasted. In the case of Hemmers, I noted in my 2007 Chairman's report that the investment was made to allow it to expand by taking advantage of a competitors demise. Like any business Hemmers operates in a moving market place where opportunities arise, and as investors Leeds is keen to maximise that value of its investment in Hemmers. A low price management buy-out would be of no benefit to any shareholder, not just smaller shareholders, and I see no reason why Leeds Board would allow the management of Hemmers to take the business away at such a price.

I asked
(3). unintentionally, a concert party may have developed. Many small shareholders suspect that the main reason that the LDSG share price has just bumbled along is that the main shareholders are very closely connected and may have been working in concert. Since between them they control over 30%, when do they plan to bid for our shares?

and he answered

· Just because my two fellow directors know each other well and between them own in excess of 30% of Leeds shares does not make them acting in concert. Nor does it place any obligation on them to make a bid for the company. Your comment about them being closely connected and the share price bumbling along just does not make sense.

Thank you for your mail, and we do appreciate hearing our shareholder's views - I have shared your views with my colleagues. I can assure you that the Board of Leeds is seeking to maximise shareholder value for all shareholders, small and large.

Yours sincerely
Ewen Wigley
Chairman

I am ambivalent toward Hemmers and do not mind them putting some money in as long as the return justified the extra money. Otherwise, they should sell it and give us the cash.

I do not know what to make of the people at the top. As I posted at the time I sent them the email - From what I have read the directors are decent people and they are wealthy men; if we hassle them by asking questions, agitating for dividends and being willing to complain to the regulators about a suspected concert party, etc. that may encourage a bid.

Other than a bid I cannot see an outer.


Regards,
TD

[davidosh] 12/10/2008 21:08

Apologies Des....not suggesting I have a large stake. In actual fact I sold most of my holding months back because other opps beckoned. I suspect this one has held up just as well in the end but I just could not see the outer. I am happy to join any action group of course.

[deswalker] 12/10/2008 19:55

davidosh,

Yes I agree with you. It is not fair enough.

It's good to see someone as prominent as you on this thread. Any interest in trying to get a minority shareholder group going ? Do you plan on going to the AGM ?

Des

[davidosh] 12/10/2008 14:17

Des..you stated

The reason for not updating is simple, they don't want the share price higher whilst they're doing the buybacks which is fair enough but why not just admit it and explain that this is in the best interest of all shareholders in the medium term ?


Sadly that is not fair enough as it may be you or I or another co- owner selling our shares to the company without the knowledge of how well our company is actually doing !! How would you feel if directors you need to be able to trust do buybacks and then announce record results and a NAV which in better times takes the share price to double the price it is now ?

There needs to be more clarity on strategy and performance.

[the diviner] 11/10/2008 22:02

I have not yet received a proper reply to the email that I sent. (I did not email Ewen Wigley directly, I used the email link in the company website).



A few days ago, a Mrs Carolyn Wood replied that she will forward my email to the Company Sectretary, who is in the office every Tuesday.

I expect that I will eventually receive a reply that is similar to the reply that was sent to Arthur.

If we all send emails and letters that may stir some positive share price action.

We must all be down on LDSG for no good reason. I have 100,000 LDSG shares at an average price of 21.85p per share including dealing costs so at the present bid price of 15.5p I would be over 25% down if I was to sell and I suspect that we are all in a similar boat. (Worse still every year that goes by we are down another 5% in interest that we could have received had we just banked the money).

If the directors interests are aligned with ours they will take meassures that increase the share price and they will keep us fully informed.

Regards,
TD.

[arthur_lame_stocks] 11/10/2008 21:34

I think the next set of results won't be great. Presumably they're going to have to write down EET to about 7p or whatever it was at the year end, just before it went broke. That's going to knock £200k off of the finals.

I wouldn't be surprised if Dawsons went under too, that'd be another £1m wasted.

[deswalker] 11/10/2008 19:23

Arthur,

Thanks for sharing the email. Please keep a copy somewhere as if something funny happens then it surely gives weight to any claim that we have been deceived.

The reason for not giving trading updates is ridiculous in the extreme. His argument runs that because previous statements were bad then they'll not bother any more. Clearly ridiculous and needs questioning at the AGM. The reason for not updating is simple, they don't want the share price higher whilst they're doing the buybacks which is fair enough but why not just admit it and explain that this is in the best interest of all shareholders in the medium term ?

That said, this comment gives me a bit of confidence ...

As my two fellow directors are also major shareholders in the company I believe that the shareholder's interests are very much aligned with the Board's decision making.

Now I'd feel happier if it said ..

"As my two fellow directors are also major shareholders in the company I believe that the interests of all shareholder are very much aligned with the Board's decision making."

but I believe that as said it is close enough, intended to convey the same meaning and would be construed as deception if any inquest needed to be held.

Des

[davidosh] 11/10/2008 17:08

Mmmmm

Many of the last trading statements that Leeds Group put out tended to be associated with bad news of one form or another. More recently Leeds has chosen not to voluntarily make trading statements and the Board think that it is the correct policy to continue.


In other words we know how we are trading and why should we bother telling other owners of the company by means of an update. Plus just because the past ones have been bad news they still presumably had to be notified to the shareholders or why did they bother then ? It lends the thought that they have more bad news but this time will not bother OR are they keeping back good news and hoping to buyback lots of stock at the desperate prices in this market whilst co owners are unaware of the true position. Either way I do not like the tone or thoughts behind it. A good independent non exec needed on the board methinks !

[arthur_lame_stocks] 11/10/2008 12:19

I wouldn't get your hopes up Des. Here's a copy of an email I sent to Ewen Wigley recently and his response.

"Dear Mr Wigley

As a small shareholder in Leeds Group I wonder if I could ask the board to consider issuing a trading statement at the end of the current financial year.

Also I would like to express my disappointment that the board has seen it fit to invest some of the company's cash in EET.

I think most shareholders are in favour of the buybacks as clearly they add value and personally I was pleased with the investment in Hemmers as hopefully the increased scale will deliver benefits above their cost. I can just about also accept the investment in Dawsons as, despite it being a struggling business in a struggling sector with massive disproportionate pension liabilities, it is at least a textile business and the price paid clearly reflects the high risk of failure.

But If it's the board's intention to use the cash pile as their own personal kitty for rummaging through the bric-a-brac of the LSE for investment curios such as EET, which is totally unrelated to Hemmers then surely the fairest thing to do would be to return the cash which isn't needed for buy backs or further profitable investment in Hemmers so that shareholders can make their own decisions about where to invest their cash.

I have a feeling that you're going to tell me that the board are running the comapny in the interests of all shareholders and if I don't like it I can sell my shares, which of course I can, back to the company for a fraction of their intrinsic value! (and at a loss).

On that point also I wonder if the board might consider reinstating the dividend so that we have at least some return from our investment whilst we wait for the board to deliver value in the form of a realisable capital gain.

Yours sincerely."

"Dear Mr Lame-Stocks

Thank you for your mail, and please accept my apologies for not being able to reply more promptly.

Many of the last trading statements that Leeds Group put out tended to be associated with bad news of one form or another. More recently Leeds has chosen not to voluntarily make trading statements and the Board think that it is the correct policy to continue.

Since the sale of Leeds Leasing in 2005, which resulted in the cash surplus at the Group level, the Board of Leeds has consistently adopted the approach that it would:

Subject to shareholders approving the necessary resolutions at an AGM, it would buy back its shares in the market, assuming it made financial sense to do so;
Seek other investments for the surplus cash, and while it was doing that it would not pay a dividend;
The Board has considered all of its investments carefully with the primary aim being to invest so as to enhance shareholder value. Indeed as I said in my Interim Statement earlier this year, we are trying to maximise the long-term value of the Group. We have not restricted ourselves to investing in Hemmers or in the textile industry. As my two fellow directors are also major shareholders in the company I believe that the shareholder's interests are very much aligned with the Board's decision making.

We are living with difficult markets and, no doubt like you, I wish that Leed's share price reflected its true value. I would question whether paying a dividend would make any difference to the share price, particularly in the markets as they currently are.

Thank you for writing to me, and I will share your thoughts with my colleagues as we prepare our year-end numbers and continue our management of the Company.

Yours sincerely"

[deswalker] 11/10/2008 07:51

Yes, I intend to mention it at the AGM. It's a pain but perversely it might work in our favour by reining in any further ideas of management. It ought to do as there is no justification for any such actions.

[arthur_lame_stocks] 10/10/2008 21:16

Anybody see the news that EET looks to be effectively bust. Bloody good use of £270k that!

[arthur_lame_stocks] 06/10/2008 18:10

I thought it was in November. That'll just be the first hurdle though won't it?

[deswalker] 06/10/2008 10:02

Isn't the Yeadon Banks hearing due in next few weeks ?

[arthur_lame_stocks] 01/10/2008 17:19

Well I haven't got a reply to my email and there's been no trading update so I guess they're not listening.

[jonak] 30/9/2008 21:50

DesW , that makes sense, thanks

[deswalker] 30/9/2008 17:10

RNS. They've cancelled 900,000 Treasury Shares to take the outstanding number back below 10%. So it looks like they're only required to keep things below 10% at each half year date not throughout the year.

[deswalker] 30/9/2008 14:55

I imagine the company have stepped off the bid for the close period. They bought back 1.25 mill shares in the 6 months to 30 Sep. Another 3.2 mill will trigger the 30% level for JC - that's another 15 months at the same buyback rate.

[deswalker] 29/9/2008 16:59

Another buyback. 100k at 17.25p.

[deswalker] 29/9/2008 10:02

Buyback. 140k at 17p.