Nexus Infrastructure Share Discussion Threads

[pr100] 22/3/2023 09:56

They did explain why they needed to boost their cash. Costs are rising and their bank overdraft facility ended when the company was restructured. Nothing sinister albeit rising costs are a concern for everyone, everywhere. Meanwhile, they have reduced overheads, cherry-picked contracts and done all the prudent things shareholders would expect. If the recent bank sector jitters are over, Nexus look good to go imho. Of course, we are also waiting on the new Levelling Up Bill and the new NPPF, either of which could have a big impact on the housebuilding sector. So, of course there are risks but this seems to have a fat safety cushion built in at the current share price

[eezymunny] 22/3/2023 09:00

It´s a very strong buy if it makes profits etc. A couple of contracts going wrong, running into inflation problems etc, and it´s wiped out pretty quickly. I think you have to ask yourself why they kept so much cash back (12m, no?).

Hope all goes well for those left in, but not for me.

[pr100] 22/3/2023 08:48

So the new Nexus has approx 9m shares in issue and approx £18m net cash with no debt and a solid order book in a murky market. Any suitor who wanted to buy the company would have to bid way above the current cash-only value per share of 200p and yet the share price opens at the predicted sub-160p price. Strong buy imho.

[eezymunny] 22/3/2023 08:39

A complete nonsense of a tender IMO. Didn´t even entice everyone to tender their basic allocation. Cost me a few quid, this one, but I can´t regret a sensible idea ruined by a daft tender. Remaining company may be very cheap here, but who want to hold a company like that (low margin, high value contracts)? So very many companies like that have been awful - Fulcrum, North Midland, Costain, Carillion etc etc

[p1nkfish] 21/3/2023 09:55

Finally decided to tender mine, all of them. GLA, dyor etc.

[boadicea] 21/3/2023 09:12

Tender offer results tomorrow.
If tenders haven't been met in full, i.e. including excesses, then I would expect a flurry of small scrag end sales to follow.

[boadicea] 14/3/2023 14:04

HL customers have until noon on Thursday to log their tender decision.
The sagging share price seems a bit strange at this stage but it may be that small holders don't want to be left with the nuisance of an even smaller rump holding.

[pr100] 14/3/2023 11:29

You're leaving it late to get the guaranteed sale and while I agree that it looks a sound proposition logically, I wouldn't be surprised to see the new share price open at well below its cash value. And why isn't the current share price rising under the weight of the arbitrage buys?

[boadicea] 14/3/2023 11:09

There seems to be an arbitrage situation here - or at least a bargain entry.
I can currently buy shares -say 600 @158.5 for £951 and guranteed sell 500 @163p for £815. That leaves me 100 shares for £136 or 136p each less expenses only for one purchase.
It seems unlikely to me that after the tender the shares would be worth less than that although in today's market anything is possible!

[pr100] 14/3/2023 08:57

Today is deadline day for most CREST shareholders to give their Tender Offer instructions to their brokers (unless they don't want to sell any, in which case do nothing).

[pr100] 11/3/2023 10:42

It's somewhat comforting that the new BOD of the restructured company will continue to have plenty of skin in the game with three of them in aggregate owning over 22% of the equity (at least for the duration of Mike Morris's 12-month lock-in). That's the same percentage as the BOD currently own.

However, a house builder without the 'glamour' of the divested assets might find it harder to attract new investors, albeit taciturn NEXS never really succeeded in setting the market alight anyway. It was never ramped or pumped and never courted much publicity in the investing media. Investors discovered it if they were searching for an 'E' play.

Doubtless some shareholders will try to sell their entire holding to Numis at 163p, especially with yesterday's news of the Silicon Valley bank collapse which could spread fear in that sector. But 163p is less than the £77m paid for the two divested assets so, in light of that valuation, it's too cheap.

OTOH, the market looks to be gearing towards an share price lower than 163p when the bell rings on 18 March (assuming the Tender offer is fully subscribed) - in which case earlier sellers at 163p would be able to buy their shares back at a lower price. But logic dictates that a market cap of around £12.2m (@163p) would be far too low for a company with around £16m net cash, a £95m order book, no debt and promised dividends this year and next. So, if the share price is manipulated to open lower than that then the assumption would be that it would soon find its right level.

The other big imponderable is what happens to any excess cash returned to Nexus in the event that the Tender Offer is under-subscribed. They have stated that they will find another way to distribute it to shareholders…but which shareholders? Will those who sold all their shares prior to 17 March miss out on any surplus cash? Will it be distributed only to shareholders in the NewCo - in which case do those who choose not to subscribe to the Tender Offer hoover up more cash than those who do subscribe?

Presumably not since the BOD have all pledged to subscribe for their full Tender Offer entitlement - and under "Risks", the Tender Offer circular states that there is *no* guarantee that any surplus cash will be returned to shareholders (which is odd considering that the chairman earlier pledges to find another way to return it).

But with the BOD and some other significant shareholders having committed to subscribe for their full entitlement, combined with recent market jitters, the likelihood is that the Tender Offer will be taken up in full, imho.

[yump] 06/3/2023 19:50

I don’t like the idea of Tamdown being left with a massive stash. Too easy to spend it.

[fastbuck] 03/3/2023 17:18

I think voting for the tender is a no-brainier whether you think the tender is the right price or not. It means the large holders will exit with cash at 163p a share leaving Tamdown with as few as 7.5 million shares.Of course us small shareholders may be tempted to keep a larger stake in Tamdown, which will be a risk with the housing market but should be worth significantly more than 163p in my opinion.

[pr100] 03/3/2023 10:33

boadicea, it may not be entirely voluntary for shareholders based in some overseas territories…

"No steps have been taken to qualify the Tender Offer or to authorise the extending
of the Tender Offer or the distribution of the Tender Form in any territory outside the
United Kingdom."

[pr100] 03/3/2023 09:03

On reflection, today's share price values Tamdown shares at 157p each.

EXAMPLE
Buy 1000 NEXS shares today @ 162p = £1620 outlay
Sell 830 back to Numis @ 163p = £1353 income
Leaving 170 Tamdown shares bought for £267 or 157p each.

That's still less than Tamdown's assumed cash assets but not quite such a screaming buy. But it's a clue that the MMs will price up the restructured business at around 157p per share when they start trading - if there are 7.5m shares in issue. And by my calculations that price should move quickly to above 200p if the company still has around £16.5m cash. But we have been warned that Tamdown's cash has been temporarily stressed over the past few months so shareholders can't make a judgement unless Nexus update Tamdown's current cash position.

[p1nkfish] 02/3/2023 14:58

Very clearly stated pr100.

[pr100] 02/3/2023 14:36

Sorry for the confusion. The debate is only about whether current shareholders should take up their Tender Offer entitlement. It makes little or no difference whether the cash is returned to shareholders or not as, for me, the decision hinges solely on the valuation the market attributes to Tamdown.

Assuming there are no skeletons in the cupboard, and notionally that no-one subscribes to the Tender Offer, then Tamdown would have c. £80m in cash and 46m shares in issue - or c. 180p per share.

And if everyone subscribes to their full entitlement then Tamdown will have around £16.5m in cash (at Sept 2021) and 7.5m shareholders - or c. 220p per share.

That doesn't mean that Mr Market will price up the new Tamdown shares at 220p of course but with no debt the business should be saleable for more than that.

The mystery is why the current share price values the Tamdown shares at zero.

[boadicea] 02/3/2023 14:32

That's a lot of money voluntarily surrendered (approx. £64.5k) in yesterday afternoon's big dump at 150p compared to taking the offer. Clearly they either didn't expect it to go through or were desperate for cash.
It also explains the price action - but not much more.

[p1nkfish] 02/3/2023 12:09

How much if any to tender?
What value will be left over at what price?

[fastbuck] 02/3/2023 12:03

PR,I do not understand your logic. The 2 businesses have been sold already, shareholders approved that on 16 January. The sales were completed as previously RNS.The only vote now is to return cash to the shareholders via the tender or leave the cash in the company, the company who does not need to cash, voting against the company is asking the company to keep the money in the bank or buy something with it.

[pr100] 02/3/2023 11:27

Tamdown cash at Sept 2022 was £4.6m according to the Nexus FY results but has clearly fallen since then judging by the 30 Dec RNS admission that "Cash within Tamdown has come under pressure since year end due to higher trading activity coupled with higher levels of debtors." What we need to know is its cash position today but that information is withheld. We do know that Tamdown will receive £12m from the proceeds of the asset sale but that doesn't tell us the net cash position.

Clearly, if Tamdown NewCo had net cash of £16.6m, no debt and only 7.5m shares in issue (assuming full take-up of the Tender Offer) then Tamdown on its own should be worth at least its cash value of 221p per share. So either the NEXS share price today is very wrong/manipulated or there's a lot less cash in Tamdown, and maybe other skeletons, which only the insiders know about.

The major shareholder seems very keen to take most of his cash out of Tamdown to fund a controlling interest in the divested operations without having to share the rewards with us pesky retail shareholders. To all intents and purposes this looks like an MBO - but only of the best bits of the group.

While it may be true that Triconnex and eSmart need investment, I can't figure out why Tamdown had to be dumped in order to raise that cash since the current Nexus Group has demonstrated its creditworthiness over time.

In short, this looks like shareholders are being kicked out of Triconnex and eSmart on the cheap so that the suits can pocket all the gains.

The BOD own 23% of the equity and need 75% support to get this proposal through the GM on 17 March. I don't think it's a done deal and I will be voting against unless more information is provided pronto.

[boadicea] 02/3/2023 11:11

A weak market this morning, leaving apparent room for arbitrage.
This could indicate ...
.scepticism about the tender going through, or
.fear by modest holders of being left with a miniscule rump (so dump the lot now) or
.deliberate suppression of the market to make the offer look generous or
.none of the above!
Take your pick.

[p1nkfish] 01/3/2023 22:47

New banking facility interest rate - most likely higher than the old AIB revolving line of credit. Perhaps a lower amount at higher rate now they will have an extra £2M on the balance sheet.
Any thoughts?

[boadicea] 01/3/2023 18:27

If the shareholders aren't happy they should vote it down. Perhaps they will.