Northern Bear Share Discussion Threads

[this_is_me] 18/7/2022 07:39

Revenue is at a record level and operating profit looks good. The business seems to be coping well with current difficulties. A1 trucks has been revamped. It looks like there will be little or no dividend in the near future as cash is retained in case good acquisition opportunities arise.

[patsc100] 18/7/2022 07:35

What's interesting ist that they just released FY numbers and have a 2.6m write off related to their forklist leasing business.

Seems that they just closed down the business unit. As I mentioned, this business was asset heavy with low ROICs.

[arthur_lame_stocks] 18/7/2022 07:32

Respectable results I thought, but once again no dividend. If it wasn't for the exceptionals this would have recorded a good profit.

It looks like they're planning on getting acquisitive hence the lack of dividend.

The outlook seems a bit more uncertain however.

[aimwinner] 10/7/2022 10:48

Patsc100
How much do you think the forklift company is worth?

[aimwinner] 08/7/2022 15:15

Pat
Given you answer re Jeff above you must know him or have worked with him in the past.
If the forklift business could be sold, what would you suggest the proceeds be used for?

[patsc100] 08/7/2022 14:22

I don't want to share my thoughts about Jeff in public, but he brings the missing capital allocation part to NTBR.

I don't know what is the best way to get rid of the fork lift business, as I don't know it well enough. Either sell it, scale it down and close it or dissolve the business.

Not sure which one of those is the most viable and realistic option.

[aimwinner] 08/7/2022 14:09

An interesting reply thank you.
Please also answer my question 3 about what Jeff brings to the table.
What would you be advising Jeff to do with the forklift rental business?

[aimwinner] 08/7/2022 13:34

What was wrong with the capital allocation, which areas had too little and which too much?
Given that the only change to the board was the resignation of Steve Roberts at suspiciously short notice is your criticism directed at him and his record?
What are those core competencies and what experience of them do you have given Jeff is in Canada?

[aimwinner] 08/7/2022 13:12

"If Jeff executes" How is this plan different from the existing one pre board coup, apart from 11 months of navel gazing?
Patsc100 would you vote against a dividend?

[patsc100] 08/7/2022 12:53

@zangdook it is exactly the opposite. Why should Jeff pay a dividend when there's a fragmented construction market having trouble to find a successor and therefore willing to sell the business for a cheap profit multiple.

Why would anyone want a dividend? Jeff should keep the money and reinvest into acquisitions/business.

This will improve the business quality as it will diversift the customer base and contracts while providing opportunities for further cross selling and collaboration among businesses within the group.

Therefore, NTBR should continue with a disciplined m&a strategy, at a later point when the multiple increases they should issue shares to accelerate m&a.

If Jeff executes, there's some really good upside from here and we're looking at double digit earnings growth.

[zangdook] 08/7/2022 12:11

from the interims in November. I think that's the last time they talked at any length about dividend policy. I wonder if Jeff got anywhere in his "process of engagement" wrt dividends; he doesn't seem to have on general strategy. From the tone of this I guess he would like to have dividends.

Strategy and Dividend

Following recent Board appointments, as detailed below, I have commenced a process of engaging with the Board and management to discuss and review the Group's strategy and approach to capital allocation, including the dividend policy. Once this process is completed, we will provide further information to shareholders. Our existing policy is to pay only a final dividend, at the Board's discretion, and to assess future dividend levels in line with the Group's relative performance, after taking into account the Group's available cash, working capital requirements, corporate opportunities, debt obligations, and the macro economic environment at the relevant time.

[aimwinner] 08/7/2022 11:44

Given the cost of doing a tender it would be cheaper just to pay a dividend. Even before Covid the dividend with the special was 4p, a 10% buy back would at 58.5p cost £1.09m or 5.85p per share. Given the cash out flow of the court case that maybe a bit optimistic.
If shareholders get a dividend, I will guess it would be 1.5 to 2p at best.

[patsc100] 08/7/2022 11:05

That's right. Jeff owns 26% as far as I remember. He could buy back 10% without passing the 30% threshold.

[aimwinner] 08/7/2022 10:49

Hi Patsc100
It may be that the cash is better used in the business, it has big working capital swings as they say in the trading update.
The problem with a tender is that if Jeff does not tender any stock he may, depending on the size of the tender, go over the 29.99% level and then have to bid for the rest of the company.
I am guessing that some or all of the £600k has already been paid out, but I agree it will effect the level of any dividend shareholders may get.
Its 11 months since the boardroom coup and little if anything seems to have changed, lets hope we get some details with the results.

[patsc100] 08/7/2022 09:51

Great to see that they managed to settle the claim for 600k.

It doesn't seem that they'll Pay any Dividend. At least from a capital allocation point this won't make any sense.

Jeff seems to focus on an anorganic strategy. I assume that they won't overpay for any acquisitions and will follow a disciplined approach.

At current valuation a tender offer would be nice and in my opinion the best available option.

[zangdook] 08/7/2022 07:26

settlement cost about 3.2p / share. I wonder if that will affect any planned dividend.

[zangdook] 28/6/2022 00:24

perhaps it's a vanity project and he's trying to get the votes to rename it Northern Baryshnik.

[3800] 27/6/2022 17:38

He bought the shares and took the chairman position to make a lot of money. He has a big incentive to make money for himself lets hope it's not at shareholders expence.
3800

[zangdook] 27/6/2022 15:31

He has an incentive but he doesn't seem to have done anything.

[this_is_me] 27/6/2022 15:25

He bought the shares and took the chairman position to make a lot of money. He has a big incentive to make the company do well.

The old guys who retired and sold are probably spending the money to help them enjoy life and why not; they worked for it.

[zangdook] 27/6/2022 08:35

yes...perhaps that's why the acquisitions failed.

But what is JB's strategy? Just make some acquisitions? Is he planning to retire on the Costa del Humber?

[zangdook] 27/6/2022 08:32

No, but I might want my company to join a larger group, and stay involved.