Orchard Funding Share Discussion Threads

[kabrams] 20/4/2024 14:30

Konradpuss this is all very childish from you. I am not Peter and you know it. Stop saying so! I’m here to pose the potential risk and not let investor’s become blindsided by the risks. They are real.

[konradpuss] 20/4/2024 13:47

Thanks - Ravi - Peter - Kabrams

[kabrams] 20/4/2024 11:38

I’m anxious for all you holders. Be careful out there.

[orchardholder] 20/4/2024 08:31

The 54.19% + 2.44% is how I got to my 57% (56.63%). But I see no further holdings.

This isn’t about fair or not fair. It’s just about these two points:
1) what is the value of the company (=83p per share, earning >7-9p per share per year at an ROE of 10%), and it is about
2) what legal rights/ways do I have to participate in this value (=way 1: company stays public, paying 3-9p dividend per year; way 2: company is taken private with a decent offer that I accept; way 3: company is taken private with a bad offer that I don’t accept, meaning I can’t trade the stock likely for years, but continue to receive the dividends of way 1).

At 30p, this is just a great and safe (long-term) investment, in a market environment in which most stocks are quite expensive. The majority of my net worth is in stocks, so, I am happy to have such a bond-like holding. I would be glad to keep holding this company for another decade, earning high and stable dividends every year.

Some of you seem to be pessimistic because the price of the shares have dropped a lot over the last 5 years. However, the quality of the company has not dropped. In fact the financials have become gradually better over all these years. Orchard has been crushing it over those last 6 months.

[konradpuss] 20/4/2024 07:50

Well Peter you might be correct this time.

From the Orchard web site.

R.Takhar. 54.19%
Mrs.Ravi. 2.44%
Res Privata 1.18% - a relative?

Other (all below 1%) 6.54% - a few more relatives perhaps?

As to comments about minuscule holdings, all shareholders in my book should be treated fairly. I am unsure this will happen here.

[orchardholder] 20/4/2024 03:36

Hey Peter, the rule is >75%
So, Gresham + Chelverton + us is enough

Would you mind sharing how you arrived at the >60% that Ravi holds? I can't see that anywhere

[97peter] 19/4/2024 21:32

Orchardholder, you are naive beyond belief! If Ravi decides to take private it will happen. Your miniscule holdings will not stop or impede this! He owns with family above 60%. So a few MM’s or II’s will be happpy to sell all at 45p, plus if he gets the vote as with any takeover/ buyout, read the rules, h3will get to buyout 100%%%%%%%%.

[orchardholder] 19/4/2024 12:07

Thanks for pointing that out David, you are right – they sold their whole position on the day of the fraud news, crashing the price to 16p.

So, from what I can see, it is basically this:
Ravi: 57%

Vs.:

Gresham: 15% (got in at 65-70p)
Chelverton: 6% (got in at 80-85p)
Valueman (2.5%) + me (1.5%): 4%
(note, all of us combined are 25% = can theoretically block a taking private move)

+ Rest: 18%

[kabrams] 19/4/2024 11:56

I am a worrier I know that hence I don’t like unnecessary risk which is why I’m pointing out to those who’ve bought at 28p plus to be careful as it’s worthwhile to remember these were 16p only a matter of days ago. I’m not saying you will ever see that again but be mindful.

[davidosh] 19/4/2024 10:54

OrchardHolder....Recent announcements suggest that Stuart Hawthorne sold down his holding below 3%

[konradpuss] 19/4/2024 10:52

Orchard, if you can accept being locked into a private company then fine. I would not be happy about this unless I held a majority.

My buy price was 45p so I think that I will be tending if the offer comes in at circa 50p. I only have a small holding. I was was going to go in much bigger however the three 'red flag' events really troubled me.

[topvest] 19/4/2024 10:09

Interesting and informative post. Time will tell.
Of course, they still have the listed bonds as well...

[orchardholder] 19/4/2024 09:49

I am completely new on this board, but I don't quite get why some feel so negative or so much pressure to sell at this price..?

A takeover would be great, but if the company just keeps doing what it is doing, this is still an incredible investment below 50p. The company will at the very least earn 7p per year - and that is still a conservative estimate.
If now one growth avenue breaks away it will allow for a higher payout ratio, implying a dividend of at least 5p per year (=17% dividend yield + 2p increasing book value per year). Ravi has since day one been very generous and reliable in terms of paying dividends (of course also for his own sake).

Some people seem to fear that Ravi will make a low-ball offer...? But then what...? I am not forced to sell and am happily holding my 1.5% in the private market. Everytime Rami will take out money, he also needs to pay money to me.

And in the first place, why on earth would the other larger investors sell at 30p...? They might start considering it at 50p+. Their average purchase prices are just too high:
Gresham got in at 65-70p
Chelverton invested at 80-85p
Stuart Hawthorne got in at 50-60p

So, I only see an upside, no downside at 30p. If this actually goes below 25p again, I will double down, which should by itself give the stock a bottom.

[konradpuss] 19/4/2024 08:42

kabrams, as the famous saying goes value is what you get, price is what you pay.

I guess you have a loss that can be off set.

[valueman94] 19/4/2024 08:28

Kab - looking at your previous posts it looks like you’re quite the emotional investor. You sold your stock because the share price went down not anything relating to the business, now you are commenting pessimistic comments about the impending doom of a low ball offer.
You no longer own a single share of this company. I can only assume you want feedback if you made the correct choice. I do not know, but what I do know is; you sold your 80p for 50p

[kabrams] 19/4/2024 07:31

Please listen to me and be careful. There’s far too much optimism that Rav will tender for shares at 40p or 50p. Why?? I ask would he do such a stupid thing when he had the opportunity at 20p. What frightened me within their update was the word partial. Interpret that how you will but with the risk/reward at the current 28/29p I’d sell.

[konradpuss] 18/4/2024 21:03

Ravi, 40p will just not do it.

[97peter] 18/4/2024 20:56

All- If and big IF, Ravi after review decides to take the company private, he has 56%, other relatives 8-10% and the MM’s will vote with him to purchase all other shares I believe at an offer price of 40p, if he gets the vote all holders will then be bought out at 40p, no minnow holders, holding on. See LSE and FCA rules!!

[konradpuss] 18/4/2024 19:31

I think it will be at 50p

Shall we have a bet?

[valueman94] 18/4/2024 18:26

I appreciate your reply. Basing a low offer on the ‘feelings̵7; of two multimillion asset companies isn’t a strong argument for a valuation of a business.
Using financial metrics is what drives rational financial decisions (which I’m sure the asset management follow otherwise they would be out of business) . Selling for less than a liquid NAV and such a low p/e (a point that has gone missed so far). The company looks like it’s going to earn close to 2m for the year. This company is worth more than 3 times earnings. If you want to Ignore NAV. A profitable company should be selling around a 5-10 P/E ratio.

[topvest] 18/4/2024 18:12

Fair point, but their hand is not strong. I suspect Gresham House and Chelverton are fed up with this and will want to get out at something reasonable before it delists. What that price is will drive the tender.

[valueman94] 18/4/2024 17:59

You seems to keep dodging the question. Why would someone sell 80p worth of assets for 30p? You Call it optimistic. I call it the reality of the situation.

[topvest] 18/4/2024 17:53

LOL - super otimistic!
It's not an offer. It's a tender. No chance of that price unless we get a bid from a third party.
Would Close Brothers make a bid when the FCA is hovering?
Very unlikely in my view.
Its not really worth book value - look at the banks. Virtually none of them trade at book value because their ROEs are lower than their cost of capital.
Half of book value would be a good outcome.

[valueman94] 18/4/2024 17:34

Offer price can’t be less than the share price from the past 12 months. Which is 44p. So that’s the absolute least. Plus a share appreciation for the fact it’s being taken over. I don’t think 80p is unrealistic.

[topvest] 18/4/2024 17:20

I suspect Gresham House and Chelverton will drive the tender price. Maybe a 30p (pessimistic) or 50p (optimistic) outcome. Lets see what happens.