RSM Tenon Share Discussion Threads

[wiganer] 05/1/2012 17:36

And volume.

[wiganer] 05/1/2012 15:56

Interesting price action.

[engineer66] 27/12/2011 22:30

Agree. Positive cash flow, deleveraging and confidence that they are within debt covenants is what they need to show.

[nehpets81] 18/12/2011 17:55

The negative cash flow seems to be due to the fact the company can't stop acquiring other businesses. They pay out for them, then lay off the work force and do it again a year later. Thankfully they are now concentrating on organic "growth" but it may be too late for that. There are still provisions for some deferred consideration to the RSM Bentley owners, and the borrowings just keep going up. Hopefully they won't be paying out much more in redundancies though.

Also, they seem to be paying a lot out in rental leases so a reduction in offices in the long term would be good, but in the short term getting out of those leases will damage cash flow even more.

I have lost pretty much all value I had in these shares just sitting on them, it's not worth me selling them now but I wouldn't buy any more until I see evidence of a positive cash flow, which is not going to be seen until the second half of the year at the earliest. Lloyds TBS may remain supportive for now but they are still going to be wanting to be paid back!

[cnx] 18/12/2011 01:44

the receivables problem appears strange to me

on a personal aspect i have been asked to deposit with my solicitor 100% of her barristers estimated fee.................which she will hold on behalf of the barrister. i have been a client for 26 years


from my company's perpespective the auditor wants 70% on signing annual agreement and commencing the interim, and the balance when he commences the final audit. he has been told he will get 50% on completion of the interim audit and receipt of the management letter, and the balance when the directors approve the audited statements. the company has been with this big 4 auditor for 57 years

[nigelpm] 16/12/2011 19:01

THE SHARP DROP in RSM Tenon's share price has not shaken its chief executive's belief in the business.

RSM Tenon's share price fell to 9.4p on Tuesday, from 14p, after warning that tough trading would impact on its net cash outflows.

Andy Raynor said that while 'you can't say you don't care about the share price', he was very confident in the listed firm's fundamental strategy and structure.

[wiganer] 16/12/2011 16:04

Candlestick chart is UGLY

[still waiting] 16/12/2011 15:25

hardly a vote of confidence from the directors there...

[aleman] 16/12/2011 12:35

At the start of the year, I thought the better promised cash collection and less investment should improve things but someone suggested they might be booking revenues on signing contracts rather than when cash is received later. This would enhance profits as the business grew (next year's higher revenue against this year's lower costs) but show up as poor cashflow due to increasing receivables. Any slowing in growth would expose this as falling profit margins. I don't know if this is true or not but I jumped ship when results failed to provide the better cash collection they had promised. I still monitor to find out what the reality is.

I have found booking revenues on signing contracts seems to occur in a few Chinese AIM shares as well. Their profits always look healthy and growing as they expand yet cashflow is often poor and they have fundraisings if the shares do well. Trouble ensues if growth tails off, though. It's something to watch out for.

[nicedude1976] 16/12/2011 10:28

Amazing, the chart was telling something is fishy before the "official facts", it wasn't wrong...

[engineer66] 16/12/2011 09:31

yep, this pre-pack threat staff off to another firm laughing shareholders stuffed, wondering what happened! Gut feeling a refinancing is needed as biz is likely to lose too much confidence. Given there was a rights issue not that long ago you'd think the institutions would wake up and demand some changes.

[imastu pidgitaswell] 16/12/2011 08:53

That's pretty much my take on it - there should be value here, a reduction in gearing from simple cash collection would go a long way to transforming it as an investment proposition, but they seem to be unable to do anything positive to achieve it.

And there's the risk of a pre-pack (the morality of which is another debate), so staying away for now.

[engineer66] 15/12/2011 22:18

Looking at the cash flow statement if they dont have any outflow on "Cash flow from exceptional items" which relates to acquistion integration, and they improve their working capital managment by getting in trade receivables on contracts then their operating cash flow looks healthy. They will probably not be so much outflow on investing activities either. So even if their operating profits are down significantly my estimation is on the one hand they are still afloat, especially if they have a substantinal overdraft approval.

On the other hand there is a loss of confidence in this business that damaging - the concern is a refinancing or pre-pack that wipes out existing shareholders.

I find it hard to judge this situation.

[wiganer] 15/12/2011 19:12

They also have quite a big segment of their business which is public sector, which is hardly awash with cash these days.

[engineer66] 15/12/2011 14:26

Suppose it depends on their terms - possibly a lot of fixed cost for an over leveraged biz.

[still waiting] 15/12/2011 14:00

not difficult just costly in redundancy/ lease costs etc..

[engineer66] 15/12/2011 13:52

Still waiting
Not sure why you think it is difficult to take out cost after acqusitions. It ought to be ideal opportunity to be more efficient take out say 20% of staff, cut overheads and close a couple of offices.

I dont know what TNO charge, but I should think their rates are a lot lower than big 4 or possibly other mid tier accountants; so why would they necessarily be undercut?

[still waiting] 15/12/2011 12:00

income from sme's is collapsing, many firms don't have the profits to warrant dubious tax planning schemes which always end up rearing their heads 2-3 years down the line anyway.

minimum fee charging rates only help competitors undercut them so all they can do is cut costs which after taking over numerous firms is going to be a costly excercise in itself.

bottom is nowhere near reached yet imho.

[engineer66] 15/12/2011 10:39

Hoped they would be able to flex the size of the firm by reducing staff to preserve cash and compete more against the big 4 on price.

[imastu pidgitaswell] 15/12/2011 09:22

On the volume spike of the 13th, trades 174, 175 and the last one - 242 were essentially 2.5m traded each time - so 7.5m of the 13m traded.

May well have been a rollover plus a further 2.5m, but probably doesn't matter anyway.

[aleman] 14/12/2011 23:14

No. Trade 42 shows 100k at 9.03p with the same time as trade 33's 100k at 3.03p. Clearly fat finger syndrome.

[still waiting] 14/12/2011 19:39

trade 33 today, did someone really dump them at 3p.. WOW.

[nigelpm] 14/12/2011 13:26

somebody else transacted the other 11m shares.

More likely lots of other people transacted the 11m!

[imastu pidgitaswell] 14/12/2011 13:25

Interesting.

But it was 2m shares they bought yesterday, somebody else transacted the other 11m shares.

[nigelpm] 14/12/2011 12:39

Odey have been buying!

to 8.45% now.