Rws Share Discussion Threads

[ragehammer] 26/10/2017 14:17

The RNS is for RBC Trustees (Guernsey) Limited. This must be part of Andrew Brode's personal holding which was around 39% in total and will now have reduced due to the dilution of the Placing, in which he presumably did not participate.

[commiesy] 26/10/2017 12:38

So RBC had a 30% stake and they have reduce - the question now is by how much they will reduce by...

[douglas fir] 26/10/2017 10:59

[...]
TR-1: NOTIFICATION OF MAJOR INTEREST IN SHARESi





1. Identity of the issuer or the underlying issuer
of existing shares to which voting rights are
attached: ii


RWS Holdings plc

2 Reason for the notification (please tick the appropriate box or boxes):

An acquisition or disposal of voting rights


N/a

An acquisition or disposal of qualifying financial instruments which may result in the acquisition of shares already issued to which voting rights are attached


N/a

An acquisition or disposal of instruments with similar economic effect to qualifying financial instruments


N/a

An event changing the breakdown of voting rights


N/a

Other (please specify):


Private placing has occurred


X

3. Full name of person(s) subject to the
notification obligation: iii


Royal Bank of Canada

4. Full name of shareholder(s)
(if different from 3.):iv


RBC Trustees (Guernsey) Limited

5. Date of the transaction and date on
which the threshold is crossed or
reached: v


20 October 2017

6. Date on which issuer notified:


25 October 2017

7. Threshold(s) that is/are crossed or
reached: vi, vii


30%





8. Notified details:

A: Voting rights attached to shares viii, ix

Class/type of
shares


if possible using
the ISIN CODE


Situation previous
to the triggering
transaction


Resulting situation after the triggering transaction

Number
of
Shares


Number
of
Voting
Rights


Number
of shares


Number of voting
rights


% of voting rights x

Direct


Direct xi


Indirect xii


Direct


Indirect



ISIN

GB00BVFCZV34


78,659,060


78,659,060


78,659,060





78,659,060





28.82%

[alphabeta4] 20/10/2017 10:10

Point taken to an extent - the trades at 425 need to be stripped out to get a true feel for the volume there has been since the placing. I'm not sure I have the heart to do this when lv2 is showing me a solid order book anyway.

Whilst I know every buy has a sell(!) clearly if there are institutions who have bought at 425 for a quick turn a decent volume would help to shift such sellers quickly and would be a good sign.

[phillis] 20/10/2017 09:43

Volume figure are not real
New shares start today
Previous volume seems to be connected with new listing, all the volume is matched buy/sell

That kind of real volume would have sent the share price rocketing

It will come

[alphabeta4] 20/10/2017 08:42

I'm liking the volume over the past couple of days - IMO with over 17m traded any potential for overhang looks to be clearing quickly. There could be a bounce in short order if it continues.

[robinnicolson] 19/10/2017 12:41

FWIW Numis have raised their price target to 490 from 430 and maintained their 'hold' recommendation.

[redartbmud] 18/10/2017 20:21

Orange, what about the stellar results?

[orange1] 18/10/2017 16:12

That´s very harsh. As previously stated the approximate placing price will have been determined some time ago. The company cannot change that price just because there was a run-up yesterday. If you look at the placing price in the context of the average price over the last 30 days it a premium of 2.5% to the 30 day volume weighted average price up to and including 17 October 2017 of 414.6p.

[microscope] 18/10/2017 16:07

Agree jeffian, management have a proven track record that should be the envy of most on AIM. The price rise in recent days is not their fault and I suspect the leak will not have come from RWS's end. Brode made an acquisition at LTG recently after a reported nine months of negotiation, and there wasn't a sniff of a move in the share price in the days leading up to the announcement..

It is this company's modus operandi, to grow by selective (large) acquisitions and they have all come up trumps for investors thus far. This to me looks another superb deal.

The one disappointment would be the non-invitation for PIs, but if you go to a supermarket there are always "bulk buy" offers, and I guess that's why institutions get priority, though it's a shame in this case.

No reason i can see for investors with a long term view to sell at this level, I'm sure returns will continue to grow superbly.

Cracking business and as the numbers new posters have come up with, set to remain so. And don't forget the existing businesses continue to increase profits.

[phillis] 18/10/2017 16:07

why would people buy on a leak when there is a pending financing event
are they mad?

[jeffian] 18/10/2017 15:40

That's harsh, ramridge, and to my mind a little unreasonable. Quality of management and sustained long term performance to the benefit of shareholders, including a progressive dividend policy, is the reason I have held long term and increased my holding during that period. It's only a "deep discounted" placing in the light of the spike, possibly caused by a leak(?), of the last few days.

"The Placing Price represents a discount of 21.1% to the closing price of 539.0p on 17 October 2017 and a premium of 2.5% to the 30 day volume weighted average price up to and including 17 October 2017 of 414.6p.

If this deal had been announced 2 weeks ago, you'd have been well pleased!

[ramridge] 18/10/2017 15:19

The manner of this placing and the deep discount offered to instis has left a bad taste in my mouth. They don't really give a toss about the likes of you and me.
As soon as I have made a modest gain, my holding will be sold. There are more decent companies and more decent management I'd like to deal with.

[orange1] 18/10/2017 14:49

Note the drop in price at just about the time the US markets opened.

[phillis] 18/10/2017 14:22

I guess those that bought on "the leak" are feeling a bit down in the mouth
LOL

[jombaston] 18/10/2017 13:17

I agree with Alphabeta

1. no question - the deal leaked hence the price surge y'day

2. I'm also hacked off I had to pay over £4.50 to avoid dilution. This is a stock that has been well supported over the years by private investors.

3. On a more positive note, the placing and acquisition may have drawn in new institutions (and new funds in existing institutions) who otherwise would have been put off by a lower mkt cap, less liquid share (but I should still be allowed to buy at the same price!)

4. Clearly the deal is highly earnings enhancing so could support a higher share price (hence the move y'day)

5. The purchase price isn't super cheap but with a 3 yr CAGR of 26% this is a high growth company and the combined entity should be very cash generative, supporting the increased debt.

On balance, I'm pleased that this will support a share price that was starting to look toppy over £5 and longer term this should help extend RWS's exceptional record of profit and dividend growth since flotation.

[martinthebrave] 18/10/2017 12:42

Bouncing now 473p to Buy.

[phillis] 18/10/2017 12:36

6/7x EBITDA is a full price
This is 12x

Never knew a private equity outfit to exit a successful business cheaply

Big management test for our newish CEO

EDIT
DS Smith announce purchase at 5/6 post synergy EBITDA multiple

[alphabeta4] 18/10/2017 12:24

Thanks Ramridge - pleased to see the EV / EBITDA calculations are favourable too.

With regards to comments surrounding the placing I do confess to find placings a bit annoying. SNN did a nice thing last year where people got to apply for additional shares on favourable terms and it was open to everyone, here I've had to buy at around a £4.56 average whereas institutions have been able to get over 30p off. This doesn't feel right to me.

[orange1] 18/10/2017 12:19

Here´s a list of some of Monrovia´s customers:

Adobe,F Secure, Microsoft, Micro Focus, Oracle, Sologic, Tektronix, Toshiba...

They say that they also work with some of the hottest Fortune 1000 software companies and hardware manufacturers — but they have promised not to say who they are, so they don’t. (Think big. No, bigger. Yeah, them.)

A bit more digging reveals that IBM and Novell are customers as are 5 out of the top 8 Fortune 1000 computer software companies and 4 out of the top 7 Fortune 1000 computer hardware manufacturers.

[martinthebrave] 18/10/2017 12:07

43,529,412 shares placed 425p. 21.1% discount to last nights close. Nice for the institutions pretty poor for PI's!!👎

[wjccghcc] 18/10/2017 12:07

43.5mm shares at 425p to get them to the 185mm proceeds. Clearly they were working on this for the last couple of weeks and the recent surge caught them by surprise.

[ramridge] 18/10/2017 12:05

Alphabeta4 - very good analysis. Just a small correction. The RNS says the deal is expected to represent one third of the enlarged group's profits. But I can see that your numbers correctly take this into account.
On a more traditional basis, the deal is roughly 10x adj EBITDA which compares very favourably to RWS's EV/ EBITDA of 37 (at yesterday's valuation).

[alphabeta4] 18/10/2017 11:00

P.S. the £5.42 is around where the price peaked yesterday. IMHO the deal clearly leaked. Orange had mentioned consistent buying coming in after 2pm each day suggesting it coming from the states.

Will anything be done about it? I'm not holding my breath...

[alphabeta4] 18/10/2017 10:56

I'm back in at £4.52 and £4.58. This looks an excellent deal to me, FWIW my calcs are below:

RWS had 229m shares pre deal and expected 2017 eps of 14.9p. So post tax profits were expected at £34.1m.

The deal says Moravia would have been 1/3 of 2016 adjusted operating profit. I've been a bit lazy and to get onto eps terms I've assumed it would have also been 1/3 of 2016 adjusted eps. RWS's was 10.9p. 10.9p x 229m shares = £24.96m. so Moravia was c£12.5m. (Incidentally this means if RWS is paying $320m then at 1.3 $ to the £ it's paying £246m and the historic eps multiple is 19.68x).

It then comes down to what Moravia does this year. We know 2014-6 CAGR has been 53% but I've assumed 20% to be cautious so that will be £12.5m x 1.2 = £15m.

So if both were combined now then this estimates profits would be £49.1m (£34.1m +£15m). EPS becomes £49.1m/(229m shares + 45m placing shares)= 17.92p. However, there is also an estimated £80m increase in debt post working capital which is about 6% of the revised market cap at £4.55.

So 17.92 * c0.94 = 16.84p. So I estimate this is immediately earnings enhancing by 16.84/14.9 = 13%.

I had a price target pre acquisition of £4.80*. So my new target is £4.80 x 1.13 = £5.42 or around 20% upside.

* I had calculated this as £4.35 previous high at the end of July, 7.7% eps upgrade since on 2018 analyst forecasts and 3 months further through the year with organic growth running at c10% so £4.35 x 1.077 x 1.025 = £4.80