Safeland Share Discussion Threads

[rowjimmy] 24/7/2002 23:39

Why is there a loss per share if th company made a profit before tax?

[simonevans] 24/7/2002 22:02

Shares look a screaming buy at this level!

[rowjimmy] 23/7/2002 01:18

So when the results are announced the company could get back into the market for buy back shares, which could give it some renewed life. But I don't suppose the results themselves will be much good

[rowjimmy] 18/7/2002 23:31

Not long ago you could get 46p for these. Once the company entered the closed period and so were not in the market themselves for shares the market dried up pretty severely

[rowjimmy] 22/6/2002 18:17

Oh well I haven't been following very well! I am surprised because dividend has been a main thing with them, hasn't it?
all the more reason not to have the shares I guess
on the other hand once the commercial property market starts to get shaky they could do better. It does seem to depend on good one off deals rather doesn't it

[simonevans] 22/6/2002 10:05

what do you mean about "conjecture of dividend cut"...they have already announced that they will not pay one!

[rowjimmy] 21/6/2002 11:26

Jeff yes a family member has had lots of shares for years and talks to them and hercules on the phone form time to time
obviously they are often not explicit
but we have the picture
that safeland do not find stockmarket very rewarding
so the buyback could eventually perhaps go all the way to a delisting
but one would expect the final act to be at a higher share price reflecting asset value, as is typically the way

safeland can be expected to treat their shareholders decently
regardless of whether company had a good year

[simonevans] 15/6/2002 10:18

I don't agree. I for one, would like to stay with Safeland. I think that distribution of Hercules and Bizspace shares would be a good thing, but I still think that Safeland could have an interesting future as a listed company. I think the time has probably come for some corporate restructuring of the business, but taking private would be a disappointment to me. I am not sure that the quote costs quite this much; how do you get to £0.5m? I would have thought it was a couple of hundred k at most for a company like this. Maybe a transfer to AIM would be sensible.

[jeff h] 14/6/2002 22:13

Simon....at least Johnson had a reasonable excuse for axing the div....
expanding the Strada chain and mananging debt.

A 1p final div would have cost £250k... given that the management here
(and quite rightly so) think that high property prices mean that suitable
acquisitions are thin on the ground, doesn't that mean :-

- the cash requirement for acquisitions is vastly reduced
- it's a good time to sell the existing properties ??

... add to that the company had £3.2m cash at 30 Sep 2001 and you can
understand my suspicions of the motive behind ceasing the dividend.

The most positive thing the management could do is to take advantage
of the property boom by selling existing properties and buying back more
shares.

The Lipman's will still pick up £1m from the company... we pick up nothing
unless as you say they have a positive surprise in store... a distribution
of the stakes in hps biz etc would be nice.

With minimal trading volume after a profit warning and today's big market
fall, any parcels of shares becoming available likely to be bought back or
snapped up by Chelfords, no dividend and an apparent gloomy trading outlook
.... you have to question what's the point of being on the market which
costs the company maybe £400 - £500k a year for the quote.

Without the positive surprise I would think it was now in everybody's
interest that the company was taken private.

[simonevans] 12/6/2002 22:11

The difference here is that Luke Johnson is not the best advocate of generating value for ALL shareholders. I don't believe the Lipmans will rip-off the minority shareholders, but I must admit I am surprised that the dividend has gone. Lets hope the Lipmans pull a positive surprise next. Bizspace is a great company and, just maybe, they have another good idea. I will watch with interest and buy more shares on weakness in the price.

[jeff h] 12/6/2002 19:51

Skyracer.... ok, so they are to make a write down against BizSpace and
yes my view on it being classed as 'temporary' wasn't proved correct..
I'll grant you that. I'm a holder of BizSpace, believe the company to
be doing really well and for it to be undervalued.... that's my opinion
.. you may agree or disagree.

Your arguments however related to :-

- HPS and as I previously pointed out and the statement has confirmed
no provision is necessary

- 'disasterous buybacks' which I pointed out boosted Net Asset value
and the statement confirms , whereas you seem to think a 'provision
against losses made on buybacks' is necessary when no such accounting
treatment exists under UK GAAP or SSAP/FRS Accounting Standards under
which UK companies accounts are prepared and audited by.

- Your refusal to accept the purchase and cancellation of a company's
shares was a Balance Sheet rather than a Profit and Loss account item.
... you now agree 'that share buybacks only affect the Balance Sheet.'
you are confusing the Profit and Loss account with the Balance Sheet
Profit and Loss cumulative reserves.

I don't know why you have chosen to highlight the policy on Stock being
valued at the lower of Cost and NRV. The statement says that after allowing
for Safestore/Bizspace write down they anticipate a profit before tax, all
be it a nominal one. So this confirms my view that values in excess of the
book value would be obtained.

All in all Skyracer I'll have my slice of humble pie, but the rest of the
pie is yours.

Safeland to me is resembling the story at Signature Restaurants.... paint a
gloomy picture... cease the dividend....and then at a future date make a
MBO offer for the company. I'm cynical of course and it's purely my opinion.

Jimmy... would you care to enlighten us on where you get your information
on Safeland from ?

[skyracer] 12/6/2002 15:37

" I'm sure in the case of Bizspace it will be classed as a 'temporary diminution in value', and very likely the same for Safestore as well. "

" for the sake of prudence the valuation is based on the LOWER of Cost or NRV and not Current Market Value which you are keen to use "

Jeff, I assume you have consumed a nice slice of blackcurrent humble pie.

I agree with you the share buybacks only affect the Balance Sheet but the buyback cost reduces the Profit and Loss Account total within the Capital and Reserves in the Balance Sheet as can be calculated from the Reconciliation Note.

[jeff h] 12/6/2002 13:51

Jimmy... I'm happy to hold as its a good value stock.

It wouldn't be a surprise if the Lipman's did a MBO.

Safeland could buy back more shares but if you exclude
the 2 largest non-Lipman owners there ain't that many
around.... cash wouldn't be a problem.... they could
easily borrow if they wanted to.

[rowjimmy] 12/6/2002 13:37

True that SAF are always apparently worht more in cash assets than share price indicates
but as this is a fairly permanent state of affairs, it does not indicate a rise in the share price should be expected
meanwhile SAF are unlikely to be doing very well in the property market
I think you are both right...it is safe to hold in as much as the assets far exceed the share price
but the share price should not be expected to perform well
the only thing likely to support the share price is when the buyback starts having to winkle out the last shareholders who will be looking for a price nearer the asset value
that is not about to happen, I am told, because Safeland doesn't have the cash to take things that far yet

[jeff h] 11/6/2002 23:03

Apologies to you Sky but I am an accountant.

The 'Reconciliation of movements in shareholders funds' is a NOTE to
the BALANCE SHEET.... and if you don't believe me have a look at the
Safeland Annual Report 2001 Note 35.

Buybacks only ever affect the Balance Sheet... in Safelands case in
2001 they bought back (and cancelled) nearly 3 million shares for a
consideration of less than £1.4m.

Net assets were 73p at the year end.... so in simple terms Safeland
have been buying assets worth say 70p for 46p.... in your language
I would have thought you'd have called this a 'profit'

The shares (which are a Balance Sheet item) are cancelled and the
reduced amount of shares in issue boosts the Net Asset value.

If the values attached to the assets in the Balance Sheet are overstated
then obviously the net asset valuation is also overstated, but I see no
evidence to suggest this.... you are correct Skyracer in saying the current
market value of HPS is reducing. I've just checked the value of the HPS
stake in the Safeland Balance Sheet (see P29 of the 2001 Annual Report)
and it is £2,414,000 for 1,172,797 shares... which = £2.05 per HPS share
... so even at today's market price there is no fall in asset value there.

The book value of the stakes in Safestore and Bizspace are below market
value, but I'm sure in the case of Bizspace it will be classed as a
'temporary diminution in value', and very likely the same for Safestore
as well.

Looking at the Balance Sheet the biggest item by far out of the Assets
is Stocks at nearly £16m. Stock here are the properties that Safeland
intend to shortly dispose of and are thus classed as a Current Asset.
The valuation at 31 March 2001 in the Balance Sheet is at the lower of
Cost or Net Realisable Value....given that Safelands properties are
mainly in the London area I would have thought it extremely reasonable
to suggest that the values at 31 March 2002 (assuming they hadn't been
disposed of during the year) had risen, and thus Safelands Net Asset
Valuation at 31 March 2002 had also RISEN.

The forthcoming results may or may not show this, as I've already pointed
out, for the sake of prudence the valuation is based on the LOWER of Cost
or NRV and not Current Market Value which you are keen to use for the HPS
stake. If a building had been bought for £1m and it could be sold now for
£1.5m after expenses the valuation used is £1m.

I trust this clarifies matters

[skyracer] 11/6/2002 11:49

Sorry Jeff not true;

The cost of the share buyback is charged as a cost including expenses against the P&L. Have a look at the "Reconciliation of movements in shareholders funds" in the accounts.

If the share price subsequently falls Safeland will have paid too much and made a real loss on the transaction although it is true that this will not be recognised explicitly in the accounts.

As for the stake in HPS... Jeff, the share price has collapsed!

[jeff h] 10/6/2002 13:47

The Auditors will be feeling comfortable... a share buy back
reduces the amounts of shares in issue on the balance sheet..
it's got nowt to do with the P&L a/c.

As for the stake in HPS... if there was a permanent diminution
in value before the accounts were signed off then you might
have a point.... it's about 1p off GROSS assets hence it's not
material and in any case you wouldn't class it as 'permanent'
.... were you clamouring for a revaluation of the stake when
the HPS shares hit £7 ???

[skyracer] 10/6/2002 10:44

True and Fair - A Double Whammy

I would have thought the prudence principle would require a provision against losses on investments. While HPS was strong it was reasonable not to require this but the situation has now changed for the worse.

And, if a provision IS made and the share price falls I would have thought a further provision against losses made on buybacks would then be required.

Auditors, are you feeling comfortable ?

[jeff h] 01/6/2002 01:29

Skyracer.... yes... there's just over 25m Saf shares so it's in the assets
of Saf at under 10p a share.

Safeland have always reported the stakes in these companies at book value...
it wasn't so long ago that HPS was over £6 a share.... the trouble with
minority stakes in other companies is you only incorporate the dividends
received into the P&L a/c.... and only HPS pays a dividend.

In a previous post I stated my belief that Saf should distribute its stakes
to the Saf shareholders, and I suppose it's a possibility, but not as likely
as a MBO or continued buybacks so that the Lipmans own eventually all of
the company

[skyracer] 31/5/2002 14:06

Jeff, looking at the 2000 accounts SAF own 1172797 HPs shares at £2414000 cost making 206p per share. Guess you meant 10p per SAF share. Overall SAF now appears to have made a substantial loss on their investments (BIZ, HPS, STO, EVS). All IMHO and DYOR of course.

[jeff h] 30/5/2002 21:51

Skyracer... you are one of lifes pessimists..... you were the same
with your comments on Fulmar which I bought in the low 50's and
a few months later exited the majority of my stake in the low 70's.

HPS is in Safeland's books at below 10p a share.... Safelands net
assets are maybe 80p a share.... even if HPS was worthless (and it
definitely aint) the net asset figure is north of 70p as against a
share price of south of 50p.

I find it a curious time for HPS to announce a profit warning and
quantify a profit figure given that there's still just over a month
to go to it's year end.

The cynical amongst you would say it would make a MBO offer easier
to pull off.....it's only a matter of time anyway... the Lipman's,
Henderson's and the recently arrived Chelfords Ltd (who are they?...
I've only discovered an address for them in London with no other
details) owning way over 60% of the shares.

Irrespective of HPS, or Safeland's forthcoming results, I'll be hanging
on to my stake and if they were to fall below 40p I'll be buying more.

Just out of interest, which companies do you like/hold/rate ?

[rowjimmy] 29/5/2002 18:44

however day may arrive when they go after last buybacks to leave stockmarket, when perhaps they will have to offer a better price to winkle out diehard shareholders. What do you think? we are selling

[rowjimmy] 29/5/2002 18:41

Skyracer u r right I think; except that buyback is the company policy strategically as a move towards leaving the stockmarket? but they will run out of cash to go on buying back at some stage which will remove another price support. along with likely poor performance in the wheeling and dealing sector until property market cools and collapse in HPS, safeland is not ok for time being

[skyracer] 29/5/2002 08:30

Writing on the wall for SAF; HPS now valued at only 285p!



Update: HPS now at bid 245p down 85p!! This is just awful.

[skyracer] 28/2/2002 00:09

SAF should be going throught the floor.

Yuk. HPS now fallen to 390/420p. SAF should be valued at around 34p not 44p and the buybacks are probably the only reason for the artificial levitation. The share buybacks have been so disasterous that they probably merit a profit warning and provision by themselves.