Savile Group Share Discussion Threads

[deswalker] 29/10/2010 08:12

Big acquisition announced

[stegrego] 27/10/2010 23:12

OOooooo.... whats occurring?

[deswalker] 27/10/2010 10:41

Must say the action of the some of the shareholders on here is pathetic. Suggest you take a long hard look at yourselves.

[ewen chatfield] 26/10/2010 19:30

thanks for the options information deswalker. i'm going to sit on my hands a bit

[pugugly] 26/10/2010 16:22

Liarspoker: I do but spread still not nice even with a good broker (

[liarspoker] 26/10/2010 11:52

PUGUGLY - use a phone broker and you will find that you can buy well inside the spread.:O)

[pugugly] 26/10/2010 10:17

Des Many thanks. At least my basic maths still works !!

It will be interesting to hear the feedback.

Major difficulty for me is still the spread.

[deswalker] 26/10/2010 09:56

PU,

There has been dialogue between the company and various people on this board over the last week to make sure we got to the bottom of this.

The upshot is that AR2008 and AR2009 were incorrect and AR2010 was adjusted to correct these errors. The vesting criteria are based on pre-tax profits and so, contrary to my belief in the run-up and post the Prelims, the vesting criteria have been met for the last two years and are comfortably expected to be met for this year.

Thus one has to allow for an increase in the shares in issue to 14,441,822 + 2,183,114 = 16,624,936 and adjust the cash balance up by about £ 450,000 for the option exercise consideration.

The result is that the share is obviously not as cheap as if the option hurdle had not been met but it is still very cheap even after the dilution. I tend to look on worst-case scenarios so have been buying shares assuming the options would vest anyway so it's not the end of the world.

Of just as much importance is the good dialogue between shareholders and management this last week and also management's anxiety to clarify the situation in today's RNS. Hopefully this is the start of an active dialogue and I believe there are at least a couple of shareholders going to the AGM today so hopefully that will prove fruitful too.

Des

[pugugly] 26/10/2010 09:03

Des. I have just run the numbers for theoptions and they are in the money for 2010. Can you confirm my figures please.

2010 NOS OF SHARES FOR CALCULATION 15,213,386

Profit before taxation £504,781.00

basic eps for options £0.0332

So very heavy dilution very probable.

[deswalker] 26/10/2010 08:44

Well, needless to say I've bought a few more.

Poorish trading update but it's only Q1 with signs that Q2 might be better. But trim the forecasts all you like and it still looks very cheap.

Even assuming flat trade (fcf of circa £500k) they can afford to pay a divi of 2p pa forever without even touching the cash pile. After netting off tomorrow's divi that's a running yield of 2/(32-1) = 6.45%. Some of the cash will hopefully be returned in due course too with some used for acquisitions.

Good to see the options clarification in the RNS and management reacting quickly to clear up an unfortunate mistake. Hopefully the AGM goes well today and any report would be greatly appreciated.

Des

[liarspoker] 26/10/2010 08:06

Yep but you pay for what you buy Steg.

SAVG is basically valued at a small premium over cash so the operating business is practicaly valued at a little over zero. If they make an earnings enhancing acquisition then no doubt the share price will move the other way. This ones a bit like CAO in that you buy and shove it in the bottom draw. Very good value imo. Ex-divi tomorrow too ( 1p ).

[stegrego] 26/10/2010 07:18

Poor statement from this serial disappointer.

Usual vagueness shining through.

[ewen chatfield] 25/10/2010 22:25

placing and lost contract ringing alarm bells, albeit quietly, on an otherwise very cheap looking share

with regard to the options mentioned by deswalker above (thanks for that post i had missed the EPS conditions), it seems cut and dried to me that they cannot vest, does anyone have any prior experience to the contrary?

[liarspoker] 20/10/2010 14:04

Bit of stock available at 34p now. Got an extra 7K myself. :O)

[liarspoker] 15/10/2010 12:58

Hi Masurenguy - Could you please send me your email as I may need your help with something. Actually any serious longer term SAVG holders are welcome to email me at springmusic at hotmail.com

[liarspoker] 14/10/2010 16:16

Perhaps illiquidity can be tackled by a share split ?

Maybe we can forward the motion at the next AGM.

[masurenguy] 14/10/2010 16:09

Some very positive investment factors in the Savile metrics BUT the major negatives would appear to be illiquidity and an absurd 20% spread !

[deswalker] 14/10/2010 15:37

Another write-up about SAVG ...

[masurenguy] 14/10/2010 09:04

Cheers DW !

[masurenguy] 14/10/2010 08:20

DesWalker - 22 Sep'10 - 248: I note the corporate broker has kept his £1m pbt forecast for the current year following yesterday's numbers (and presumably a chat with the company).

Do you have a link to the latest brokers note/forecast ? TIA

[deswalker] 12/10/2010 14:43

Nice buy GHF.

I never know what to do in situations like this. My heart says stay quiet and keep adding but my head says going all-in is not wise no matter how cheap the stock is, hence I finally got my finger out to publicise it a bit.

If anyone is going to the AGM later this month, I'd be really grateful if they could ask about the vesting of the options highlighted in my post above.

My gripe with this share when it was higher and (very briefly) all the rage was the dilution of the options which was very significant with an share price of 80p but didn't seem to be getting noticed. Now at 35p this issue can be accounted for and the share still looks way too cheap in any case.

Even so I'd still like to see them cancelled and a smaller number reissued at the prevailing share price at the time to keep people onside. However I suspect they will vest them anyway based on achieving the aggregate target across two consecutive years.

Des

[glasshalfull] 12/10/2010 13:58

Concur Des/david (and I see you floating around liars...I'm certainly in good company). Looks like a few of us nibbling ;-) I was hoping this would stay under the radar for a while longer.

Looking for a positive AGM statement in a fortnight which suggests that the stronger H2 performance has been maintained.

Managed a few more at 34p today but looks like the cheap stock drying up.

Kind regards,
GHF

[deswalker] 12/10/2010 12:27

Just written this on TMF. May as well post it here too ...

An AIM listed human resources consulting group hoping for increased opportunities due to restructuring in both public and private sectors.

Finals to 30 Jun 10 ( show net-cash of £3.567 mill. House broker forecasts for the current year (to 30 Jun 11) are for a PBT of £1 mill. Approximating interest received at 60k, Depreciation at 120k and Amortization at 2k this leads to a forecast EBITDA = £1.062 mill.

So what is the market cap ?

Current shares in issue = 14.442 mill which at 35p to buy gives a market cap of £5.055 mill. So on a forecast EBITDA/EV basis we get 1.062/1.488 = 71.4% which is very cheap.

However, there are 2.183 mill options in issue struck at very close to 20p. Adjusting for these gives a net-cash figure of £4.004 mill, the number of shares in issue rises to 16.625 mill and the fully diluted market cap rises to £5.819 mill. In this case the the forecast EBITDA/EV = 1.062/1.815 = 58.5% which is still very cheap.

BUT, these options only vest if the company achieves a basic eps of 3p in each of the years ending 30 Jun 09, 10 & 11. They did NOT achieve this in the year to 30 Jun 10 so by rights this dilution should not take place so the undiluted numbers should be the ones to go on IMO. That said, they haven't cancelled these options yet as the performance period hasn't ended. Maybe they will try and argue that an agregate 6p eps in the two years to 30 Jun 10 & 11 is sufficient for them to vest and they are forecast to achieve this with over 4p expected for the current year.

Even so, on a fully diluted basis (ignoring the warrants struck at 86p) they are dirt cheap and super dirt cheap if they cancel the options next June as they should.

The 1p divi for the year ended 30 Jun 10 is still available (xdiv 27 Oct, pay date 12 Nov). Netting this off the 35p buy price and using the forecast divi of 2p for the current year gives a prospective yield of 2/34 = 5.88%.

As for the register ...

The two main Directors hold 22.9% between them (falling to 21.6% if the options do vest) with five other key employees (none of whom are related to each other or the two main Directors) holding 10.7% (rising to 17.26% if the options vest). Named outside individuals and institutions hold 27.88% (falling to 24.22% if the options vest).

It looks a decent register to me. The two main Directors are unlikely to try anything with their key (yet unconnected) employees almost certainly wanting divis and a stock-market quote, thus siding with the outsiders rather than falling in with any shennanigans.

It is illiquid with a wide spread, but it was trading at over 90p a couple of years back so there is plenty of upside IMO. When at 90p it did a placing and shortly after warned so there will still be some disgruntled holders out there.

It's as cheap as anything I can find at the moment. Any thoughts appreciated.

[davidosh] 08/10/2010 10:02

Hi Des,

Blimey that is a coincidence and a half. You have exactly the same holding as me. I will try to arrange an investor presentation in the next few weeks but I am afraid Mello is fully booked for the next three months. They are exceptionally popular these days with just below 70 investors at the last one in September.

As for PC and MUBL. Watch this space as the large investors are on the case. I already told them nearly a year ago that two new non execs were vital. I think we shall see some tightening on corporate governance there.