Scs Share Discussion Threads

[patsyluck] 26/10/2023 18:03

Thorpematt,

As most know UK market teeming with low p/e opportunities mostly in the AIM space.
Re Severfield yes headline figures are not demanding but if you look over say last near 20 years share price chart shows a negative 4.8% growth over that period which would suggest they are not really in a wealth creating business...my knowledge of SFR is limited but what gives here?

[thorpematt] 25/10/2023 19:54

Farrugia
RFX I do like, different mix of business to HAT ultimately. I have always preferred HAT but I rate RFX a buy too.

GAMA
Well, not so much (director sells) recently (more so early in the year), but yes that's the one!

SFR
Anytime the yield tends to be higher than the PER works for me! But pretty much any valuation you like it looks cheap (take your pick).

Charlie Munger was once asked whether (at a berkshire AGM) if he was a value or growth investor. In brief he said that the 2 go together and I fully agree. Companies with great quality and growth metrics deserve high valuations and vice versa.

Simply put SFR is a better quality and better growth company than the average on the LSE...and yet it trades at a MUCH lower than average valuation. So I think it's a pretty good quality company at a very reasonable price.

BUT, here's the thing these are just suggestions and they may not be for you and you ought to DYOR as they say.

[farrugia] 25/10/2023 09:55

ramsdens holdings looks better value to me than HAT? And why is Severfield great value?

GAMA - you mean Gamma Communications? Directors been offloading not great

[niklol] 24/10/2023 23:00

Exactly
Couldn't agree with you more!

[finkie] 24/10/2023 22:29

We are all there currently (the sea of red) nice to get some cash back in to reinvest (in what won’t be the bottom) it
never is!

[scooper72] 24/10/2023 17:51

Well from being minus 37Percent to being up 23 percent. Bit of good news is welcome when I look at my sea of red

[thorpematt] 24/10/2023 14:53

GAMA
VTU
PLUS
HAT

(I don't need any more of these, so fill your boots).

VTU is similar to SCS in that Mr. Market doesn't understand its intrinsic value (it owns swathes of property that potentiolly are worth its market cap). As well as being a very good business (watch the PI world video with the CEO and FD)

PLUS is worth several multiples of the price. It's HQ is Israel (so that you know). It's a cash machine but trades of a huge discount. At this rate it will buy all of its stock back with its cash pile.

GAMA is a very high quality growth business with a big moat and large repeat business portfolio. It has a low divi but could readily pay our 2x what it does (it tends to feed the cash into more growth). It should trade of big PERs...but it doesn't.

SFR
Good quality company, strong yield, low PER too cheap.

HAT
fPER of 7 divi 5.3%
Again cap structure not wholly understood. All of its debt is loan book (so its like a bank, the debt is the objective!). Really it has no LT debt just some property leases. It will make lots of cash in the higer rate environment. Very solid. Unlikely to get bought out but its not lasted this long for no reason. If you want a short term loan there is no better option for you...and people do need short term loans these days. Much more ethical that people want to believe too.

[laughton] 24/10/2023 12:43

Brilliant news........until I realised my 3,920 shares cost me £12,211.

LTH, as you will have guessed.

[thorpematt] 24/10/2023 12:32

Why not 280p?

A. Because
a)you have to wait for the divi
and
b)you have to wait for the bid to transact to get your cash

So, arbitrage

In esssence if you are impatient you will sell at less than 280p and also if you have pre determined sell orders on the books (a dangerous game for value stocks) then you get taken out.

FWIW I tend to sell prior to waiting for the brokers to pay out BUT importantly I wait for the price to drift up toward the full bid AND in case there is an alternative bid.


I have lots of value stocks of similar elk to SCS...which I'd love to shared and discuss with you all in the next few days...but I might wait until I have finished buying first :-)

[farrugia] 24/10/2023 12:20

why is this not trading at 280p given the dividend?

[currencytrader1] 24/10/2023 11:29

It won't go for this low price. I'm holding for over £3.

[chinahere] 24/10/2023 11:27

Yes, it is way too cheap still if you think this business can keep making money. So it's a Sofa producer in Italy buying the thing for nothing (if you add a bit of serviceable debt). Complete no-brainer for them. But are there any other competitors interested?

[catabrit] 24/10/2023 11:13

Congrats to holders here. I first bought this at 120p odd but sold most of my shares late last year in the mid 160s. I was waiting for the trading update to be released before buying again as I was expecting them to flag softness. This is a great example of buying deep value; you have the safety harness on so know you’re going to be fine but you just cannot predict when you’re going to summit. So well done to everybody that has stuck with this and made money.

[roghart1] 24/10/2023 10:25

I'm not in a rush so will probably hold on until the end. I did with SUR a few weeks ago - held off for the extra couple of pence which was worth more than the interest from it sitting in a bank

[farrugia] 24/10/2023 10:14

I wouldn't sell. I can't understand why the stock price is not even 280p given that SCS has confirmed the payout of the 10p dividend as well? Besides the bigger shareholders might push for a better price and other predators could enter the fray.

[roghart1] 24/10/2023 10:12

Should I hold from selling until the ex divi date?

[finkie] 24/10/2023 10:02

ive sold and bought PSN, JET2, LGEN and BATS all too cheap not too.

[applied1] 24/10/2023 09:38

Wish MTCwould do this .

[farrugia] 24/10/2023 09:17

why is the stock price not even 280p given that SCS has confirmed the payout of the 10p dividend as well?

'More evidence that small/mid caps are far too cheap and I have a good list of companies with minimal debt or net cash on low ratings but high yielding so that you can afford to sit and wait.'

The major shareholders should ask them to upp their offer.

'Poltronesofà S.p.A is a private company that is not publicly listed. It is a family-owned business that was founded in 1995 by the brothers Gianluigi and Vittorio Colombohxxps://www.habitante.it/aziende/poltronesofa-catalogo-2023-novita-prezzi-e-offerte/. The company is headquartered in Forlì, Italy, and operates as a manufacturer and retailer of sofas and armchairs. The company has more than 300 stores in Italy, France, Belgium, Switzerland, Cyprus, and Malta. In October 2023, the company announced its intention to acquire ScS Group PLC, a British furniture and floorings retailer, for £99.4 million
hxxps://www.retailgazette.co.uk/blog/2023/10/scs-bought-poltronesofa/
hxxps://www.proactiveinvestors.com/companies/news/1030724/scs-agrees-99-4m-bid-approach-from-italy-s-poltronesofa-1030724.html
hxxps://www.bigfurnituregroup.com/scs-agreres-to-cash-offer-from-italian-furniture-firm/.

'More evidence that small/mid caps are far too cheap and I have a good list of companies with minimal debt or net cash on low ratings but high yielding so that you can afford to sit and wait.'

which ones if you don't mind sharing?

[davidosh] 24/10/2023 09:10

I have held for quite a few years and this price is still below the level that I paid for a few of them but lets face it the markets are in a mess and buyers are holding off even when bargains abound.

This deal is costing the bidder almost nothing though, as it can use SCS's own cash pile, and a bit of added debt, to finance the whole thing! Crazy really. It gives holders a nice pot of cash to deploy buying something else that's extremely cheap and in this case having 66% more money to deploy on the new purchase. Also provides another liquidity event for redemption hit institutional holders.

More evidence that small/mid caps are far too cheap and I have a good list of companies with minimal debt or net cash on low ratings but high yielding so that you can afford to sit and wait.

I expect bid situations at one or two of them... however the family run firms are less likely to fall but will deliver long term.

[aishah] 24/10/2023 07:53

Major holders have not committed their shares. Directors have very little skin in the game. Will be interesting to see if the IIs extract more value from BidCo. £100m seems underwhelming imo. But times are tough, let's see.

[dan_the_epic] 24/10/2023 07:47

The main two am researching which are all profitable even in a bad environment but are below value

-> Wynnstay group £112m of tangible assets compared to £80M markcap.
-> Headlam group, £260m of tangible assets post freeholds compared to £155M markcap.

I also like the housebuilders here but not the same argument on P/B

[farrugia] 24/10/2023 07:46

what about Frasers?

[finkie] 24/10/2023 07:42

Suits me don’t count on another progressive sofa retailer entering the fray, there aren’t that many 🤣

[actybod] 24/10/2023 07:42

I've missed this until now!!