Security Res. Share Discussion Threads

[envirovision] 26/11/2014 12:57

Looks ok to me, took some in my sip, expect minimum 15% average PA return across each year over a 3 year time frame, could be considerably more.

[meijiman] 26/11/2014 12:53

Well guess his interests are aligned with shareholders-sort of.............

[stegrego] 26/11/2014 12:43

Spoke to chairman. I don't think they have any sales lined up.

I got the impression that most of the value is in the housing business, with packaging steady and audiotel very lumpy.

He doesn't know what they are worth but sees shareholder value in delisting and returning cash.

He holds 14%

[meijiman] 26/11/2014 12:16

Thanks for that interceptor. Having bt in a few weeks ago at a good price (and got the stock which was not easy) I was initially very despondent on reading the RNS from this morning. I am much more relaxed now -equally don't think the BOD has covered itself in glory here.
My view on buying was that the two more peripheral businesses would have have been sold and the larger business expanded via acquisitions possibly using the re-rated paper.
Still no point in crying -its not anything one could have forecast happening.

[interceptor2] 26/11/2014 11:51

I have this morning tried to work out the level of returns that might be expected here, and would agree with estimates already given. I deliberately didn't look at other poster opinions here while I worked out the figures ,so I wasn't influenced by other.

Being conservative with my expectations to valuing the business, I reached a figure of 88.75p a share. But concede this is at the lower end.

I won't provide a breakdown on how I achieved this figure, I don't mind raising my head above the parapet a little, but I am not totally stupid, and wouldn't want to cause an endless debate about specifics.

[meijiman] 26/11/2014 11:31

Check again with them -mine are in my SIPP. I already have one similar investment which sits there.You may be able to persuade them.

[wjccghcc] 26/11/2014 11:20

Alas, mine doesn't.

[eezymunny] 26/11/2014 11:09

Some/most(?) SIPPs can hold delisted companies WJ. Mine certainly does.

hxxp://www.investmentsense.co.uk/sipp-zone/help-choosing-your-sipp/allows-unlisted-share-purchase/

[wjccghcc] 26/11/2014 11:06

Transferring out of an ISA into certificated form is no big deal. Unfortunately I had a few in my SIPP as well and those have to be sold.

[eezymunny] 26/11/2014 11:05

Managed to get another 10k ;)

In for a penny ;)

[eezymunny] 26/11/2014 11:00

bb

I think we'd all (PI's) prefer that this stay listed but if the aim is to maximise returns then delisting looks the correct route. It's a pain for PI's because of the ISA issue.

I note that various Bob Morton companies own an awful lot of the company (hadn't realised before).

Substantial shareholders
On 25 June 2014 the Company’s register of shareholders showed the following interests in 3% or more of the Company’s issued
share capital:
20p ordinary
shares %
Hawk Investment Holdings Limited 3,558,329 18.41
J P Mervis 2,795,945 14.47
Artemis Investment Management Limited 1,830,902 9.47
Groundlinks Limited 1,437,882 7.44
Seraffina Holdings Limited 1,367,734 7.08
Retro Grand Limited 1,247,319 6.45
J R Davie 611,714 3.16

I think Hawk, Groundlinks, Seraffina and Retro Grand are maybe all Bob morton things - hence the high acceptance level already.

Given that, I feel about 91.34% comfortable with goings on ;)

[meijiman] 26/11/2014 10:57

I think the timeframes here are unduly extended. In any company -particularly one like this -you are aware of who the likely buyers are -in fact there will have already been discussions on such matters. It doesn't take years. The key though is arriving at a mutually satisfactory valuation!

[yump] 26/11/2014 10:53

Given the choice of remaining listed or not, with this agenda, there doesn't seem to be any real point to remaining listed. It would just use up money/time for no reason.

Its not as if they are rationalising with the intent to sell 2 and buy more of the 3rd type with the proceeds.

[yump] 26/11/2014 10:50

eeza
You're right, I saw head office mentioned next to 15p and jumped to a conclusion !

[battlebus2] 26/11/2014 10:26

Yes I fail to see why they don't stay listed as Danger says the costs aren't that prohibitive unless there is some value in selling the businesses without a Listed status. With the current outlook on the optimistic side there is scope for decent returns as it may take a few years to complete the sales so the valuations should be higher imv.

[cfro] 26/11/2014 10:00

That is the point isnt it really, they should stay listed whilst attempting to sell the various businesses.

Doing otherwise suggests to me that the directors have little regard for smaller shareholders.

[dangersimpson2] 26/11/2014 09:55

Hi battlebus, yes seeing the positive performance of the business and following our conversation I was regretting losing faith in this one, however given that I would have been a forced seller on delisting (ISA holding with a cheap broker) it's not looking too bad a decision today. Looks like you don't have that restriction so think you should do ok from the returns to shareholders over time as long as you are happy to wait. I do think it's a shame they couldn't get the businesses sold more quickly while maintaining the listing. I have a small position in Holders Technology (micro-cap bad business but big discount to NWC) and they manage to maintain their AIM listing for £30k a year - not sure why SRG couldn't do the same. Cheers.

[eeza] 26/11/2014 09:54

What are your expectations for each division, Eezy?

[meijiman] 26/11/2014 09:53

If you are right then anything over 80p rather takes care of the 'time value of money' impact. All rather annoying for recent holders but it may turn out OK if you are prepared to be patient. The rationale for delisting is difficult to fault as there is no interest in mini conglomerates.

[eezymunny] 26/11/2014 09:40

My view is that this is very good news indeed. If they had announced a sell up and cash return while remaining listed this would (I guess) have risen by 20-30% today. The fact that they are going to delist and cut head office costs simply makes it better.

I've added today but it seems extraordinarily difficult to buy any. Limit orders in all over the place not being met.

Downside of course is having to hold on for sales/distributions while unlisted and no decent ability to trade shares in the meantime. That's fine with me but annoying for some I'm sure. One is also now reliant on the goodwill of the directors with less regulation etc, but their record is one of being totally above board and distributing cash as and when. A pain if holding in an ISA, as about half of mine are, but should be able to move to a non ISA acct pretty cheaply.

My guess is eventual total returns in a range of 80-120p. Time will tell...

[battlebus2] 26/11/2014 09:13

Hi Dangersimpson our last conversation has turned out to be the complete opposite, hate say your were correct in the end.
Anyway should be enough of a return for a few pints :))

[eeza] 26/11/2014 09:12

Re post 133 - Yump

"Stunning really that 15p of the share price is based on head office costs."

Does not necessarily follow.

They have approx £3.6m cash which would equate to approx 19p per share.

[dangersimpson2] 26/11/2014 09:02

While disappointing for those who have to sell I think that this is much more like a proper outcome of their strategic review (which I was critical of before for not really having any strategic element.) There is very little reason for 3 small businesses in different industries to be listed together. I think anyone who can hold de-listed stocks and is happy to wait will do ok out of this - the businesses should be worth more than current price.