Severfield Share Discussion Threads

[bluesbeater] 28/2/2013 12:56

A sad state of affairs is often a very good time to buy

[spaceparallax] 28/2/2013 09:46

A sad state of affairs.

[edmundshaw] 28/2/2013 09:41

Well, not cheap at present. I guess if you have a long view it may be OK - always assuming the new management is good.

[the anteater] 28/2/2013 09:33

Should drift lower after this heavily discounted rights- at this price (67p), market cap after rights issue equates to around £110m- not cheap imho considering the Group is looking to achieve 5% margins in medium term on around £256m of sales.

[fangorn2] 28/2/2013 08:54

Far worse than I was expecting,and a 7 for 3 rights issue at 23p/sh....Ouch.
Spot on with your description Edmund. Highway robbery for sure.

I will take the dilution, not participating in this rights issue myself.

[jaf111] 28/2/2013 08:50

Severfield-Rowen has today announced its intention to raise approximately GBP44.8 million (net of expenses) by way of a rights issue. Pursuant to the Rights Issue, the Directors propose to offer New Ordinary Shares at 23 pence per share to Qualifying Shareholders, on the basis of 7 New Ordinary Shares for every 3 Existing Ordinary Shares that each Qualifying Shareholder holds at the close of business on the Record Date.

"Record Date" close of business on 14 March 2013;


ANSWER is therefore no, it is not too late!

[batham1] 28/2/2013 08:44

Apologies for simple question, but is it too late to buy more shares to increase entitlement to rights?

[edmundshaw] 28/2/2013 08:23

Even worse than I thought. At that discount it is more or less highwayman stuff: stand and deliver: "partake in the rights issue or be massively diluted". But to be fair, something like this was absolutely necessary.

Bargepole stuff for the present...

[edmundshaw] 28/2/2013 08:21

Rights Issue

-- 7 for 3 underwritten Rights Issue of up to 208,252,511 New Ordinary Shares at an issue price of 23 pence per share:

-- Represents a 38.7 per cent discount to the theoretical ex-rights price and a discount of 67.8 per cent. to the Closing Price of an Existing Ordinary Share of 71.5 pence on 27 February 2013 (being the latest practicable date prior to the date of this announcement).

-- The New Ordinary Shares to be issued will represent approximately 70 per cent. of the Enlarged Share Capital following the Rights Issue.

[manabo] 27/2/2013 18:07

Year end results tomorrow!

[maroni tony] 26/2/2013 19:59

Would like to get some alternative opinions of the Net Asset Value of Severfield Rowen. Any takers ?

[waldron] 20/2/2013 06:27

SNB To Enforce Euro/Franc Floor
PrintAlert
ZURICH--Swiss National Bank monetary policy is focused on ensuring price stability and, with interest rates close to zero, its floor of 1.20 Swiss francs per euro is the correct policy tool, central bank head Thomas Jordan said Tuesday.
"For almost 18 months now, the SNB has been enforcing the minimum exchange rate with the utmost determination, and will continue to do so," Mr. Jordan said in a text prepared for delivery at the Swiss Institute of International Studies.
He reiterated that the need for the SNB's floor is widely recognized, both domestically and by the International Monetary Fund and foreign central banks, due to the substantial appreciation of the franc in the summer of 2011.
"In addition, we set the minimum exchange rate at a level that still leaves the franc highly valued," he said.
The Swiss central bank imposed the floor of CHF1.20 per euro in September 2011 to try and brake its relentless appreciation versus the currency of its main export market.
There have been claims that some central banks have tried to influence exchange rates, either directly by currency purchases or indirectly through the sale of securities, Mr. Jordan said.
"Criticisms of this "beggar thy neighbor policy'--using the weakening of a currency to boost the economy at another country's expense--has led to fears of a currency war," he said.
Japan, the U.K., the U.S. and Switzerland were often cited in this regard, he said.
Furthermore "there are isolated voices claiming that given the large Swiss current account surplus, the franc is too weak, and that the SNB should allow it to appreciate in order to contribute towards reducing global imbalances," Mr. Jordan said.
But this view is based on a lack of knowledge of Switzerland, he added, where factors like investment income from its substantial net international investment position, and financial-sector earnings from business with customers abroad contribute to the surplus.
"These elements are dependent on developments abroad, global financial markets and demand for commodities, and the franc exchange rate doesn't play a decisive role," Mr. Jordan said.
The Swiss central bank also said a comparison of the franc's trade weighted index trend and the current account surplus showed that a strengthening of the franc didn't necessarily lead to a lower surplus, and vice versa.
"There is thus no contradiction between having a strong franc and a large current account surplus, nor is the surplus a suitable measure for assessing Switzerland's share in global imbalances," Mr. Jordan said.
It is "much more the case that Switzerland and its extensive level of direct investment abroad contributes significantly to balanced global economic growth," he said.
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[napoleon 14th] 19/2/2013 13:21

Shame! I had some in '05 to '07.
If they survive I'll be watching to get back in after all the negatives have been factored in.

[spaceparallax] 19/2/2013 09:53

No doubt, they've been fighting so hard for work that margins and contingencies have been cut too much, leaving little room for manoeuvre

[leedskier] 19/2/2013 09:25

Surprising if it is essentially a management issue why it has not been taken over either by another company or private equity. On the other hand present Government policies hardly help the sector.

[spaceparallax] 19/2/2013 09:02

Poor Severfield. it just gets worse. My last significant engagement with them was with Rowen Structures who had a superb design and fabrication process, which was undermined by a poorer attention to detail outside the factory gates. Sadly it appears to be the failure to apply the same works standards to the scrutiny and implementation of site standards that still appears to be a weak point. It's a shame and easily sorted IMHO.

[edmundshaw] 19/2/2013 08:54

Hm. I am just thinking an open offer is more expensive - but as they are raising £50m I suppose it may be OK with the banks etc. I hope so for PI's sakes.

[leedskier] 19/2/2013 08:46

I am not in this, but I would be very surprised if it is not an open offer. SFR is a Yorkshire company with many Yorkshire shareholders. I doubt that the company would shut them out.

[edmundshaw] 19/2/2013 08:32

If there are nil paids, maybe. Hardly going to help the instis much though. I can see the institutional point of view - their holdings (over 50% of the stock) are unsellable, so they have to rescue what they can - support the company, get involved with a rights issue on the best terms possible.

For PIs, if you can sell, I cannot see the point of holding. I have doubts the dilution will be an open offer, personally. Even if you want to hold SFR, surely the price will come down, so you should sell and watch??

[leedskier] 19/2/2013 08:21

The real money is made in a rights issue by trading the Nil Paids. The greater the dilution the greater the potential to make money. The Nil Paids are essentially call options on the underlying shares. The daily/weekly volatility of the NP can be very high.

[volvo] 19/2/2013 08:10

If it raises 50m at 55p that is 100pc dillution for existing share holders.

Simply put, any broker forecasts are halved.

A complete doubling of the shares in issue........plenty to go round lol.

This company will be in the health centre for 24 months imo, then it will at the mercy of the british economy.

[edmundshaw] 19/2/2013 08:08

Hm, with £200m odd order book, hopes to achieve 5% margin the future, that is future hoped for profits of £10m on 90m shares - eps around 11p. On a PE of 10 that is 110p price tag.

Now the dilution will be say 90m shares at 55p (optimistically I think), so eps is halves to 5.5p. Not a comfortable proposition at the current price. In fact that does not add up well, so I am guessing at a dilution of over 50%, share price under 50p - this is worse than I imagined.

Still watching; at least the management is sorting the business out. PIs are not in focus right now I'd say, but workforce, customers, banks and institutional shareholders. Not optimistic any placing will be an open offer.

If I held I would sell. All IMO.

[leedskier] 19/2/2013 08:03

showing 65p in the extended auction.