Sivota Share Discussion Threads

[bookbroker] 31/1/2017 10:31

This co. has been appallingly run, when you look at the intangibles, the rise in debt, one has to wonder what on earth they bought over the last few years, a high cost, low margin set of disparate businesses, Martell set this on the road by getting out of an antiquated business of printing CD covers, etc, and embarked on a spending spree driving up debt with earn-outs that do not reflect the current market place, I suspect there will be significant writedowns of assets down the line, there are now too many pieces in this business!

[master rsi] 25/1/2017 13:58

Nice to see a follow through on the bounce
the order book is still strong on the bid side

DEPTH 24 v 19

[edmundshaw] 24/1/2017 22:03

There's a good argument this is oversold, so I added. Glad Mr RSI also has a good feelinf here, though! :-)

[master rsi] 24/1/2017 16:21

Time for the bounce?

I bought some expecting is going to happen
There is volume today and looks ready to bounce after such a large fall last week
Volume and rising is bullish, closing above 75.50p would give a nice candlestick to look forward

1 month candlestick chart with volume

[bookbroker] 23/1/2017 10:43

Nothing would surprise me with this guy in charge, since the first warning back in April 2016 he appears to done little to tighten working practices, in fact it appears that the market for SIV's products improved somewhat, and he took his foot off the gas, only to be caught with his pants down, he needs to hunker down and concentrate on the prevailing conditions in its markets, I always think US executives have to be on the mark, the expectations over the pond are such that more than one slip up and they receive their pink slip!

[aleman] 23/1/2017 10:38

Thanks. That makes sense. So Numis have only reduced figures a bit. They must be taking the commentary at face value. It said that contracts were just delayed until Q4 in the main. If that is true then the shares are cheap - but management seem to have a credibility issue with the market. It doesn't help that there are signs UK might be slipping into recession, although I suppose SIV have probably got most of their fall out of the way early if that happens.

[glasshalfull] 23/1/2017 10:25

Aleman - bookbroker is on the money. Singers updated the market on the 19th Jan but left figures under review.

As an investor in CMS I'd been watching the developments over at SIV closely. Thankfully no read across but commiserations to SIV holders nonetheless.

This was Singers commentary from last week,

"Marketing activation has been impacted by further decline in grocery retail impacting profit by c£5m. Strategic The Company is also taking this opportunity to revise its guidance for Strategic Marketing as its recovery pace is not running at the planned target rate.

PBT falls from N1Se £31.9m to £25m. The Company expects dividend to be held based upon lowered guidance and the implied cash flow performance. There do not appear to be any covenant issues. Forecasts and TP under review and downgrade to Hold. We expect the shares to test the 100p level."

Hope this assists.

Kind regards,
GHF

[bookbroker] 23/1/2017 10:20

I doubt it, N+1 must be prior to the warning, Numis post warning, nonetheless despite my angst at the management of this co., they still offer value, however the statement was pretty ambiguous in its presentation, it suggests that the business will remain under pressure for the foreseeable future, why is it that these CEO's simply fail to see the signals, the grocery market has been under severe pressure for two years and counting, so it is a pathetic excuse by Armitage, has been asleep at the wheel, either that or he needs to visit Specsavers!

[aleman] 23/1/2017 10:13

Are these right? N+1 Singer has 17.56p eps and 7.8p dividend for this year and 18.78p and 7.8p dividend for next year - updated on the 19th of Jan according to Hescott. Likewise Numis has 13.7p and 14.8p earnings with the 7.8p dividend held both years.

That's a 10.7% yield and two brokers forecasting a rise in earnings next year - with a prospective P/E of about 4.4?

[elsa7878] 22/1/2017 21:29

Depends. The existing businesses could be going to the dogs and the acquired businesses meeting their targets. Withuot any clarity who knows. The management does, but are not telling us.

[bookbroker] 22/1/2017 17:11

CC. will only be due on the basis of performance targets being met, that has to be in doubt!

[elsa7878] 22/1/2017 15:10

Yes and what about the contingent consideration that might be due on the 2016 acquistions. Could eat up all cashflow for years to come and so no chance of reducing the debt load. Really a case study in how NOT to do acquire growth.

[edmundshaw] 20/1/2017 21:40

When the price paid is reimbursed through performance of the acquisition, that should be reflected in the amortisation of goodwill. When the goodwill is "impaired" that implies something has gone wrong or they overpaid.

Although goodwill adjustments are an historical comment, and I often look at them fairly fleetingly, nevertheless it bears a relationship to management performance - whether because the price paid was too high or the acquisition has not performed as it should. £12.7m impairment can hardly be regarded as anything other than shocking.

[bookbroker] 20/1/2017 20:38

I tend to ignore goodwill, and the way it is carried on the balance sheet, but that is on the basis that the premium paid for it is justifiable, when it is written off one assumes in an ideal world the price paid for it has been more than re-imbursed through performance of the acquisition. However, too often that price has proved too high, Martell and Armitage have accumulated a number of businesses to re-direct this co., it was their job to ensure the price paid would generate a commensurate return, so far the omens are not good, but I recently bought in hoping this dude will sort the job out, get rid off Clays and bring the business into focus! And with it some cash to pay the debt down!

[edmundshaw] 20/1/2017 19:38

Hard to disagree bookbroker. Just looking at the impairment of goodwill and acquired intangible assets in the Annual Report tells a story: £12.7m down the pan (and £1.5 the previous year, and £1.2m the year before that). Of course some of it may be kitchen-sinking, but that is a pretty miserable reflection on some of the acquisitions of the last few years.

[bookbroker] 20/1/2017 18:33

The chief needs to be sent packing here, he's issued two huge profits warnings which have destroyed all trust in his stewardship, personally that signifies that he has no grasp on the underlying trends within the industry, and more worrying the performance of the disparate numbers of businesses acquired, why have these acquisitions not been consolidated to drive out costs, they all seem to be operating independently, it's time Armitage got a grip and started earning his keep, all the progress of the last five years is basically down the can!

[edmondj] 20/1/2017 14:16

It's not really two big warnings, more a re-set to the scenario as outlined in the April 2016 warning. In between, last August they said strategic marketing had stabilised and was growing strongly, and some brokers upgraded towards end-2016. Inept controls/communications? But if things were going much better mid-summer they had a duty to inform the market. Looks highly volatile/low visibility; maybe foreshadowing challenges ahead generally.

[bookbroker] 20/1/2017 13:16

This co. needs a bid at these levels, they appear cheap, what the co. requires is some rationalisation, lot of moving parts with all these acquisitions they have made, is Armitage the man, he has overseen two big warnings in the last 8 months, shareholders need to apply some pressure on the bloke, he got away with it last time, the time to act is now!

[declan2] 20/1/2017 12:59

i'm in, will settle for £1

[bookbroker] 20/1/2017 08:40

Pension deficit of no consequence whatsoever, deficit was £26.5mln at last report, will have reduced most likely and with the rise in long term rates in line with inflation will be beneficial, but this co. should sell Clays, it is non-core and the debt should be addressed, although not pressing!

[spob] 20/1/2017 07:44

re 167

what they mention is irrelevant

people have to weigh up the facts/risks

and decide for themselves

[bookbroker] 20/1/2017 07:43

A going concern!

[qs99] 20/1/2017 07:30

strip out intangibles then what are you left with? 2nd profit warning when everyone was expecting a recovery, just be careful is all I am saying...

[whites123] 20/1/2017 07:15

"The balance sheet remains sound and we have the necessary cash flow capabilities to support our investment priorities and to further reduce debt."

Nope, not seen any mention whatsoever about pension defecit.

My opinion = Strong Buy.

I do own shares in the company.