Smc Share Discussion Threads

[gilly1965] 20/7/2007 10:29

hi Devere, I no expert, and I only trade in small amounts, I decided to buy at 25p, the share price has drifted a little since my buy, however I like SMC, and my small stake is mearly a speculative buy.

Over the last couple of days there seem to be more buys than sells, I think this share as I'm sure you no is oversold and expect there is plenty of stock around, however I think with some +tive news we could see addtional interest and the share price will lift.

I have no target price as i would no how to set one, but I would like to think in two years we may see a turnaround, however this all depends on how the management communicate with shareholders over the next 6 months.

I hope the worst has been uncovered and I think until we see a +tive RNS the share price will stay as it is.

Just my thoughts

DYOR

Andrew

[devere] 20/7/2007 10:07

Haven't looked into here for a while.

Looks like a bit of buying interest in these over the past couple of days. Got my fingers badly burnt after the last profits warning and sold out at 42p with a £15k loss - now wondering if we've hit rock bottom and worth tipping my toes back in !!!

Thoughts ??

[hvs] 14/7/2007 12:42

lol !!!

When these big packet salaries are paid this going down under .

And guess what all those who sold out will buy back their businesses for NOTHING.

What a SAD CITY pump and DUMP story.

They do look after their OWN dont they with other peoples MONEY.

[spectoacc] 14/7/2007 10:10

Just come back to this after a long time away; good to see an ADVFN thread full of useful info, rather than the usual "I told you so" vs "shorters burn in hell" cr*p.

I'll just take issue with one point: "..Can be grown both organically and by selective aquisitions at low cost." Isn't the acquisition strategy the root of all the probs?

SMC do look like a good sh*t or bust proposition, but doubt just yet with some obvious overhangs..

[amd7000] 13/7/2007 16:25

Agree siwel, theres not enough cash or action with this company anymore. The market cap is still high compared to the fundamentals, i think theres quite a wait until its a decent recovery play.

[siwel100] 13/7/2007 16:01

If you kitchen sinked it, the current valuation incl. sp, debt and earnouts is in the region of 35m (ish).....so its then a case of pencilling in a guesstimate profit figure for this year and next to see where a trade becomes worth the risk.
Considering its mostly debt/earnouts the share price becomes a bit arbitrary, it wont get to the point of being "irresistable", more a case of judging if there will be a strong relief rally with any attached short closeing to give a big enough bounce. If it did get a big bounce, very much doubt it would maintain it, the share would have to work for a living and deliver results. So a case of patience until next year or try for the spike, sell and then revisit.
For me it would have to be low single figures, simply because I could then see room for a decent quick trade. For others it may be 20p or not on any condition.
Anyway thats enough ramblings on a share I probably will either not trade or miss a bounce....back to other stocks where I have money attached :)

ps...On their turnover I dont see a forward profit of 6m on their turnover as totally unrealistic once they are ship shape so plenty of room to suprise next year. Also the ramping up of a Divi to help bridge the credabilty gap wouldnt suprise me.

[siwel100] 13/7/2007 15:26

NJP...Considering the cashflow I dont see the Bank applying pressure for a cash injection unless we come back to a "fatal flaw". The business is extremely cash generative, its the nature of what they do. No stock or financing required (other than serviceing aquisition debt) just staff and normal overheads, your bog standard service model,even the earnouts are being shunted to payment in shares. Margins normally excellent so unless something is drastically wrong, the debt shouldnt be an issue. I would tend to go with a cashflow pinch rather than a cashflow problem.

[izzywizzy] 13/7/2007 14:33

great posts - thanks

[njp] 13/7/2007 14:30

The company has debt to the tune of £15m or more, slowtrain. Yes, as far as I recall it did have the option to pay in cash but the old forecasts indicated that this was unlikely to be a year of positive cash generation, so it's up to the banks and my guess hitherto is that they would be wanting to reduce exposure rather than increase it.

Ultimately the bank's decision will rest on the financials, the projections and how much faith they have in them.

I still believe that the underlying business ought to be sound, but tend to the view that the bank will want to see some fresh equity issued to reduce debt.

[slowtrain11] 13/7/2007 14:22

Does the issuance of equity suggest that the company is short of funds to meet stage payments on acquisitions?

Didn't it have the option to pay cash for these??

Slowtrain

[siwel100] 13/7/2007 14:11

When you get a pattern like this one its either a forced seller bottoming it (my preference) or the market has wind of a fatal financial flaw.
Big gains if my theory is correct (it will bounce to 50p+) or total loss if wrong so its punt territory. I may punt a trade if I think I am right and see some trade activity to justify it but more likely to be sensible and wait for the figures and make a decision from there.
But as I said before, I like the company and its prospects.....as long as.....etc etc

Yep, Glenigans and ABI both have innacuracies but for trend purposes the innacuracies tend to cancel each other out.
But the Construction sector is about the only one I can think of with that degree of "inside" information available. Every other sector you are running totally blind on companies order books.

[paulcaine2003a] 13/7/2007 12:09

I use glenigans in my day job as I work for a large M&E company. Glenigans is only about 70% accurate, and that claim is reinforced by the fact that some of the large projects we win ie £10m+ dont have the correct details when listed. It is a good place to start but like anything, its not going to give you a totally acurate picture.

Siwel, following the drop today and from your points stated earlier, do you think you will reinvest in SMC?

[siwel100] 13/7/2007 09:49

paulcaine....If you are still interested in this one and as you are involved in the industry then contact either Glenigan or ABI (Glenigan is probably more accurate as based on planning data)
You would need a Quarterly report on the number/value (possibly sector if interested)for projects under the SMC group at outline, detailed and contractor appointed. This will give you their forward and current workload. It will provide a very accurate trend of the companies progress. To get a feel for final stage payments then also ask for a quarterly summary based on project completion date reached.
Have used both companies under different circumstances for research in the past, can be very useful if planning a major investment over a period of time in the construction sector.

As to the downturn in construction sector cycle, its a bit like the spanish inquisition, potential is always there but you never know when it will hit.

[paulcaine2003a] 13/7/2007 09:16

RE: siwel100 - 13 Jul'07 - 04:03 - 7445 of 7448

Fantastic post Siwel, and I agree with almost every point. However, the point you make about the construction industry changing sooner rather than later is incorrect. We are seeing a sustained period of bumper growth within the construction industry due to 3 primary reasons:

1) Building schools for the future programme for the government (BSF)
2) the 2012 olympics
3) an increase in private investment

Whilst I accept that point 3 can fluctuate, the market is seeing an extra 15 billion worth of work through BSF and an extra 9 billion through the olympics. So basically SMC are in a buoyant and primarily sustainable market.

I got into this based on those reasons and got burnt!

I belive the main issue here to be the acquisitions and not the industry, their capabilities or there clients etc. For that reason I want to see some fundamentals before getting back in as this company definately can grow.

[masurenguy] 13/7/2007 09:02

siwel100 - 13 Jul'07 - 04:03 - 7445 of 7447: "No mention of debt but I just dont see that as a problem, bankers are happy and they can pay it down comfortably".

Well none of us know what the debt position is at the moment and we also don't know the full extent of the contingent liabilities either. To say that the bankers are 'happy' doesn't mean anything either - they were 'happy' with Homebuy and a few weeks later that company went into Administration !

"The one proviso to everything is that there are no devastating skeletons still tucked away....cant imagine there are but considering their rocky road, its just a faint lingering concern".

Don't know why you 'can't imagine' this still might be the case after the events of the past 6 months. The fact is that we don't know since there is still a complete lack of transparency here.

All of the potential in the world won't pay the bills and produce profit if they run out of cash. Not saying they will or won't, just that the Jury is still out and may continue to remain so for a long time yet !

[m0270h00] 13/7/2007 07:58

agree, thanks siwel, :-)

[izzywizzy] 13/7/2007 07:54

great post siwel.....thanks very much, it is appreciated

[izzywizzy] 12/7/2007 20:24

dave..... am in the same camp as you...good luck

[anusol] 12/7/2007 19:27

nothing worse than sitting on a dog of a share thats lost its way....

[dave7] 12/7/2007 19:15

Still in too,lost so much it doesn't matter if it goes down anymore!You never know,it may just shoot up,and I'm teaching one of my pigs to fly too.

[izzywizzy] 12/7/2007 17:17

I am still in.... will have to see what happens.....