Spaceandpeople Share Discussion Threads

[hatter2] 06/11/2014 06:34

Paul, thank you for your thoughts on SAL. At one time SAL were an appreciable part of my portfolio and with, at the time, a decent paper profit. I managed to sell early on the day of the first profits warning and fortunately came away without profit or loss. I was however a touch disenchanted with the management team who in my opinion did not have their finger on the pulse of what was happening in the company; something which takes a lot of forgiving in my view.

Whilst I like the business concept I feel I will only enter another trade with SAL once some really positive momentum is built up in terms of share price and encouraging trading statements. I rather hope that they can sort out the business plan as such niche markets are often so promising.

[paulypilot] 05/11/2014 23:23

This is my current thinking on SAL, for what it's worth. Obviously the company has had a bad year, and has disappointed, we know all that. So what happens next?

They've got a good, niche core business. They've run into a series of problems this year, and have cut costs & are sorting out the problems. Give them time, and I think it will be on the mend in 2015.

2p divi indicated for spring 2015. I think a reasonably reassuring trading update after Xmas should see these shares recover to maybe 65-75p. Then we'll need further confirmation that the problems have been fixed properly for hopefully a continued share price recovery to about 100p maybe by the middle of next year? That's just a guess, but it's how I could see things panning out.

Management own about 20%, and hence are properly incentivised.

When I last met management, they were clearly passionate about turning the company around, and indicated that the company is NOT under any financial pressure. The Balance Sheet is OK, with little to no debt, so no concerns there.

I'm supportive of management, and think they will turn it around, so from this level there's good upside in my view. It's not going bust, as they can strip out more costs if necessary. Everyone is on the same page about turning it around, so it's just a question of waiting to see what happens.

Management have also recognised that they need to be much more cautious with forecasts in future. So they need to steer the market towards a base case forecast which can be achieved even if a few things disappoint. Then any out-performance is icing on the cake. But we can't have another profit warning.

It's still profitable. So a disappointing share so far, but it will recover in my view.

Regards, Paul.

[vinnegar] 04/11/2014 21:53

topvest - everybody seems to be on the same page so I think we are just curious to substantiate MagC claims. But for me the directors significant shareholding is the best safeguard in this scenario so am not too bothered anyway.

[topvest] 04/11/2014 21:21

If they spent £10-20k on a good annual event, that's very good value. This is a capitalist company, not a charity or socialist convention. Ridiculous comments in my view.

[vinnegar] 04/11/2014 14:09

Doesn't Matthew Bending (CEO) own like 10% of the equity and therefore it is rather unlikely he would accept wasting his own money on something which is too extravagant? I would say that given significant management shareholding I am less worried about the conflicts of interests as I see CEO rather aligned with other shareholders.

What do you guys think?

Still interested to see how much it cost and some more details, so please come forward MagC if you have any more specifics.

[pugugly] 04/11/2014 08:25

BG &tv:_ Agreed needs to get involved and spend time to get to know the executives and their teams. The fact that no answer from MagC yet and the fact that he/she only stated using this handle on 3rd Nov 2014 suggests to me that he/she may be an employee or very recent ex-employee.

However I stand by my previous comment - What appears to be extravagant out of office expenditure on a get to know you exercise is (from my experience which is considerable) a negative rather than a positive -

Hence my initial request for details.

Memo to self and other holders - Need to ask the coy "How much and Where" next time we speak.

My worry is we now have a big Company Chairman who might just think big company levels of expenditure.

[topvest] 03/11/2014 21:25

You certainly cannot say that SAL have been anything other than careful with their money historically. Directors remuneration for example has been modest relative to the success achieved in prior years. If they have spent a couple of grand away somewhere then that sounds like money very well spent to me!

[briangeeee] 03/11/2014 18:39

It might even be that Martin was a good guy, who just wanted to retire!

My own view in terms of the PLC board, is that the company should slim to around two exec directors and four useful non-execs, but I don't suspect Martin's decision is (in the main) related to anyone's view of board composition. Perhaps it would be good for the company to have a separate executive board reporting to the PLC board.

MagC, you mention about the new chairman organising to spend some time with his new colleagues. That sounds an excellent idea if true. Presumably your only issue might be one of cost? If you can provide numbers to back your view that it was 'extravagant' I'd be very interested - otherwise, I'll simply assume he was doing what I'd hope for in a cost conscious and appropriate manner. Just for clarity on that subject, I in no way wish to deter employees or recent ex-employees from pointing out wrong-doing or activities that are not in shareholders interests - just please provide sufficient information to ensure it is such, not just tittle tattle.

[topvest] 03/11/2014 15:37

Well you chaps are an optimistic bunch. If you look at the accounts, they appear to have MD overload. Matthew Bending does this role so it seems pretty logical to me to move this chap out and save a six figure sum and more.

[envirovision] 03/11/2014 09:17

This will end up insolvent imo.

[pugugly] 03/11/2014 07:57

Night of the long knives ?? So soon before what should be the peak revenue period the immediate departure (?? forced ??) of an ExecutiveDirector may indicate bad news in the pipeline.



Decision ?? Bail out and take a major hit or top up - The water is very murky (IMO etc)

Anyone have any direct knowledge about Martin Kemp that has not been on the web site ??

[cerrito] 07/10/2014 08:26

I think you will find that many if not most of the companies that Hammond is a director of are group companies of Forth Ports so not too concerned about this.
I had not realized that David Henderson-Williams had left and can find no RNS to that effect.

[gac141] 07/10/2014 07:11

Good heavens seeing Mr.Hammond's extensive list of directorships I question if he has the time for SAL?

[valueinvestorshouse] 29/9/2014 22:07

hi StudentInvestor13 - thanks for your comments.

I'll check what's with the bullhorn alert - we are using just a standard wordpress installation so not sure why you getting this messages - thanks for pointing out!

[valueinvestorshouse] 29/9/2014 21:46

Just released our first ever write up and it happens to be on SpaceandPeople:

Based on our fair value estimate the stock offers a big fat juicy 82% upside from the current share price.

Our estimate is based on a DCF fair value estimate of GBP 16.5m versus the current market cap of GBP 9m. Following are our key subjective assumptions:

- full recovery in operating cash flows in 2016 to the average levels seen between 2011 and 2013
- zero growth after 2016
- maintenance capex at current depreciation levels in line with the zero growth assumption
- 10% discount rate (WACC)

here is the link to the full piece: wp.me/p57Kw2-K

hope you enjoy this. comments welcome.

[vinnegar] 22/9/2014 13:50

interesting how difficult it was to buy that 7k this morning - was only third time lucky and it was impossible to get an RFQ. where are all the sellers please? does it mean it's the bottom (at least until the next news release....???)

[hydrus] 18/9/2014 08:37

It clearly wasn't that ridiculous an idea.....how about being a little less dismissive in future just because you have a different view.

[paulypilot] 12/9/2014 21:24

What a ridiculous idea, shorting an £8.5m market cap company that is profitable, cash generative, is cash/debt neutral, and has just pre-announced a 2p dividend for April 2015.

Also terrible timing - why short something when the bad news is out, and the stock has already crashed? The time to short things is BEFORE the share price has crashed.

I'm surprised you managed to get a borrow on something this small to be able to short it.

Another point to note (which I have on good authority) is that Hargreave Hale have stopped selling, so the overhang has now effectively cleared.

I'm seeing the company on Tuesday, but have already had a chat with the CEO. The situation is disappointing obviously, but the company is still profitable (including the busy Xmas period), and £700k overheads have been cut recently. Plus the reasons for the profit shortfall, when you drill down into it, are things that are genuine, but fixable.

The company needs to be more conservative with its forecasting, and I think management need to step up a gear in terms of properly controlling the business, but in my view they've been fire-fighting various problems this year, but should get the business back on track next year.

So for longs, it's just a case of being patient in my view. I'm happy to give them another 6-12 months to turn it around. It's an entrepreneurial company, and there's considerable potential from S&P+, but they're just having a bad year due to a number of unfortunate issues. That doesn't make it a bad business. The track record prior to April was superb, so I don't think having one bad year means you throw out the investing baby with the bathwater. It just needs time to recover.

Regards, Paul.

[topvest] 12/9/2014 20:46

It depends how much cash the directors have to spare. £16k is better than nothing. Shorting this is very dangerous in my view. They could easily come up with a big contract win at any time in H2 given Matthew Bending's sales ability. I'm still very optimistic on this one. They are having a rough patch, but they are still winning contracts, designing new businesses and are in a net cash position. It will take 1-2 years to recover, but this is a bit like Zytronic in my view. More upside than downside risk at where we are today.

[seernb] 12/9/2014 13:02

I've decided to put my money where my mouth is and have gone short. Target price 30p. No doubt this post will mark the bottom of the share price.

[bigdazzler] 12/9/2014 12:54

Agreed pugugly that shows to be what some may describe as a token gesture. Me that signals no short term confidence what so ever by the buyers so I actually read it as a bearish signal or at best no short term price movement expected.

[pugugly] 12/9/2014 08:22

Total "investment" across 2 directors of ONLY £16,350 - Does not sound to me a massive vote of confidence.

Even if they may be short of cash BUT were confident about the prbable progress then I would have expected a far bigger investment - even if they had to borrow.

Read between the lines - Message I receive is very different from that which may have been intended!!!!