Sprue Aegis Share Discussion Threads

[melody9999] 25/3/2018 00:05

Might me see Newell start to buy up SPRP stock at low prices they have now created?

[playful] 23/3/2018 20:41

Seems a good buying opportunity

[cockerhoop] 23/3/2018 13:50

Cheers GHF

[pugugly] 23/3/2018 13:14

gnnmartin: That takeover cheap thought is a good one - Yanks possibly playing Trumpish games - Could well be something there - The news coming so soon after FD departure certainly seems connected However topped up a bit at these prices - Will probably lose another finger or two !!

[gnnmartin] 23/3/2018 13:04

The resignation of the FD at no notice eighteen days before this does sound connected. I wonder if the FD is being blamed for this alleged breach of trademark, or alternatively that he did not like the way the company planned to react. Newell "has representation on the Company’s Board of directors with a right to nominate one director (Thomas Russo) and to jointly nominate a second director (Ashley Silverton) for appointment to the Sprue Board." That ought to have meant this sort of dispute could be avoided.

Newell (through BRK) own 23.4% of Sprue so it can't be just about who picks up £3m worth of stock. Perhaps Newell hope to cut off Sprue at the knees & take over their market. Or perhaps they hope to have another go at taking over Sprue.

[fozzie] 23/3/2018 12:18

Speedsgh #1627 Couldn't have put it better.

Management do appear slightly accident prone don't they. Looks like BRK shouldn't have a leg to stand on but we shall see. Oversold as ever 😳

[masurenguy] 23/3/2018 11:29

"BRK have lost approx £6m on their shareholding in SPRP this morning! To avoid paying £3m in stock."

It's called cutting off your nose in order to spite your face !

[orchestralis] 23/3/2018 10:07

Glad I set my stop at 1.60. Will review once the dust has styled and we get an update from the company

[glasshalfull] 23/3/2018 10:07

Pyemacky - SPRPs interim results indicated: -

“Following receipt of 12 months' notice from Newell to terminate the 2010 BRK distribution agreement as announced on 31 March 2017, any remaining stock of BRK products held by Sprue as at 31 March 2018 will be repurchased by BRK at the price Sprue paid for the goods. It is expected that this will result in a cash payment to Sprue of at least £3.0m...“;

As I understand from the RNS, Newall/BRK have terminated for an alleged breach of BRKs trademark rights & have terminated the DA 9 days early, stating they will not repurchase the BRK stock alluded to in the H1 RNS.

I don’t read of any further impact on Sprue. Happy to be corrected.

Kind regards
GHF

[dangersimpson2] 23/3/2018 10:06

Yeah reads like games being played to avoid their obligation to take back unsold stock to me.

The size differential combined with their Sprue shareholding means they think they can get away with it. However IMO there are reasons to think this is a bad move:

1. Reputation matters in business. Would you do business with Newell if you thought they would do this sort of thing? And the amounts are small to Newell to risk their reputation over.

2. Sprue are now free to go head to head against BRK in their core market of North America. Although I don't think there was an official agreement preventing them in the past it would have been considered bad form. I suspect that Sprue will be aggressive in this area if they believe Newell have treated them unfairly.

[fishbournetrader] 23/3/2018 09:43

I am wondering what Sprue might have done to cause what BRK obviously consider to be material damage.
Any suggestions?

[pyemckay] 23/3/2018 09:42

the fact there is no guidance on the potential damage shows the company hasnt a clue how it impacts the figures. A quick check of inventories could have gave a range for investors to work with. thats an area of concern for me.

[cockerhoop] 23/3/2018 09:33

Agree BRK appear to be behaving in a churlish manner for their short term financial gain. They could have sighted the breach at anytime over the last 3 years but chose to do it with a few days remaining in the contract.

So SPRP have distributed maximum BRK product over the last year and are now saddled with any remaining stock.

Are BRK initiating any legal action here or just terminating the contract slightly early?

I wonder if SPRP have any outstanding payables to BRK to offset?

[masurenguy] 23/3/2018 09:29

Added @141.80p

[pyemckay] 23/3/2018 09:22

divi could be easily cancelled this year as i expect profit to be totally wiped out. This is a perfect time to kitchen sink anything else the want to also.

Could be a decent buy in the coming days. NO hurry though due to uncertainty.

[speedsgh] 23/3/2018 08:56

My initial reaction is that this smacks of bad blood between BRK & Sprue and, as GHF suggests, BRK are taking a parting shot. It would not surprise me if in the fullness of time this amounts to nothing. However in the interim the uncertainty is unwelcome and maybe BRK are calculating that Sprue might prefer to come to an agreement rather than have a long, costly legal case hanging over them for the foreseeable future. If the matter does proceed to the courts and it turns out that Sprue are indeed in breach of certain provisions of the distribution agreement, this would further reinforce a perception held by some (not necessarily a view that I hold) that the company has in recent years acquired an uncanny knack of locating rather large cowpats to stand in.

[martinthebrave] 23/3/2018 08:50

Bought back a few at 150p. May dip a bit more but it looks very good value at this level to me. Time will tell...........

[speedsgh] 23/3/2018 08:46

Very tasty yield again down at these levels...

[melody9999] 23/3/2018 08:40

Can anyone give an idea of the likely impact? Surely SPRP would have been reducing stock in any case knowing that the relationship was coming to an end?

[masurenguy] 23/3/2018 08:32

Just 20 trades so far with an overall volume of 36,122, averaging 1800 shares per trade. That hardly constitutes a sell off resulting in a price drop of more than 20% !

[pj 1] 23/3/2018 08:29

Is the fall compounded by the recent resignation of the FD? I recall GHF spoke to the Company on the day I believe where there was some reassurance, which the Market generally will be unaware of.

Wiseley or unwisely I am sitting this out short term.

[pugugly] 23/3/2018 08:22

Double ouch Now down 19.2% - 148//147p Falling knife ?