Supercart Plc Share Discussion Threads

[the drewster] 04/11/2010 08:49

So 2 years almost to the day, they were 10 times the price.

5 placings raising 10.9m, and I suspect at nearer 2.5p, the market cap after this round will be sub-4m. Quite some achievement.

Have the directors remuneration packages been in line with their achievements?

[masurenguy] 04/11/2010 08:19

The Drewster - 4 Nov'10 - 503: A big pat on the back for the management. A few years back they took some for 10 times that amount I believe.

Supercart first listed on AIM in February 2004 placing 8m shares @50p to raise £4m. At the time of their IPO there were 20.5m shares in issue and the market cap was £10.25m. Since then there have been 5 further placings - one evey year for the past 5 years - to raise more working capital as the company has reported losses in every year that they have been publicly listed.

04 Feb 2004: Raised £4.0m by placing 8,000,000 Shares at 50p per share (IPO).

03 Nov 2006: Raised £1.2m by placing of 15,000,000 Shares at 8p per share.

22 Nov 2007: Raised £1.6m by placing of 8,000,000 Shares at 20p per share.

23 Nov 2008: Raised £1.0m by placing of 5,000,000 Shares at 20p per share.

26 June 2009: Raised £1.4m by placing of 15,000,000 Shares at 10p per share.

23 Nov 2010 (proposed): £1.7m by placing 105,500,000 Shares at 2p per share

The IPO plus the subsequent 5 placings will have raised a total of £10.9m.

Cumulative losses in 6 fiscal years since the IPO total were £6.4m.

Almost 7 years later, subject to GM approval on Nov 22nd, there will be 168.5m shares in issue, which is over
an 800% increase on the issued shares of 20.5m following the IPO in Feb 2004. If and when (as is clearly very likely) the new shares are admitted later this month, then their market cap would be just over £5m if todays midprice of 3p (a 50% premium to the placing) still applied on that date. That would be around half the original market cap of £10.25m following their original IPO in 2004.

[the drewster] 04/11/2010 08:12

A big pat on the back for the management.

A few years back they took some for 10 times that amount I believe.

[masurenguy] 04/11/2010 07:19

Placing at 2p, which represents a 47% discount to yesterdays closing price, and a new fundraising and loan capitalisation which dilutes existing shareholders by a further 57% !

RNS Number : 5870V
Supercart PLC
04 November 2010

Placing and Subscription of 70,000,000 New Ordinary Shares at 2.0 pence per share and issue of 15,000,000 New Ordinary Shares by Capitalisation of Loan at 2.0 pence per share.

Supercart is pleased to announce that it proposes to raise £1,400,000 (before expenses) by way of the Placing of 35,500,000 New Ordinary Shares with certain institutional and other investors at a price of 2.0 pence per share and a Subscription for 34,500,000 New Ordinary Shares by Venture Holdings also at 2.0 pence per share. Venture Holdings is the Company's largest shareholder and long term manufacturing partner. In addition, it is proposed that Venture Holdings, will capitalise £300,000 of the Loan upon the terms of the Loan Capitalisation Agreement, details of which are set out in paragraph 6.3 of Part V of the Circular being posted to Shareholders today. Following the Subscription and the Loan Capitalisation, Venture Holdings' interest in the share capital of the Company will increase from 35.73 to 48.61 per cent. of the Enlarged Share Capital.

The Subscription and Loan Capitalisation are therefore conditional upon the Whitewash Resolution being duly passed by the Independent Shareholders. Under the rules of the Code, Venture Holdings would be required to make a general offer to Shareholders for the whole of the issued share capital of Supercart not already held by it, unless a waiver of that obligation is approved by Independent Shareholders by passing the Whitewash Resolution at the General Meeting. A General Meeting has been convened for 11.00 a.m. on 22 November 2010 to approve the Resolutions relating to the Proposals and the Waiver. If the Resolutions are duly passed, it is expected that the New Ordinary Shares will be admitted to trading on AIM on 23 November 2010.

The Company is proposing to raise £1.4 million (before expenses) by way of the Placing and Subscription of 70,000,000 New Ordinary Shares at 2.0 pence per New Ordinary Share and further to strengthen its balance sheet by £300,000 by way of the Loan Capitalisation of 15,000,000 New Ordinary Shares, also at 2.0 pence per New Ordinary Share, by Venture Holdings. The New Ordinary Shares, to be issued pursuant to the Proposals, will represent approximately 57.24 per cent. of the Enlarged Issued Share Capital. The Issue Price of 2.0 pence per share represents a discount of 46.67 per cent. to the closing mid market price of 3.75 pence per Ordinary Share, as derived from the London Stock Exchange Daily Official List, as at 3 November 2010, being the latest practicable date prior to the posting of the Circular. Venture Holdings will hold 48.61 per cent. of the Enlarged Issued Share Capital following the completion of the proposed Proposals.

[masurenguy] 18/10/2010 15:17

Supercart first listed on AIM in February 2004. As a result of their IPO and 4 further placings, they have raised a total of £9.2m since listing on AIM. They have never posted a profit since their IPO and cumulative losses during that period total £6.4m. Their ongoing requirement to raise further working capital was first officially confirmed when last years results were published over 4 months ago.

RNS: 2099N - 8 June 2010: "the Company will have a short term cash requirement over the coming months, and that the directors are currently considering a number of alternatives including further equity or debt funding arrangements.......based upon the director's expectations that additional funding will be successfully obtained......the directors have a reasonable expectation that the Company has adequate resources to continue in operational existence for the foreseeable future."

It was then reconfirmed in a Trading Update 3 weeks later.......

RNS: 2949O - 28 June 2010: "the Company will have a short term cash funding requirement over the coming months, and that the directors are currently considering a number of alternatives including further equity and debt funding arrangements.........the Board expects to be in a position to announce further details shortly."

........and reiterated again just over 5 weeks later.

RNS: 5640Q - 05 August 2010: "the Directors are considering further equity and debt funding arrangements to provide the Company with further working capital sufficient to meet its anticipated requirements over the coming months........the Board expects to be in a position to announce further details shortly".

Urgentclick has a very valid point since they first stated on June 28th that "the Board expects to be in a position to announce further details shortly" and a further 16 weeks have now elapsed without any further reference to any such fund raising being made. This could be interpreted that they may be having problems securing a further placing, that they are seeking some alternative form of financing or that they might be pursuing some other form of corporate action to sustain future trading activities. Whatever the situation I
would have thought that some update to shareholders was now way overdue !

[the drewster] 18/10/2010 14:50

When a company has pretty much said they need funding to carry on "Business as Usual" then suddenly go quiet, it hardly breeds confidence, especially in the current economic climate.

On my watch list, since if RFID ever becomes what it could and should in our everyday lives, every supermarket in the world ought to have plastic carts!

[urgentclick] 18/10/2010 14:36

2 months since the last post.

What's going on here?

Are we going to lose all our investment money or what?

"the Board expects to be in a position to announce further details shortly". How do they define shortly?

[ebomber] 19/8/2010 09:08

Until we have visibility on matters raised in the second paragraph (see below) the share price will hover at these low levels in anticipation of dilution.

Financial Results

Turnover of GBP2.81million (2009: GBP0.95 million) was 199% higher than the
comparative period in 2009 due primarily to a strong performance in North
America. As a result gross margins in the first six months improved
significantly to 23.4% for the period (2009: 17.8%). The operating loss for the
period was reduced to GBP0.51million (2009: loss of GBP0.99 million) and
retained losses fell to GBP612,000 from a loss for the first six months of 2009
of GBP1,083,000.

As announced at the time of the Preliminary Results statement on 28 June, the
Directors are considering further equity and debt funding arrangements to
provide the Company with further working capital sufficient to meet its
anticipated requirements over the coming months. The Board has received
confirmation of support in principle from certain of the Company's main
shareholders and while there can be no certainty that such funding will be
ultimately successful, the Board expects to be in a position to announce further details shortly.

[urgentclick] 05/8/2010 13:49

@Masurenguy

very good points, these are the same concerns that I have as an existing shareholder.

I don't see the company going down the pan but the share price could be devalued even more which is a concern.

No trading activity in the stock today, just artificial moving of the price by the jolly Market Makers.

[masurenguy] 05/8/2010 08:23

Interims announced.



Some progress here certainly during H1 with a considerable improvement in the gross margin to 23.4% on an increased sales volume being the most significant factor to emerge.

However, if they can maintain this margin improvement for the year and continue to hold operating costs at the same levels as last year then they will still have to achieve sales of circa £12.75m just to reach break-even. That equates to a 360% increase in H2 sales over H1 this year or a 55% increase in sales over H2 last year. Quite a tall order but not a completely impossible one !

There are also two other issues that would bother me if I was an existing investor here.

1. They have still not raised the additional working capital that they confirmed they would need some two months ago in order to continue operating for the rest of this year. I suspect that they probably will be able to raise the funds but at what price ? The dilution could be as much as 50%

2. Their major shareholder (Venture Holdings BV) is also the owner of their outsourced trolley manufacturer in Michigan ("We have an excellent working relationship with our principal plastic manufacturer, Mayco Inc., the Detroit, Michigan subsidiary of our single largest shareholder, Venture Holdings B.V."). This could potentially create a conflict of interest with privately owned Mayco making good profits on the trolleys manufactured and sold to Supercart with the latter continuing to make losses on the sales and distribution of these products to their customers. Not saying that this is necessarily the case but it is a possible scenario. The other issue here is the longer term economics of manufacturing a product like this in the USA rather than in a lower cost area such as Asia or Africa.

[the drewster] 30/7/2010 11:46

A cynic might think that the 6.4m has been to get the company in a decent state, but with a combination of poor marketing and poor PR, perhaps they can now take it private at a snip?

[masurenguy] 30/7/2010 11:37

Sadly, but almost inevitably, they reached an all time low today with a sub 3p trade this morning (23,277 sold @2.65p) for the very first time.

The current market cap of £1.9m is only 35% above the funds raised at the last placing just over a year ago. With a negative operating cashflow of circa £100,000 per month last year, and a y/e cash balance of £500k, they must now be very close to needing a further capital injection in order to continue trading. They reconfirmed this requirement only last month.

June 28th 2010 RNS: "The preliminary results announcement stated that the Company will have a short term cash funding requirement over the coming months, and that the directors are currently considering a number of alternatives including further equity and debt funding arrangements. The Board is also pleased to announce that it has received confirmation of support in principle from certain of the Company's main shareholders and while there can be no certainty that such funding will be ultimately successful, the Board expects to be in a position to announce further details shortly."

If capital is raised via a further placing then it would have to be at least £1m net of expenses to be worthwhile and to guarantee trading for the next 12 months. Even at todays mid-price of 3p that would require a further 33m new shares to be issued which would dilute existing shareholders by another 50%.

Since it would appear that recent placings were to a few existing core major shareholders, as opposed to a wider franchise, I cannot really see any sense in them maintaining the cost of a public listing. If the same "main shareholders" are prepared to provide further funding, they might consider combining this with a simultaneous delisting as the annual cost of maintaing an AIM listing is circa £200,000 per annum.

It looks to me as though the most likely options here are:
a) No further funding can be raised and the company goes into administration
b) Existing shareholders fund a low priced MBO (sub 1p a share?) and refinance the business as a privately held company with the longer term exit strategy of a trade sale if profitability can ever be achieved.

IMV, whatever the outcome, I find it hard to see a future return here for PI shareholders !

[the drewster] 30/7/2010 09:16

For the future supermarket models of RFID tags on everything, these trolleys (or similar) will be mandatory. Competition is limited, but the management here have been woefully poor at creating a sustainable business during a period in which they should have been able to make substantial strides.
Have had them on my watching brief for years, but good ideas and even good technology, don't necessarily make for a good business.

[masurenguy] 15/7/2010 22:28

Supercart first listed on AIM in February 2004 placing 8m shares @50p to raise £4m. At the time of their IPO there were 20.5m shares in issue and the market cap was 10.25m

03 Nov 2006: Raised £1.2m by placing of 15,000,000 new Ordinary Shares at 8p per share.

22 Nov 2007: Raised £1.6m by placing of 8,000,000 Placing Shares at 20 pence per share.

23 Nov 2008: Raised £1.0m by placing of 5,000,000 Shares at 20p per share.

26 June 2009: Raised £1.4m by Placing of 15,000,000 Shares at 10 pence per share.

The four post IPO placing raised a further £5.2m. A further placing will be necessary before the end of this year to provide more working capital (see June Trading Update)

Their cumulative losses in 6 fiscal years since the IPO total £6.4m.

Today, some 6 1/2 years later, there are 63.5m shares in issue. At the current share price of 4p the market cap is £2.6m.

In that 6 year timeframe their sales have grown from £2.4m to £7.3m but the latter figure includes acquired Rehrig orders so like for like sales have effectively just slightly more than doubled during that period.

Operating costs increased from £1.1m in 2004 to £2.8m in 2009.

Gross margins were 16% in 2004. They increased to 18% by 2008 but fell to an all time low of 11% last year.

Operating losses of £800K increased to a record loss of £2.2m last year.

The above summarises some of the key financial metrics since the IPO. All existing or prospective investors should do their own research and make their own judgement calls ! As they say in financial circles "Past performance may not be indicative of future returns"

[urgentclick] 15/7/2010 20:00

What market?

I should learn my lesson and never again invest in small companies like this that seem great at first and erase our money later.

[pro_better] 05/7/2010 11:02

market do not think so...

[urgentclick] 28/6/2010 12:51

Fairly reassuring news today as regards the finances and further orders.

[fo77y] 25/6/2010 10:47

I think anyone looking to 'invest' in sc. at the moment, should definatley read masurenguys posts and take heed.

It makes a refreshing change to see a poster who is prepared to back up his comments with facts and figures that supports, what i think, a fair and honest view of the company as it stands at present.

I agree somewhat with MikeF's reason in that at this price it may be worth a 'punt' as there is potential for the share price to rise steeply we have seen it happen a few times in the past), but at the end of the day, that's what putting money into this one at present equates to...a punt.

keep up the good posts masurenguy.

[urgentclick] 24/6/2010 12:03

I do hope the management secure a loan to sustain the business and keep us informed.

I figure that if they don't do this by September time, then I will sell out and award them a black mark.

This business looked quite promising when I invested £3,000 back in November 2009 now it is worth circa £600 assuming I could sell.

Guys, if you keep holding to the end, then your investment will become worthless. But selling now means you will loose a lot of money.

So we have to determine the bail out time before the bad news hits us.

If they don't get a loan, they will run out of money and your shares will become worthless, and they will not tell you this until it is too late.

[masurenguy] 23/6/2010 12:32

I really don't want to rain on your parade here Mike_F but the 'tick up' of 0.125p is meaningless. It was purely due to the spread widening from 0.5p to 0.75p prior to the last transaction which was a 75,000 sell @3.99p.

Good luck.

[mike_f] 23/6/2010 12:04

Tick up! 2.9% up... GLA

[mike_f] 23/6/2010 08:33

Measurenguy, thanks for your thoughts, i don't have loads in here but well worth a punt at least at this price IMHO, any good news or another contract win will see this back up towards 7p.

[masurenguy] 23/6/2010 08:24

There's an old cliche which goes "Sales are vanity, profit is sanity" and after 6 years their organic sales growth - excluding the sales emanating from the Rehrig asset acquisition - has roughly doubled from £2m to £4m while operating costs and losses have increased.

As far as I can see they have still to prove that they have a viable business model - they will have made 5 placings since their IPO in January 2004 all, except the last one (to fund the Rehrig assets), haver been to underwrite increasing losses.

It may be that the Rehrig deal might prove to be a catalyst for a major change but unless they can get their gross margins over 25% I don't see it being the case. Still not for me, even at this price, but I wish you luck !

[mike_f] 23/6/2010 08:03

It has only been in the last year or so (helped by the aquisition of Rehrig) that the co. has started to frequently win decent sized contracts. Yes the administration costs have risen sharply due to this aquisition as well but it takes time to fully intrigate a company into another and i am sure the cost base is already being looked at to reduce this. So if their expenses fell to around c£2m (probably not much less with the high cost of production in North America) then they wouldn't need to make anything like 250% increases to break even. It would still be a big ask granted but with larger orders coming in over the last year or so and hopefully more to follow i don't think it's out of their reach! I have invested on the prospects of the company and not on the history... always best to be in at the bottom to maximise profits even if the path going forward is a little cloudy at first. All IMHO. GLA

[masurenguy] 22/6/2010 17:14

This company has never made a profit. In the 6 years since it listed on AIM it has posted the following losses.

2004: £800k
2005: £700k
2006: £700k
2007: £800k
2008: £1200k
2009: £2200k

Total £6400k

They initially raised £4m by placing 8m shares at 50p 6 years ago. Since then they have raised a further £5.2m in four further placings which has all been used to finance trading losses during this timeframe. A further placing will be necessary this year !

Last years gross margins at 11.5% are the lowest that they've ever been since the company commenced trading. Their expenses at £3.1m were also the highest that they have ever been. Even if they improved their gross margins back to 18% in 2010 they would still need to increase sales by 250% to circa £18m just break even and who thinks that there is the remotist chance that they will achieve that !

Their current market cap is just 20% higher than last years pretax losss so how do you figure that this fall in the share price is "way overdone" and on what fundamental equation do you base your assertion that the share price will "rise again shortly".

The sales increase last year was wholly attributable to turnover that was largely acquired from existing customers and contacts of Rehrig in the USA, who went into administration. Organic sales outside of North America actually fell by 13% last year.

This company has completely failed to demonstrate that they have a viable business model in the 6 year period since they listed on AIM. I would be very interested to see your investment case for this company to support your claim that the share price will shortly rise again !