Swallowfield Share Discussion Threads

[topvest] 25/11/2012 17:24

I am surprised the share price has bounced back given this year's forecasts have been withdrawn - it seems very unlikely that the dividend will be maintained given the lack of cover anyway versus their policy. I suspect WSE are keen to mop up any shares, but can see this going down to about 50p if the interims confirm how bad things have got.

[countryman5] 23/11/2012 16:09

Markt.
Yes FL was at SWL AGM.
Yes he read out a prepared statement on behalf of WSE.
It is good to read your investigations on WSE , because it helps prevent DM climbing on to SWL board. SWL board is too big already. Do you ever post material on NBI site about DM?
Good luck

[markt] 23/11/2012 11:28

Countryman
1) is it true that F.L. was at the AGM ?

2) and spoke from written papers ?

(FL is not on the board of WSE (large shareholder in SWL) nor a significant shareholder....
and is officially recorded as an Independant Director at LFI

Independant !
ie. supposed to be Independant wrt to the main shareholders of LFI
and the controlling decision maker at LFI, David Marshall

and hence, imho the LSE regulations imo prohibit him from attending an AGM at SWL to represent WSE and to lobby for DM

Since F.Lucas is the major shareholder of Arob Leon which is licensed to do share issues to the UK public....then it is even more important imo that FL should comply with the regulations.

If true it would also indicate that WSE is controlled and "used" by LFI.....and the Takeover Panel rules imo prohibit that.
------

I am interested in getting the board of WSE removed (see WSE msg board) but difficult since most WSE shareholders are asleep and as long as they get a dividend then they are perhaps happy to stay asleep !
(and if it were possible to remove David Marshall from LFI/WSE that would be good but looks impossible)
(my reasons are all over the WSE msg board, and new thread 'remove the board')
with a sleeping partner D.Marshall looks to have over 50% of the votes at LFI and WSE, although at WSE he probably can not use the LFI votes in subjects that affect him.


if the block of long term SWL shareholders can do anything to assist....I would be grateful.

[markt] 20/11/2012 16:10

One company where David Marshall is on the board, and I think brought the company to market

now in administration

article in the Time ...."investors seek legal advice" !

[markt] 20/11/2012 12:09

.....if FL really did attack the bod at the AGM in a Churchill style manner, ref. 1 poster...

perhaps LFI/WSE could consider to try a new approach....of co-operation and teamwork with the SWL bod in order to try to benefit the performance of the company....imho many SWL and WSE shareholders had hoped that the boardroom fights were over and that the company could get back to normal work....

and WSE/PG have their own man as chairman....so they have a route to the bod if they want to influence bod decisions

DM was on the board at MWB, Sanctuary Grp and Doctors Direct (chairman). All 3 have gone into administration.

(the last 2 were then sold to get some cash to reduce the debt to creditors, shareholders got ZERO !).

And DM is resident in S.Africa (so doesnt see the day to day cosmetics market in the UK) and close to 70 years old, and is CEO of a company operating in S.Africa (so I assume he has little free time).

Imho the operation of D.Marshall controlled companies is at least 'questionable' (employment of at least 1 son and kept secret from shareholders, share option details are secret, money going to an "unamed overseas company" (eg. see previous NBI accounts), sleeping partner at LFI and WSE giving over 50% of the votes but not declared as a concert party (really ?!) and hence not recommended for SWL.


(Does anyone believe that the existance of the same sleeping partner at LFI and WSE (W Lamb Holdings Ltd) that gives a combined voting power of a fraction over 50% when added to Marshall controlled votes.....is a mere casuality ?

I don't !)

[markt] 19/11/2012 15:25

Countryman5

Maybe you could send DM a letter ?!

1) Is it correct that 3 out 7 companies where you have been on the board in the last 10 years have gone into administration ?
And hence would that be a risk for SWL ?

2) W.Lamb Holdings Ltd holds a block of shares in LFI and in WSE which when combined with the Marshall shares gives just over 50% in LFI and in WSE.
Is W.Lamb H Ltd a related party to the Marshalls or is there is connection ?

3) Do you think it is honourable that a Marshall family member has been employed at a subsidiary of LFI PLC (LSE listed) on a high salary over at least 10 years and this was kept secret from LFI shareholders ?

4) Do you think it is honourable that the share option details (including for Marshall family members and LFI/WSE/subsidiary directors) for WSE and LFI are secret ?

5) Do you agree that the acquisition of Lightbody Ltd by FIF was done at a ratio to turnover and profit and assetts that was many times more expensive that other acquisitions done in the same sector and has produced large losses for shareholders ?

If yes, is there a risk that you would promote another over-priced acquisition by SWL if you were on the bod at SWL ?

6) Is it correct that the yearly return to the Marshalls from their investment in LFI has been approximately 14% per year over the last 10 years ?
Hence, is your interest in being on the bod of SWL to help the operation of SWL or in the income that it would provide to yourself or some 'unnamed overseas company' ?

7) Do you agree that the performance of LFI and WSE over the last 15-20 years has been bad, below inflation, while the NAV of funds that invest in small UK companies has multiplied by X 3 over the same time ? (Morningstar, Blackrock smlr cos, Artemis, Montero....)

8) Do you refuse to change the investment strategy of LFI/WSE to benefit LFI/WSE shareholders because the strategy provides financial benefit to you and your family members ?


Best Regards
Countryman5

!
-------

PS
I see that 1 unhappy Western Sel. shareholder has created a thread proposing to remove the bod at WSE.
Even if WSE shareholders were to wake up (only 20 of them own most of the company)....then consider the subject and take the bod to task......may be impossible to remove the bod since they seem to have a sleeping partner shareholder (W Lamb Holdings Ltd) that gives the bod over 50%.

[markt] 19/11/2012 12:59

correction
David Marshall
3 out of 7 companies into administration in last few years, not 3 out of 6.


---
David Marshall

(operating companies where he has been on the board after making a large investment, that have de-listed and then been wind up or sold to part pay off the creditors; also Sanctuary group, Doctors Direct since 2000)

3 out of 7 !!!!!!!!!

(FIF, NBI, CRE, and an unlisted company, still going)

43% company failure rate !


(oh, and BTW, over on MWB msg board you will read numerous accusations against the bod there, DM is on the board,

the dirs. ran their own company from the same offices,
and also set up a company to run the HQ of MWB, at a high cost )

and at CRE there are many people complaining about the high salary, share options and bonuses for the CEO, who took over an LFI/WSE shell company
...while....yes you guessed it, shareholders have lost money ! The share price is still lower than it was when the shell company turned into a trading company back in 2000.
---

Note
Payments from various of these investee companies are paid to an unnamed overseas company for the services of D.Marshall. Tax Free ? Cayman Islands ?

----

The money paid for the services of 1 son was around 75k for at least 10 years.
3/4M pnds. 12.5% of the cap. value of LFI.
----

The return to the Marshalls from their investment in LFI....I have calculated as 14% per year. (so their investment looks to have been repaid years ago)

14% !!

See LFI/WSE msg boards. Return to LFI/WSE shareholders over 15-20 years is a LOSS wrt inflation.

[markt] 19/11/2012 11:37

F Lucas

in case of interest
it could be that he is useful to the Marshalls because he is qualified in geology

and the history of the Marshalls has been in mining companies I believe, S.Africa.
(D.Marshall is resident in S.Africa)....and there is money to be made (or lost) by investing in mining companies

and his company can do share issues

[countryman5] 18/11/2012 18:05

Hi Threewheels. Enjoyed meeting up again at AGM. I understand that PG has just sold down in Pittards, perhaps he wants to do the same at SWL. He is buying into TEG and growing his fibres business.It would be good to see fresh faces at AGM.How many NEDS does SWL need? How about a chairman and one or two at the most? (preferably chairman plus one)

[threewheels] 18/11/2012 17:33

Fellow SWL posters - was at the AGM, and reading between the lines it seems one mid-sized SWL customer was acquired by a business who then took all the SWL (and other outsourced work) in-house, so loss of t/o for SWL but not lost to a competitor; the SWL bod also reported that they were v busy on enquiries from companies looking to outsource to SWL (and others); so sounds like a timing issue on replacement work being won to cover the 'loss' of work.

Dr Lucas introduced himself as a director of LFIG, and then proceeded to read a 3 page tirade on the performance of SWL's board, in a style similar to Winston Churchill - all negative with hardly a constructive comment apart from the need to appoint DM to the board of SWL, and comparing DM's tenure at Finsbury Foods with that of Warren Buffet at BH. All a bit ridiculous!! The reaction from SWL members - 'Talk about the pot calling the kettle black' !!

WSE must have got other strategic investment targets - I'm sure W Buffet would have moved onto to something more profitable by now.

[countryman5] 17/11/2012 10:02

Markt.
I don't think David Marshall or Edward Beale like you posting on this site about WSE. However, as a shareholder in SWL I am very grateful. We had Frank Lucas at the SWL AGM representing WSE and he appears to be a bright lad. I suspect he could do wonders for WSE if he was given a free hand.

[topvest] 16/11/2012 20:18

The part of the strategy that doesn't work is buy and hold for ever. Certainly MWB and Sanctuary could and should have been sold for very decent profits, but then he wouldn't be able to retain his directorship. That is the bit that doesn't work. MWB could and should have been sold at the top - something like £2 per share I think!

[markt] 16/11/2012 17:18

SWL may not want David Marshall added to the board to fix their problems

---
MWB just gone into administration

Another one for David Marshall , non-exec at MWB, to add to his list !!



(operating companies where he has been on the board after making a large investment, that have de-listed and then been wind up or sold to part pay off the creditors; also Sanctuary group, Doctors Direct since 2000)

3 out of 7 !!!!!!!!!

(FIF, NBI, CRE, and an unlisted company, still going)

43% company failure rate !

[markt] 16/11/2012 14:08

"Topvest

what rubbish!"

I agree 100%....the RNS was worded to mislead.

You suggested they had perhaps lost a customer. I agree with you.

----



"Marshall on the board"......and maybe the performance of WSE and LFI can be replicated at SWL !

Like, no NAV growth in 15-20 years.

And the employment of a son at 75k/year for at least 10 years (3/4M pnds) at subsidiary and keeping it secret from shareholders !

And arguably LFI being the pimp for WSE and using it for its own benefit when it wants to ! (cash raising at WSE....to fatten WSE and its income and then bleed it via subsidiary of LFI which LFI controls...and where son(s) was/is/are employed.....and no cash raising at LFI since that would cost the Marshalls money, whereas cash raising at WSE costs them zero but increases or supports their own personal income)

And payments being made to an "unamed overseas company".
High return to Marshalls, 14% annual on their investment while son was employed.
And opaque operation.

(I would like WSE to change since its investment strategy has been shown to NOT work. But imho the bod will not make changes since the current strategy benefits them...and son !)

And share options awarded to directors and family/son are secret. And share option performance conditions are secret.

No thanks !

[markt] 16/11/2012 13:56

AGM
"In the light of the views indicated by certain major shareholders in their proxy forms, the Board withdrew Resolution 7, 8 and 10 set out in the Notice of AGM, which related to the authority of directors to allot new shares in the Company, the seeking of approval in respect of the disapplication of pre-emption rights, and adoption of new Articles of Association respectively"

imo it should be illegal to withdraw resolutions from an AGM
surely the resolutions should be voted and the YES or NO of the shareholders should be recorded.

but it seems to happen at various AGMs, showing that bods often want things that are different than the people that own the company !!
(UK company law needs to be improved imo)

----

The withdrawal of 3 resolutions perhaps indicates that the previous boardroom fights at SWL are not over !
----

Perhaps the recent profit warning is/was to trigger sellers...to allow others to increase their % in the company, and at a low price.
Noting that no numbers are given, the reduction in profit could be small, or big, or temporary ....no information was given.

[topvest] 16/11/2012 08:17

I've sold most of mine. Yesterday's RNS was horrible. Has to be a chance of another profit warning this year if trade doesn't pick-up and the dividend will probably be cut. I was in the fortunate position of still being able to sell for a pretty good profit having bought at 79p and benefited from some nice dividends along the way. Kept a few to stay on the shareholder list.

My thoughts:

"We have explained previously that the company is undergoing a much higher level of customer rebalancing as some customers take work in house and which we are replacing with a broader range of customers. This will reduce our risk profile."

This = we have lost customers + haven't managed to win much replacement business. If you lose business it is not "customer rebalancing" it is a customer loss...what rubbish!

From the AR:

"In the year ended 30 June 2012, the Group had two customers that exceeded 10% of total revenues, being 25% and 16%
respectively."

I would draw the conclusion that they have probably lost one of these customers. Anyone any thoughts?

I will keep watching, but I can't see this turning around for a year or more.

We might see Western Selection buying more shares now and increasing their stake to closer to 30% which would probably get Marshall on the Board.

[housemartin2] 15/11/2012 12:44

Markt, don't you feel that this RNS is a strange beast with a mixture of generally neutral paras 3 & 5 and killer negative conclusions, paras 4 & 6. Maybe its just what happens after several edits by different people.
However, seems to imply that things have got worse v quickly as you say. Imagine PG said a few choice words !

[markt] 15/11/2012 12:30

Hmmmmmm
profit warning just issued at AGM

previous RNS was that profits would be "higher".....and a few weeks later they issue a profit warning

?????!!!!

[markt] 19/9/2012 12:16

Hi Topvest
I agree that the results look pretty good....
I liked the feeling that they have been busy, reviewing everything and trying to make improvements.....and busy at all levels I think...including cranking up new production facilities...and working on efficiency

and they have made progress on various things...reduction in debt, increased EPS, increased EBITDA, increased overseas sales, etc

(and in part, one assumes that some of these results are due to previous board/chair, a continuation....)

interesting to see that they mention that acquisitions is a possibility, imho something that perhaps/probably would not have been considered with previous chairperson.....(or maybe not true, previously opened Czech factory and a venture in China)


...so...10/10 from me
---

With earnings before depreciation being around 2.8M....and high assetts per share....the share price of 115p and cap. value of 13M looks too cheap to me...good chance it will increase imo, perhaps slowly since SWL is not well known imo.....and not exciting enough for many investors looking to make a quick profit within 2 weeks

-----

I noted the end sentence

"We anticipate that these measures, together with an improved margin mix and an expectation that raw material and component prices have broadly peaked, this will provide an impetus to our profits during the coming year. "

(hopefully the market will like that statement....)

----

If someone wants to post any -ve aspects....more than welcome...to give some balance.

[topvest] 19/9/2012 08:27

Results look pretty good, albeit could do with better UK revenue growth which was negative. Profitability improvements and gearing improvements made. Dividend policy looks sensible. Current year looks more H2 weighted, which is a risk, but pretty solid overall. Happy to hold.

[markt] 17/9/2012 11:39

results on 19th Sept....not long to wait...

we'll soon see if SWL has been driving on 3 wheels or 4 !!