Thalassa Share Discussion Threads

[rcturner2] 06/10/2014 13:05

sailing john - my experience is that very few companies like this want to own their own property, they can better employ the capital in their business and the rent is tax deductible of course.

[propercharlie] 06/10/2014 12:49

Reaction IMO is well overdone. and extract from IC when the share price was 140 on Sept 17th.


"In the first half, gross margins rose from 33.5 per cent to 43.7 per cent, so factoring in a full-year margin of 39 per cent (up from 28 per cent in 2013), Mr Cummins expects this improved profitability to soften the profit impact of the lower turnover. In fact, WH Ireland only cut its full-year pre-tax profit estimate by 10 per cent to $4.5m.

On this basis, expect adjusted EPS of 15.8 cents, or around 10p, for the full-year. True, this is down from EPS of 26.3 cents generated from pre-tax profit of $5m in 2013, but this also reflects the dilutive effect of a capital raise last October when Thalassa raised £18.1m from institutions at 250p a share to provide the funding needed to service a number of large contract wins. At the end of June, the company had net cash of $21.2m on its balance sheet, or £13m at current exchange rates. That sum equates to 52p a share alone, or 40 per cent of the current share price. It also means that after the 25 per cent share price fall yesterday, Thalassa shares are being rated on a very modest cash adjusted PE ratio of 8 for the 2014 fiscal year."

Strip of the cash at 52p against today share price of 110. and an ePS of 10 the the P/EV is 5.8.

[sailing john] 06/10/2014 12:49

Thalassa should have bought the property themselves imo and sold on the stables and land (note Soukup also formed Eastleigh Stables Ltd at the same time as Eastleigh Court Limited.)

It looks as if there will be quite a bit of refurb work and I have concerns over who will pay for this - Eastleigh Court Ltd or Thalassa. And what happens after 10 years? especially if Soukup no longer at the helm.

Both of these issues could have been avoided if Thal had bought the property and they would have seen an effective return of circa 10% for their investment.

Fortunately I have been out from earlier this year. Remains on watch

GL - SJ

[rcturner2] 06/10/2014 12:37

I have a limit order in at 100p and would love it to be filled, but I don't think it will be unless Henderson start offloading again.

[varies] 06/10/2014 12:37

RCT2
I was just about to say much the same thing and your post appeared whilst I was checking the figures. I am so glad that I looked again first.
I am going to buy back some shares that I was lucky enough to sell in April.
Even so, I think that Mr Soukup needs to provide further details of his role in the transaction and I certainly expect these to appear in the next annual accounts.

[itchycrack] 06/10/2014 12:30

Agree RCTurner2, folks on here quibbling over petty points IMHO.
THAL have $175 million of potential orders in the sales pipeline and just a few successes here will result in a swift turnaround IMHO.
I've been adding here this morning.

[rcturner2] 06/10/2014 12:19

I do think some people have lost their sense of proportion here. The property deal was ok with the NEDs and the NOMAD and the cost to THAL is £120,000 per year. We are not talking some mega bucks deal, it is £12 per sq ft for a 10,000 sq ft office. Even if it is slightly overpriced (debatable) the cost to THAL is no more than £20k extra per year, if it was 20% over priced from say £10 per sq ft. Do you think £20k is going to make any difference to the success or failure here?

[saucepan] 06/10/2014 12:09

The cue to getting back in here may, and I stress may, be when there is a sign of an institution adding to its holdings. I'd also like to see a support level established on the chart.

That said, my own confidence in the Company has been shattered by recent developments, and I am not at all sure I will be back.

[merrimac] 06/10/2014 12:01

I took a big hit on this stock too...sold because I just don't understand what the management are up to. Put my funds into GSK.L, over time, I should recover my losses in Thal. Dont think I will buy into Thal again even if they turn around because their communication was poor and something smelled a bit burnt (not my fingers either).

[rcturner2] 06/10/2014 11:55

The building in question was on the market for £1.25m and is listed as containing 13400 sq ft of offices. This works out roughly at £100 per sq ft and is now let at £12 per sq ft, a 12% yield, which looks quite high, normally you would expect to see something between 5% and 10% as the yield on commercial property. However, the building must be empty and therefore the asking price was probably depressed quite a bit as the new owner would have to find a tenant(s). So it is not that outlandish really and is a smart move by the director. I suspect that once the dust settles he will be able to sell the building on at a lower yield and hence a higher price, hence why there is probably the 10 year tenancy without any break clause.

[pbutterworth1] 06/10/2014 11:44

Call me traditional but I exited today and I don't care what the price drops to. I am not backing management that pumps public company around property deals to line managers pockets. Crass and arrogant

[tonytyke2] 06/10/2014 11:36

IMO i think your last few posts RCT are spot on, WH Ireland were indicating only a 10% impact on results coming through from recent events. The future guidance will be important, but I am starting to buy now around this price.
TT

[soundbuy] 06/10/2014 10:59

On the brightside unlikely they'll ever be evicted...

[21trader] 06/10/2014 10:30

Relentless selling that RNS has totally killed the faith in management here

[rcturner2] 06/10/2014 09:35

If this goes sub 100p I will be buying.

[21trader] 06/10/2014 09:15

And 7500 online bid after all those sales so there is some kind of buy order in
the system otherwise the price would be sub 100p by now

[rcturner2] 06/10/2014 09:14

It might happen, net of cash they are at a very low multiple of profits. Usually people buy the future so it will much more depend on the outlook. The Russian problems are a massive pain for them, but let's see what the final results bring in due course.

[lollipop4] 06/10/2014 09:11

RCT - yes, forgot about that. At these levels, they could be a t/o target too? And someone picking up the volume sold.

[rcturner2] 06/10/2014 08:52

Lollipop, they have quite a significant amount of cash in the bank don't forget, so that will come into play soon. I cannot see it going to 50p, as that would imply quite a big discount to the cash, which seems unlikely.

Cash is about 60p a share, according to my rough calculations.

[lollipop4] 06/10/2014 08:37

Like PJ1, I read the RNSs as BoD carried out extensive search, found offices, DS then bought them (recently on rightmove per sailing johns post a couple of days ago, and nothing on zoopla for sale price yet which suggests sale went through in last 3 months???). Anyone who really wants to know could always check land registry. Still, they've lost the confidence of the small investor, and while I'm no chartist, I can't see any chart support here now until 50p. Hope for holders it doesn't come to that. A seeming success story gone wrong.

[janeann] 04/10/2014 12:59

The only positive I see is that it appears the figure of £12 per sq ft is fixed for the 10 year term

But then the RNS also talks of leases plural so I wonder what that refers to

[pj 1] 04/10/2014 12:04

Note to above

I am aware of a Company called Rainbow International who undertook a similar thing.
They were running short of space and the unit next door became available (for rent) and identified as suitable
During negotiations the MD and owner purchased through a holding Company the Unit as the then current landlord indicated he may be open to offers. At the time it was a private Company. I am unsure if rent was negotiated by an independant party or not, nor the length of lease. 10 years is a long time !

[pj 1] 04/10/2014 11:57

By chance I spent some time talking to Hogdon Elkington yesterday a Commercial letting agent. Obviously (I think) rents (and rates/?) are probably much cheaper in the East Midlands than 'daun souff'.

10,000 sq feet is slightly above the average sized unit(or number of units) i.e. per Business.
They look for a minimum 3 years tenancy, with the average being 5 years 1ith a possible break clause (both ways) after 18 months/ 2 years.
Their current landlords would be absolutely delighted with a 10 years lease, especially if no break clauses were included.
I suspect the unit may be fitted with existing offices/ fittings which could substantiate the cost.
The long lease though could benefit the company if they had to install specialist equipment with a high set up cost e.g. chemical sampling, controlled environment working,duplicating environments or specialist weighing/sampling/cleanliness.
Or a very high estimated cost to return the unit to pre-agreement condition (lots of landlords will not allow motor trade/ servicing repairs for this reason, plus risk of them going bust)

Maybe the last 2 points could relate to THAL?

What really annoys me is that I ignored the failure of the Co to communicate to my obviously inadequate attempts, as posted over the last 6 or so months

Last point, did Soukup buy the unit after it had been identified as suitable? Thats how I read it. So maybe a mitigating factor? (straws! clutching!)