Mongi123> Most unlikely - More likely to fall - Cost of producing tiles up (gas prices - OK now falling but still high) Macro economic conditions very negative - Mortgage costs much higher - taxes higher - discretionary disposable income down. |
Are these ever going up ? |
Spring feels like it has arrived |
"cost saving exercise" sounds quite wide, I think it could mean anything, I also think that the chart is starting to look primed. |
Change of Auditor from PWC I note. It may just represent a cost saving exercise as the RNS suggests , but sometimes it means that the old auditors were not happy signing off something. Let us hope the former. |
Or they just sit on their holding and regard it as a simple investment. They acquired most of their holding over last summer , as the share price dropped from 60p to 40p , so maybe they are sitting on a small profit, if they sit and hold and gradually drip them out.
Or put a takeover offer in.
Or...back comes Matt Williams , the former CEO (And son of Topps founder) with a rival offer. Not impossible as he has just bought out Tile Giant , I think from Mike Ashley. |
MSG can't dump it's holding as the share price will drop sharply and hit them hard. It's not easy to dump 1/3 of the shares. If they want to sell, they'd most likely do an off the book trade. |
So AGM went as predicted. Back to the chess game and awaiting MSG's next move: stick, sell, hostile bid |
AGM tomorrow |
In my imagination, I think the game is to use tpt as an outlet for the cersanit tiles at prices that are to the benefit of cersanit and detriment of tpt, it may also lead to a demand that other tile producers supply for less than they are or tpt won't buy from them. |
Just noticed the feisty response of the board to the Galleon activities.
Basically says that being 30% holders does not entitle them to boss the board , stop misleading other shareholders, you have conflicts of interest, and the Cersanit products were too expensive so sod off and stick to investing.And btw we already have 41% of the holders who will vote against the resolution.
Hopefully this will put a pin in the Galleon balloon, though what happens next will be interesting . And possibly good for the share price |
Hopefully, next Wednesday, investors will re-iterate Brexit to the Europeans at the AGM. |
It tells me that they are doing well, are in control and that they don't want to become a sacrifice focused on being a cash generator for a manufacturer in control of them. |
Perhaps not the most optimistic update. Little between the lines comments. Gas costs is perhaps not good particularly now Govt help is ending in April. On the upside gas prices have tumbled so this should feed through. Let's hope the market sees the long term growth and doesn't concentrate on the 'crosswinds' |
One to filter. |
wad collector - To hell on a broomstick (imo). Company very much consumer focused. Interest rates up - heating costs up - taxes up = financial squeeze. Massive reduction in consumer disposable income.
Conclusion - Significant reduction in consumer interest in kitchen or bathroom refurbishment PLUS of course reduction consumer choice if new shareholder forces through stocking demands. |
Well the recent gains seem to be steadily unwinding. Where is this going in 2023? |
 XD Tomorrow 2.6p which of course is 5% of current share price ; worth having!
From Bearbull on IC last week;
When activist shareholders go to war with a target company there is usually entertainment to be had (though probably not for the directors of the target) and often money to be made for investors. However, it may be a first when the activist says to the target, 'buy more of our products or else the chairman gets it in the neck'.
In a nutshell – and with just a little caricature – that is what’s happening at tiles retailer Topps Tiles (TPT). It faces a call to sack its chairman, appoint two of the activist’s nominees to the board and, in effect, to buy lots and lots more stuff from a Polish bathroom-equipment maker that the activist just happens to own. The activist is MS Galleon, a Vienna-based investor that seems to focus on Polish companies, and which has built a stake in Topps fractionally short of the 30 per cent threshold that would trigger a mandatory bid.
Galleon began building its stake in Topps in 2020. During 2021 – by which time its holding had risen to 20 per cent – Galleon suggested that the proportion of inventory Topps sourced from Cersanit, the Polish bathrooms specialist, should be about the same as its stake in Topps. That was an interesting – and even challenging – symmetry since, at that time, Topps sourced just 0.5 per cent of its stock from Cersanit, which in the 2020-21 financial year would have had a retail value of about £1mn. Even to raise that proportion to 20 per cent would be the equivalent of buying about £46mnn-worth of goods – great for the Polish end of the deal, not necessarily so good for the UK end.
Indeed, Topps’ bosses point out that the company’s internal rules forbid it from sourcing more than 10 per cent of inventories from one supplier – a sensible precaution. It adds that the activist’s proposals present a clear conflict of interest. On the one hand, the activist wants its Polish subsidiary to be a major supplier to Topps; on the other, if the activist gets its own people on Topps’ board, it would not be possible for them to act in the best interests of all shareholders.
Maybe it’s not that simple. It is permissible for a company’s directors to have conflicting interests so long as that is made clear and so long as it does not influence the company’s decision-making. Yet achieving that in practice is harder than in theory, especially in this case where the activist’s equity stake is so influential and its demands so obviously self-interested.
All that said, however, Galleon, the activist, has a point. All has not been well at Topps for some years and the decline – if decline it is – coincides quite neatly with the tenure of Topps’ chairman, Darren Shapland. Since he took the chair in February 2015, Topps' shares have lost 60 per cent of their value and have dropped 63 per cent relative to the FTSE All-Share index. True, much has happened in the intervening years that has been bad for retailers, particularly those with a limited online presence, such as Topps; and Shapland has never held an executive position at Topps. Even so, more influence might have been expected from a chairman whose CV in retailing was as impressive as Shapland’s. It peaked when he was finance director at J Sainsbury (SBRY) in the 2000s and subsequently included a short spell as chief executive of Lord Phil Harris’s Carpetland where he had earlier been the finance director.
Galleon seems keen to contrast Topps’ performance and share rating with Victorian Plumbing (VIC). Topps appears to come off second best. However, the comparison isn’t necessarily fair. Both companies make a living selling tiles and related stuff, but Victorian Plumbing is exclusively an online retailer while Topps is mostly the bricks-and-mortar variety. Consequently, it is to be expected that Topps’ measures of profitability and efficiency would be inferior since the online retailer, assuming it has built up a critical mass of sales, can happily run on lower overheads.
No matter. When shares in Topps were most recently in the Bearbull Income Portfolio (they were sold at 49p in mid-2020 as Covid bit and the dividend was axed) there was no shortage of value in relation to their price. I suspect it is much the same today, except the dividend has been restored; at the current 51p share price it yields 7.1 per cent, although that implies Topps is over-distributing. Even so, ahead of the fun and games at January’s annual meeting, Topps' shares may well be worth a punt, especially as the 2.6p final dividend is in the price until 22 December. |
Pleased to be heavily invested here. The lack of BB ramping and (so far as I am aware) of media comment/tip makes the share price action especially significant. |
Still think that this ends up in hostile bid by the Poles. Linking supply agreement to shareholding is utterly ludicrous, but the Pole has succeeded in flushing out the level of support for the management. He isnt going to get his way with a supply agreement and will fail to get seats on the baord at EGM. leaves him 2 choices: full bid for the company or skulk away holding a near 30 pc holding in a business he cant influence and w/o prospect of a bid dea money for him if he is lucky or a large paper loss if he isnt. Topps management best off extracting a decent premium now rather than continued interference going forward from a hositle shareholder capable of disrupting their plans ad infinitum. |
I am certainly no expert but the'W' formation of the chart and the robust nature of the business suggest that we have a chance to go back to 80p |
I agree with you. Galleon must have spent £25m - £30m for their stake and to be fair that would be a very expensive way to obtain a marketing agreement. They will perceive that there is a benefit to Topps and so they gain both through increased revenue and margin directly as well as upgrades to their Topps holding and dividends. What they need to do is convince other shareholders that their proposal is not simply self serving |
The demand that the company source 29.9% of its stock from a supplier that is owned by Galleon is extraordinary. It seems a very twisted logic. It makes no sense in terms of the benefit to Topps or its shareholders. Presumably the two stooges who agreed to put their heads above the parapet are being paid handsomely for their names to be public.
If they did force their way onto the board it is hard to see that it won't be divisive and result in official meetings and unofficial ones. Hope they fail. |
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