Totally Share Discussion Threads

[grahamwales] 06/6/2019 14:19

Contained within the Group’s total trade and other payables figure as at 30 September 2018 are a number of accruals and provisions to cover, for example, exceptional costs on contracts with Vocare that were required to bring these contracts back to acceptable CQC levels. The Board anticipates that the accruals balance will be reduced going forward now that certain of these costs have been paid.


Should see a nice drop in payables

[microscope] 06/6/2019 14:13

One other point 'not getting the cash' should not be confused with the amount paid.

The total consideration therefore as in 'amount paid' is 11.5 million. You don't pay for cash that wasn't your's in the first place, if you aren't getting it, as Graham says.

So I will stick with 11.5 million as the accurate mount we are paying for Greenbrook in the form we are buying it.

That's the fairest way for us all to look at it.

All imho

[sikhthetech] 06/6/2019 14:08

Micro,

absolutely, the key is that they are buying a growing profitable company at the right time...

New IUC contracts being rolled out over the next 2 yrs...




Create Integrated Care Systems everywhere by Apr 2021.

"In the meantime, within the current legal framework, the NHS and our partners will be moving to create Integrated Care Systems everywhere by April 2021, building on the progress already made. ICSs bring together local organisations in a pragmatic and practical way to deliver the "triple integration of primary and specialist care, physical and mental health services, and health with social care. They will have a key role in working with Local Authorities at level, and through ICSs, commissioners will make shared decisions with providers on population health, service redesign and Long Term Plan implementation."

[microscope] 06/6/2019 14:04

Yes I was confusing LTIP and consideration. Fair enough 1gw, still well below the 20 million plus I expected.

And don't forget the IUC contracts.

I expect overwhelming approval and institutions to be voracious either in the placing or afterwards, the speed of the placing indicates that could well be the case.

I fear I will be scaled back to near my entitlement :(

[grahamwales] 06/6/2019 14:03

1gw £4.5 million wasn’t TLY’s in first place so stop saying they are paying £16 million ffs

[1gw] 06/6/2019 14:00

microscope - Consideration Shares and LTIP shares are 2 separate things. Consideration Shares are issued to the sellers of Greenbrook without vesting criteria. LTIP shares, or rather LTIP options are nil-cost options which vest over time and only if the share-price hurdles are met.

For the acquisition we have consideration of:
£9.0m cash
£2.5m shares (25m shares)
£4.5m to reflect excess cash in Greenbrook (normalising the wc)

£16m total

To incentivise and retain key management we have 10.5m nil-cost options with shareprice hurdle rates.

[grahamwales] 06/6/2019 13:59

Micro

Correct me if I’m wrong but 1gw is referring to the cash already held by GBH in his calculation of how much TLY are paying. Not sure why he is doing that as if GBH had the cash in the first place then how can he claim that Tly are paying it to them.

[microscope] 06/6/2019 13:56

The key thing is that we are acquiring a profitable company for less than the 20 million plus I thought was fair value.

And don't forget the IUC contracts up for grabs soon.

[grahamwales] 06/6/2019 13:52

1gw Will ask you another way. How much cash are TLY actually paying to GBH owners of money currently held by TLY and not held by GBH.

[1gw] 06/6/2019 13:49

microscope - the £11.5m includes the Consideration Shares (25m shares issued to the sellers at completion) not the LTIP shares.

grahamwales - they need 2 shares for every 1 because of the dilutive effect of the issue of all the shares.
"Qualifying Shareholders who do not take up any of their Open Offer Entitlements will suffer a dilution of 67.64 per cent. to their interests in the Company"

which is why I keep saying I think nobby might need to get 1m shares. If he has 500k+ now, he will need (more than) a further 1m to maintain his % interest in the company after issue of all the shares.

[grahamwales] 06/6/2019 13:48

£4.5 million plus £11 million = £16 million?

[grahamwales] 06/6/2019 13:45

1gw why would they need to get 2 shares for every 6. If they only get 1 share they are avoiding dilution as you say.

[1gw] 06/6/2019 13:43

It does what?

[1gw] 06/6/2019 13:31

microscope - the £16m isn't because I add in value for the incentive shares, it is because they are normalising the working capital (i.e. only getting some of the cash and leaving the rest with the sellers, as they did with Vocare):

"In addition, adjustment to the purchase price to reflect a normal level of working capital is expected to result in additional cash consideration payable of £4.5 million on Admission giving a total purchase price of £16.0 million."

And the FD intends to apply for a mere £10,000 worth of shares under the Excess Application Facility. But yes, it is also noteworthy that she held only 5000 shares (£500 worth at the placing price) as of the date of the Admission Document.

grahamwales - under the Open Offer they will get just 1 share for every 6 they hold. In order to stand still (i.e. avoid dilution) don't they need to get 2 new shares for every 1 they hold?

[nobbygnome] 06/6/2019 13:12

Well said chaps. Your posts just shows that 1gw puts a negative slant on everything and stretches the facts beyond belief. He is either a very sad individual....or a STT hater who went so far as to buy shares to wage his war. Very very sad!

[grahamwales] 06/6/2019 13:05

1gw

What does the lack of participation in the placing of most of TLY's major institutional shareholders (Unicorn, Killik, Seneca, Royal London) say about market perception of the deaL.

Perhaps they are buying some of the open offer shares after all they will be entitled to quite a few shares.

[microscope] 06/6/2019 13:01

As there have been so many more bear posts than bulls recently (as per usual imho!) it's time to put an alternative scenario, every bit as valid as 1gw's claims in my view.

I'm only putting this out there remember, not saying it is the case - the 9 million placing was done very fast. NOW, What if some institutions were SCALED BACK in the placing? Maybe they wanted more than they got? That could create a pent up demand for the shares after completion - and might help to explain the support so far around 10p incidentally

And I do not accept the 16 million argument: "The total consideration for the acquisition is GBP11.5 million on a cash free and debt free basis, with a normalised level of working capital (the "Acquisition").

And finally the FD - the FD no less - has applied for x20 her current holding.

If the FD thinks that of the deal, that's good enough for me! :)

That is "Participating Meaningfully" in my book!!

All imho as always :)

[grahamwales] 06/6/2019 12:58

1gw. They are not paying £16 million why do you keep insisting on this. No doubt you will throw loads of useless figures at me but at the end of the day they are paying no more no less than they have already stated.

[1gw] 06/6/2019 12:10

nobby - I don't know if it's a good deal or not. Greenbrook looks like a good company, but is it worth £16m? Greenbrook has built a profitable business with a conservative balance sheet. Totally are going to take a load of cash out and run the combined business with a much more aggressive balance sheet. Totally's track record on past acquisitions does not give me confidence that they will be able to make a near-term obvious (to the market) success of integrating Greenbrook and developing the joint business. Equally, if the intention is to pass control to Greenbrook management in the near-term, are they going to be happy running the balance sheet so aggressively or will they look to change it?

Does the market know "this is a very good deal for TLY"? That's not at all obvious to me from the price and volume action so far. What does the lack of participation in the placing of most of TLY's major institutional shareholders (Unicorn, Killik, Seneca, Royal London) say about market perception of the deal? What does the board's lack of intention to participate meaningfully in the open offer say about even the board's confidence in the future?

[1gw] 06/6/2019 11:54

stt - it's easy enough for someone to check if anyone else is with Barclays. The issue with corporate actions through online brokers is that (at least some of them) need to get an official communication telling them what to do to enable the action, in this case the open offer. Barclays apparently are aware that there is an open offer but haven't received the follow-up communication that tells them what to do, so there is no option at present in the online account (ISA) to take up the open offer.

I've been through this on more than one occasion on other shares. As an investor, I thought the fact that a formal document had been published would be sufficient. But it isn't (at least for some brokers) - they need to have an additional specific communication.

[nobbygnome] 06/6/2019 11:42

>> 1gw

I am honoured that you think the bulls on here dictate the price. Sadly I don’t think that is the case. The reality is the market knows this is a very good deal for TLY. You just can’t bring yourself to acknowledge that because it involves saying something positive about TLY. You are such a sad half empty individual...

[sikhthetech] 06/6/2019 11:39

1gw,

"So I just checked with Barclays, who are showing my tly shares as "ex divi" as of 31st May but don't have any line for open offer application. They say they are aware of the open offer (hence the ex-divi flag, meaning ex-entitlement) but are still waiting for the official communication from the company before making an application option available online."

So you JUST checked with Barclays and immediately phoned them...they happen to be aware of the Open Offer but not much else...

How did they become aware of the open offer then? Wasn't it an official communication or did they guess???

Honest guv...

[sikhthetech] 06/6/2019 11:34

Mac,

"What is going on?"


What 1gw has failed to tell you is that the placing is to buy Greenbrook, a growing and profitable company with contracts in the lucrative London & SE area...Therefore, with Vocare it widens TLY's foothold in the UK..







The Acquisition provides Totally with a strong and commercially attractive opportunity to continue to execute its buy and build strategy, with the aim of building the Company into a leading out-of-hospital healthcare provider, providing more comprehensive services across the country, helping to address the significant healthcare challenges faced by the UK.

· The Acquisition allows the Group to obtain a further foothold in the urgent care sector in the UK with Greenbrook Healthcare being a leading provider of UCCs in the Greater London area.

· The Board believes the services offered by Greenbrook Healthcare are highly complementary to and offer synergies with the Group’s wholly-owned subsidiary Vocare Limited (“Vocare”), one of the UK’s leading national specialist providers of urgent care services.

· The total consideration for the Acquisition is £11.5 million on a cash free and debt free basis, with a normalised level of working capital.

· The Consideration will be satisfied by the payment of £9.0 million in cash on Completion and as to the remaining £2.5 million by the issue of the Consideration Shares on Completion. The cash consideration payable on Completion will be satisfied using the net proceeds raised pursuant to the Placing and the Open Offer and existing cash resources of the Company.

· Greenbrook Healthcare has experienced substantial revenue growth in recent years with revenue growing from £23.8 million in the financial year ended 31 March 2016 to £33.4 million in the year ended 31 March 2018 (equivalent to 40.1 per cent. growth over the two financial years).

· With effect from Admission, Michael Steel, the Chief Executive Officer of Greenbrook Healthcare, will join the Board as Executive Director.