Uniq Plc Share Discussion Threads

[woodenman] 12/2/2011 17:33

So what are you suggesting? That people sell until 0.5p? Then the pensioners will still take 90% and the 0.5p UNIQ will be worth 0.05p.

As one analyst stated a number of months ago, a UNIQ free of pension issues would be worth circa 70p, therefore the 10% left would be worth about 7p if we trust that analysis. The '90% solution' has been known about for some time and the share price is already priced to take into account of this. The recent rise reflects the removal of risk that the pension plan would not be approved and the company would be taken into administration.

[purplebox] 12/2/2011 15:45

robandkerry - 12 Feb'11 - 14:10 - 10371 of 10371

Have people not read the RNS? 90% of the company is going to the pensioners. Which leaves shareholders with a 10th of the company. At the current price that makes the shareholders stake worth 640k or 0.5p per share. Why would anyone be buying this at this price?

The current price (and therefore the current market cap) is not important - it's the actual value of the company people are considering here...

[robandkerry] 12/2/2011 14:10

Have people not read the RNS? 90% of the company is going to the pensioners. Which leaves shareholders with a 10th of the company. At the current price that makes the shareholders stake worth 640k or 0.5p per share. Why would anyone be buying this at this price?

[brando69] 12/2/2011 08:33

good piece on motley fool - it's a sorry tale. still fee now the only way is up. just wish i was investing my 15K in UNIQ now and not way back when.

[purplebox] 11/2/2011 17:29

Decent day today - people are starting to buy after they have done their homework.

The weekend with give more time to digest the full details of the restructuring deal.

[stud-muffin] 11/2/2011 13:35

Good find Peawacks.

Still gots some way to go for my sell target but its creeping - 5.38p bid.

lets call it 1p more?

I have probably put the kiss of death on it now!

[peawacks] 11/2/2011 13:15

From Cliff D'Arcy on Motley Fool

Email

Published in Company Comment on 11 February 2011
1 comments

Here's how a £6m firm tackled its £473m pension deficit.

How can a company valued at £6 million sort out a £473 million pension deficit? By giving more than 90% of its shares to its pension scheme and then moving to AIM, of course!
How Uniq was crushed

At least, this is what's on the cards at convenience-foods maker Uniq (LSE: UNIQ), which I last wrote about in July 2010.

Uniq's crisis has its roots in the Nineties, when dairy group Unigate sold its dairy and cheese divisions to Dairy Crest (LSE: DCG), reinventing itself as Uniq in 2000. In May 2001, Uniq demerged its logistics business Wincanton (LSE: WIN) to focus on its pan-European food operations.

The bad news for its shareholders is that Uniq remained on the hook for roughly half of the combined pension liabilities of its former businesses. Hence the massive mismatch between Uniq's market capitalisation and the shortfall in its occupational pension scheme (£473 million as at 31 July 2010).

Back in its heyday during the Nineties market boom, Uniq/Unigate was riding high, with its share price peaking at 468p in April 1999. In the intervening years, the chilled-food manufacturer's shares have been utterly crushed. As I write, they trade at 5.2p, down 99% from their all-time high. This 12-year nose-dive has transformed Uniq from a £500 million mid-cap into a micro-cap tiddler today.
Throwing shares at a black hole

Let's take a look at Uniq's proposed deficit-for-equity restructuring in more detail.

For more than 18 months, Uniq and its shareholders have been negotiating with its lenders, the Pensions Regulator and the Pension Protection Fund (PPF). The firm's aim was simple: to save itself by agreeing a process to rid the firm of its toxic pension burden.

Yesterday, Uniq revealed that its latest proposals have won approval from the Pensions Regulator. These involve:

* surrendering 90.2% of its equity to its pension scheme, leaving shareholders with under a tenth (9.8%) of the post-restructure business;

* injecting £14 million of cash into the pension scheme;

* a new bank facility of £25 million (from which the £14 million top-up will come); and

* moving the company's listing from the main market to the Alternative Investment Market (AIM), as the proportion of shares in public hands will be below the 25% free-float requirement for LSE-listed companies.

Everyone's a loser

As part of the deal, most of Uniq's 21,000 pensioners -- largely former milkmen -- will no longer receive inflation-linked increases in their pension payments.

Uniq's shareholders face their own headache, as its proposed move to junior market AIM will mean that Uniq shares can no longer be held inside tax-free ISAs. Thus, Uniq shares inside ISAs will have to be sold and, possibly, repurchased outside of these tax shelters.

Of course, this deal is subject to approval from Uniq's long-suffering shareholders, as well as the High Court. In addition, the Pension Protection Fund will waive the deal through if it is completed by 31 March.
Hardly a Uniq lesson

The glaring lesson from the devastation of Uniq is simple: directors and investors alike must take full account of all company liabilities when making judgement calls on future performance. More often than not, company failures (when investors suffer a 100% loss) happen because of problems with liabilities and/or cash flow, rather than strategic decisions.

Thus, when analysing a company's suitability for your portfolio, take its pension legacies and liabilities into account as much as its bank loans and other debt. Otherwise, the company's risk/reward ratio will be falsely lowered, putting you and your money at greater risk of loss.

Similarly, watch out for major changes to company pension schemes, as these have great potential to benefit or harm shareholders. As Uniq shows, what may appear to be a humble salad-and-sandwich supplier can turn out to be a pension pit with an operating company tagged on.
From Cliff D'arcy on Motley Fool

Next steps for Uniq

Assuming all goes well, Uniq will continue to stock the chiller cabinets and sandwich shelves of Marks & Spencer (LSE: MKS) and the like. However, there are four hurdles to be cleared for its reorganisation to be successful:

1. Shareholder and Court meetings: 25 February

2. Shares suspended from trading: 17 March

3. Capital reorganisation takes effect: 18 March

4. Listing on AIM: 1 April

Lastly, good luck to Uniq's hard-pressed shareholders and pensioners. Let's hope their next ten years prove easier than the past decade!

[billybankrupt] 11/2/2011 11:07

Pack dropped through the letterbox this morning
89 pages made quite a thud!

Shame it has not had the same effect on the shareprice
Still, will have to be patient
I see a crawl upwards to the Aim listing when potential bidders may begin to circle!

Looking for a least 10p by the admission date
Then it will be somewhat down to the business abilty to address minsterley as a current cost rather than profit contributor.

[purplebox] 11/2/2011 10:52

brando69 - 10 Feb'11 - 22:31 - 10361 of 10363

give me 15p and i'd be over the moon. i'll settle for 10p

Well 10.0p would realise around £100 million for the pension fund - would they settle for less?

[stud-muffin] 11/2/2011 10:39

You dont say.

[brando69] 11/2/2011 10:25

another RNS yesterday i see

[brando69] 10/2/2011 22:31

give me 15p and i'd be over the moon. i'll settle for 10p

[stud-muffin] 10/2/2011 16:48

Space 20p sounds fanciful but maybe 6.5p is a tad low.

I will be gone here Monday next so I hope you are right and we see some decent movement.

Howmany - I agree - anyone waiting for the dust to clear on the pension issue now has clarity and may strike - I will wait with baited breath for the morning opening RNS, stranger things have happened.

[howmanyfools] 10/2/2011 15:57

I can see this going private. A competitor can get 90% of the company at a discount price and offer a higher sweet price to remaining shareholders. The rns reads as a steamroller cracking an acorn. And only £10 million cash on the books, probably now fully spent given the benign wasteful spending of Uniq. With sales in excess of £300 million and Minsterley desserts division running at 50% efficiency, it is time for Eaton to step down.

[spacedust] 10/2/2011 15:56

last time the share price was this low it was priced to go bust then it soared to 50p, stud i have a target of 20p, i've added couple of times today. The mkt cap is low it wont take much to move this and when it does move this moves fast, chart shows a run up to 8p in the short term

[purplebox] 10/2/2011 15:11

Yes - the overall opinion regarding the restructuring must be reasonable otherwise we would have seen an avalanche of selling, but exactly how much is the company worth?

The Pension Fund must have it's own target and that target must have been part of the Pensions Regulator's process as well.

The maths aren't that complicated really.

After restructuring UNIQ will have 117,187,910 shares listed on the AIM - current shareholders will own 9.8% and the Pension Fund will own 90.2%.

If the company is worth £58.5 million that's 50.0p a share, £87.9 million gives 75.0p a share, £117.2 million gives 100.0p a share, £146.4 million gives 125.0p a share and so on.

As an example of the Pension Fund share we have 90.2 % of £117.2 million equal to £105.7 million.

Keep in mind the approximate 10:1 share aggregation that will happen as part of the restructuring - so the figures above equate to approximately 5.0p, 7.5p, 10.0p and 12.5p when thinking in terms of the current shares before restructuring.

From page 9 of the Circular:

"On the 'best estimate' assumptions used in the IAS 19 accounting valuation basis, the deficit in the Pension Scheme as at 30 June 2010 was £229 million against which approximately £97 million was held in a secure account, resulting in a net deficit of £132 million. On the more prudent buy-out basis (the basis adopted by the Trustee for statutory funding purposes), it is estimated that the net deficit as at 30 June 2010 (after taking into account the £97 million which was held in a secure account) was £428 million. As at 31 July 2010 the net Pension Scheme deficit (after taking into account the £97 million held in a secure account) was £473 million."

So you can see that the deficit can be expressed in various different ways depending on your legal standpoint - i.e. depending whether you are trying to get a low figure for the liability in your company accounts, or whether you are a pension trustee responsible for paying peoples pensions.

So how much does the Pension Fund expect to realise?

Exactly how much is the company worth after restructuring (the RNS stated that the Pension Fund may be looking for a quickish sale)?

Answers on a postcard...

[stud-muffin] 10/2/2011 14:34

Space

I have 167,994 now they went thro' on plus in three trades.

I have modest expectations here but feel when the news gets recognised it will rise.

The AIM issue and sellers holding within ISA's is a question.

Target for me 6.5p.

Who knows - except that looking at the charts uniq can move up quite quickly - oh and also long termers probably see it as a swear word.

[spacedust] 10/2/2011 14:12

aim is volatile could see 500% increase or 50% tank take your pick, but i think all the negatives are priced in remember the all time low in uniq's history was 4p to buy n 3p to sell...i can see us doubling from here

[purplebox] 10/2/2011 13:59

It's not exactly running away with itself at the moment.

There's a lot to understand here - but at least the direction is upwards.

[propane] 10/2/2011 13:49

I've bought back, can only see upside from here.

[spacedust] 10/2/2011 13:37

guys theworst is over its upwards from here....

if u had a restaurant that was going under due to debt but then u took the option to give 90% away keep 10% but keep your restaurant alive and reap 10% of its profits is that a good thing or bad??? go under completely or have 10% of it. u decide.....also (not 100% sure on this) uniq have the option of buying back that 90%

[stud-muffin] 10/2/2011 12:55

I've bought 150k for a punt.