Work Service Share Discussion Threads

[smithie6] 31/12/2013 15:21

Topvest
Hartim accounts and auditor note.

I personally dont see that it would block the possibility of listing Hartim
....if the auditor note states that 1 Auz. subsidiary went into admin. and loan of Z not repaid to Hartim and goods to value of X also not paid back to Hartim ie. a total max. of Y....and that auditor has not seen the internal accounts of Auz. subsidiary to verify the use of that money or that it cant ever be paid back

then surely the max. loss is limited at Y

and that is already in the Hartim accounts

if Hartim were ever to get anything back then it would be a plus for Hartim....
but I cant see any reason for it stopping the accounts.

And in any case, I see no need for any auditor comment this year, since the money was already fully written off in previous accounts. (the dir. notes to the accounts could mention, if they wanted to, that there might be a possibility to get something back from the administration process in Auz)

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Doctors Direct IPO papers stated that there was a legal case about whether the sellers of Doctors Direct were in fact the full legal owners....
and the IPO went ahead !

so, if an IPO can happen with such a statement then imo, virtually anything can be floated, as long as the IPO document includes a note or info about all relevant material facts. Its then up to investors if they want to subscribe for shares or not.

What do you think ?

could Hartim not surprise us and issue an IPO doc. around April for 10% of new co. capital ....with annual accounts. year end is 31st Dec 2013 I think, so 3 months is enough for accounts. Including that it has declared to pay a divi of X on each existing share and new share.

[smithie6] 31/12/2013 15:10

or even a pony that can only do one trick.....I did get it !
(and hence my subsequent content in my older post...ref. FIF)

[smithie6] 30/12/2013 16:00

LFI/FIF.....trick pony !....nice to see a new angle !

(a trick pony ...whose success or not is very much linked to whether the gas price rises or not....and whether it rains in the Russian and American wheat fields...(dictating the price for flour) and same for sugar...)....

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Topvest
a) Hartim accounts qualification
'if' the Auz. venture produced audited accounts before Hartim produces theirs.....then could the Hartim accounts not then be unqualified ?
(although I note that it appears that once in administration.....often things take a lot of time)

b) Hartim...Auz.
unreturned money for goods supplied
did I ask this before ?
normally contracts for goods are that goods remain the property of the supplier/producer until after they have been paid for in full....
and that they can recover any goods that have not been paid for
so...imo the legal owner of the goods not paid for could send in an agent to regain their goods.....and hence Hartim would be re-paid

and/or surely Western Rose Auz should have had a matching unpaid debt to whoever supplied the goods to them (for export) and hence there is no nett impact on Western Rose ??

(appears to me to be IMPOSSIBLY STUPID, if Western Rose actually paid for goods supplied to it where the end customer had not yet paid to Western Rose.....
I thought that normally the distributor did not pay the mfr until they themselves got paid...
otherwise for say Tesco, a distributor would need a working capital reqt. of hundreds of millions for rolling 60 days as waited for goods to be sold and then for them to get paid...so they can pay the mfr.

and secondly. surely any distributor will/should have insurance in place....so that if goods in their warehouse are destroyed then insurance pays for the goods so that does not bankrupt the co. .....or if an end customer takes goods and does not pay and does not return the goods ...that the insur. co. would pay.
if so, does Hartim have such insurance and is Hartim processing to try to get 1-2M pnds back....

if Hartim Auz. were to get 1-2M pounds back then it would be a good jump to Hartim accounts.

imo...we're just the shareholders......not going to tell us anything !

c) Is there a part of Hartim in Auz. still trading ...and just one of its subsidiaries in Auz went into admin ?

[russman] 27/12/2013 21:11

I try to stay focused amongst your conjecture. I suggest WSE should be more aggressive & assume control of Hartim; the risks are known. LFI is a one trick pony, if the pony bolts - LFI will have 1 option left.

[topvest] 27/12/2013 18:08

Halogen Holdings PLC is still unlisted I believe and owns a substantial stake in Heartsone Inns which owns 9 pubs valued as a business at about £7.8m of which £3m is Halogen's share. See www.heartstoneinns.co.uk Heartstone is an EIS investment. It's EBITDA positive, but hardly a cracking investment. The pubs look nice and no doubt the wider family of interested parties enjoy visiting. Halogen has been left as an unlisted holding company and so a few holders are presumably not that happy given there is no dividend and no trading opportunity. Marshall Monteagle own 47% though.

Hartim accounts will be qualified in 2013 as well I believe, but the qualification will eventually work it's way through. No chance of a Hartim float in the near term in my view.

[smithie6] 27/12/2013 16:27

'Will LFI buy Western ?'

One fairly obvious possibility would be to do it at the same time as move Hartim in to occupy Westerns empty listing.....and as a sweetner to get Western shareholders to agree to it...

I note that LFI would only have to buy out one major shareholder to get over 50%
...in such a case LFI would have to match that price for anyone that wanted to sell to them....but at say 55% of Western, Western would still have its listing and own bod. To move the Western assets to LFI and then move Hartim into an empty Western shell would I assume need a 75% vote of Western shareholders.

2) Topvest
in next Hartim accounts will the accounts still carry an auditor qualification ?
or only in first year ?
or is an auditor note needed every year until the accounts from Auz. are obtained and auditted by Hartim ?

3) Hartim lost about 1.3M of good and similar amount in cash loan...

I wonder if the other 2 partners lost the same amount...
since Hartim only had 50%
or was it only Hartim that put its hand in its pocket ?!!

[smithie6] 27/12/2013 15:57

updated previous post in case of interest


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Western
if true NAV is around 113p +/- X
then if grows NAV by 10% in coming year then = 13p
13/57p = 23% ...+ 4% divi = 27%.
very good if it were to happen imo
and the discount could easily reduce by 10p imo
to give 13+2+10 = 25p.

44%

while the risk side looks very reasonable imo...invested over a number of companies not just one, main investment as NBI, which has an excellent track record of growth under existing exec. dirs.

EPS for WSE works out imo at atleast 7p, calculated from the EPS of its constituents, giving a low P/E rating

it went up 40% in 2013 !!.....40p to 57p

...one only needs 20% per year every year to make a good gain over 10 years from ones investments.

[smithie6] 27/12/2013 15:53

Halogen Holdings
Do you follow this one ?

Was it not bought by another company that the Marshalls control ?

(small pub/restaurant company if I recall.....dangerous times to invest in that sector imo....as people's disposable income has been tight imo...and a lot of pubs have closed due to lack of income....although if you are buying pubs then prices are probably reasonable)

[smithie6] 27/12/2013 15:50

'ISDX perhaps closing' 'possible merger with LFI'

ISDX...I see it continuing..but who knows.....they get some income, and a cut via trading of AIM shares as well....
Is it loss making or profit making ?

LFI and Western have had the chance to do various logical moves in the past....and they never make any !.....eg. share buy backs to reduce the deficit to NAV

or a compulsory share buy back at NAV of say 10%-20% of the shares followed by cancellation

(they get a cut from the NAV and the NAV pays their office running costs and expenses and salaries.....so perhaps they dont want to reduce the total Asset value and hence reduce the money that goes for office costs (and salary and expenses for any Marshalls !)

(the share price would increase, shareholders might wake up !....and ask for more of the same !....going against long term Marshall desires, ie. shrinking the size of the co. and its income)

de-listed or listed, little difference perhaps
as listed co. the dirs. refuse to tell us how they spend 280k. so, wouldnt change if the co. was de-listed imo.

Move back to AIM.
Looks unlikely AIM. BUT AIM shares are now ISAble....and perhaps that would appeal to the bod.
But, Mr Beale does not own 1 Western share, so there would be no tax benefit or loss to him of Western shares being moved to AIM and ISAble.
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Will LFI buy Western ?
Who knows.
So far they havent.
There were perhaps better times, from LFI viewpoint, to do it than now.
Before NBI doubling in price the Western shares were much cheaper imo.....and LFI knew that NBI shares were under priced. But they didnt try to buy Western.

The long term plan of the Marshalls is imo to keep adding subsidiaries....like Hartim and Ind. Comm. Holdings (the land near Glasgow).....without requiring any cash from the Marshalls (paid by LFI or Western or new PIs)

and hence the Marshalls can increase their power and income....and secure future income for future generations of Marshalls and family members/wives/kids.
D.Marshall took over from his dad......who had perhaps taken over from his dad
and L.Marshall is now on LFI board ready to take over from D.Marshall who is now around official retirement age.

[russman] 24/12/2013 22:32

I am focused on the unlisted value - Hartim. The other risks I can manage.

[topvest] 24/12/2013 20:47

Looking ahead there probably won't be a market for WSE shares quite soon. I suspect ISDX is going to close in 2014. It's not had anything list on it for months and companies continue to exit. At least then you won't have a share price to worry about the discount! In fact, there won't be a trading facility at all. It might present a good buying opportunity if some punters panic though.
Be interesting to see what happens then. I suspect that may well be the trigger for a merger with Lonfin. Maybe that was always the long-term plan and the costs of this will be lower as WSE would then just be a private company. What do you think?
To be honest I cannot understand why WSE ever moved from AIM to ISDX unless this was just saving some money short term / a merger was contemplated medium to long term. They could re-list on AIM, but that's going to cost c£200k which is not great use of funds.
A bigger concern is if they stay as an unlisted holding company like Halogen Holdings has done for the last 5 years or so.

[smithie6] 24/12/2013 18:48

Hi
Not got any Athelney....I did once upon a time....I sometimes read the long market views in the accounts.....often throwing mud at politicians ..enjoyable !

Panther...I have looked at in the past.....but Im not a fan of commercial UK property at present....although the Panther dirs. do seem to know what they are doing..
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cut

Western
if true NAV is around 113p +/- X
then if grows NAV by 10% in coming year then = 13p
13/57p = 23% ...+ 4% divi = 27%.
very good if it were to happen imo
and the discount could easily reduce by 10p imo
to give 13+2+10 = 25p.

44%

while the risk side looks very reasonable imo...invested over a number of companies not just one, main investment as NBI, which has an excellent track record of growth under existing exec. dirs.

EPS for WSE works out imo at atleast 7p, calculated from the EPS of its constituents, giving a low P/E rating

it went up 40% in 2013 !!.....40p to 57p

...one only needs 20% per year every year to make a good gain over 10 years from ones investments.
---

cut

[topvest] 24/12/2013 18:17

Yes, glad you enjoy being a holder in Athelney Trust - I also have some of these. The Chairman's ramble is nearly as good as Perloff at Panther. Again not the best, but a relatively safe home and a reasonable dividend record albeit some of the dividend is effectively paid out of capital.

[topvest] 23/12/2013 18:17

They hold the investment at cost +/- their share of profits or losses rather than a valuation, as you would do a listed company. The valuation is therefore very cautious in my opinion, but it's difficult to value anyway. Personally I think it could be worth £2-3m once they get on an even keel.

There is no point saying WSE is cheap on one hand and slating management on the other. The discount is caused by average management and a controlling shareholder.

As I've said before, WSE management are OK in my opinion. Running businesses is no easy job and they have a few successful investments, and some not so successful ones. The only real basket case has been Doctors Direct. Sanctuary was good for a while and so was MWB, but they both failed eventually. MWB failed because of excess leverage, but they had some good things...Malmaison Hotels, Liberty etc, MWB Exchange.

[smithie6] 23/12/2013 16:54

Topvest
for Hartim to be re-valued as part of these share transactions...does it require new shares to be issued ?

and the resulting value for all of Hartim from that would then be used
...increasing the Western NAV


2) if the shares are moved/sold from person 1 to person 2 (a major transaction as we know, old MD to new execs) would that meet the accounting rules for Hartim to be re-valued ?

[smithie6] 23/12/2013 14:49

ah
and if Hartim is trading well

how and why is the MD willing to sell his shares in it ??!

If I was the departing MD I might be willing to sell 1/2 of my shares to new dirs. ...as a trade to avoid being formally sacked or investigated
but I wouldnt be willing to sell all my shares.....since surely the claimed good current trading is partly due to my work over the last 5 years ??

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'to buy' NAV 93p imo ("to buy"- explained in old posts)
using NBI 465p, SWL 90p, CRE 87p, Hartim value 300k (just under 2p per Western Share), Gen Portf 2.95M
(ie. new investment in Hartim is not included, imo no change in value at present until we get more info)


with Hartim at 10p higher then NAV around 103p
with Hartim at 20p higher then NAV around 113p

Western share price at 55-58p.....crazy imo, far too cheap.
not far off halve price imo

just the NBI part is around 52p per share, surely underpinning the share price

the risk part of risk/reward looks tiny imo
and paying almost 4% divi now....and Hartim should now pay a divi, so Western Divi looks fairly g'teed imo.

(SWL showing signs of life today, quoted price to sell has moved up a few p)
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The dirs. buys confirms that the current accounts Hartim value of 300k for 50% is ....not true....way undervalued....new dirs. are paying much higher price

[smithie6] 23/12/2013 14:29

following on from Russman post about Western not being able to stop certain actions....

Western had the full chance to make that one of the conditions of the recent debt funding.....such as any major decisions to be first approved with Western....

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appears to me that Western does not sit on the boards at lower levels....
seems amazingly STUPID to me.

Anyone that invested in an venture capital deal like this would insist to sit on the boards of any significant parts of the group, surely.

There is imo a holding co. below Hartim, Tudor Rose Holding....and imo Western are not on the board, nor on the board at Tudor Rose.

NUTS imo

[smithie6] 23/12/2013 14:22

Good to see some discussion on WSE msg. board.


Topvest
"Having convertible debt is far more sensible and is what they have done."

personally I think I would agree with Russman....(and I think my earlier post)
that in return for helping out Hartim that Western should have obtained a benefit of some sort

2) personally I think that Topvests note is not true, imo the loan is NOT convertible..

An IMPORTANT point imo.

....it is just secured by the value of the business.....if the business breaks the loan conditions then Western could in theory issue a winding up order request to a court and own the business.....but if that was to happen then it would infer that the business was in big problems and not worth owning

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I agree with Topvests post that the 160k loan to directors is probably just a part of the money that dirs. are using to buy shares in Hartim.

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I repeat my earlier comment/post....that shareholders are intentionally being kept in the dark.
IMPORTANT points are not being revealed.
How many shares, or what % of Hartim are the new dirs. buying ?
How many shares is the ex-MD. not selling ?
At what price...and how does that compare with the price that Western paid back in 2007/8 ?

2) What is going on in Auz. and is it possible that Hartim will recover any money ....imo they should since the goods normally remain property of the original owner/producer until they are actually paid in full for them.....

could Hartim get 1M or 2M back ?

cut

[topvest] 22/12/2013 17:59

Yes, it is a risk. There is more upside than downside though as Hartim SHOULD be worth considerably more than the book value. It's a cracking little business - they just need to run it properly. I don't expect them to make the same mistakes again, but then again!

[russman] 22/12/2013 17:02

I agree with your statement. My headache is the potential downside to this further investment. WSE Bod said that Hartim's £1.4m loss was due to a management decision & as WSE is a minority shareholder they were "powerless" to stop it. WSE may still be in the same minority position but have provided further cash to support their investment. If Hartim rejuvenates, we will not worry.