William Sinclair Share Discussion Threads

[srichardson8] 30/12/2014 12:38

Defined benefit pension plan 3.14 3.13 9.13
deficit 11,788 14,578 10,840

The comments from somebody called profdoc above,whilst understandable given the volatile and largely poor earnings of the past two years, added to the recourse to an extremely expensive convertible bond, reflect no understanding whatsoever of the company's actual operations and major changes to them. This is frankly a low quality business and highly impacted by weather, however the interims are almost useless in assessing the company given the extreme seasonality of the business. This is still high risk but such a basic mistake as the incorrect presentation of the pension deficit suggests the prof should go back to school.

[coolen] 07/12/2014 22:48

Grateful for the analysis, with thanks.

I believe the convertible loan holders may also be ordinary holders, so possibly this debt will not be called, ie. more likely to have convertible terms adjusted downwards.

The resultant dilution will not help shareholders, but would assist the likely negative cash flow.

[gingerplant] 07/12/2014 11:06

Glen

I disagree with you on SNCL but nevertheless appreciated the analysis and effort and have taken a sub out for your service as a result.

Regards,

David

[profdoc] 04/12/2014 15:54

Arthur Lame Stocks asked me to look at William Sinclair. So, here goes.
This share does not have a hope of getting into my portfolio on the basis of trading performance and managerial potential. So I looked at it as a possible net current asset value share. I’m sorry if the following contains errors, but I cannot spend too much time on this one – please correct mistakes. The following figures are somewhat tentative as it is not at all clear what is happening to the BS of this company.
From latest interims: Inventory £13.6m, Receivables £23.9m, Tax refund £0.5m, Cash £0.9m. Thus total current assets amount to £38.9m.
We need to deduct, at a minimum, payables (£14.2m) and pension deficit (£22.1m).
This leaves £2.6m.
However there was an influx of cash in July of £12.25m.
But even with that influx “net bank debt” stood at £3.5m in September (it was £25.7m in March).
We also need to deduct the extortionate convertible loan (they must have been desperate, and the desperation indicates limited surplus value in property to offer lenders). Even at its nominal value it is £8.24m (it may amount to more).
Thus we have £2.6m + £12.25m - £3.5m - £8.24m = £3.11m NCAV before we do the usual thing of knocking off a proportion of inventory and receivable to be more conservative (do you trust this managerial team to avoid rose-tinted views on value of inventory and receivables?). Thus NCAV is probably negative.

Does the property in the BS help? Well, as far as I can tell from the Notes this is mostly land in hilly country. Difficult to value that (and they have difficulty making profit when they try to do anything with the land).
The 9 acres in Lincoln? Even if worth £1m per acre I’m not tempted. Can anyone tell us if it has lots more industrial land, say at Ellesmere Port?
Qualitative factors:
Reasonable business prospects? No
Capable management? No
Stable? Impossible to tell if BS is stable with the information available, but it probably is not. Operations are not stable.
Conclusion: No margin of safety for this share.
I have much more solid, lower risk shares to put my money into - see
Arthur: I hope some this helps.
Glen

[nocton] 25/11/2014 09:10

I think that this is just the sort of site that would fit the brownfield criteria mentioned in this report: hxxp://www.sharecast.com/news/brownfield-land-in-england-could-accommodate-1m-new-homes-research-shows/22257834.html
The only thing that would stop a development of a site like this for housing is local government inertia. Lincoln has lots of new business/industrial use areas on the outskirts and it is very unlikely that a new industrial company would be allowed on a site such as Sinclair's today. I don't see why the site should be particularly expensive to clean up. Lincoln, like so many other cities, has arguably also too much retail park space!

[bookbroker] 24/11/2014 14:20

Yeah, and SNCL. would have to demolish. clean up and obtain outline planning permission for a residential development, I see the houses, but you see that rectangle is all warehouse, retail parks, the consent is for industrial use only, otherwise there would be houses all over the shop, in middle of factory space that is redundant throughout the country. Has SNCL. got the money to pursue the demolition and clean-up before placing the site on the market!

[nocton] 24/11/2014 13:54

Not true that there are no houses there. There are houses on the other side of the road on two sides of the site. You can see them clearly on Google. It would make a prime brownfield site for houses, flats or university accommodation

[bookbroker] 24/11/2014 13:42

Big place, but no houses there, more like an extension to the retail park round the corner, make a nice site for a supermarket, shame they are all headin in the other direction!

[eclair] 24/11/2014 13:16

According to company history, the site is 9 acres (about 3.5 hectares I think).

[nocton] 23/11/2014 12:39

Must be at least 2 hectares, if not 3. Post code is LN6 7AH so you can see it by looking on Google where you can see how close it is to city centre.

[arthur_lame_stocks] 23/11/2014 12:15

That's very interesting Nocton. Have you any idea of roughly how big a site it is? Another large cash injection would really fix this company as well as reducing running costs.

[nocton] 21/11/2014 08:55

This company's main base (until Ellesmere Port) is in Lincoln close to the university and main shopping centre. I should expect them soon to close the Lincoln site and offer it for redevelopment. I am no real estate valuer, but I should imagine that the site is worth several times the market cap of the company today (Digital Look says £7.21).

[pugugly] 21/11/2014 08:24

callumross:> Refs does not take account (so far as i am aware) of pension liabilites - If they did most uK coys with legacy pension schemes would be in negative territory - The liabilites are hidden in the notes to the accounts as copied bove.

[callumross] 20/11/2014 19:31

Check post 240 from 18BT for the accounting facts and the reason why company refs are out of date, pugugly

[pugugly] 20/11/2014 13:45

callunross:> Not sure where you get assets of £1 per share - Refs: November states ntav per 2013 accounts at 72.7p and should have degraded significantly since then. (imo)

If Castleford Tiger is anywhere correct with his £5M loss then could be an erosion of some 30p oer share in ntav to about 42-43p So at current share price about at asset value e&oe.

The above subject to the accounting of the Bolton Fell compensation. i still need to crunch the numbers

Further crunching of numbers: Per 2013 accounts net pension deficit subject to assumptions between £8.6 million (per accounts) and £15.2 million based on possible amended assumptions

Sensitivity analysis of scheme liabilities
The inflation assumption used is based on the government long term target. If an assumption of 2.75% were adopted instead, along with correspondingly higher assumptions on salary and pension increases, then the value of future liabilities would be higher and the pension net liability is estimated at £15.2 million

This is looking more like a company being kept alive for the benefits of the pensioners rather than a potential investment (imo etc) Possible pension defict could be as high as twice current market cap

(as one used to say on the CB over and out)

[castleford tiger] 15/11/2014 18:36

callum

Too many mistakes mate.

it need a new BOD and bloody fast.
tiger

[callumross] 11/11/2014 09:18

And yet....you can sell at way above the bid price of 38p...41.1p last time I checked and assets exceed £1 per share. May be that with the new production facility and ample peat supplies that the worst is behind this company. Could, just could, represent a buying opportunity for those willing to take a long view. Unfortunately I thought that when I bought in at 60p!

[castleford tiger] 11/11/2014 09:05

Bunch of clowns running this.
Loss is before all excp items/dep/interest etc.EBITDA
Probably be close on 5 million.

Its blame blame anyone except the BOD.

Time to get rid or go bust
Tiger

[pugugly] 11/11/2014 08:47

PLUS the level of bank debt - Possibly now too small for AIM - To be taken private ??

[18bt] 11/11/2014 08:15

Well the market didn't even like the more confident statement, just concentrating on £1m loss.

[coolen] 07/11/2014 20:32

Tiger, I'm with you. I repeat my previous comment that it will be the convertible holders that will keep this afloat by doing exactly as you request.

[castleford tiger] 07/11/2014 18:28

That smacked of desperation at the time. 1.00 million for the banks again as well.
New board needed.FAST

tiger

[coolen] 05/11/2014 22:02

Does anyone know if Slater participated in the Convertible Loan placing some months ago and, if so, whether that interest would have been a "declarable" interest ?

[nocton] 05/11/2014 14:15

It was a (small) sale - from 1,229,445 to 1,204,445, which means they still hold 6.93% of the shares.

[3800] 05/11/2014 12:30

regarding the recent RNS has slater bought more or sold?
3800