Work Service Share Discussion Threads

[topvest] 08/7/2011 21:16

I can't see that happening to be honest. Only possible route is an LFI / WSE merger as this would sort out a few issues. Otherwise, I'm happy to hold and see what happens with the very good strategic investments.

[markt] 08/7/2011 11:33

Topvest
no interest in the pro rata handout of assetts ?
...via share scheme such as done by Aggreko recently....returning assetts via share cap. distribution not giving out benefits, so little or less tax...

[markt] 08/7/2011 11:31

thanks for that info

(Valiant. my days of investing in any small investing fund are over for ever I think....when I get my money out of WSE at some good point/time in the future I will then only ever manage it myself or perhaps make use of large funds (like Herald Investment for example)
...it is too much, high % costs, too many related party transactions, illiquidity of shares, large buy/sell spread, little or no information out of small fund managers (Even NAV, WSE/LFI provides no monthly NAV update but they know....and they can and do buy/sell shares, with insider info.)

[topvest] 07/7/2011 21:48

I wouldn't have thought shares in Valiant Investments were a good bet for anyone other than a gambler. Conrad may have convinced some mates to invest at a bargain price but it's never going to make any money so its a pure speculation - intrinsic value = zero!!

[markt] 07/7/2011 10:47

BTW
I am sure that there is widespread misuse imo of small companies by directors....
(eg. one on Plus today that has issued new shares...Valient Investments PLC....;and Blackstar Inv. in the past)

when a small company is doing well it seems common practice that friends or contacts are allowed to subscribe for new shares....gaining tax relief.....and a capital gain since buying at a good time....and often the volume they buy is not available in the market and such buying would drive the price up....

(directors wont subscribe new shares to friends/contacts/business associates at a bad time.....since they would lose their friends/contacts/business associates !! and that could damage their own wealth)

normal shareholders are being misused imho...they take the risk and hold long term....and at some companies...friends just subscribe for new shares at a good time when it appears to be a gteed short term win.

Ah, the LSE/AIM and Plus markets.

[markt] 06/7/2011 17:53

Topvest
imho....even if the divi from WSE were in some future year to increase...
my calculations are that it will still be a low % return on the assetts invested....the lowest % return out of my assetts

if you are only after dividend then over the last 10 years you (and me !) would probably have done better with divi provider like water, electricity, gas company shares.....(but I haven't looked/checked, I'm after total return not chasing dividends)...but not the time to jump ships I think or just lose with buy/sell spreads and commissions.

[markt] 06/7/2011 16:56

Topvest
the only person making money from CRE appears to be the MD and the FD

1/2M shares today....under share benefit scheme......the MD kept his (after selling enough to pay tax) and the FD sold all of his !!....not a good sign

the MD has received a lot of money via salary (1/2M pnds per year I think, 5M pounds total or ?) and via shares (some bought some for free I think, like today)...while shareholders over 10 years have received almost nothing.
oh, and of course Mr D.C.Marshall has received his directors pay each year for 10 years...and the years before that before became marketing co.

[markt] 06/7/2011 11:27

Topvest
note that if WSE handed out the shares it held pro rata to shareholders then "you" would get the divi from those shares directly.....rather than part of it going to pay Mr Marshall and 48% of it towards the salary of one son of Mr Marshall

and NOT completely consumed by running WSE (1,4p per WSE share, 250k, 18M shares.....over 10 years that is 14p, higher with interest, 14p is 1/3rd of current share price !!!!) (perhaps part of the reason for the high, imo, costs is that City Group offers services for Luxembourg and off shore tax havens.....that may be of use to the Marshalls but are not needed for WSE or LFI)

AND you would get the increase (or decrease !) in value of those shares directly....

and you have liquidity whereas in WSE it is often not possible to buy or sell more than say 1k pounds in shares.....if there is no buyer then the market maker may not want to buy any more....except say 1000 shares that he is quoting a price for, 430 pounds.....waste of time, if you need 10k quick (say for a new boiler or to buy another share) then at 430 pounds per day it will take for ever to get 10k.

whereas in NBI or CRE you could sell 10k pounds worth (or buy ) in 1 trade.

====

how can running WSE on Plus cost 250k.....ridiculous (wrong !) imo
noting that most of WSE investments are static....
RNS from WSE ? the prelim results, interim results and maybe 1 RNS per year if a director buys any shares....so not a lot of work there

PLUS market cost itself is tiny.

[markt] 06/7/2011 11:07

income to WSE from dividends....

you make a valid point that WSE may increase....
but I think it is worth noting that WSE costs over last 10 years have been higher than its income (and dividend to WSE shareholders has hence been paid from consumption of WSE assetts)

so
if WSE income increases....perhaps it will just reduce the shortfall that has existed compared with running costs.....and also it would be natural sadly that the running costs will increase to take part (all ?!) of the increased income

WSE is controlled by LFI....and LFI owns City grp which runs WSE and LFI and is expensive....
and Mr Marshalls director salary has multiplied by 10 in last 10 years....I wont be surprised to see that jump if WSE income increases.....

and LFI/City Group had a 38k motor vehicle back in 2000....so perhaps it is time to buy a new one !....and perhaps new office furniture....perhaps new bigger offices....higher salary for City Grp staff if it has more income, including for the Marshall son that is a director (and any more family members , we dont know)....increase to pension fund for staff at City Group, especially directors...


and you and I would not know anything about it....since occurs at subsidiary and we dont see the accounts...and even those accounts give very little break down....
(the main WSE cost is titled as 200k admin. cost and that is all I think.
maybe 50k goes for flight cost from South Africa for the main director, a valid/legal expense one assumes, we dont know....)

1/2 of the possible increased income could be consumed via 'a bit here and a bit there'......and the remaining part would not be so much and have much impact on WSE share price imo

[markt] 06/7/2011 10:35

Topvest
New point !.....and quite a good one I think !

If the Marshalls wanted to use WSE and LFI for personal benefit ....but at the lowest investment cost to them.....how would/could they do it ?

If one was in their position what are the choices ?

Let's note that the Marshall investment in shares is only in LFI and nothing in WSE....but LFI controls WSE via its 44% holding + the shares of WT Lamb (which could be a sleeping co-operating partner, present in LFI and WSE as vital controlling votes to give > 50% at all times......building, development sector...and Mr D.C.Marshall has many fingers is that sector including ICH, Monteagle Marshall Property, Honeycomb needs bar/restaurant refurbishments done, MWB, MBE, Creston property in the past.......)

(note, Mr D.C.Marshall used that LFI control of WSE to intentionally word the 2006 AGM resolution to allow him to use LFI votes to vote thru a benefit scheme with his son as one of the 2 main beneficiaries....and one assumes that MR D.C.Marshall is also a beneficiary himself....and are there any other family members to benefit ? (3 sons are employed at one Marshall company, perhaps all 3 work at City Grp...which runs LFI and WSE, we dont know).....all scheme details are kept strictly secret, and questions are refused, why ? is there something they want/need to hide ?

If one wants to make a personal benefit by receiving free shares at no cost or get a subsidiary to subsidise the operating costs of the overall web (LFI and WSE and City Grp).....do you enlarge the capital base of WSE or of LFI ?

The answer is WSE. (and that is exactly what has happened over the last few years)
Why ?
Because the cost in pounds in having to buy new shares is smaller for the Marshalls.
LFI pays for its part of any new shares in WSE. LFI, not the Marshalls...and LFI can do this via debt without issuing new LFI shares to raise money.
LFI has issued very few new shares over the last 10-15 years. The big growth in capital base has been at WSE and not at LFI.
Why ?
Is it because it is the cheapest and best option for the major shareholder at LFI, the Marshall family trust(s) ?
....so , is WSE being operated for the benefit or whims of another company, LFI ?
And if so, is that legal ?

===
The big sudden share issue in WSE in 2007....was that really for the benefit of WSE shareholders or was it for the benefit of LFI which saved money imo by subscribing for shares....reduce any LFI tax liability from the sale of 1M shares in MWB at 3 pounds per share (now 38p).

====

Noting that 4% free shares in assetts of say 20M pounds is much more money/benefit that 4% free shares in assetts of 10M.

The WSE warrant units issue in 2007 would have DOUBLED the number of WSE shares.
At LFI.....not 1 new share was issued. Some warrants were given out free 1:8 I think but they expired out of the money and worthless.

DOUBLING the number of WSE shares was really intended for the benefit of WSE sharesholders ....or was the benefit of LFI and/or the Marshalls any part of it ?...noting that the Marshalls would benefit but they would not have to invest any money !!
If new shares had been issued in LFI then the Marshalls would have had to invest hundreds of thousands of pounds since they own approx 40-44%...and cap. value is around 6M....if 2.5M of capital and double the number of shares (as at WSE) then it would have cost the Marshalls 2.5M pounds !!...Probably money that they do not have.
Hence I am asking if the doubling of capital at WSE was intentional...since it would not cost the Marshalls any money but would provide them with benefit.

====

If WSE is much bigger.....and hence with more income via dividends etc....then it can support to pay higher costs (such as the salary of the son of Mr D.C.Marshall (WSE effectively pays 48% of it as 48% owner of City Group PLC) or other costs.....any other family members ?.....office rent of over 40k/year when WSE has no staff !!

so the benefit to the Marshalls could increase if WSE income increases by it being bigger (by massive issuing of new years in last few years, 12M to 18M and would have been to around 26M or so if the 3 remaining warrants had been worth exercising........while at LFI, no shares issues except a minor one in 2005 which was a small benefit thing (if sell shares but exercise warrants for new shares then I think no tax to pay, tax relief for new shares)

[markt] 06/7/2011 10:00

....just to repeat that I dont suggest to sell at the moment since large discount to NAV....

but I am interested to see shareholders discuss the operation of LFI and WSE and to discuss what shareholders want for the next 10-15 years.....and how best to obtain that....noting the bad performance over the last 10-15 years (and probably longer)

Any WSE or LFI shareholders reading ......or only Topvest and me ??!!
(shows the low level of interest in this company.....due to its dismal long term performance over last 10-15 years imo)

Investment managers who have been performing in last 6 months.....include
- tips1 (but personally I do not recommend them for integrity....one of their subsidiaries has had its wrist slapped by the FSA in the past....Square Mile if my memory is correct..(high risk strategy, microcaps, but WSE/LFI has been the same)...and they write public buy recommendations for shares they have big holdings in....)
- Lion Trust Assett Mgrs


....or the published performance lists who which managers can repeatedly do well...LFI and WSE would be well below the middle imo

[markt] 05/7/2011 11:01

Topvest
you mentioned that you are only interested in dividends, not the share price....

(personally I think that approach is from the past and not valid in modern times, but each to their own opinion (I think that must consider total return, imo if a share does not pay any divi but goes up x 5 in a year....then can always sell a few shares if need some income.....)

The WSE price would be 127p if it had increased 6% per year since 1995 ("big" cash raising then at 56p)...or 95p if increased at 4%. (simple calc. using excel, iteration).

Share price now 43-49p I think.......imo the loss in value compared to inflation and compared to the market (eg. FTSE) is so big that any thoughts about dividends is, imho, completely irrelevant.

And if the share price or NAV had been increasing since 1995 then it would have been easy to pay good large dividends.
But the reality is that the divi has been around 3-4 % of the share price (1-2p, more years around 1p)...because of the poor NAV performance.
And in at least 2 years no divi was paid since prevented by law from doing so, because of poor performance.

On the plus side, it hasnt gone bust...and maybe the future will be better than the past.....but the past has been proven to be bad. (MWB, FIF, CRE, .....all currently showing as failed investments imo...and SWL has gone no where...as shown/proven by the poor WSE and LFI NAV performance....all under the control of Mr D.C.Marshall...with a son as a director of the co. doing the day to day running.....and with Mr D.C.Marshall sitting on the boards of those companies....)

IMO in most listed investment companies the investment manager would have been replaced/sacked years ago.....but because of the family ties and spiders web of links.....no changes

[markt] 04/7/2011 20:46

Topvest
I note your points....
there are of course +ve and -ve points.....

(note that are risks at some investee companies as well, FIF could announce at any time similar news perhaps to PFD which dived recently.....or SWL the same, has produced news in the past which has clobbered its share price...or MWB could get nailed by its high debt and gearing or have problems linked to the cake fight/squabbles about MBE....and a major account at CRE is up for competition....compared with future possibilities the performance of WSE/LFI over the last 10-20 years is not a maybe, it is fact...and it is not so good)

....the running cost is too high imo.....2.5-3%......over 10 years that is 25-30%
.....with 2 blocks of 10 years 50-60 % !!.....

This consumes a BIG amount of the assetts of the shareholders....unless the NAV really motors and is able to tolerate such a big loss and still rise a lot..and over last 10-20 years LFI/WSE haven't been able to.

(detailed calc. is more complicated, with inflation etc)

(on Plus I can see no justification for the WSE running cost..noting that WSE/LFI havent done many deals in last few years, MWB/FIF/SWL/CRE (had these for years....and even NBI dates back maybe 4-5 years now, with maybe 1 rights offer per year)..and over 40k for office costs....but WSE has NO staff !!......total cost for the offices with 10-12 staff (secretarial work for FIF, CRE, MWB, Monteagle Marshall ....) is around same amount.....so why does WSE pay all of the cost when is subcontracts its running to City Group which it pays 90k ??!!)

[markt] 04/7/2011 20:32

Topvest

There is a post on the MWB that includes a bit more info on things like related party transactions related to Mr D.C.Marshall and/or LFI/WSE/City Grp

markt - 14 Jun'11 - 18:55 - 337 of 337

=======

....I repeat that I am not suggesting that anyone considers to sell WSE shares....more that shareholders and the market should be fully aware of the bad performance over the last 10-15 years of WSE and LFI (and LFI I think has an even worse performance if go back 20-30 years)

and be aware of various activities of WSE and LFI which are dubious , such as mentioned in post markt - 4 Jul'11 - 10:35 - 60 of 62

and be aware of the various related party transactions and operations and profits of private companies of the directors and related parties from the same offices (paid for almost completely by the operation and shareholder money of LFI and WSE)

and that WSE/LFI intentionally do not disclose the value of related party transactions...whereas every other company accounts I have seen discloses the value of transactions.......are LFI/WSE breaking the rules ?

and be aware that Mr D.C.Marshall, imo, took over WSE and LFI from his dad.....and that one of his sons is being warmed up, imo, to take over from him..(Mr D.C.Marshall is now around 65 yrs old......long flights from South Africa where he is officially resident...anyone over 65 would have to be a 'glutton for punishment' or a masochist perhaps to be over 65 and fly back and forth for directors meetings at NBI, CRE, MWB, FIF, WSE, LFI......) director at subsidiary City Group PLC which runs WSE and LFI (noting WSE has NO employees)

Perhaps shareholders should
- use a qualified and experienced and proven investment manager to manage the investment of the shareholders funds.
- And avoid having a director sitting on the boards where it invests since this produces a conflict of interests (did not sell MWB at 3 pounds per share perhaps since Mr D.C.Marshall would lose director's income....same story at FIF...and at CRE)
- separate the board of directors from the investment manager, as is done at almost every other investment company. eg. Herald Investment. If the Inv. Manager does not perform wrt the market...then just change the manager.
At LFI/WSE family ties and spiders web of responsibilities.....it has not produced good results over the last 10-20 years.
- ensure that transparency is provided to shareholders. Definitely NOT the case at LFI/WSE.....eg. a son being a director at subsidiary is not stated in any company accounts.
- insist that the performance requirements for the free shares for employees including the son as one of the 2 main beneficiaries are made public. At other companies incl. investment companies the performance reqts. for option shares or whatever are normally stated in the accounts. At LFI/WSE it is strictly secret.

[meadow50] 04/7/2011 12:10

I got out of these a month ago aftr holding for 15 years.
Markt 's warning post doesn't emphasise the slashing of divis and the transfer to plus which reduced marketability and increased the spread.This is a company run for the benefit of the directors imo and the dangers have been well flagged up.

[topvest] 04/7/2011 11:47

I think you also need to focus on some positives:

- WSE shares are way undervalued, partly because of the family company discount
- NAV is understated imho as Hartim is standing at book value and Creston is very undervalued for a dynamic business with no debt. Creston will be re-rated at some point
- NBI is being re-rated as a growth company and could go to £5 without too much difficulty if the good news continues
- There is scope for NAV to get back to a £1 soon
- The share price is irrelevant imho, provided dividends start flowing
- I see good scope for the dividend doubling over the next couple of years as Hartim is going to generate some serious cash flow for WSE now that the acquisition debt has been repaid.

Yes, there are ? about long term performance and related party transactions. But the latter is often the case on "family" businesses. Costs are generally fairly low.

If I didn't have too many already I would be buying more at 50p.

[markt] 04/7/2011 10:10

You mentioned that Creston has been doing well.
Lets recall that Creston has been a terrible investment for WSE shareholders.
around 1 pound in 2000 when Creston changed to use the cash to appoint DOn Elgie as MD and start marketing business. And 113p now 11 years later !!. And WSE paid 130-131p for shares issued by Creston to raise cash.
11 years later and showing a loss on those shares.

At the same time Mr D.C.Marshall has been paid each year for being a director of Creston, I understand that the money is paid to overseas company, I assume of Mr Marshall so I assume tax free. If pay was 30k/year then 330k total.
Then multiply by the other companies which pay Mr Marshall......probably adds up to over 1M pounds over 10 years.

and that LFI rented for use by 'employees' a flat valued at 1.57M charging 2% while LFI borrowed money at 5% !! 'Employees' could be Mr D.C.Marshall or one or more of his sons (at least 3).

=====
Nice to have some good news.
(but noting that Hartim is exposed to many risks...such as the change in the value of the pound perhaps reducing the Hartim sales in the future....time will tell. Hartim profits look very similar to what they were when WSE invested, just that 1 or 2 costs reduced such as the high salary of the previous owner/MD......and expats may reduce spending as their income has fallen since pound has fallen...and Greece, Portugal, Ireland, Spain, Italy, UK, people are cutting back spending.....)

Let us also recall the NAV history for WSE, see below, under the guidance of Mr D.C.Marshall (now with a son as a director of the subsidiary that actually runs WSE and LFI, noting that Mr D.C.Marshall is resident in another contintent, not in Europe). In past years there has also been good news, eg. Sanctuary Group, or selling some MWB shares at 3 pounds. But the overall result is what matters. And it is not good.

Let us recall also that the share price now would be 127p if it had increased by 6% per year since 1995 (when 2 Miners Pension Funds bought 2.7M shares at 56p, converted for 4:1 consolidation). And the share price now is 43-49p, sell/buy. Negative compound growth for those retired miners !!.....or perhaps now 15 years later, some of them will have sadly passed away.
In 2009 the Miners Pension Funds received NO dividend since WSE was prohibited by law from paying a divi since performance had not been good enough over X years to build up assetts of higher value than had been raised from shareholders. And also happened in another year before. So, Miners, 2 years with no divi.

====

Is 6% annual growth too much to ask ?
share price now would be 127p if it had increased by 6% per year since 1995...

at 4% it would be around 95p.
And actual price is only 46p ! ARGHHHHH !!

Small companies=risk....stock market = risk.....need a return to take the risk.

====

NAV of WSE
(this NAV history looks to me to be a DISASTER !....absolute rubbish
...while at same time Mr D.C.Marshall gets an income of approx. 107k/year, perhaps tax free, paid outside of UK, 23% annual return on his personal investment of approx. 400k pnds, which is in LFI shares, 0 in WSE shares.)

(pre- 2006 already multiplied by 4 since consolidation, 1 share to replace 4)

1993 82p
1994 71p
1995 [ 89p market mid price. NAV = ?]
1996 65p
1997 64p
1998 73p
1999 71p
2000 119p
2001 120p
2002 80.4p
2003 88.4p
2004 92.7p
2005 83.2p
2006 90p
2007 100p
2008 58p
2009 50p
2010 61p

[topvest] 04/7/2011 08:39

markt - sorry to be the bearer of good news, but thought you might be interested in this.

Just had a quick look at the Hartim accounts for 2010 at Companies House...wow is all I can say!

Headline financials
- PBT of £747k versus £455k last year
- Turnover increased from £20.4m to £22m
- Operating cash flow £1.9m
- Shareholders funds increased from £1.9m to £2.4m

...and wait for it..ALL but £85k of the acquisition debt has been repaid already!!

Net cash £755k versus net debt of £965k last year.

This company is worth significantly more than the £1.2m carrying value. I think it's worth 2/3 times the carrying value which would push net asset value over a £1.

Dividends should start to flow sometime soon in my view.

[topvest] 04/7/2011 08:22

Things are going well for WSE this year - net asset value is now c85p by my reckoning. Northbridge and Creston are doing very well. Given the increased dividend on Creston, dividends should also be increased.

[markt] 03/7/2011 22:08

...sell.....nah...large discount to NAV.....I keep on dreaming that 'things can only get better' !

...maybe Mr D.C.Marshall will step down ...and maybe you will make the investment decisions....over 20 years I reckon you would grow the NAV better than the existing directors have !

82p in 1993 and 71p was the NAV reported in 2010 interim results I think I recall.

18 years and NAV is lower !! Amazing !
...if one had invested in say Sage or Pearson or even the FTSE index......then you would be a lot richer now 18 years later than investing in WSE...

[topvest] 14/6/2011 21:26

Markt - you make a number of valid points but this is a Marshall vehicle and what he decides goes! If you don't like it then sell. I'm happy to hold and await some value coming back. In the meantime we get a reasonable dividend. How many shares do you own exactly as you seem to be investing too much time on one stock?

[markt] 14/6/2011 19:02

NAV of WSE

under the direction of Mr David C.Marshall

(pre- 2006 already multiplied by 4 since consolidation, 1 share to replace 4)

1993 82p
1994 71p
1995 [ 89p market mid price. NAV = ?]
1996 65p
1997 64p
1998 73p
1999 71p
2000 119p
2001 120p
2002 80.4p
2003 88.4p
2004 92.7p
2005 83.2p
2006 90p
2007 100p
2008 58p
2009 50p
2010 61p

Dismal performance !!!

and no dividend in at least 1995 and 2009...since prevented by law.
Nominal share face value is 40p and mid market price is 45p....that data also shows you that the share price is only just above the nominal share value.....simple visible demonstration that the directors are unable to get the co. to perform....if it did then the nominal share value would be 40p and the share price would be say 250p or 5 pounds.
Company had Mr Marshall as a director since 1974 !!

[markt] 14/6/2011 17:37

mid market price for WSE in Dec 1995 was 89p,
now, in 2011 it is 45p

HALF WHAT IT WAS 16 YEARS AGO !!

Chairman during these years....Mr David C.Marshall.