Work Service Share Discussion Threads

[topvest] 21/12/2013 15:58

They didn't do that for 2 reasons I think: 1. Doing so would have caused them a bit of a headache. Consolidating a material entity with a disclaimer of audit opinion would lead to qualified group accounts; and 2. To incentivise executive management. Having convertible debt is far more sensible and is what they have done.

[russman] 20/12/2013 22:37

In WSE last yr end Hartim stake @ 49.50% had a carrying value of £185k. I would be very "displeased" if they have not taken this opportunity to attain greater than 50% of the votes.

[topvest] 20/12/2013 21:28

I expect the management team have invested some of their own cash as well as the loan monies - maybe 50% loan 50% their own money? Yes, it does look like the MD was forced-out. The original FD left about a year earlier I believe after the leasing fiasco. The important point was that Hartim is now trading well. The new management team will prove themselves over time I guess. We will see.

[smithie6] 19/12/2013 17:20

btw
a dir. at SWL has picked up another 10K SWL shares....probably the MD
hopefully a good indicator for the future SWL sp

and for SWLs sales in the important Xmas period !

[smithie6] 19/12/2013 16:58

topvest
"Hopefully the new management team don't make the same mistakes."

btw
imo only the MD is being changed...only 1 director has left according to co. house
and the co. secretary was changed
the rest of the board are not being changed imo

appears that new MD was perhaps taken on 8 months ago..if it is Mr Couzins-Short
..there is also a Mr N Short, since Nov 2011.....whether related or not I dont know..
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the Auz. mess up looks pretty bad....if you look at the numbers it had large costs.....and the chance of paying them from the turnover needed major major changes to happen, especially if note that the % margin from distribution is always small, like suddenly doubling the turnover....I had assumed they had arranged sufficient new contracts to achieve that before making the aqusition, appears that they did not....which appears a bit stupid, without knowing the details.

UPDATED
...the extra turnover coming from merging with 2 other companies....one was Gourmet (a name also existing in UK)
got it all pretty wrong imo to create a merged venture, which someone calculated would be viable....and supportable with the financial means of the merger partners....to then write off the loans from Hartim only 9 months later !!
infers that the decision was about to be made 3 months before....and that considering to make the decision 6 months before, ie. only 3 months after the acquisition !
the ink on the cheque hardly had time to dry !

[smithie6] 19/12/2013 14:52

I thought that the MD of Hartim that was forcibly removed imo (after losing the co. 3M squid, with the approval of the rest of the board including E.Beale and Marshall junior) had close to

50%

of Hartim...not 35%

when Western invested there were imo only 3 shareholders, Western, Mr Aird and 1 more director that had a relatively small stake, maybe 2-5%
...later Mr Aird seems to have sold some shares, maybe 5%. (hopefully he didnt do it knowing about the Auz. losses without telling the buyer !)
Who to ??
---

Mr Aird must have a background in import/export one assumes, or something similar, in order to have been willing to put in over 300K of his own money to Hartim when it started.

Does the new MD have a background in import/export....or does he have no idea at all ??


----


a) the dirs. need to put up some of their own money, or to at least g'tee the loans with their personal assets.
How much of their own money are the new dirs. putting in ??
If directors have their own money invested (rather than Westerns) then there would be a lower risk imo that they would take bad risks with the co.
(although it didnt work for the Auz. venture)

b) infers imo that no money has been recovered from Auz.
.....imo it needs to be chased up.....imo goods supplied should be returned, or sold, and if sold then the money should be paid to the Hartim Auz. co.
...to make sure no money goes missing, especially since it is at same time as the main responsible leaves

------

cut

[smithie6] 19/12/2013 14:34

Athelney trust up 20%.....arguably another similar small eclectic fund
to now be on I think close to zero discount to NAV

fingers crossed it might happen to the Western share price one day

[topvest] 19/12/2013 08:08

Yes, just read the announcement. Hopefully the new management team don't make the same mistakes. Not much about who they are. Positive that it says Hartim is performing well and that WSE will start earning a return through interest and dividends. As I thought, too early for a listing, but maybe the start of a new and better story. Would like to see it listed at some point!

[russman] 18/12/2013 20:03

Very conservative transaction. I presume the "retiring" director had 35% of Hartim? Let's see if Hartim shapes up.

[smithie6] 18/12/2013 16:12

any views on the Western RNS ?

[smithie6] 06/12/2013 18:57

NAV reminder

end of year accounts
June 30th 2012 72p. share price 42.5p
June 30th 2013 82p *1 share price 52p (maybe 22% increase on previous year)
Dec 6th 2013 95p (using buy prices not mid prices, my estimate, 125p if value subsidiary at P/E of 10)

shows good historic perf. in the rise of the NAV....for the future we have to wait to see...

current share price is 55-58p ( being the actual prices that buy and sell trades have gone thru at....while quoted price to buy is 60p)

fill order buy trades have gone thru.....only when a sale is processed....and since the MM doesnt want to sit and hold the stock he is happy to fill buy orders at 58p and make easy money for 30 seconds of work, 5-6% !!

---

current discount % to NAV is high
'if' Hartim is worth a multiple of its PBT then the NAV is imo around 125p.
whereas if Hartim manages to self implode after its Auz 'misadventure' then the NAV is 95p ...and share price is still well below that...at 58p to buy


----

95p comes from using
NBI 490p
CRE 86p
SWL 90p
2.95M Gen portfolio.
200k nett debt and 300k value in Hartim and associates (real value is much higher imo, eg. if price based on P/E of say 10 it is worth a few million squid)

logic for using 'buy' prices, see previous posts


(shows the share price increasing by 10p as the NAV increases by 10p.
the share price increase of 10p being a much higher %)

Dec. my est. around 93-96p.....I havent calculated it for a week or so, NBI is a tiny bit lower, small %, CRE down 15% but only a part of the total Western NAV. *1

*1. The true NAV is considered to be higher since valuation method used for a subsidiary is not reasonable and values it only based on its nett assets (small at present) and not its profitability, which is high.

[smithie6] 04/12/2013 13:30

3 buys of 10K (and sales) gone thru in last 2 weeks

unusually big trades for Western....hopefully a good sign, some year ends coming up soon...and also I assume closed periods...

[smithie6] 04/12/2013 13:28

Occasionally one sees a cool posting name
"oooff" very cool !

and thanks for pointing out the AGM info, agrees with the numbers I had been posting for NAV for Western imo

[oooff] 28/11/2013 20:33

LFI had much more information in their result of AGM announcement today, than WSE.

[smithie6] 26/11/2013 13:02

with NBI at 495p to buy and grinding up....

now 55p of NBI for each 1 share in Western

(2M shares in NBI and Western has just under 18M shares, 17.9M I think)

imo Western is now a better buy than NBI since if you pay 57p or 60p to buy Western shares...you get 55p of NBI inside that prices
and a load of other assets as well.....imo a good deal

imo a good chance that Western will tick up another 1-2p, if anyone buys any shares....illiquid, few trades...

[smithie6] 15/11/2013 15:59

good acquisition by nbi

sp up

around 54p of nbi for each western share

makes the price to sell western shares of 55p looks nuts imo.
considering all the other assets that come with 1 western share

nbi share price could easily pop up on monday if any press mention at the weekend

---
western NAV must be around 95p now using hartim at book value
and around 125p if value it at 30p higher based on P/E of around 10.

keep on holding on as far as I am concerned

[smithie6] 15/11/2013 15:57

was the Auz mess up done by the holding co. or tudor rose ?

although the holding co. has no business so would have to use Tudor Rose I assume to provide any money needed or security
although I guess the holding co. can borrow money to make deals using the subsidairy as a gtee for any loan

[topvest] 12/11/2013 21:18

They will be qualified as I don't think they have access - it's a limitation in scope if I remember correctly.

It's very difficult to put a value on Tudor Rose given its habit of screw-up's. Definitely worth quite a bit more than book value, but can't see this getting reflected for 2/3 years somehow. Wish it was sooner, but their Australian accident must have delayed things significantly.

[smithie6] 12/11/2013 16:38

can you maybe explain a bit more about why you think the Hartim accounts will include an auditor qualification/note this year ?

surely the data from inside the Auz subsidiary that went into administration should be known now....and fed in to the Hartim accounts ?

eg. the value of goods supplied to auz. subsidiary but not paid for .....hopefully by now some stores have paid for those goods...and the money paid to Hartim....or the goods returned
or am I being hopeful !

----
even if not floated, do you agree with my guestimate value, around 30p to each western share ?...I think you posted a similar value in the past. if profit is up this year, 6 weeks to go...then another increase...

profit has grown a lot since the investment was made, and they were +ve for this year...although with small companies that doesnt equal results

[topvest] 11/11/2013 20:53

Hartim accounts will be qualified this year as well, given the impact of the limitation in scope on last year's P&L. I can't see that floating Hartim is an option. They could float Tudor Rose by putting a new holding company in place though, which is reasonably straightforward to do (i.e. injecting a new holding company in between Hartim and Tudor Rose and floating that). I don't expect a float in the short term though. Indeed there has never been any mention of it.

[smithie6] 11/11/2013 18:45

NAV History. price to buy NAV, see previous posts for explanation

official NAV was 70p at end of Dec 2012.


5th Nov
NAV = 28p Hartim + 93p = 121p


8th Nov
95p
+ 28 p extra ref. Hartim = 123p

(if value Hartim at approx. 10 x profit)

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for details of Hartim valuation ...need to read past posts....
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with rising NAV and large discount...the 60p share price is underpriced imo

[smithie6] 08/11/2013 11:40

calculated 'buy price' NAV up 2p since 5th Nov imho

2p wrt to 60p price to buy.....useful addition

[smithie6] 08/11/2013 11:19

NAV update now that SWL has risen a bit

note, I have used buy share price and not mid prices......
to then compare with price to buy for Western shares
..to get an idea if better to buy the shares that Western holds individually
or to buy Western shares because they are at a large discount

so heres the numbers Ive used

NBI 470p
CRE 100p
SWL 90p

Other data the same as in previous NAV post

Result is 'buy price' NAV of

95.5p

with Hartim at its book price...which is NOT a true value since less than its annual profit !!
(not a true value, not a 'fair and reasonable' value (ref. Company Act 2006).....but it is used in the accounts, strange world sometimes !)

this compares with a price to buy for Western shares of 60p...too large a discount imo...sp has been rising rapidly, imo it looks likely to continue....partly since the discount will reduce imo and also because the NAV is increasing in recent weeks and months

and over 120p if value Hartim (or Tudor Rose) at a P/E of approx. 10. +/- X %, to give 28p, Hartim valuation is very rough guestimate

so
95p + 28 p = 123p

current share price is approx. 1/2 this number !!. Nuts.

And if Hartim continues to grow profit this year, as it has over last 5 years then the x10 value increases, and the x10 should perhaps be increased to x15 since growth cos. normally get a higher P/E.