Recovery required
26 Sep 2017
Re: Results Really struggled to top up my holding this morning! Managed to get a few at 150.46p.
gamesinvestor
26 Sep 2017
Re: Results LK -- Nor me -- I bought some more yesterday lol !!!Still - there is not a lot wrong with the results here either and everything seems to be sold off whether you do OK, badly or wonderfully -- it's a nervous market indeed.The only real gotcha here is the extra £35M they are needing for IT -- but in the grand scheme of things the company is pretty stable.It's reducing it's interest payments by £90M over the last 3 years - it's reduced it's debt by £500M in the last 3 years and they now have a growing underwriting arm which if conducted sensibly will add more profit down the line to their growing insurance business.At 152 (ooohps no 155) as I type it's a bargain unless you think Hammond is going to slap 5% on interest rates - in which case all your other stuff will go south pretty rapidly notwithstanding AA's position.Games -- It's enough to bring on a breakdown innit !!! -- (see what I did there !)
LK Hyman
26 Sep 2017
Re: Results Games,This was surely the last thing Woody needed.LKH on the flybridge
gamesinvestor
26 Sep 2017
Results [link] pretty reasonable from here :- Financial performance was robust in Roadside and strong in Insurance.o Trading revenue rose 1% to £471m reflecting growth in both insurance broking and underwriting. Roadside demonstrated its resilience, maintaining revenue, and despite the anticipated retention challenges, membership numbers rose slightly year-on-year.>>> So it is far from the disaster some have been predicting.o Trading EBITDA up 1% to £193m reflecting gains in insurance broking as well as reduced Head Office costs. In Roadside Assistance, the increased costs related to erratic workload patterns and the relatively inflexible resourcing model held back profitability.>>>>o Robust cash conversion at 101% (H1 17: 99%).o Membership base rose to 3,325,000 (H1 17: 3,321,000) driven by a 13% increase in new members and stable retention.>>> Pretty good in a competitivive market.o We have retained or extended contracts with five of our major business-to-business (B2B) accounts and increased average income per customer; we continue to expand our service offering in this market.o Motor insurance policy numbers grew 8% to 616,000 (H1 17: 572,000). The in-house underwriter now has 321,000 (H1 17: 25,000) motor and home policies in force.>>> Assuming all underwriting has been performed sensibly, this looks like a reasonably new stream of profit now that they have bolted on over 321,000 contracts.o The new advertising campaign has been well received and driven a significant increase in awareness amongst our target segment.o 38% of members are registered for the App and it is used in 28% of breakdowns (FY17: 22%).o Car Genie, our connected car technology, was launched in the summer and has potential to pre-empt breakdowns in up to 30% of cases.>>> Hopefully the Car Genie can lower costs.Games -- stock sell off looks like an opp -- will add more today
Recovery required
25 Sep 2017
Re: Doubled up Fingers crossed for tomorrow. Now my largest holding.
Intellectual Amateur
25 Sep 2017
Re: Doubled up Oooo! Good luck! I just want it to get back to 1.862828 for the time being! Ha! Let's see what tomorrow brings! Best wishes, IA, aka "The Not-Know-It-All" Ha!
gamesinvestor
25 Sep 2017
Doubled up Games
gamesinvestor
24 Sep 2017
Still a good runner.... [link] sell my Glencore on Monday and triple my investment in the AAGames
Intellectual Amateur
28 Aug 2017
Re: A.ctually A.ce or a D.oD.o? Follow-u... Bill & LKH: I completely understand your comments on my "I don't sell at a loss" stance; "mis-guided" is a fair description that I accept & I wouldn't encourage anyone else to adopt this peculiar rule. It is a symptom of my overall attitude to trading / the market, I guess: I am prepared to go down with the ship, at one with my stupidity, enveloped in the arms of my lover, Fate (Ha).I bought the damn thing, so if it tanks then who's responsible? Me! I would be pretty disgusted with myself if it ever happened but I live by the sword, die by the sword.It's one of the things I like about the market: the brutal, no hiding place aspect of it. I like the thrill of being accountable (it beats parachuting in my book!). I hate funds, trackers, bonds - I like singular stock picking - I love the clock ticking down the seconds as you decide whether this is "the price" at which you're prepared to buy or sell at. I am probably crazy.Bill - I am very heartened by these points you make:1) no good reason for the 20p fall - sentiment, confidence, leading to net sellers2a) why have the AA been able to "get away with it" / raise plenty of new debt2b) what would the AA fetch on the open market: £5-6 billI am concerned about non-AA related issues (short-term & long) that will likely pull general sentiment down further (much further!) but the stuff within the AA's power gives me hope, ie half year results in line, settled board, hopefully strong indications that the debt will not increase - that sort of stuff, broker up-grades would be very cool also.Optimistic: year end SP: 187pPessimistic: if it falls through 150p, then it's panic in the streets, well, in my street. Ha! Ciao.
Bill1703
27 Aug 2017
Re: Is the AA now the DD? "... all I have to do now is hang in there for seven years..."Yes, good point LKH... best you steer clear (geddit?) of the AA. It is unlikely to be a sedate ride... however rewarding it may prove eventually.
Bill1703
27 Aug 2017
Re: A.ctually A.ce or a D.oD.o? Follow-u... IA - I don't think you will find any good fundamental reason for the 20p fall in recent days... all down to confidence and sentiment, which has been undermined, and you now have net sellers, people running fearful to the exit. But you know what Uncle Warren says about the fearful and the greedy...These are wise words from LKH, about refusing to sell at a loss... a perfectly reasonable mindset, I know it myself, but you have be disciplined about it. Particularly with this one... could easily come a time where you have to sell to avoid a more complete meltdown. BUT... I do not currently envisage the conditions which would cause this, for the foreseeable.LKH is also right, we all like a strong balance sheet, all else equal... I think you have to view this as a "special situation", and decide whether your glass is half empty, or half full? Yes, the debt - and leverage - is huge... but why have they been able to get away with it? Very few entities could raise any finance, debt or equity, with such a structure... yet the AA has been able to raise plenty of new debt in recent times, at increasingly lower rates. And the equity was reasonably buoyant and far from distressed... until just lately?One other way to look at it... what would AA fetch on the open market, free of all debt? A business generating some £300m of free cash flow, after 'normalised capex', and possibly a tad more going forward? With a strong, long-established brand and market position, well-invested, and with very stable, quasi-utility up-front core cash flows? Possibly £6bn? A FCF yield of 5% (merely the market average).... certainly, £5bn I would say. But possibly even more... I know of various entities who would pay top dollar for such an asset. Which puts into perspective the current £2.7bn of debt... and also lends weight to the argument that the equity could easily be worth a multiple of the current market valuation.Of course, not so easy to separate the equity and the debt in practice... at least in the near term. But perhaps it does make your glass look that bit more like half full....?
LK Hyman
27 Aug 2017
Re: Is the AA now the DD? Games,"you went into a relatively weak balance sheet situation with the sausage boys."Do as I say, not as I do, m8! Anyhoo, I went into Devro near the end of an intensive capex programme to build new snorker skin plants in China and the USA. Sure, that meant that the balance sheet was a bit stretched but I could see the prospects for a veritable tsunami of cash subsequently, as the Chinees and Amurkans (including Latinos) started playing hide the sausage big time.Anyhoo, as you imply, it's all academic now as I've sold my Devro and handed the cash over to the next generation .... In your face, Spreadsheet Phil!LKH on the flybridge all I have to do now is hang in there for seven years
gamesinvestor
27 Aug 2017
Re: Is the AA now the DD? "give me a strong balance sheet every time"LK -- You may have sold Devro, but as a holder or ex -- you went into a relatively weak balance sheet situation with the sausage boys.The borrowings were over £160m last year and with pre-tax at £15M it's pretty weak.AA is poor admitted, but there are a couple of important differencesAA's operating margins are 30% compared to Devro's 6+% (net +ve assets but questionable)AA's free cash flow is 12+% and Devro's is negative. (net negative assets)mmmmm -- makes you ponder doesn't it.Now Devro maybe about to reverse that - let's hope so and it'll be interesting to see what happens to the two sets of share prices in 12 months, with 
evro at 234 and AA at 167.Games -- Not a fan of weak balance sheets either but maybe never say never as they often utter !!
LK Hyman
27 Aug 2017
Re: A.ctually A.ce or a D.oD.o? Follow-u... IA,"what you paid for the share at some stage in the future."the past, not the future!LKH etc
LK Hyman
27 Aug 2017
Re: A.ctually A.ce or a D.oD.o? Follow-up. IA,"I don't sell at a loss (pig-headed, stubborn, mis-guided?!)"A lot of people have this attitude which is understandable psychologically but certainly misguided.The only thing that matters is where you believe, as a result of your research, that the share price is going in the future over whatever time period you choose. It doesn't matter what you paid for the share at some stage in the future.Personally I always reset the"cost" of my shares at the end of December every year. That enables me to see clearly, on an intra-year running basis, how my shares are doing relative to my benchmark, which is usually the FTSE100. I guess that, if I regularly underperformed year after year, I would recognise that my stockpicking skills weren't worth a cup of warm spit and would (sadly) stick whatever pitifully small heap of ackers was left into a tracker or an active fund with a long history of outperformance.LKH on the flybridge still picking for the nonce
