Callun
12 Mar 2017
Re: UBS view DD,Yes, shame about some of the iii bulletin boards. Several well respected contributors have fallen silent for various reasons in the last few years. So often now, significant events go unremarked, while increasibly boards are hijacked as O/T battle grounds for sometimes quite unpleasant exchanges.Interesting to hear your experience in dealing with Cobham. That was a while ago in context with the current situation, but if typical a good indicator of how things went bad.Lockwood was surprised and disappointed with what his broom uncovered. Had he realised what a mess it was he might have declined the position, but he has expressed determination to sort things out.As you say, and with Jack in mind "Oh Well"[link]
Dealing Dude
12 Mar 2017
Re: UBS view Callun:You won it fair and square with the usual protests from U know who! ( Good to see he's still on form)Disturbing for all iii contributors that someone like him can be banned and no reason given.Jack also had a post removed supposedly on the whim of some complainer.It would seem someone powerful wanted him gone (Buns that is).....I really think iii is getting worse with a lot of boards virtually dead, whilst the equivalent LSE board have maybe in some cases hundreds of posts a day......although the quality can be poor sometimes and trolling seems endemicWRT Aeroflex: They sold off their test equipment UK outfit for £19m in 2013, just prior to the COB T/O.COB paid a premium of 23% to the then current SP for a total of $920m.They also inherited net debt of $540m for a total at the time of GBP 990m or roughly 1Bn.Way too much IMHO.WRT COB: A lot of the smart money ( I mean employees) have moved on or been forced out.The only one's I still know working their are only staying because of their pensions and are just keeping their heads down. They are actually selling off things that they need to function effectively and this year it seems that the call went out to shore up the balance sheet at any cost.Of course that's not Lockwoods' fault but he simply can't just turn years of mismanagement round quickly........it will take at least 3 to 5 years IMO to even stabilise things and that's assuming no more skeletons and more favourable trading conditions.I don't really think their are any positive financial rabbits being kept in the hat, if anything the converse, it's just I really do find it puzzling why they haven't announced the terms of RI.I obviously think things will get worse before they get better and having had some dealings with them and also a lot of friends who had and still are working their it's frustrating to actually have witnessed them walking over the cliff......but the management simply didn't listen to voices of reason on many different fronts..They have had some complete Bozo's working for them, in many cases as contractors.Some ten years ago now I was tech director of a small company and myself and two colleagues had a meeting with them over some proposed work. They had some sub contractor "management consultant" and we exchanged cards.OK I've got a degree in Physics and I'm a member of the IEE.....but no big deal.This guy's card said "MIM". I looked it up "Member of the Institute of Management" which you get by subscribing to a magazine!Anyhow he was extremely rude ....had no clue.......and we just left and said OK go ahead and shoot yourselves in the foot.......which they did. That one little debacle ended up costing millions.Oh well. We can but wait and see.ATB
Callun
11 Mar 2017
Re: UBS view Hi Dealing Dude,Thanks for the BARC congrats. A fluke I assure you. As with share trades, timing is everything. Over the season I have selected close to the correct Friday crossing trade several times, just not in the correct week.Re your thoughts on withholding price sensitive information, I strongly doubt that would be the case.Lockwood strikes me as being a thorough and cautious operator. The reason for his cautious forward looking statement in February, the one about 2017 results not guarateed to even match the 2016 ones, is perhaps concern that he had not at that time uncovered all of the rot left by his predecessors. It might also explain the delayed RI. It would taint his credibility if, after asking for cash, he announced yet another write down on more recent findings.I think he has a good understanding that the first rule of management is communication. I expect encouraging words from him prior to the RI announcement along the lines of what the corporate plan is to stabilise the company, and how each of the (remaining) Cobham divisions will be profitably viable in their own right.Re your thought on Aeroflex, didn't Cobham sell off some parts of that a while ago, and haven't they just written off a huge chunk of the cost, in recognition of the poor price on the deal? I'm led to believe that most of what's left is worth keeping, probably.Anyway, I still don't expect such a generous offer as before, and after Lockwood butters us up with a well prepared presentation I expect LTHs to be scrabbling for the offer.A word of caution. I was wrong 2 weeks ago when I said I did not expect a further RI,so as well as this being IMHO, also DYOR.Good luckCallun
Dealing Dude
11 Mar 2017
Re: UBS view Hi Callun Congrats on BARC comp......SBUK not happy.......messages relayed via proxy JD.I agree they are probably delaying the terms and conditions of the RI and hoping for a better price.If they are withholding price sensitive information that might cause a hike just prior to announcement then it's against the rules.....they might get away with that on AIM though!The tipping point was the acquisition of Aeroflex for 900m.I could have told them that but they didn't ask and anyway I know there were a lot of dissenting voices on that one but they were too arrogant to listen. They're going to find it difficult offloading that lemon for anything more than chump change.......a bit like RBS and ABN Amro only not nearly so bad in terms of money ( not billions.....just a few hundred million).Will LTH put their hands in their pockets AGAIN and so soon?The offer is going to have to be attractive.Also all IMHOATB
Callun
10 Mar 2017
Re: UBS view Perhaps they wish to disassociate this RI from the previous heavily discounted one that was needed to stave off an immediate funding problem.Had they gone for an immediate placing price it would perhaps have given a poor return for significant further dillusion.delaying, and with hopefully some better news going forward, and a possibly better SP within their declared time window,and because the cash would be used to support the business rather than to pay down debt, they will give away less stock for the cash. I don't expect a 1 for 2 deal at 89p again.Unlike the first RI where nothing else was done to the business, not even a divi cut,I expect to hear of changes to the business, as well as a few selloffs perhaps to show how well it will be in the future, prior to the announcment.The uncertainty over the date and conditions has added further volatility to the price with probably more upside than down, making COB good for trading at the moment.Just IMHO of course.Callun
Dealing Dude
10 Mar 2017
Re: UBS view UBS upgrade from neutral to buy. Accounts for SP rise.Cobham is a manufacturing company i.e. they "make stuff".Actually "stuff" that is specialised and needs money and good, highly skilled people.The analyst at UBS has something in common with Lockwood and Mellors insofar as none of them have ever "made" anything in their lives!RNS says they hope to complete the RI before end of Q2, no doubt at a high discount rate and underwritten.I think we can assume a 30% dilution.Underwriters will have some cheap stock and plenty of time to set up their short positions.Look at the chart......increase in time in disclosed short positions.[link] strange not announcing RI terms and dates......would welcome others views.Over to you LKH, RAC and anyone with an opinion.ATB
nk1999
09 Mar 2017
UBS view "UBS upgraded its recommendation on shares of Cobham from 'neutral' to 'buy', hailing management's decision to address its excessively high gearing through a rights issue and 'self-help' initiatives as the "beginning of the turn-around".The company's efforts were expected to lower net debt as a percentage of operating profits (EBITDA) down to a "more comfortable" level of 1.8 times.Furthermore, analyst Cristian Nedelcu believed markets were underestimating Cobham's ability to improve its margins.He estimated markets were pricing-in about 100 basis points of margin increases over the medium-term, whereas Nedelcu saw scope for 400 basis points worth of improvement which would take them to 15.5%.As a result, starting with 2019 UBS revised its estimates for earnings before interest and taxes up by between 3.5% and 5.5% a year and for free cash flow by 18% per annum."We see ample room for FCF improvement going forward driven by: improvement in profitability, the non-repeat of cash outflows related to past provisions, lower restructuring cash charges as well as cash release from working capital and a normalisation of capex investments," he said."From ADVFN.
nk1999
09 Mar 2017
Re: COB buy Hi R94,They have only announced they will raise £500m in Q2 this year. No further details so far. They will come in due course, and ex-rights date will be after that announcement.nk
Ripley94
09 Mar 2017
Re: COB buy Thanks LK HymanI was searching for the RI price , how often is a rights issue announced without a price ?If you would be kind enough to inform / educate me.Did they indicate an ex rights date ?
Dealing Dude
04 Mar 2017
Re: Jefferies If that is satisfactory, well what's unsatisfactory?....these people make me laugh.They have for the last ten years been acquiring companies....operating just fine.They move in and sack managers, replacing them with the " cobham style, face fits talking suit ".This of course has caused them to become unprofitable and caused significant cash burn.The " cobham ethos " has become endemic and it will take more than a few top managers to sort that out. They have lost many centres of excellence and are now selling off valuable assets in an attempt to temporarily present a false view of the true balance sheet.......which even after all that is still atrocious.The 500m will avoid covenant breaches for the time being but as to future profitability it is merely a band aid for a terminal disease.Factor in the trump " we want jobs for Americans " and things could get really ugly.More bad news and it's game over. Furthermore, WRT a bid or hostile T/O who would want to take on the huge debt, pension obligations and " cobham baggage " when they could just cherry pick the assets they wanted in an Admin firesale.
nk1999
04 Mar 2017
Jefferies "Cobham failing to inspire JefferiesDefence and security specialist Cobham (COB) faced ‘grisly’ full-year results but it has still performed ‘satisfactorily’ despite problems, says Jefferies. Analyst Sandy Morris retained his ‘buy’ recommendation and target price of 180p on the stock, which was trading up 4%, or 5p, at 127p at the time of writing. ‘The full-year 2016 results were clearly going to be grisly and probably accompanied by a rights issue - Cobham plans to raise £500 million,’ he said.‘Nonetheless, we maintain our stance that the major setbacks were foreign exchange translation on the US dollar debt and a working capital increase in the second half of 2016. In terms of trading, the second half of the year may not have shown the hoped for improvement on the first, but our sense is that in the second half much of the group still performed satisfactorily.’ He added that for 2017 ‘Cobham should be able to deliver operating margins 2-3% higher’ but that ‘is not an inspiring number’. "From Citywire.
dodge999999
03 Mar 2017
Re: out for now I agree RAC. I think it was Bill who outlined three possible strategies. I actually think that strengthening the balance sheet could be a pre-cursor to a sale (takeover). With current £/$ exchange rate, a US company could be interested in Cob. I am sure The Donald would approve.
RAConnell
02 Mar 2017
Re: out for now Difficult call but once RI terms are out you may not benefit from lower SP if suppressed by RI.Cheers, RAC
dodge999999
02 Mar 2017
out for now Need more info about the RI. Out with a tidy profit. Will look to get back in possibly...
soi
02 Mar 2017
Re: COB buy I think I`m possibly late to the rally but bought back in @ 122 shares not SB.( 28/2 )..........134.35 sold.Out for a quick + 10 %.ATBsoi
