seadoc
14 Mar 2018
Re: Suspended The RNS was issued by AIM directly rather than the company. Not seen that before. Not expecting good news. Seadoc
cooperboy
14 Mar 2018
Re: Suspended is a share ever suspended other than for very bad reasons-ie the losses are much worse than previously stated?
Up in Smoke
14 Mar 2018
Suspended TEMPORARY SUSPENSION OF TRADING ON AIM CONVIVIALITY PLC Trading on AIM for the under-mentioned securities has been temporarily suspended from 14/3/2018 7:40am, pending an announcement. ORDINARY SHARES OF 0.02P EACH, FULLY PAID (BC7H5F7) (GB00BC7H5F74) If you have any queries relating to the above, please contact the company's nominated adviser on 020 7597 5970.
Meanbugger
14 Mar 2018
Re: target now I hope you're right Tiger. My concern would be over possible accounting or stock irregularities. Hopefully an RNS will be issued this morning to clarify the position.Fingers crossed it's not as bad as some fear.
CASTLEFORD TIGER
13 Mar 2018
target now for 300/400m or 150/200p a share a big player could take out 1.6b of retail sales.My view it will happenTiger
frusset
13 Mar 2018
Re: NEW ARTICLE: Stockwatch: Is this AIM sha... Excellent piece IMO, with good previous calls by the author.
Bill1703
13 Mar 2018
Further update... or not? "... prevailing market expectations for adjusted EBITDA at the time of the Announcement were a range of £69.1 million to £70.5 million. Based on the guidance provided .... the Company confirms an expected range of adjusted EBITDA of £55.3 million - £56.4 million.... In addition, the Company can confirm that the reference to the material error in the financial forecasts of the Conviviality Direct business in the Announcement related to an arithmetic error in the compilation of the forecast."A rather curious further update today, which they doubtless felt some pressure to issue - but actually tells us virtually nothing we didn't already know. Only really two things to note:Confirms that previous EBITDA forecasts were around £70m, and hence that new guidance is for around £56m - well, as previous posts indicate, we worked that out already, and none of us are rocket scientists (not that I'm aware, anyway)."Confirms" that the "material error" in forecasting was an "arithmetic" error - really?! As opposed to what? A semantic error? A metaphysical error? I think we knew this already, too - and crucially, I don't think it even begins to answer all the other outstanding questions around this (eg. whose forecast? ... why was it not spotted? ... where exactly in the P&L did the arithmetic error occur?)You could say, at least they are trying. But equally, it is worrying if they think any of this clarifies anything much. More needed, if confidence is to be even stabilised, let alone restored...
II Editor
13 Mar 2018
NEW ARTICLE: Stockwatch: Is this AIM share good value after crash? "Does an 8 March profits warning from AIM-listed LSE:CVR:Conviviality, a retailer/wholesaler mainly of alcoholic drinks, signal growing pains or over-stretch?After the stock had plunged over 75% from last November's high, briefly below 99p last ..."[link]
frusset
12 Mar 2018
Re: Shambles I bottled out and sold, for a small loss after dealing costs.
Bill1703
12 Mar 2018
Re: Shambles -what actually IS CVR? "... it helps me rationalise that you are really looking at a PE of 12 when accounting for debt conversion to equity. Not quite a like for like granted, but helpful to me in contextualising value or otherwise..."And of course, when it comes to ratios, there are no actual rules... people can look at what they choose, whatever they can make work for them.In this case, I agree, whatever your chosen metric, it needs to take account of the debt... a level which was considered comfortable has suddenly, with the double whammy of "forecasting error" and significant margin weakness (both of which are evidently a lot more of a surprise to management than they should be), begun to look like an excessive burden. And an entirely discretionary one, driven by the massive acquisition spend - which once again calls into the question the judgement of management.
Courtier1
12 Mar 2018
Re: Shambles -what actually IS CVR? I try and look at a business based on a conservative view after they have warned especially if they have lots of debt compared to their market cap.So whilst I agree that I am probably being harsh in my choice and conventional metrics would be EV/EBITDA it helps me rationalise that you are really looking at a PE of 12 when accounting for debt conversion to equity. Not quite a like for like granted, but helpful to me in contextualising value or otherwise.
Bill1703
12 Mar 2018
Re: Shambles -what actually IS CVR? "I prefer to look at this on an EV against EPS basis. I am assuming eps circa 17-18p and current EV equates to a share price of 210p on £150m debt so that looks around 12* EV/PBT. I’m not seeing that as particularly cheap for a business that has just warned."Courtier - I would question some of your ratios - but not the conclusion.I am always wary of not comparing like for like in ratios and metrics, as the picture often gets distorted and the relationship is not linear. With EV vs EPS, you are comparing a total capital figure with an equity-only item (ie. profits after finance costs)... and of course EPS does not equate to PBT.But looking at EV/EBITDA, @ 119p the "rating" is 6.6x current year "forecast" - not particularly high, a decent discount to the UK market average BUT not stand-out cheap... there are plenty of (relatively) 'high quality' stocks on similar or lower multiples on this basis. And then throw in the fact that the implied forward run-rate for profits (as per my earlier post) might well be quite a bit lower than this... I agree, nothing suggests there is any rush to get in here. Management has much to do... and much to explain!
Courtier1
12 Mar 2018
Re: Shambles -what actually IS CVR? All good points I think.I would add though that debt is high at circa 5* PBT and at current share prices is around 3/4 of the market cap. whilst that may not prove problematic at an interest cover level any further deterioration could cause problems.I prefer to look at this on an EV against EPS basis. I am assuming eps circa 17-18p and current EV equates to a share price of 210p on £150m debt so that looks around 12* EV/PBT. I’m not seeing that as particularly cheap for a business that has just warned.I will wait before considering a buy.
Bill1703
12 Mar 2018
Re: Shambles -what actually IS CVR? "... If not then a little harsh to say the CEO should go IMO and I doubt she will. Usually right to suspect growth by acquisition, I would also guesst the 12% margin might be unsustainable... I was only interested in making something on the likely bounce..."OP - yes, I too was looking at a possible punt here, but after a bit of looking around I held off, for one main reason.Not so much the £5m "forecasting error" - shambolic indeed though that is, and about which they need to do a lot more explaining. It is the c.£9m profits shortfall indicated, following "margin weakness" in Jan/Feb, and assumed to continue to end FY - so, at most, 4 months of the year? That's a whopping hit on an annualised basis, and begs the key question - what is the effective run-rate for profitability going forward?If this "weakness" continues for any length of time, this run-rate could be WELL below the c.£56m (EBITDA) they are signalling for the current FY - which raises serious concerns on debt covenants, etc, and the prospect of a major equity raising, from a position of weakness (never a great starting point). But there is also a question of management's grip on the business. They now admit to margin weakness in Jan and Feb, and we know the restaurant trade has been under pressure for some time - there're also reports around about how CVR has been, since last year, forcing customers into administration at an increasing rate in order to collect debts... doesn't say much for the sustainability of the revenue base. Yet they stood up at the END of January to say this: "... pleased to announce its results for the 26 weeks to 29 October 2017 ... and that it continues to trade in line with the Board's expectations for the full year."I think my charge against the CEO, possibly the board in general, stands... until we hear otherwise. They've shown a talent for spending other people's cash - but what else? The clear implication is they were not on top of what the biggest part of their business was doing, and seeing. If they do manage to address this margin problem in short order, then the shares are probably cheap still, and the CEO probably gets to continue. If not, then we're into rights issue territory (the divi is probably already cut, at least), and I don't think the CEO will be trusted with that... nor should be.
old_punter
12 Mar 2018
Re: Shambles -what actually IS CVR? Bill,Thanks for updated estimates, its a gamble as you say on whether there is more bad news or not, this morning's price action up to 126p suggests some think not. If not then a little harsh to say the CEO should go IMO and I doubt she will. Usually right to suspect growth by acquisition, I would also guesst the 12% margin might be unsustainable particularly dealing with the likes of Weatherspoon. Anyway, I was only interested in making something on the likely bounce after such a large fall, although I missed the bottom c100p.
