megaloss
15 Mar 2018
Re: Administration? Agreed, meanbugger, it's no Carillion but there will be precious little shareholder value left in this once the restructuring is complete..just lots of juicy fee income for the lucky ones.
II Editor
15 Mar 2018
NEW ARTICLE: A share to pick from the bargain bin? "Conviviality (LSE:CVR)As can probably be guessed, we're choosing to 'headline' shares which we're being emailed about. Often, it has to be said, we're being asked questions by folk who've been scared and scarred by some irrational price ..."[link]
II Editor
14 Mar 2018
NEW ARTICLE: Trends and Targets for 15/03/2018 " CONVIVIALITY (LSE:CVR) As can probably be guessed, we're choosing to 'headline' shares which we're being emailed about. Often, it has to be said, we're being asked questions by folk who've been scared and scarred by some irrational price ..."[link]
penhome
14 Mar 2018
Re: Administration? The institutional holders (or anyone else) are unlikely to stump up cash unless they are reassured that there are no more arithmetic or accounting issues in the closet.The only person who can give them this reassurance is Moran, the CFO, as the CEO’s credibility has been shot to pieces. I think Moran has the experience to get their confidence and just hope he has enough competent staff on hand to do it in time.Pen
Meanbugger
14 Mar 2018
Re: Administration? HMRC cannot petition for administration. They can apply to the court for a winding-up order and Conviviality's directors must then take a view as to whether the company can meet its obligations as they fall due.The easy way out is to have an emergency placing with institutional holders at a deep discount to the suspension price followed by a rights issue conditional on shareholder approval. Investec the NOMAD won't let this go bust on what's known so far. This isn't a Carillion - it's just been very poorly managed and the board needs a wholesale clear out.
megaloss
14 Mar 2018
Re: Administration? This needs to be taken into administration quite quickly, surely, I can quite see it going under, employees need protection. Another failure for AIM, there really isn't much point in investing in AIM to save 40% inheritance tax if you're going to lose 70-100% before you even die!The share price was dropping for several weeks before the profit warning so there is a big question to be asked about the extent of insider knowledge of these problems. Trading while insolvent is illegal and needs to be "rewarded" by disqualification as a director, and more. No one who forgets to budget a £30mn. tax payment is fit to run a public company anyway, this is really pathetic.Many people have lost a pretty packet on this, lots of egg on faces; auditors; the NOMAD (who was it?); all the brokers flagging it as a buy. No credibility left on AIM, IMO. The only people who seem to make money on AIM are the chosen few selected for the IPO who get to dump their "investment" at a premium in the first year leaving all the bad news and debt for the retail investors to pick up later. Where it goes post-Brexit, who knows?
peddlar
14 Mar 2018
NO Divi I cant see large institutions liking this ,so can see another drop in price.Particularly as this was due on friday.they seem to be too many cracks.
Bill1703
14 Mar 2018
Re: Dividend? "... its been cancelled. so only another £22 million to find....... "FFS! Third annoucement today ... and the fifth in a couple of days (or is it sixth.... I lose count - which after all, is all the rage in these parts).Are they "live-tweeting" an ongoing board meeting?! How many more??
mem73
14 Mar 2018
Administration? If they cannot find the £30m looks likely that HMRC will petition for administration. I can't see these coming back from suspension. I hope I'm wrong but these are clearly very worrying times for shareholders.Could they do an emergency equity raise? Will need a fresh board and time frames look very tight.
cooperboy
14 Mar 2018
Re: Dividend? good spot TX2 - its been cancelled. so only another £22 million to find.......
TX2
14 Mar 2018
Dividend? Interestingly a divi is due to be paid on Friday costing circa £8m.Have they got the money and/or remembered?
Courtier1
14 Mar 2018
Re: Heads definitely rolling now.... Agreed. Difficult to know exactly and odd not to include CEO and FD on announcement but even odder not to announce their resignation st the same time if that’s what it amounts to!!Still, wouldn’t surprise me given the current show!!With a repaired B/S this is fundamentally a good set of companies imo. Will be looking for a sub 60p entry point as long as accompanied by change of mgmt and a rights issue (or not more debt)
Bill1703
14 Mar 2018
Re: Heads definitely rolling now.... "I suspect three things now occur... 1) as long as no more skeletons then short term finance achieved and trading resumes... 2) further reduction in EBITDA... 3) rescue rights issue of £30-50m heavily discounted to repair b/s and allow headroom on cash flow... Plus replacement of finance function and CEO."Excellent post, Courtier. Let's hope there are no more skeletons, but who knows... this has quickly descended into a surreal "Reality TV" run where we are invited to watch, pretty much "as live", as the CFO turns over each of the ominous-looking stones left lying around the office to see what lurks beneath.I actually see the PwC involvement as, effectively, a mini and (hopefully) temporary "administration", with the business being run for the creditors for as long as this need last. The absence of the names / contact details of either the CEO or CFO on today's most recent update (credit to the FT Alphaville daily blog for pointing this out) is perhaps telling in this context... it remains to be seen whether their names will ever grace any future announcements. FWIW my best guess is, they do find a source of debt funding to cover the £30m owed to a taxman who will doubtless be persuaded to be patient, and there will be minimal impact, if any, on current year EBITDA; and thus they will remain within debt covenants, comfortably enough - at least for this year. It won't be cheap finance, of course... though it'd pale into insignificance against the cost of any emergency rights issue, which would be expensive equity indeed. Whether that is required will likely come down to he margin and hence profits outlook for next year, to which focus must quickly turn - but again, assuming the relatively optimistic scenario, as above, on the immediate plight. "Will watch closely now as it could get very cheap if/when it resumes, so might be a good recovery opportunity."So, make no bones about it, CVR is technically insolvent as things stand, with its future now reliant on the "kindness of strangers" (whether the taxman or the banks, or a bit of both). I'm not sure I can even guess at what price this resumes trading... possibly higher, given that it probably only resumes once the short-term funding issue is sorted. Unless they have to announce the rights issue at the same time....
CASTLEFORD TIGER
14 Mar 2018
this might be duty........ not vat Could be duty on stock taken from bond.No idea what is going on but its a shambles.It is not an assessment but due payment so how can it be missed?I am starting to question just what the previous FD had been doing.Wish I was not in here.Tiger
Courtier1
14 Mar 2018
Re: Heads definitely rolling now.... Oh my word!!!! Wow wow wow....... I am glad I had decided it wasn’t cheap enough to invest given debt. However, I don’t half feel for anyone in much higher....Auditors not to blame here. This is all forecasting / financial control errors - ie current year, so auditors won’t have even seen it yet!!Personally I’d fire the CEO and the FD as this is beyond horrendous oversight. Not including a known amount of £30m in a cash flow, borrowing to leave no headroom for such an event, material errors in profitability forecasts.....crikey!!!The EBITDA potential impact is operational. Ie because of the cash flow constraint they (a) may not be able to deliver against contracts (b) may face reduced/delayed/cancelled orders as clients will worry about solvency and move elsewhere (c) suppliers will ask for upfront payment exacerbating cash flow constraints and further impacting a & b above. Thus can have a current year and beyond impact.I suspect three things now occur1) as long as no more skeletons then short term finance achieved and trading resumes2) further reduction in EBITDA3) rescue rights issue of £30-50m heavily discounted to repair b/s and allow headroom on cash flow.Plus replacement of finance function and CEO.Will watch closely now as it could get very cheap if/when it resumes, so might be a good recovery opportunity.
