Bill1703
09 Feb 2017
Re: Profit warning "My view until this latest profit's warning was that the board would have a struggle to return to profitability and stability, but now there is at least the possibility (if not probability at this time) that we are witnessing a sinking ship."Maybe too early to call the end... but I think we can safely say the dividend is gone. Possibly in entirety...It may still end up a big Buy, but not here I suspect...
numberbiter
08 Feb 2017
Profit warning I am afraid that profit warnings are like buses; you don't see them for some time then three arrive together. As I said, you will be OK until the next profit's warning, but now you have it.Based on today's profit's warning, things seem significantly more dire than they were. The board now say they will mitigate losses with further cost reductions, but that usually means redundancies leading to ill feeling. The board' s comment that despite the latest setback they are confident about the future is simply an exercise in damage limitation,My view until this latest profit's warning was that the board would have a struggle to return to profitability and stability, but now there is at least the possibility (if not probability at this time) that we are witnessing a sinking ship.
idontwanttolose
08 Feb 2017
: numberbiter Div/Cashflow Looks like you were right NumberBiter: SIV Bid:62.75p Offer:63.5p Change:-9.6625Near 13% drop in the SPSt Ives plc ("St Ives" or the "Group"
Statement re contract St Ives, the international marketing services group, was informed today by HarperCollins that its contract with the Group's Books business for the production of monochrome books in the UK will not be renewed. The current contract ends on 30 June 2017. Notwithstanding the generally positive trading in the Books business in recent months, management will be initiating actions to reduce the cost base of the Books business and therefore mitigate the impact of the non-renewal of this contract. The HarperCollins contract represents approximately 3% of the Group's current revenues. The non-renewal will not materially impact Group revenue or Group EBIT in the current financial year to 28 July 2017. After the planned mitigating actions, the Board expects the non-renewal to result in a reduction of approximately £11 million in Group revenue, and £3.5 million in Group adjusted EBIT, in the financial year ending 3 August 2018. The Board expects the mitigating actions to result in a one-off cash cost of £1.5 million the majority of which will impact the financial year ending 3 August 2018. In addition, the Board expects there to be a £3.0 million non-cash impairment charge impacting the current financial year ending 28 July 2017. Matt Armitage, CEO of St Ives, said: "Although we have recently seen some increase in demand for book production overall, the market remains competitive and we are not prepared to chase volume at uneconomic prices. We will be taking decisive action to ensure that the cost base of our Books business reflects the future level of volumes we now expect." As stated in the Group's pre-close trading update on 19 January, the Board remains confident in the long term growth strategy currently being pursued. The balance sheet remains sound and the Group has the necessary cash flow capabilities to support its investment priorities and to further reduce debt.
numberbiter
02 Feb 2017
Re: Div/Cashflow Disorder,When 1 was at school I had to learn my 12x tables, so I can manage to get to 4
1j Makes a profit(2) Generates cash(3) Has little or no debt(4) Is growing (this means either increasing profit or reducing losses.St Ives generates cash (2), but does not make a profit (1) has a high level of debt (3) and is in decline (4). Hence the company passes only one of my four criteria,I have never said which way the company would go other than saying the Board have a tough task. In other words it will be difficult for the Board to achieve (but not impossible) what they hope for.When you buy a company in decline (as St Ives are) you are gambling that the company will be turned around. If you are right you will make lots of money, but there is also a 50% chance that you will lose money. I have spent several years studying the market and my research reveals the time to buy such shares is when there is clear evidence of improvement (previous losses turned into a small profit, for example). As I said, you will miss the bottom, but given the market over-reacts it is a fair bet the the price will continue to go up.With regard to statins, I am neither a medical doctor nor qualified to form an opinion, However, Dr Malcolm Kendrick is a medical doctor who has carried out a great deal of research on cholestoral and statins. His view, based on substantial research, is that statins do far more harm than good and that the NHS is wasting £2 billion a year on this drug, which would be better spent elsewhere. His research reveals that the only people who should take statins are males who have already had a heart attack or stroke. He has written a book on this subject called 'The Great Cholestoral Con!. This book is readily available from Amazon and should be read by anyone who is either taking statins or thinking about taking statins,
Disorder
02 Feb 2017
Re: Div/Cashflow It must almost appear as if I am being pedantic: Im not.But where the heck is your mathematical equations to prove this statement."On this scale, St Ives scores only 1 out of 4."With little respect but your whole post reads as though you are "TELLING" us mere mortals how the market works.You must be very very extremelly sucessful.If you are then thank you humbly fpor sharing your wisdom.If however you are on your way to work but sharing your views which you clearly like to state as fact then many have heard it all before.Meterially below expectations, was changed by you to a "Thumping Loss".No mention at all of dividends either way have been seized upon by you as "No Divi payment"You may indeed be correct on any of your statements, but they are guesses purely to suit your agenda. As a declared non holder here and having no short open either, one can only assume its for boosting your ego.I happened to read on another forum that you are also an expert in the medical field, slating statins and the use of such.Maybe you will get lucky with one of your guesses, but in all honestly it will be hollow as you will not benefit financially, and believe it or not that is what majority of us are here for.Lots of positives were contained in the update.No mention of cut of divi.The board are clearly on the case.Lots happening in the world with regards to retail.I predict a much better than anticipated set of results along with a divi and a much better forward looking statement.My opinion = Stroing Buy. (I will benefit from a rising sp)
numberbiter
01 Feb 2017
Re: Div/Cashflow Hi Northerner 76,Understanding how the market works is quite simple really; it over-reacts in both directions. As a general rule, it is never wise to buy shares in a company displaying negative growth (as is the case with St Ives) as such shares often keep on going down. This is especially true when the negative growth is after a significant profit's warning. It does not make sense to buy a share hoping for a turnaround; it is better to wait until there is evidence of this.Now following this strategy you will never buy at the bottom, but when a share recovers because things are on the up, it will likely go up further.What can also happen is that things get so dire that many shareholders have given up and the share price crashes, Then suddenly there is strong evidence of a turnaround, but nobody is looking. This is where you get real bargains, as shareholders have become so frightened they will sell at any price.So, what you are looking for is companies that make a profit, generate cash, have little debt (larger amounts may be acceptable if there is evidence of debt coming down) and are growing, On this scale, St Ives scores only 1 out of 4.Good luck with this; the next full year's report will be critical.
Northerner76
01 Feb 2017
Re: Div/Cashflow Interesting observations re: marketing activation numberbiter. The fortunes of that division have to date been largely dependent on the fortunes of the major grocers (Tesco, Sainsburys, Morrisons...etc) - because a lot of their proposition is around instore marketing/promotional materials. As they have struggled, so have the businesses in this division of St.Ives. The answer to future success is therefore in moving to the growth areas (so, looking beyond traditional grocers) which means sales effort and new business wins and also hoping that the grocers themselves turn things around (noting that most of them are papping themselves over arrival of disruptors like Amazon doing more and more grocery sales)... wont happen overnight, but I do know the board have a plan and aren't idly sitting on their behinds.On the Strategic Marketing side, that's becoming a very competitive battle ground, with management consultancies, systems integrators and other less traditional businesses all trying to gain ground and share of the marketing departments wallet. The good thing about St.Ives is that it has some strong companies and brands in this area and should hold its own.On the whole I am cautiously optimistic. I bought shares on this down turn, but I did so because I fundamentally understand the business and the market (having worked in the marketing services sector for the last 12 years). That being said, my history with share buying is hardly great... I think that's because I largely approach things in a logical way, but the market is often about emotion, herd mentality and sentiment...
nk1999
31 Jan 2017
Results First half results are due on 7th March. So I guess we just have to wait and see how they compare to the new (revised lower after the warning) market expectations. We may keep arguing either way, but ultimately we have to assume that all the known information is reflected in the lower SP that we have seen after the last profit warning.nk
Boring Bernie
31 Jan 2017
Re: Div/Cashflow fwiwI think the Market Makers read the trading statement, and then dropped the price because they believe that it meant that the divi was likely to be cut,so, to a certain extent, that's already in the sp. If it was ceased entirely rather than reduced then that'd be worst case scenario and the sp would likely drop again, but if it's held, without increasing the debt then the sp should rise Because the market makers ( I think there are eight or nine on the book ? ) and the broker analysts ( Peel, Numis and Singer ) are different people / companies, it's not unusual for the MM's to take a different stance on a company to the analysts. Personally I think the MM's are closer to reality than the analysts on this one, but you pays your money and takes your choice.
Disorder
31 Jan 2017
Re: Div/Cashflow The board have stated "materially below its previous expectations with the majority of the shortfall due to the pressures within the Marketing Activation segmen"You have changed this to "Marketing Activation is going to make a thumping loss"Hmmmmmmm: Really?The Board say that it is hopeful of restoring revenue, but at the expense of margins. "So the short term does not look good."Really? Are you aware of the efforts made thus far and do you think they started implementing the changes on the day of the RNS? or maybe prior to this?In the long term the Board is hopeful they can sort things out and return to growth, "but then all Boards are hopeful."And how many actually suceed? An awful lot when they have high calibre staff, and decent plans. (I could show you many tens of companies who have turned things right around)I have read their statement again and really cannot see the positives hidden in it, apart from being positive about the future.
As opposed to what? being positive about the past? It is the future we are heading to, and therefore the board are Positive.!!!!!"There is no mention of maintaining the dividend."There is also no mention of NOT maitaining the dividend, and all ANALysts covering SIV believe the dividend will be maintained.The stock has suffered a massive trashing of its SP.Overdone? I certainly 100% think so..I hold stock and will benefit from a rising price.
numberbiter
30 Jan 2017
Re: Div/Cashflow Disorder,St Ives has three divisions, Marketing Activation, Strategic Marketing and Books. (All figures shown below are in £'000). In 2015 Marketing Activation made a profit of 6,228 on revenue of 166,970. This division accounted for more than 50% of the profit. However, into 2016 while both Strategic Marketing and Books grew in both revenue and profit, Marketing Activation went down the pan making a loss of (7,668) on sales of 154,807.The latest update from the Board indicates that both Strategic Marketing and Books are doing well, but that Marketing Activation has deteriorated further so that the 2017 result will be materially below expectations.What the Board are saying is that Marketing Activation is going to make a thumping loss, greater than in 2016. Given that in the past this division had the highest revenue it is certain the company will declare an overall loss, greater than the 2016 figure.The Board say that it is hopeful of restoring revenue, but at the expense of margins. So the short term does not look good.In the long term the Board is hopeful they can sort things out and return to growth, but then all Boards are hopeful. They say they will generate sufficient cash flow to cover priority investment and reduce debt, There is no mention of maintaining the dividend.So, I believe, not disbelieve, what the Board has said. It is just that my interpretation of what they said is not after reading their statement with rose tinted spectacles. I have read their statement again and really cannot see the positives hidden in it, apart from being positive about the future. But then I have never read a Board statement that said, "we are going from bad to worse and your Board can only see liquidation on the horizon."Now I am NOT suggesting St Ives is going bust; my interpretation is that they have a lot of work to do to get back on track and if they break even or make a small profit in 2018 they will do well.
Disorder
27 Jan 2017
Re: Div/Cashflow "They may well decide to hold the H1 divi and hope that they make enough ground up in H2 to maintain the full-year divi out of cash-flow, but equally they might not."But they might... And not just "Might" as your choice of word, but likely "Will".Its all subjective.I don't know, you don't know, the only ones who know are the board and they 100% have not suggested nor intimated that they "Won't".Therefore there really is no reason to suggest or consider they "won't".Perhaps I am to trusting when it comes to company boards and announcements they make. Certainly some stocks I have held have been subjected to boards who in layman's terms are nothing short of criminals.However the board of SIV have certainly not suggested that they are anything like that to me.I actually believe (Reading between the lines) that the snippets of positiveness contained within the RNS were strategically placed so the company CAN issue upbeat news and not be so far off the mark that they are then accused of not knowing their own business.Certainly they would know that its better to air all bad news in one go..My opinion... Same as all the ANALysts, and that is, the Divi is still on.
Boring Bernie
27 Jan 2017
Re: Div/Cashflow AvonI'm not sure where you got that from ?The divis for the full year were 7.8p and the last full year accounts came out on the 4th October 2016 ( See [link] )Cash generated from ops was 23.6 millionInterest payments were 2.9 millionIncome tax paid was 6.3 millionNet cash from ops was : 14.4 millionDivis paid were : 10.9 millionSo the divi cover was reasonable, but, given the recent trading update, it's hard to see how nigh on 11 million pounds can be paid out of operating cashflow. They may well decide to hold the H1 divi and hope that they make enough ground up in H2 to maintain the full-year divi out of cash-flow, but equally they might not.
AvonSeaWitch
27 Jan 2017
Div/Cashflow In the last full year accounts published on 12 Feb 2016, cash-flow per share was 56.57p and the dividend was 16.37p per share
Bill1703
27 Jan 2017
Re: Add more? To play peacemaker, I think some good and fair points have been made on both sides of this debate. And it takes both a buyer and seller to make a market. FWIW I think it neither here nor there whether NB holds SIV... The last thing any of these boards needs to be is a rose-tinted confirmation-bias club for holders only, unreceptive to all alternative views... Always remember, the great thing about advice is that don't have to take it! But it's always foolish not to listen - you might just learn something which will make or save you material money. As has often been the case on these boards. As per my previous post, my guess remains that SIV is probably too cheap down here. But I do think people should note Boring B's earlier analysis of statements - I suspect the dividend will have to be cut, at least. It's what the market is telling us... and while the market is often wrong, it usually pays to at least listen (see above on advice). Equally, there is no evidence that management are lying in any way... But market history tells us that management's crystal balls are rarely any less clouded than our own...
