Insightful and much appreciated post thirty fifty twenty.
Also I agree that rights issues including existing shareholders are unlikely here, in the first instance at least.. although if insolvency is avoided, in due course an all inclusive rights issue might occur.. and I'd probably not take part even if offered..my exposure is fairly small here thankfully and FRP is clearly in a huge mess now so I just take my punishment and move on.
Generally, I do a lot of speculative betting on the stock market and such occurrences have happened to me before and will again.
technically the accounts would have been prepared on a 'going concern' basis,
i.e. the ability to meet obligations 'as and when they fall due'
the bank finance was due for renewal within the next 12 months and thus was an 'obligation due'.
AIB obviously said they would not renew the facilities, and FRP has obviously not been able to line up renewal of said facilities thus the draft accounts could not be signed off.
If a bank is prepared to pull the plug i'd think the only solution is equity finance,
and I think any new equity money has the upper hand in negotiating,
and thus current shareholders likely to be heavily diluted.
The need for finance quickly also means that shareholders unlikely to participate IMHO.
It interesting to see these sorts of situations as gives guidance on the state of the market.
I certainly have revisited current investments to see if any exposure to banks pulling in horns.
All IMHO, DYOR + BoL
I do no have any exposure to FRP
Paul Scott who had owned shares here in the not too distant past - but I see from his blog today has dumped a while back and stopped following this company - is saying in Stockopedia that based on his previous experience his reading of the RNS is that the bank has lost confidence in the company and that usually - but not always - spells insolvency and we should expect/prepare for 100% losses here.
If that turns out to be the case then ouch financially for me and sincerest apologies for the buy posts I offered here recently.
I guess it's not over yet though so there's always some sort of a chance they can find lending/ a backer from somewhere.. There are 700 odd employees here as I remember and sadly some or many of them could be the real losers here.
Can't answer your question with any real conviction WS.. but I guess it's got to be to do with the Auditors refusing to sign off on accounts currently and so they can't be filed. ( amount or structure of debt needs to be changed and AIB not prepared to facilitate to the extent they need perhaps.. )
I am a shareholder and am obviously concerned about this. But lets wait and see if they can get alternative/additional financial backing/flexibility from somewhere, hopefully
I've read some more comment on this but it's all now a fair few months out of date and so may be way off.. but I increasingly don't see this going under in 2017 or 2018... and so it has the chance to turn itself around.. to that end I've just done a small top up to bring my average sub 15p..
(delayed ) Final Accounts for last year end due within next two weeks .. so place your bets.. or not..
Very high risk but reward could be great if it sorts itself even somewhat out in 2017..
I sold most of my holding in FRP, at least all of the ones in my SIPP. The last time I was in the situation of a struggling, indebted company which delayed its results was Metalrax and they went broke on me.
I have taken a decent loss on these and am still sitting on a substantial loss on my remaining shares but at least I have got something back.
This has been my worst investment for a number of years and the frustrating thing is it is all because the company misled the market for a long time.
I guess I should have realised that when the price hit 50p the market really was telling us all something.
Interesting to note recent interest from Miton Group - now holding nearly 23%. This can only have the affect of reducing the free float for any new investors, assuming they hold for a sensible time! This may (possibly) make any upside move sharper IMHO.
I think it would take a 'positive' RNS to get it to 40p WS. Positive doesn't have to be too positive granted.. just that they have steadied the ship.. indeed even anything with no further bad news is likely still positive from here.
A lovely run up from 11.5 p so far and while I'm not disappointed about waiting to 14p to start buying I am disappointed with myself for not topping up more/more quickly between 15p and 18p ..
I did my - likely- last top up at 20p this morning and have an average of 17.5p and will sit and watch now..( I'll likely put a stop for half the position at 17.5 p)
There is of course a reasonable chance that the next RNS will be further negative - profit warnings come in threes type thing etc - and this may then get meullered again from here..so still very risky..bet accordingly etc..
16p being asked my the mm's with 15.95p being paid.
The highest ask is now 18p.
Precious little stock being openly advertised - just a pitifully small total of 12500 shrs, ranging from 16p - 18p on each side of the bid/ask on show and those few come from the five mm's - each 2500 shrs.
But, the NMS here is only 2000shrs!
Also with only 48.5m shrs total, the free float is not that large and any significant buying is likely have a rapid and sharp effect.
I'm now in here to a small extent on the basis that from where this company was a year ago, even including a series of profit warnings, it's unlikely to go bust quickly and therefore they can steady the ship and that alone will see a decent jump back here...
Also Paul Scott was good to me on Boohoo and so if he's in here he'll have done plenty of due diligence also...
That said I've done little of my own diligence and see this as a speculative punt only
That's why I bought in originally as Miton Group had it down as one of their star shares for 2016-think it must have fell 95% so only way back is to load up in more shares which considering the falls is hard to do when you've lost SO MUCH by keeping the faith.
Paul Scott of Stockopedia has loaded up sub 20-seemed too cheap around 60-70p and yet fell over 60% on news of poor trading in December.RNS issued at 343pm on a Friday afternoon-doesn't inspire confidence in current management when despite the share price continually falling no statements were issued regarding falling share price.
Difficult one I agree. Mainly as not much information given in the recent updates.
Read between the lines that earn out is close to top line. Vendors not happy with deal they struck as shares trading at just 10% of the value they expected!!! Reduction to 100p seems reasonable given circumstances and suggests there is reasonable confidence the price can get there again.
Rights issue would be massively dilutive to those guys so I would say unlikely unless absolutely necessary. Doesn't seem like they have much problem with debt headroom so again suggests equity raise less likely.
Cash flow at half year was positive and contributed to net debt going up less than cash acquisition cost. As long as they can stay cash flow positive then shouldn't go bust anytime soon.
Issue is how bad the Nov/Dec drop off was and whether that is continuing or picking up again.
Seems shares are priced at option value - £5m market cap but with potential to earn that in profits next year or two.
Sensible thing to do would be to kill dividend and focus on cash flow and debt reduction imo.
Reset bar and start growing again.
I bought more at 12.5p to average down - not quite sure that's not throwing good money down the drain but feel the risk/reward is commensurate at these levels - at least for me.....
These are now priced to go bust but if they don't they could be dirt cheap. I hope they don't go bust as I have bought 4 times on the way down based mainly on the misleading guidance given to the market by the company.
I guess we'll have to wait for some figures so that we can see just how bad the second half has been, but if they were still profitable in the second half then hopefully all is not lost and they can recover.
Debt is a problem but a rights issue at this price would decimate holders so again I hope they don't have to do it.
Losing the dividend is a big blow as it was the high yield that first attracted me to these shares.
The adjusted earn-out payments (see RNS today) tell me that the acquisition of
Colemans is performing well and not immensely far from top line expectations.
'The potential for Fairpoint shares to rise massively is perhaps still obscure, but
a punt at 12.5p-13p may perhaps prove well worth the risk, indeed may prove
I bought this one on the basis of a recommendation of the Fleet Street Letter, a long time ago. If you are tempted by FSL, avoid, the number of duds is so great it makes me think it highly suspect. Global Energy is another, now 10% of the recommendation price.
Any idea why the SP has fallen so much today? i can't see any logical reason. Divi is now well over 10% and P/E is looking v cheap. Also market doesn't seem to have reacted to Government's decision to shelve reforms to whiplash injuries which was one of the drivers of a falling share price.
Yes winningstreak, I do not normally worry about share price movements in the companies I own but in this particular case my thesis for buying the shares a couple of years ago is no longer valid as the company's business is fundamentally changing in nature, along with its financial characteristics and the share price suggests that this transition is not going smoothly. I still reckon management is doing a decent job in challenging circumstances but I do not find this company attractive as an investment any more as the risk has increased greatly so I took advantage of today's bounce to sell.
I got the fundamentals of this share wrong and took profit hy in the past, still getting them wrong in 2016 and have bailed out. Share now seems to be going into free fall on no fresh news. Whether or not the management is competent and/or unlucky, the fact remains it has been an endless stream of negativity since passing 190 pence so recently..
With the next projected write offs baked into the upcoming adverse results and the debt now growing over £15 million with poor cash flow, how many years will it take to make solid profits and pay this down? I fear another Sepura, acquisitions bringing a company to its knees. let alone a market crash
Good fortune to remaining holders.
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