Markets Live transcript 21 Jun 2011

Posted by Neil Hume on Jun 21 11:04. 163 comments | Share

Markets Live chat transcript for the chat ending at 11:25 on 21 Jun 2011. Participants in this chat were: Neil Hume, FT bryce.elder

NH
Hola markets Rabble
NH

welcome to ML
NH

and we have another deal in the UK
NH

that’s two in a week
NH

M&A is back
NH

then again
BE

Well, you forget Foster’s.
BE

Which makes it three.
BE

Kind-of.
NH

Foster’s! What are SAB thinking
NH

why on earth do they want to buy Foster’s?
BE

We’ll get to that I’m sure.
BE

However, let’s kick off with the longest running bid rumour in the western world.
Misys PLC (MSY:LSE): Last: 416.70, up 32.2 (+8.37%), High: 430.00, Low: 387.00, Volume: 11.96m
NH

OK then
NH

here’s what we know
11:07AM
NH

Over the past week
NH

there hasn’t been any press spec on Misys
Strange software outfit, seemingly controlled by US investor ValueAct Capital.
NH

nothing at all
NH

which is helpful
NH

since a formal approach was made over the past week
NH

we are told the bidder is s US listed company
NH

they have offered 450-60p a share
NH

a data room has been opened and they are in it
NH

Merrill is reckoned to be advising the bidder
NH

and Barcap acting for Misys
BE

Yeah – this is curious.
BE

Barclays Capital is providing investment banking services to Misys plc in connection
with the approach it has received that may or may not lead to an offer for the company.
The rating, price target and estimates on Misys plc have been temporarily suspended.
BE

That went out to clients this morning.
BE

But BarCap aren’t broker to Misys.
NH

no that’s Deutsche Bank isn’t it?
BE

Indeed. Deutsche Bank and Cazenove
NH

hmm
NH

strange
NH

could DB have swapped sides
NH

canned the broking account
NH

and now advising the bidder
NH

possible
BE

Indeed it is.
NH

anyway the wires
NH

are pretty much backing what we have said
NH

via the PR companies
NH

21Jun11 RTRS-MISYS PLC OFFER APPROACH IS FOR THE WHOLE COMPANY – SOURCE
10:52 21Jun11 RTRS-MISYS PLC OFFER APPROACH IS FROM ONE BIDDER – SOURCE
NH

Now
NH

the front runner for me is Fiserv
NH

US listed around $9bn
NH

but that’s only a guess
BE

Fair enough, been mentioned before.
BE

As has Fidelity National Information Services.
BE

Again, it fits the profile.
BE

And a leftfield possibility would be Thomson Reuters.
NH

(@Squarepeg – indeed. but the question is what bit of new will the market believe from PDX. they want revenue and profits)
BE

No particular exposure to this subsector, but they’re not poor and they’re not scared of an acquisition.
BE

Even at extreme multiples
BE

Which Misys, undeniably, is.
NH

well, yes
NH

420p suggests a takeout of 9x FY12 and 18x FY12
NH

and we think it’s even higher
NH

this is nosebleed territory
NH

and for that reason
NH

we can probably rule out Temenos
BE

Yeah – too rich
BE

Plus, Temenos would be unlikely to want the treasury capital markets side.
BE

Plus, the integration for Temenos would be a nightmare.
NH

that’s the other thing with Misys
NH

two very distinct businesses now
NH

Corebanking (1/3 of profits)
NH

Treasury & Capital Mkts (2/3 of profits).
NH

anyway
NH

we should spare a thought
NH

for George O’Connor
NH

the tech analyst at Panmure
NH

who wrote this today
BE

(Swedes: yup, NYSE.)
NH

The mood feels downbeat (Greece and contagion) and the sector valuation
continues to lose ground, slipping 20bp since our last valuation snapshot.
However the relative performance remains strong (out-performed FTSE All
Share by 6.4% over the past month). All in, the sector is suffering from its usual
bout of paranoia as we await Q2 results – and investors fret on ‘will they/wont
they’ hit financial hurdles. In addition there are a number of M&A stories
doing the rounds – notably Sage to be take-over by SAP or IBM and Misys
taken over by well anyone and everyone – both of these are without merit, and
for Misys in particular there is a concern that its shares will succumb to some
profit taking given its recent rally.
NH

or perhaps they won’t
BE

Ah, it can happen to anyone.
NH

glass houses
NH

but even so
NH

one should always leave an escape shoot
NH

both of these are without merit
NH

that’s a little strong
BE

Yeah – always best to give yourself a parachute.
BE

Never make a definite statement.
BE

Analysis 101.
BE

Speaking of, any sellside comment yet?
NH

no, still waiting for my contacts to report in on this. they were all caught a little cold today
BE

I’ve some desk stuff
BE

Working the PE angle
BE

Which, FWIW, looks wrong
BE

But the valuation side is interesting nevertheless.
NH

let’s have a look then
BE

The wording suggests the entire business (TCM inc. Sophis + Banking) is being considered – which would tend to suggest a private equity player or Sungard (private equity backed US financial services IT conglomerate). Temenos is also a possibility but would probably be more interested in the Banking part, not the TCM part. IBM and HCL are also candidates as they are systems integration partners for the Banking business
BE

On our numbers MSY is on c18.5x May 2012 EV/NOPAT which is a pretty healthy multiple for a business showing c2% revenue growth thus far in 2011, flat margins at c18-20%, and with a 4.7% FCF yield. The shares have already moved up 20% in the last six weeks on various rumours so I’m not sure they take off here – they probably settle in the 400-450p range
BE

The last major software deal was Apax bidding for Epicor (tier 3 ERP player) in the US in April, which was a high teens PE multiple. The top price paid for a large scale business (i.e. >$1bn deal value) in the last few years was SAP-Sybase in 2010 at c22x 12 month forward EV/NOPAT
BE

Its easy to see why a PE house would approach Misys (recurring revs, OK but not great margins, licences are RLF not ILF, just finished a product development cycle with Bankfusion, banking hasnt done a replacement cycle since pre-Y2K) but its worth noting there’s always been questions over Misys cashflow – particularly the capitalisation of R&D is expected to be c£14m this year (versus a proforma £90m of EBIT inc Sophis for a full period)
BE

The list of potential buyers is long, but at more than 20% up in the last six weeks and at 18x 2012 EV/NOPAT, we’d be inclined to think any bid would be around the 450p mark. Temenos is the obvious read-across. We’d take profit anywhere near 450p – if the bid doesnt come through, we wouldnt want to be holding a banking software vendor if Greece defaults and systemic worries re. banking start up.
NH

any more?
BE

Nah – that’s yer lot.
NH

right
NH

let’s move on then
NH

I don’t have any more to say on this
NH

and we should have a look at the wider market
11:20AM
NH

small dead cat ahead of the greek confidence vote
NH

EmoticonEmoticon
BE

FTSE up 32 points at 5725
BE

Which means it’s pretty much flat since first thing Monday.
NH

yes
NH

Whitbread the biggest riser
NH

as the rumoured awful figures did not emerge
NH

today’s statement was OK
NH

apart from the restaurants business
Whitbread PLC (WTB:LSE): Last: 1,576, up 91 (+6.13%), High: 1,588, Low: 1,526, Volume: 1.54m
NH

which makes me wonder why
Mitchells and Butlers PLC (MAB:LSE): Last: 319.50, up 2.7 (+0.85%), High: 322.50, Low: 316.80, Volume: 269.67k
NH

aren’t down
NH

they should be
NH

as we have said many many times
NH

in recent weeks
NH

the low income demographic aren’t spending
NH

and look at the brands
NH

Harvester
NH

Toby Carvery
NH

and many of these pubs
NH

are backed on to Premier Inns
NH

so why they aren’t lower I have no idea
BE

Yeah – I see your point.
BE

And, without Costa, Whitbread would look rather weak.
NH

yes
NH

any comment knocking about?
BE

Yeah – sure. Exane first.
BE

Slightly weaker Q1 trading update on tough UK environment
Q1 (13 weeks to June 2nd) sales were up 9.2%, with a further slowdown in like-forlike
growth at only +1.7% (EBNPPe +2.4%, 3.9% in Q4), albeit against very tough
comps (Q1 10 L4L was +7.6% and Q2 was +8.1%). Whitbread remains however
committed to its 5-years expansion plan highlighted recently.
BE

Further deceleration in like-for-like growth
Weaker like-for-like performance was largely linked to a slowdown at Restaurants with
-1.4% (EBNPPe +1.0%), despite covers being up 0.8%. Premier Inn was in line at
+3.0% (EBNPPe +3.0%) with +2.4% in RevPAR mainly price led (+2.2% vs
occupancy being up only 0.2 points). Finally, Costa performed better at +4.0%
(EBNPPe +2.0%). Basically, WTB sees continued growth in London while Provinces
remain challenging. This explains why Restaurants, not benefiting from London
presence, experienced tougher trading as UK consumers remain very value-driven.
BE

No changes to estimates, Underperform maintained
We maintain unchanged our operating estimates for Whitbread given still uncertain
macro outlook, notably as far as UK consumers are concerned. Earnings momentum
is likely to remain dull as comps remain tough, although the management pointed to
pick-up in like-for-likes since the Royal Wedding/Easter late April. Despite a -15%
YTD performance (-7.8% sector relative) and a not too demanding valuation (10.6x
EV/EBIT 11e and 11.4x P/E 11e), we maintain our relative Underperform rating (1800
TP) and prefer InterContinental Hotels within the sector.
BE

And perhaps something more readable.
NH

yes please
NH

too many numbers there
BE

Shore Cap, for instance.
BE

Pub restaurants reported a surprising drop in LFL sales, which were down 1.4% in the
quarter despite a 5.1% increase in covers. Management suggests that consumers are trading down,
with an increase in the proportion of ‘value meals’ sold. Furthermore, given the co-located nature of
c340 pub restaurants, we believe the slowdown in occupancy over the extended Easter period could
have negatively impacted the LFL sales figure by more than that of peers. We are somewhat
surprised by the update from the pub restaurants operation, given the recent updates from peers
such as Marstons (MARS^, Hold at 100p) and Punch Taverns (PUB^, Buy at 71p).
NH

so the poor
NH

are trading down
NH

instead of prawn cocktail starter
NH

and steak
NH

it’s straight into the main
NH

and a bangers & mash
BE

Tends, in my limited experience, to be the alcohol where you get hit.
NH

right – house red £16 a bottle
BE

Exactly. One bottle of house for a table of four.
NH

i see
NH

(@Student it was in the Irish press weeks ago. old)
BE

Where they were previously getting the second-cheapest on the list (which is always the one with the biggest markup.)
BE

Anyway, back to Shore.
BE

Costa Coffee reported LFL sales growth of 4%, an acceleration from the Q4 2011A figure of
c3%, with the number of transactions increasing 5.1%, suggesting in-store spend per head has
fallen in the period, in line with pub restaurants. We believe Costa has seen the benefit of easing
comparatives, which should continue moving through the year. Total Costa system sales
increased 20.4% to £182.5m and franchise system sales by c19% to £75.9m. The acquisition of
Coffee Nation is said to be progressing well and management expects to rebrand 500 units and
add a further 200 new units in the year, taking the estate to c11,000 in the UK.
BE

We believe today’s trading update is likely to be received by the market as better than feared, and
given that comparatives don’t toughen throughout the remainder of the year, we retain our FY2012
EPS forecast of c126p. Our forecasts are based upon c2% group LFL sales, offsetting c2-3% group
cost inflation, whilst the c£20m improvement in operating profit we expect is driven by continued
expansion in Premier Inn, Costa and pub restaurants.
NH

(@Fatdaz – what an insight!)
NH

so
NH

the rest of Whitbread is doing OK
NH

fears over profit warning banished
NH

and we get a dead cat
NH

does that sum things up?
BE

Yeah – and Costa’s growth can look cheap-ish providing the other two businesses continue to muddle through.
BE

And, with that, where do we turn now?
NH

let’s stay in the pub
NH

and have a look at Foster’s
11:29AM
NH

I can’t believe SAB has bid
NH

this looks a bad deal on many many levels
SABMiller PLC (SAB:LSE): Last: 2,113, down 69 (-3.16%), High: 2,146, Low: 2,105, Volume: 4.35m
BE

It does.
BE

It’s difficult to find a level on which this deal looks good.
NH

I can only imagine they have done because they are genuinely worried
NH

about a bid from AB Inbev
NH

and want to protect themselves
NH

otherwise
NH

the price
NH

strategy
NH

cost savings
NH

the Aussie dollar
NH

none of it makes sense
NH

and that’s at the current offer
NH

to get it they will have to go higher
NH

and the deal makes even less sense
BE

The simple fact is that Australia isn’t that attractive a beer market.
BE

It’s already a duopoly.
NH

yep
BE

Pricing’s already extremely high.
NH

how can you make Foster’s more profitable than it already is?
BE

Well, operationally, there are no synergies.
BE

Perhaps some purchasing, but that’s about it.
NH

they have no operations anywhere near Australia
NH

nope
BE

And, unless you think Victoria Bitter has international growth potential, there’s not much export scope either.
NH

the amber nectar this is not
NH

I am puzzled
NH

because SAB have always been cool on this idea
BE

The impression I got was that SAB was an emerging markets brewer.
NH

me too
BE

And Australia’s about as unemerging as you can imagine.
NH

fast growing emerging markets
NH

you have to love that
NH

not
NH

slowing growing mature market in developed world
NH

I don’t get this
BE

And it’s not as if Foster’s is cheap.
BE

I know SAB has too much cash.
NH

This has got “bulk up so we’re harder to touch” written all over it
BE

Yeah – possibly.
BE

Though, even with Foster’s, would it be AB Inbev-proof?
NH

possibly not
BE

May stretch the valuations a bit, but it wouldn’t make a fig of a difference operationally.
BE

Though, are we being too negative on this?
NH

no
NH

not at all
BE

Surely someone must support this?
NH

I’m insulted by that
BE

Always good to challenge your preconceptions
NH

go on then
BE

Particularly if you’re correct in the first place.
NH

find someone positive on this
NH

I can’t
BE

Right – let’s have a look.
BE

How about Deutsche Bank?
BE

Arguably the best of the SAB analysts.
NH

go on then
BE

Multiple requires significant synergies: While the proposed EV:EBITDA
multiple of 12.4x (June 2011) is broadly in line with those seen in the past,
Australia is already a highly profitable market (prices are amongst the highest
in the world), on the other side of the world from most of SAB’s
operations, and largely in the hands of two very powerful retailers. SABMiller
would have to extract significant synergies to generate reasonable
shareholder returns; to achieve a return equal to cost of capital (8.5% assumed)
in years 5-6, the group would have generate pre-tax synergies of A
$250m, a significant number in the context of FY11 EBIT of A$840m.
BE

Difficult to see big upside for SABMiller shareholders: Our initial calculations
suggest that a debt-funded deal might enhance earnings by around
5%, and push net debt / EBITDA to around 2.5-3.0x. However, SAB’s future
strategic flexibility would be constrained for a while, and although Foster’s
would diversify the group’s base it would also reduce exposure to emerging
markets from a bit over 80% of earnings to nearer 70%, which might reduce
the premium that SAB’s core investors have historically been prepared to
pay for the stock. Moreover, the rejection of this proposal by the Foster’s
board will clearly raise concerns that if a transaction materialises it is unlikely
to be at levels which leave a lot of value on the table for the acquirer.
NH

is that the most positive thing we can find?
BE

Um … give me another shot.
BE

How about Citi?
NH

go on
BE

We don’t think an acquisition is financially appealing – At $4.90, we estimate an acquisition would be about 7% EPS accretive in year 3, but crucially its ROIC (est. at 7.2%) would be below the project WACC (est. at 8-8.5%). At $5.40, it would be about 6% EPS accretive, with a ROIC of 6.6%. These estimates assume synergies of 6% of FGL’s sales, which seems generous to us. Even at $5.40, SAB could easily fund the deal from new debt, as its EV/EBITDA would reach only 2.9x we estimate. Following a bid, SAB’s profit exposure to developed markets would rise from 18% currently to around 30%, arguably making it a more balanced company.
BE

Hard to make operational improvements — We don’t think SAB could improve FGL’s profitability significantly. Margins are already high and costs aren’t out of line with equivalent operations elsewhere. Furthermore, FGL’s brands are well differentiated, with appropriate price points. Lack of geographical overlap/proximity suggests synergies would be limited (although there might be some procurement gains). The factors that drove the success of SAB’s Colombian acquisition wouldn’t apply in Australia; in fact its track record on acquisitions in developed markets is weak.
NH

again that’s not really super positive is it?
BE

Um. No.
BE

Look, ROTR, if YOU can find something positive to say about SAB/Fosters, please speak now.
BE

Otherwise, we’ll have to conclude that it’s a rubbish bit of defensive bulking up.
NH

I think we will
BE

The corporate equivalent of buying some Beefcake 3000 powder from Argos.
NH

Right
NH

we are done with this
NH

let’s move on
BE

Hang on!
BE

Got one!
NH

come on then
NH

who is it?
BE

Eddy Hargreaves at Collins Stewart isn’t outright negative on this!
BE

The proposal to acquire Foster’s at AUD4.90 per share values Foster’s at an
enterprise value of USD10.7bn, excluding the c$300m payment to Coca-
Cola Amatil to acquire its share in Pacific Beverages. That values Foster’s at
an EV/EBITDA of 12.5x F11 (June year end) and 12x F12. Whilst the
premium to the Foster’s share price is not huge, there is no obvious
competing bidder, so although we would expect a small sweetener in order
to complete any deal, there seems little reason to go much higher.
BE

Foster’s offers superior cash flow and has been undermanaged
The rationale is straightforward. Foster’s has a stable top line, operates in a
duopolistic and highly profitable market, and is very cash generative. Cash
generation is one of SAB’s relative weaknesses and improving the cash
conversion of the group is critical to achieving full and fair value from any
subsequent acquisition of SABMiller itself. In particular, Foster’s offers
substantial scope for the development of the local premium segment, which
SAB would consider to be its core skill.
BE

So – Foster’s management has been inept.
BE

That’s your reason.
BE

Interest coupon and synergies the key assumptions
We modelled this transaction in detail in our ABSAB note of 14th March. The
proposal is very much in line with that modelling, in which we estimated
earnings accretion in the low single digits, based on an interest coupon of
6.5% across the debt in an all cash deal. We assumed synergies rising over
three years to 8% of target sales – a short $200m. Both key assumptions
feel to us to be conservative, allowing for some sweetening to the proposal.
BE

Downside protection from ABI lurking in the shadows
Our thesis on SABMiller has been that Foster’s at the right price is a good
deal (and this is broadly at a reasonable price). There is a risk to SABMiller
that ABI would prefer SABMiller without Foster’s, hence bidding for Foster’s
risks drawing them out. At the very least, SAB shareholders should benefit
from downside protection in that any negative response in the shares
inevitably makes it more attractive to ABI. We accept that some will see this
as a dilution of an “emerging market” story, but we would buy on this news.
NH

so they need cash
NH

they are buying Foster’s as a cash cow
NH

to spend elsewhere
BE

Best reason I’ve heard yet.
BE

Though still, to be honest, not entirely convincing.
NH

the local premium thing
NH

I’m not buying
NH

but cash
NH

yes, I can see that
11:43AM
NH

Right
NH

before we go on
NH

and look at some other stocks
NH

this made me laugh
NH

BOEING (BA US) – RYA CEO Michael O’Leary is expected in Paris to do a dealwith the Commercial Aircraft Corporation of China, prompting speculation thatRYA could abandon Boeing in favour of the cheaper Chinese alternative. http://www.thetimes.co.uk/tto/business/industries/transport/article3068542.ece
NH

now I thought
NH

that was a typical O’Leary stunt
NH

but no
NH

he really does want to buy a Chinese aeroplane
NH

this one
NH

he Comac C919 is a planned 168-190 seat narrow-body airliner to be built by the Commercial Aircraft Corporation of China (Comac).[1][2][3]
It will be the largest commercial airliner designed and built in China since the defunct Shanghai Y-10. Its first flight is expected to take place in 2014, with deliveries scheduled for 2016.[4] The C919 forms part of China’s long-term goal to break Airbus and Boeing’s duopoly, and will compete against Airbus A320 family and the Boeing 737 Next Generation.[5]
NH

here’s the flashes
NH

RTRS-RYANAIR HOLDINGS PLC – RYANAIR AND COMAC SIGN MOU IN PARIS
09:36 21Jun11 RTRS-RYANAIR HOLDINGS PLC – SIGNED A MOU WITH COMAC FOR TALKS ON THE DEVELOPMENT OF THE COMAC C919 AIRCRAFT
NH

(@BMAlph. Old story from Irish press. I’d say no, with the caveat that it does look vulnerable post Northern Foods)
BE

Well, it looks like a plane.
BE

Undeniably.
NH

Design and assembly of the aircraft will be done in Shanghai, initially using foreign-made jet engines[7] and avionics. However, China has expressed its desire to eventually produce a locally-made engine for the C919.[8] It has been announced that Michelin [9] will supply Air X radial tyres.
The center wing box, outer wing box, wing panels, flaps and ailerons are planned to be built in Xi’an, China. The center fuselage sections are planned to be built in Hongdu, China.
BE

Though, admittedly, there don’t seem to be any pictures of it actually in the air.
NH

At the 2010 Zhuhai Airshow, Comac announced orders for 55 C919 aircraft from six airlines, with an additional 45 options. The purchasing airlines or lessors were China Eastern Airlines, Air China, Hainan Airlines, China Southern Airlines, CDB Leasing Company, and GE Capital Aviation Services.[12]
In February 2011 Ryanair announced they were in discussions with Comac about purchasing the aircraft[13]. Ryanair will receive the last of the Boeing 737-800′s from their current orders in 2012, and have no order placed thereafter. By this time they will have over 300 of this aircraft type. They withdrew from negotiations with Boeing and Airbus in 2009 as they were unhappy with the prices offered.
NH

It’s probably all bluster from O’Leary
NH

as usual
NH

but a frightening prospect
NH

nonetheles
BE

Hm. The Youtube video of this plane is all in CGI that looks like it was done on an Commodore Amiga.
BE

I’m not entirely reassured by that.
NH

nor me
NH

as a nervous flyer
NH

I wouldn’t want to see that
NH

draw up outside the departure lounge
BE

Easy solution: never fly Ryanair.
BE

Partly because it’s a barely human experience.
BE

And partly in protest at O’Leary, who’s a barely human experience.
NH

agreed
NH

but sometimes
NH

there is no option
NH

hang on
NH

this isn’t racist
NH

it’s just there’s no track record here
NH

I’d feel equally worried
NH

if the Brazilians made a bigger plane
NH

although they do have a longer track record
NH

We aren’t saying they can’t build a safe plane
NH

but….
BE

(Air China’s accident rate’s 33% above the average.)
NH

in fact
NH

who would want to fly on a Russian plane
NH

is that racist?
BE

Wouldn’t want to fly Delta either, because they’re rubbish.
BE

Nothing racist in that.
NH

in fact
NH

Airbus
NH

I’d be nervous on that
NH

much happier on Boeing
BE

Personally, I travel everywhere by cruise liner and ricksaw.
BE

Pulled by colonial peasants.
BE

Nothing racist in that.
BE

Anyway, let’s move on shall we?
NH

yes
11:54AM
NH

Jupiter
NH

results out
NH

and Posh Bloke Asset Management
NH

have decided to slot 31m shares
NH

placing done by Numis I believe
NH

at 240p
Jupiter Fund Management PLC (JUP:LSE): Last: 242.00, down 13.3 (-5.21%), High: 248.50, Low: 238.10, Volume: 370.66k
NH

pretty tight discount
NH

all things considered
NH

were the results any good
NH

someone said they weren’t
NH

but I haven’t checked
BE

Haven’t checked myself.
NH

Were they down a lot yesterday
NH

I wasn’t really looking at them
BE

Whole sector was awful yesterday though.
BE

Brokers saying results were in-line, pretty much.
NH

yeah
NH

here’s Peel Hunt
NH

Pre-close trading update this morning is broadly in line with
expectations, EBITDA for H1 expected to be between £69.6m
and £71.5m (PH forecast £71.6m). Placing of 31.3m shares also
announced, 6.8% of share capital, for group of directors and
employees. Buy.
NH

Detail. AuM at the end of May stood at £24.8bn (PH June forecast £25.3bn), a
3% increase from the start of the year. Inflows in the period were £623m, driven
by the fund of fund range and sales in the International channel. There were
small outflows from the hedge fund range (£72m), relating to the liquidation and
restructuring of the Jupiter Merlin Absolute Return portfolio. As a result of higher
AuM, revenues are expected to be between £126.5m and £129.0m, 15% higher
than a year ago. Performance fees up until the end of May were £4.5m.
NH

So AUM
NH

was a touch below what Peel Hunt were looking for
NH

Share placing. In a separate statement, Jupiter has announced a placing of
31.3m shares, equivalent to 6.8% of the issued share capital. The placing, by
means of accelerated bookbuild, is for a group of directors and employees,
including the CEO, CIO and FD and senior fund managers. This is the 12-month
anniversary of the IPO last year and the ending of the lock-up that applied to
these shares.
NH

can’t recall now
NH

what this was floated at
BE

Yeah – Deutsche also saying it’s a disappointing.
BE

Jupiter have provided 1H11 net revenue
guidance of £126.5-129m and 1H11 pre-exceptional EBITDA guidance of
£69.5-71.5m. Despite higher than expected performance fee guidance
(£4.5m vs. DBe £1.0m) we are at the low end of the net revenue guidance
and slightly ahead of Jupiter’s EBITDA guidance (DBe £71.7m). Given a
continuation of weak markets so far in June, we expect consensus numbers
to come down slightly on this announcement.
BE

There is stock overhang risk from TA Associates
19% holding and further potential sales from employees & directors.
Following the recent sell-off Jupiter now trades on a cal.FY11 EV/
NOPAT of 11.4x, a 5% premium to the sector. We would view a premium
as merited given the group’s low proportion of performance fees and strong
brand presence in UK retail equity
NH

hmm
NH

would you buy second hand stock from a fund manager?
BE

Of course not.
NH

IPO last year
NH

at 165p
NH

a UK IPO that’s above the float price
NH

unreal
BE

Yeah – done okay.
BE

Though was priced at the bottom of the range, if memory serves.
NH

even so
NH

talking of which
NH

Ocado
An internet food retailer that many believe is the second coming of Webvan. Loss making yet valued at close to £1bn on flotation.
Ocado Group PLC (OCDO:LSE): Last: 203.90, down 3.1 (-1.50%), High: 206.60, Low: 198.30, Volume: 351.00k
NH

that’s still above the float price
NH

and there’s big news coming
BE

Is there? What’s that?
NH

first ever net profit
NH

should be announced next week
NH

its taken a decade
NH

and several hundred millions
NH

but they have done it
NH

the question is
NH

will this be as good as it gets
NH

and on that note
BE

(@Outllaw: it’s like a normal bookbuild, but quicker. http://www.investopedia.com/terms/a/acceleratedbookbuild.asp )
NH

here is Merrill Lynch with a little scene setter
NH

H1 profits due 27 June – expecting £0.7m net profit
It may have taken 10 years and several hundred million pounds of investment but
Ocado’s H1 results next week (27 June) should, we estimate, reveal the
company’s first ever net profit. Though that may be a milestone and finally gives
us a P/E (c290x year to Nov 2011E) of more interest is the longer-term scalability
and returns of a business already struggling to grow inline with demand.
NH

5% EBITDA margin and 1% EBIT margin with CFC near full
Ocado’s AGM was a few days short of the year end but they used the opportunity
to guide to ‘EBITDA conversion on incremental sales’ of c12% which translates as
£14m or a 5% EBITDA margin. With the current distribution centre (CFC) near full
capacity, management will need to explain how the business can deliver greater
profitability given depreciation running at 4% of sales.
NH

Q3 trading a test of demand versus supply constraints
The market and we were surprised that Ocado’s trading slowed so sharply in Q2,
the group citing capacity constraints as it struggled to cope with demand. From
the results therefore, we’ll be keen to hear the impact that has had on customer
service levels which we expect have been pressured. Further, with the group now
in its quieter Q3 period (i.e. the summer holidays), we expect sales growth to pick
up given there should be fewer supply constraints.
NH

A viable business but far from a proven game-changer
Ocado may slip back into a net loss in 2013, burdened by depreciation charges
for its new CFC but from here, we mostly expect profits. However, there’s a big
difference between a viable business and a game changing business model. For
Ocado, impressive technology is still expensive technology and we estimate that
at scale, the group’s returns are loosely similar to a store. Accordingly, we prefer
conventional valuation metrics on which, Ocado looks expensive – Underperform.
12:03PM
NH

Right the sell side
NH

look to have got their act together on Misys
NH

a few notes are starting to come through
BE

Indeed there are.
BE

Here, for example, is Jefferies
BE

Misys has announced that it is in preliminary discussions regarding a potential
takeover of the company. We believe that an auction process for the Core
Banking division triggered a full approach for the company. Competitive
tension among acquirers is likely to be high. Our analysis suggests an exit
valuation in excess of £5.00.
BE

FIVE QUID!
NH

WTF?
NH

I know the analyst has been banging on about this one for a while
NH

and has been right
NH

but no one is going to pay 500p
NH

never
NH

any more
BE

Want to see his working?
NH

go on
BE

Valuing Misys for a takeover. We have focused on a sum-of-parts approach for
some time, which remains appropriate given the independent structure of the remaining
two divisions. The respective motivations of management and ValueAct to encourage a
transaction are clear, with the bulk of the transformation programme now complete.
BE

Misys Core Banking is placed on a 5.0x EV/maintenance revenue multiple, which is
essentially in line with previous transaction multiples in the sector. In addition, we attribute
£120m of incremental value to BankFusion, which we believe equates to less than the total
R&D investment in the platform to date. This implies £613m for the Core Banking division.
BE

Misys Capital Markets is a more glamorous affair, commanding 40% market share, which
is a fairly dominant position in the segment. Sungard is second-placed with nearer 15%
share. Traction in capital markets has been at least in line with the overall market and the
acquisition of Sophis, completed in February 2011, added complementary products and
footprint. We apply a 2012 EBIT multiple of 14x to Capital Markets, in line with Temenos’
current multiple, implying £1.22bn for this division.
BE

Potential North American buyers: During the auction process for Misys that was
held in 2006, the key bidders included US financial systems vendors such as FIS, Fiserv
and Sungard. All of these names could be interested in this opportunity to increase
their international exposure, especially given Misys’ Asian and Middle Eastern strengths.
Potential Indian buyers: The Indian vendors, Infosys and TCS in particular, are
compelling candidates given their respective strengths in banking software. Each has been
in the top tier of global vendors of banking software over the past few years and would
benefit from Misys’ onshore presence as well as an installed base that is ripe to be upgraded.
HCL provides a BankFusion offshore “upgrade factory” and could feature.
NH

we won’t see a 5 in front of this
NH

I’m prepared to do a George O’Connor
NH

and stick my neck on the line
BE

Well, there’s one bidder in there
BE

And, if management played hardball at anything above £4.50, I’d imagine shareholders would lay an egg.
BE

What’s the downside on this if the bid doesn’t happen?
BE

£3?
NH

bit higher 320p
NH

on the break-up angle
NH

someone has looked at them
NH

etc
NH

still the CEO must be happy
NH

the shares will be above the trigger point for 20 days now
NH

and he’ll get his big payout
12:09PM
NH

OK
NH

someone was asking about the Supergroup
Supergroup PLC (SGP:LSE): Last: 932.00, up 69 (+8.00%), High: 940.00, Low: 810.00, Volume: 274.01k
NH

dead cat?
NH

short covering?
NH

or bargain hunting
NH

the valuation is not as crazy as it was
NH

and there’s a bit short out there
BE

All of the above. Take your pick.
BE

Stitch a big number 8 on the front and sell it for 30 quid.
NH

PE looks OK
NH

if it keeps growing at 40%
NH

but that’s the question
NH

especially as
NH

the store opening programme seems to have hit a brick wall
NH

for reasons that aren’t clear
BE

“Second-half weighted”
NH

hmm
BE

For, as you say, reasons unexplained.
BE

Critical shortage of UK high street property, I guess.
BE

Can’t compete with Oxfam and Scope for the key locations.
NH

Anyway the Supergroup apologist Nick Bubb was impressed by what he saw
NH

SuperGroup (Buy): The trading update yesterday clearly didn’t entirely ease the growth fears, but we thought that the SuperGroup Analysts Day at HQ in Cheltenham went as well as could be expected and we are pleased to report that CEO Jules Dunkerton didn’t punch anyone! The “speed dating”, with five groups of 8/10 people rotating around the five Directors in the showroom, was well organised and all the Directors came across as being passionate about their subjects
NH

There are still a lot of sceptics out there about SuperGroup, but the strong pick up in UK trading over the last month is clear evidence that the brand is not dead, even if consumers are now favouring subtler logos. The range (which is pushing heavily into womenswear, jeans and accessories) can easily fill 40,000 sq ft in Regent Street and SGP genuinely think they can make a lot of money out of that site. The target is still to open 20 stores a year in the UK and though they’ve only opened Bromley so far…there are17 stores firm in the pipeline and another 17 in negotiation, so they will hit the target this year, albeit with a H2 weighting.
NH

SGP hope to open the ground floor of Regent Street by Xmas. All in all, we think SGP did enough yesterday to stop the rot and build the foundations for a strong recovery in investor confidence in due course, but it won’t turn sentiment on its head in the short term, with the final results on 13 July still overhanging things. We will probably need to trim our current year forecast of £76m PBT forecast, to allow for the store opening phasing, but a P/E of little more than 13x at this level is much too low for a company growing at over 40% a year. We have our 1725p price target under review (a P/E of 25x), but we reiterate our Buy on SGP.
NH

but Oriel
NH

who said Superdroop was a buy
NH

because Northern people hadn’t bought any Superdry clobber
NH

have gone to sell
NH

The real news regarding Supergroup had been revealed before the perfectly
satisfactory and interesting analysts’ visit to Cheltenham had even begun. Retail
sales have seen no acceleration so far in Q1 from the previous quarter’s
disappointing slowdown, and whilst recent weeks have apparently been a bit better,
our concerns about underlying LFL and the new store roll-out programme persist.
Forecast momentum is now negative: we are taking 7% out of the next two years’
forecasts. We are mindful that the shares have been very weak (and of course that
our recommendation has been very wrong in recent months here). Thus the shares
do now discount a degree of disappointment.
NH

However we feel that the most likely
outcome is a continuation of the underperformance of estimates, and on that basis,
an Add is inappropriate. The brand isn’t “broken”, or any of the overly aggressive
words that some watchers use: medium term, management will correct the problems
it currently faces, and the underlying quality and value properties of the garments are
absolutely sound. Nonetheless, forecast momentum dictates that the shares are
more likely to go down than up from here and we are moving the rating to SELL.
NH

surprised by that
NH

there were so positive
NH

on that Northern growth theme
NH

and confident enough
NH

to taunt the press
NH

over their lack of understanding
NH

(@Outlaw. not yet – test in September)
12:14PM
NH

Bryce
NH

anything else to look at?
NH

I have some fantasy M&A
BE

Oh – have you? Go on then.
3i Group PLC (III:LSE): Last: 272.20, up 5.3 (+1.99%), High: 276.70, Low: 268.10, Volume: 980.20k
BE

Ah.
BE

Let me guess.
BE

30% discount to portfolio valuation
NH

er yes
BE

Therefore, it’s cheap.
NH

er yes
NH

EmoticonEmoticon
BE

And let’s ignore the illiquidity of that portfolio.
NH

management and shareholders
NH

they do a take private
NH

why not?
BE

Because you’d have to pay a 30% premium
BE

To take it private at NAV
BE

And that NAV is uncertain at best, given the rubbish outlook for realisations.
BE

That’s why not.
NH

Look it’s not my idea
NH

it’s Oriel again
NH

When equity markets are weak we take the view that it is a good time to pick-up some solid blue-chip companies at good prices and attractive valuations. We think that such an opportunity currently exists in 3i Group and view the price of 266p as an attractive entry level. At this price, the shares are trading on a 24% discount to the NAV of 351p reported at 31.03.11 and a 28% discount to our NAV estimate of 363p to 373p at 30/09/11. We calculate that if the £405m of 3i’s NAV (12%) invested in quoted companies, (primarily £320m in 3i Infrastructure), are valued on a 3% discount to market price, then the unquoted portfolio is trading at close to a 30% discount to the March valuation, which appears excessive in our view.
NH

* 3i Group appears increasingly vulnerable to a bid approach
In our recent note entitled ‘Should 3i remain a listed company?’, we said that if 3i continues to trade on a sizeable discount, there must be a reasonable chance of a takeover approach. Suitors may be interested in acquiring a block of private equity assets and teams of experienced investment executives. Given 3i’s current share price and discount valuation, we think the chance of a takeover approach is rising. We believe any takeover interest in 3i Group could come from a number of sources including: 1) existing management & shareholders, 2) another private equity firm, or, 3) a generalist investor wanting expertise and a portfolio in private equity.
NH

(Pret – around midnight we think)
BE

(@Milky: red.)
NH

that’s harsh
NH

straight red
NH

no warning
NH

talking to
NH

yellow card
NH

just off for an early bath
BE

You can’t come sauntering in at 12:18pm.
BE

And I’m feeling no little sympathy for the other executives in Milky’s meeting.
BE

It was an empathy zap.
Warning to rude and abusive commenters – your ability to comment will be terminated immediately and permanently, without warning. Henceforth, FTAlphaville has instituted a One Strike and You Are Out policy. We’ve had enough. We are going to clean up these pixels once and for all.
BE

Right – anything more or are we done today?
NH

almost
NH

this was just sent to me
NH

FIDELITY CHINA SPECIAL SITUATIONS PLC
Preliminary Announcement of Results
For the period ended 31 March 2011
NH

given the recent poor performance of Bolton’s fund
NH

might be interesting to see what he has to say
NH

and here is the Sir Anthony Bolton
NH

When I wrote the first interim report in October last year I did so in a mood of optimism – my transition to Hong Kong was going well and I had settled back into a familiar fund manager’s routine. I was enjoying meeting lots of Chinese companies, interacting with our team of analysts and other fund managers who follow China and reading lots of broker and other third party research. Most importantly, the NAV was up about 15% from launch. I did preface my remarks by saying it was still early days, however, and it is now clear that the fund’s first period has been one of two halves. About the time I wrote my report the market and NAV peaked and the second half proved much tougher, with the market falling until it made a low in mid March round the time of the C share issue. There was some recovery in April but recently the NAV has returned to near 100p. The second half of the period and performance since the period end has been disappointing for investors and me personally.
NH

but he’s still
NH

EmoticonEmoticonEmoticon
NH

I still believe world equities are in a bull market and what we have recently experienced in Chinese stocks is a normal pause in that cycle. I do not yet see either the investor behaviour or market valuations that one would normally associate with a bull market peak
NH

In fact, given the extraordinary world events in the first quarter of this year, markets have been remarkably resilient, illustrating how bull markets typically climb a “wall of worry”. As I have maintained for some time, I still feel we are in a two-speed world where growth in the developed economies will be below normal for several years – the solution to the financial crisis has left them with debt problems that will hold back growth for the foreseeable future
NH

The US, Europe and Japan have major challenges ahead and, although emerging markets will not be immune to the effects of this, I believe the relatively higher growth they offer will be increasingly attractive to investors. For the first part of 2011 investor flows have returned to developed markets and emerging market funds have seen redemptions. I believe this is a temporary pause and flows will return to emerging markets.
NH

no mention I can see
NH

of Chinese Reverse Takeover stocks
NH

and he’s had a brush with a view
NH

via Vision China Opportunities
NH

One of the fascinating things about China is the fact that investors’ attitudes to it are very polarised; it is like one of those optical illusions where some viewers perceive a smiling face and some a sad one – the same picture can provoke two very different interpretations. Some see China as the main driver of Asian growth, on its way to becoming the biggest economy in the world, while others are concerned about excessive credit growth and inflation, property and bad debt problems. Probably the truth lies somewhere between these two extremes. I want to spend some time in this report on the negative case as, although many of the concerns are valid, I believe some of the conclusions being drawn are wrong. Like any investment proposition, China is not without risks but I continue to believe that the case for investing is compelling.
NH

conclusion
NH

In summary, I remain as convinced as ever by the long-term case for investing in China. In the short term, there are challenges as the Chinese authorities try to effect a soft landing for their economy, but I believe they will succeed. I expect investment flows to resume their trend out of the developed world into emerging markets like China; this may lead, at some stage, to valuations going well above fair value. I hope that with the help of our excellent team here in Hong Kong, we can continue to uncover the companies that are best placed to benefit from the ongoing transformation of China’s economy.
12:22PM
NH

on to the small caps
NH

very quickly
NH

no idea on Xcite
Xcite Energy Ltd (XEL:LSE): Last: 130.50, down 10.25 (-7.28%), High: 141.30, Low: 125.00, Volume: 2.93m
NH

but Merrill are pushing Rockhopper
Rockhopper Exploration PLC (RKH:LSE): Last: 271.00, down 2 (-0.73%), High: 280.00, Low: 270.00, Volume: 1.02m
NH

Flow test to establish base-case commerciality
We are adding our BUY rated Rockhopper (PO 515p) to the BofAML Europe
MidCap 1 list of preferred stocks. RKH trades at a 58% discount to our 515p NAV,
the largest discount of all E&Ps under coverage. Market concerns surrounding
commerciality of the SeaLion discovery in the Falklands remain despite the recent
successful appraisal well. We believe that positive results from the forthcoming
flow test of this appraisal should prove market concerns overdone. Given
indications from prior wells and the thick pay encountered in this well (93m vs
53m at the original find), we firmly believe that sustained flow rates of c.4kboe/d
are achievable and could even surprise on the upside.
NH

Western flank offers significant upside
A further appraisal well located 4.2km to the west of the initial discovery well will
follow these ongoing tests. This will be the first well to test the western extension
of the field within management’s larger mid-case area for the main fan, as well as
targeting the lower fan. At prognosis the upper fan is set to thin out to the west
and should be offset by the thickening of the lower fan. Whilst clearly riskier, we
believe that the western flank well (worth 60p risked, 183p unrisked) could add an
extra 50-60mmboe, and move SeaLion’s resources towards the 155mmboe level
from the 80-100mmboe level currently discounted in the shares.Southern extension another source of potential volumes
Ongoing 3D seismic studies should enable management to determine a high-case
area for the field including any potential southern extension. Early signs provided
by neighbouring operators have already indicated a potential southern extension
to the SeaLion field although management have been reluctant to be drawn on it.
Fully processed seismic data from the surveys is set to be completed by July,
followed by detailed interpretation of the results and a formal update to the market
a few weeks thereafter.
NH

and the sector watcher
NH

likes Encore
NH

For the second consecutive day, I see that Directors in EO have been buying shares, with a total of 263,000 now purchased around the 56/57p level. Can’t say I blame them, the shares have been beaten up more than any of the North Sea players, now trading 64% below their peak of 151p/share from only four months ago and down 58% ytd – I reckon their peer group is down around 10% on average ytd. The reason for the fall has been the less than impressive appraisal drilling on last year’s Cladhan oil discovery in the North Sea, in which EO has a near 17% interest. Originally the field was thought to contain maybe 100m barrels recoverable or more, but this has now fallen to a base case of around 29m barrels. However the group also has 15% of licence 28/9 which contains the Catcher/Varadero/Burgman discoveries, which is way more significant than Cladhan. On a reasonably conservative NPV12 of $12/bbl, 29m barrels on Cladhan and 155m barrels on Catcher, the former is worth around 12p/share and the latter 60p/share.
NH

Adding cash/investments gives a further 13p/share, i.e. a total of 85p/share, or 50% above the current price. Clearly the disappointment in Cladhan has a had a devastating impact on the shares, as recently as February there were strong rumours that Premier Oil was thinking of launching a 200p/share takeover bid for the company. However, I’d say that if PMO wasn’t looking at the group then, it certainly should be now, especially with its huge pool of North Sea tax losses, meaning that the Cladhan/Catcher reserves would theoretically be much higher value than our assumed $12/barrel. Moreover PMO would be using a much lower cost of capital than 12%. Hence at these depressed levels I’d be tucking a few away.
EnCore Oil PLC (EO.:LSE): Last: 57.00, up 1.5 (+2.70%), High: 57.50, Low: 55.25, Volume: 4.13m
NH

and that’s it
NH

anything from you Bryce?
BE

No – let’s wind it up.
NH

OK
NH

I have a meeting to get to
NH

so thanks v much rabble
NH

cya tomorrow
BE

Yup – cheers, and bye.

This entry was posted by Neil Hume on Tuesday, June 21st, 2011 at 11:04 and is filed under Uncategorized. Edit this entry.

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  1. Report VP | June 21 11:04am | Permalink

    Ahoy

  2. Report GAC | June 21 11:04am | Permalink

    Moaning!

  3. Report Peanut | June 21 11:04am | Permalink

    ?

  4. Report Nately | June 21 11:05am | Permalink

    MSY oh y did they wait so long to RNS?

  5. Report LH | June 21 11:05am | Permalink

    Hello

  6. Report GB Krona | June 21 11:05am | Permalink

    Good morning all

  7. Report Captain Mannering | June 21 11:05am | Permalink

    Milk time!

  8. Report Arthur “Two Sheds” Jackson | June 21 11:06am | Permalink

    The milk’s gone off.

  9. Report NuBlood | June 21 11:06am | Permalink

    Gd Day Mates

  10. Report Muppet . | June 21 11:06am | Permalink

    It’s been zapped

  11. Report BarneyBear | June 21 11:06am | Permalink

    Morning all – any more comment on BoI’s / Irish Govt’s attempts at legalised theft, or the progressions of the actions? The RNS last night was “eye-opening”… ;0)

  12. Report Swedes | June 21 11:07am | Permalink

    Morning. Well done NH & BE on being ahead of the curve on Misys.

  13. Report Stringer | June 21 11:07am | Permalink

    Unfortunate call from Panmure this morning – ‘In addition there are a number of M&A stories doing the rounds – notably Sage to be take-over by SAP or IBM and Misys taken over by well anyone and everyone – both of these are without merit, and for Misys in particular there is a concern that its shares will succumb to some profit taking given its recent rally.’

  14. Report Q | June 21 11:07am | Permalink

    they’re thinking, wasssssuuuuup!

  15. Report Nately | June 21 11:08am | Permalink

    Lol @Stringer

  16. Report Swedes | June 21 11:10am | Permalink

    perhaps a conflict of interest

  17. Report oilwatcher | June 21 11:10am | Permalink

    @BarneyBear which RNS?

  18. Report squarepeg | June 21 11:12am | Permalink

    NH- saw the market comment re PDX in today’s paper- Stock on loan appear to be around 13miliion shares now, given the free float any positive news could see a really ugly squeeze- talking my own book, of course!!

  19. Report FATDAZ | June 21 11:13am | Permalink

    morning

  20. Report FATDAZ | June 21 11:14am | Permalink

    @stringer timing is everything in this game

  21. Report Swedes | June 21 11:14am | Permalink

    Are Thomson Reuters US-listed?

  22. Report Stringer | June 21 11:15am | Permalink

    Its unfortunate but not as bad as the guy that puts out the big BUY note 2 hours before a profit warning

  23. Report FATDAZ | June 21 11:16am | Permalink

    SWedes ticker is TRi in USA

  24. Report squarepeg | June 21 11:17am | Permalink

    NH-indeed, but at 17.5% of shares in issue and 60% of shares in ‘safe hands’ a deal with P&G, or even several ethanol contracts could have an extraordinary impact. Shorts have little if any fire power left with that size of short

  25. Report BarneyBear | June 21 11:17am | Permalink

    oilwatcher – read: http://ftalphavill…s-bank-of-ireland/

  26. Report urgeview | June 21 11:17am | Permalink

    oh you mean revenue might jump from 105k to 200k ?

  27. Report yogabbagabba | June 21 11:20am | Permalink

    XEL LN, everyone seems to like, but stock now worth almost 0 ????

  28. Report Swedes | June 21 11:20am | Permalink

    Fatdaz, BE – thanks.

  29. Report FATDAZ | June 21 11:23am | Permalink

    @NH whitbread FY numbers were only on 28 th of April not much time for things to change dramatically since then

  30. Report FATDAZ | June 21 11:24am | Permalink

    Toby carverys are busy in our area but often driven by vouchers and meal deals etc but that’s true of many ( most ?) chains these days i guess

  31. Report andyalan10 | June 21 11:25am | Permalink

    Contrarian thought – Low income demographic might be spending less per head, but the number in that demographic is rising rapidly 🙂

  32. Report VP | June 21 11:25am | Permalink

    Lol @andy.

  33. Report fjp73 | June 21 11:25am | Permalink

    what’s the impact of the decreased foot fall in Waterstones on the concessions for Costa??

    @FatDaz makes for a good enticement to get the punters in and 2:1 deals can still be profitable with over priced soft drinks with a 74.6% margin.

  34. Report FATDAZ | June 21 11:25am | Permalink

    @andyalan sadly that constitutes a race to the bottom i fear

  35. Report john w | June 21 11:26am | Permalink

    Lloyds Banking weak, Barclays and RBS not following. Anything being reported on LLOY:LSE?

  36. Report Swedes | June 21 11:26am | Permalink

    Pizza Express, Ziizzi and Ask — you only ever have to pay for 50% of food bill via vouchers. This has been going on since last autumn.

  37. Report Student | June 21 11:26am | Permalink

    anything on the Daily Mail story that Greencore is being stalked by ABF or Doughty Hanson?

  38. Report FATDAZ | June 21 11:27am | Permalink

    @FJP yes indeed and in carvery you are cooking food anyway if you open … so you want foot fall must say have been impressed with quality of the Toby in Brentwood

  39. Report mrs martin | June 21 11:27am | Permalink

    restaurants look at 50% mark up on food …400% on booze

  40. Report Swedes | June 21 11:27am | Permalink

    Bangers & Mash is toff tucker: reminds one of school dinners, the Bullingdon club and matron (swoon).

  41. Report Student | June 21 11:28am | Permalink

    @NH – thanks – market doesn’t seem to believe there is anything going on, though Greencore does look vulnerable

  42. Report FATDAZ | June 21 11:28am | Permalink

    @swdedes LOL although you cant beat nursery fare can you

  43. Report NuBlood | June 21 11:29am | Permalink

    @fjp73 I can’t for the life of me work out why Costa thought sticking a mini-store inside a Waterstones was a good idea. Does anyone really go and buy and book and immediately want a coffee?

  44. Report Alphahunter | June 21 11:31am | Permalink

    Morning, longest day today, let’s dance around the midsommarstång.

  45. Report yogabbagabba | June 21 11:31am | Permalink

    XEL : iii chat room says mkt expects placement as needs funds, but just a rabble chat room …. any ideas -10%

  46. Report FATDAZ | June 21 11:31am | Permalink

    Fosters has 7 out of top ten Aussie beer brands so quite dominant in that respect

  47. Report Captain Mannering | June 21 11:32am | Permalink

    @NuBlood: if you’re perusing the photography section, one might need to sit down for a while and cross ones legs?

  48. Report BBB+ | June 21 11:32am | Permalink

    @NuBlood – does anyone buy a coffee and read book? Oh wait; yes they do.

  49. Report NuBlood | June 21 11:33am | Permalink

    @BBB+ obviously, but who takes a seat in a Waterstones in a busy town centre/shopping centre and get stuck into a book?

  50. Report VP | June 21 11:33am | Permalink

    Starbucks in Borders was v successful. Until Borders went bust of course.

  51. Report FATDAZ | June 21 11:34am | Permalink

    @ NUblood i some time take a wander to piccadilly store and have a seat for 30 mins or so

  52. Report NuBlood | June 21 11:35am | Permalink

    Perhaps I need to chill out and watch the world go by then, the view times I’ve gone into a Waterstones etc I’m aiming to get out as quickly as possible

  53. Report NuBlood | June 21 11:36am | Permalink

    few**

  54. Report yogabbagabba | June 21 11:36am | Permalink

    Ozzies drinking less beer ?

  55. Report VP | June 21 11:36am | Permalink

    @NuBlood – the opposite here, I only go in when I need to kill time.

  56. Report JSC | June 21 11:40am | Permalink

    Well, it’s positive relative to a Muddy Waters release…

  57. Report Nately | June 21 11:40am | Permalink

    Perhaps SAB are trying to flush out another bidder into overpaying/hamstringing themselves with Fosters?

  58. Report BBB+ | June 21 11:41am | Permalink

    lol BE

  59. Report GB Krona | June 21 11:42am | Permalink

    Amazing SABM would have time & energy for Fosters – much to do in all its emerging markets!

  60. Report Swedes | June 21 11:42am | Permalink

    Don’t Australia have competition rules: would such a monopoly be allowed?

  61. Report nick1212 | June 21 11:42am | Permalink

    was it lex that ran an article on fosters last week? saying pricing was high and oz market mature? coincidence.

  62. Report Nately | June 21 11:42am | Permalink

    As Barclays (cough) did with RBS/ABN?

  63. Report Hamster Ape | June 21 11:44am | Permalink

    Possible bid for Cable & Wireles Worldwide mentioned on Asian CNBC this morning – has that already been discussed previously on here?

  64. Report GB Krona | June 21 11:44am | Permalink

    Crazy logic on cash cow – spend 13x now to get a regular (if you succeed) cashflow??

  65. Report BMAlpha | June 21 11:44am | Permalink

    Any comment on the Greencore spec? Valid or no?

  66. Report Chrispy | June 21 11:44am | Permalink

    No doubt the SAB board will lavish themselves with share options on completion of the deal, regardless of the deal price and valuation.

  67. Report fanta | June 21 11:45am | Permalink

    those planes will be fine but as soon as one crashes people won’t use them (unlike with boeing or airbus due to long history)

  68. Report yogabbagabba | June 21 11:46am | Permalink

    yes … RYA, scary stuff …

  69. Report Baz | June 21 11:46am | Permalink

    Chinese planes, dont think so!

  70. Report VP | June 21 11:46am | Permalink

    China moving up the value chain – be afraid.

  71. Report walm | June 21 11:46am | Permalink

    MOU = worth nothing

  72. Report nick1212 | June 21 11:47am | Permalink

    you can fly to menorca for £10, but you may die.

  73. Report outlaw | June 21 11:47am | Permalink

    c’mon, thats racist to say that can’t build safe planes

  74. Report FATDAZ | June 21 11:47am | Permalink

    @ VP yes that is a sea change indeed

  75. Report JSC | June 21 11:47am | Permalink

    Do the Boeing & Airbus not come with maintainence/parts agreements that the Chinese co wouldn’t have…?

  76. Report BMAlpha | June 21 11:47am | Permalink

    @NH – methinks the emptor is a residual from the Panmure horror show misys call ringing in your ears, but otherwise I hear ya!

  77. Report Swedes | June 21 11:47am | Permalink

    Average male height in China is 5′ 5 and a half inches. Leg room reduction?

  78. Report BBB+ | June 21 11:47am | Permalink

    From that wiki -‘ The company plans to conduct the first flight of the C919 sometime in 2014, with deliveries beginning in 2016’ – so the plan is not yet off the ground.

  79. Report shovel | June 21 11:47am | Permalink

    jupiter placing allocated. 240p, approx 10% allocation which is supposed to be quite good!

  80. Report FATDAZ | June 21 11:48am | Permalink

    re RYA if they were buying from Embraer in Brazil would that cause a stir ???

  81. Report Baz | June 21 11:48am | Permalink

    my engineering custys in china say that they operate on a build and fix it policy( ie they discover the mistakes then correct till they get it right ), might work for a pump but not a plane

  82. Report walm | June 21 11:49am | Permalink

    Why frightening? I agree with outlaw, you bunch of racists. 😦

  83. Report yogabbagabba | June 21 11:49am | Permalink

    @BE C64

  84. Report fanta | June 21 11:49am | Permalink

    we use a lot of chinese equipment and it is pretty good

  85. Report nick1212 | June 21 11:49am | Permalink

    really racist…..meh.

  86. Report mrs martin | June 21 11:49am | Permalink

    baked beans prices to rise as tomato crops fail

  87. Report JSC | June 21 11:49am | Permalink

    Well, I’d need my legs to be removed to fit in a standard Chinese domestic plane seat…

  88. Report VP | June 21 11:50am | Permalink

    People used to say the Japanese couldn’t build motobikes (or cars)

  89. Report Captain Mannering | June 21 11:50am | Permalink

    Why wont the Chinese dominate the aircraft industry and many others? They “borrowed” western expertise and are training their graduates in teh millions. it will be a fact of life for the next generation

  90. Report Baz | June 21 11:50am | Permalink

    outlaw fanta you can test it for us

  91. Report outlaw | June 21 11:50am | Permalink

    @baz: I’m more worried at O’Leary gungho attitude to flying thru ash clouds.

  92. Report FATDAZ | June 21 11:52am | Permalink

    @NH agreed would be a an easier sell if the planes had 3 or 5 yr record on internal Chinese flights for instance

  93. Report shovel | June 21 11:52am | Permalink

    or a french plane?

    oh, we do already!

  94. Report fanta | June 21 11:53am | Permalink

    ok baz no where as scary as a SCAT airline antanov

  95. Report walm | June 21 11:53am | Permalink

    That’s fair – they aren’t nicknamed “scare-bus” for nothing…

  96. Report walm | June 21 11:54am | Permalink

    ricksaw = racist

  97. Report Head of IT | June 21 11:54am | Permalink

    @NH whats the latest on ring fencing?

  98. Report pretzlik | June 21 11:54am | Permalink

    You can get a russian car working by hitting it with a sledge hammer, real bulletproof stuff

  99. Report pretzlik | June 21 11:54am | Permalink

    I know, live right next to it

  100. Report outlaw | June 21 11:54am | Permalink

    @BE,NH: you need to be careful Chinese are very good at cyberattacks.

  101. Report walm | June 21 11:54am | Permalink

    I want some POSITIVE chatter on SuperPoop!

  102. Report fanta | June 21 11:55am | Permalink

    or the uzbekistan airlines ad at the airport:

    http://themavesite…uzbekistan-airways

  103. Report GAC | June 21 11:55am | Permalink

    Chinese companies sign MOU’s in much the same way we hand out visiting cards. It is only an agreement to talk, and talk is cheap especially if you are trying to strongarm Boeing into giving you a better price!

  104. Report shovel | June 21 11:56am | Permalink

    @NH thestk was down 5% yesterday as it was well flagged to some people.

  105. Report outlaw | June 21 12:01pm | Permalink

    what exactly is an ‘accelerated bookbuild’ please?

  106. Report Nately | June 21 12:01pm | Permalink

    @Outlaw – when Waterstones expands.

  107. Report fjp73 | June 21 12:02pm | Permalink

    apologises…@Nublood…I thought the same…very odd indeed re: Costa in a bookshop.

  108. Report yogabbagabba | June 21 12:02pm | Permalink

    OCDO … but will it be last net profit, with Waitrose London move ?

  109. Report yogabbagabba | June 21 12:03pm | Permalink

    @ NH, agreed, as good as it gets, next step has to be taken over

  110. Report D rFeelgood | June 21 12:03pm | Permalink

    Any gos on Southern rock

  111. Report outlaw | June 21 12:03pm | Permalink

    @be: thanks, I guess I could have googled that. Apologies.

  112. Report JSC | June 21 12:04pm | Permalink

    Erm… Apart from the Waitrose issue…

  113. Report Neil Hume, FT | June 21 12:05pm | Permalink

    *OFT WON’T REFER PURCHASE BY PEEL OF PINEWOOD SHEPPERTON

  114. Report Peanut | June 21 12:05pm | Permalink

    http://tinyurl.com/3bldsh4

  115. Report shovel | June 21 12:06pm | Permalink

    @BE, In EXCESS of £5 !!

  116. Report yogabbagabba | June 21 12:07pm | Permalink

    Jefferies have been very good on the MYS, most quoted analyst by the press so it seems

  117. Report Dr Feelgood | June 21 12:07pm | Permalink

    Anyone here reckon SCHE are headed for the kermit.

  118. Report Chrispy | June 21 12:07pm | Permalink

    @NH -agreed, but always good to leave yourself a parachute.

  119. Report yogabbagabba | June 21 12:08pm | Permalink

    Carrefour, approve spinoff DIA

  120. Report HipHopYouDontStop | June 21 12:08pm | Permalink

    Anyone see the new Nokia N9 phone? Shame it’s not a W7 phone, but gives us a glimpse to what they can do on the design front

  121. Report yogabbagabba | June 21 12:09pm | Permalink

    SAFRAN supposedly in some bid deal 4bn Eur, AVIO … no idea what this is.

  122. Report shovel | June 21 12:09pm | Permalink

    @NH so is MCRO next?

  123. Report JSC | June 21 12:10pm | Permalink

    @HHYDS – it looks like an Psion

  124. Report Neil Hume, FT | June 21 12:11pm | Permalink

    RTRS-PORTO COACH ANDRE VILLAS BOAS INFORMS CLUB HE INTENDS TO TERMINATE CONTRACT – PORTO STATEMENT
    12:11 21Jun11 RTRS-PORTO SAY COACH ANDRE VILLAS BOAS’S CONTRACT WILL BE TERMINATED ONCE RELEASE CLAUSE PAID – CLUB STATEMENT

  125. Report Fido | June 21 12:12pm | Permalink

    Margin going up at Supergroup as they are not stitching the numbers on any more

  126. Report fjp73 | June 21 12:13pm | Permalink

    If you look at the concessionary element within House of Fraser, SuperDry appears to be doing ok…albeit on an opportunity sample of a few stores.

  127. Report outlaw | June 21 12:14pm | Permalink

    @Neil Hume: re Porto job opening for you then. Have you got your certificate yet?

  128. Report BMAlpha | June 21 12:14pm | Permalink

    As above, what now for MCRO – one participant recently issued PW and another being bid on a rich multiple? Wheat from chaff, or disconnect?

  129. Report yogabbagabba | June 21 12:15pm | Permalink

    this new Nokia ,,. still Symbian ?

  130. Report outlaw | June 21 12:17pm | Permalink

    @BE: re liquidity: don’t value investors have to wait a while for value to be realised anyway. Would Buffet buy?

  131. Report pretzlik | June 21 12:17pm | Permalink

    what time today do the greeks vote?

  132. Report milky | June 21 12:17pm | Permalink

    HELLO sorry im late, extraordinary executive meeting.
    did we already cover the banks?

  133. Report mrs martin | June 21 12:17pm | Permalink

    NOOOOOOOOOOOOOOOOOO

  134. Report Stringer | June 21 12:17pm | Permalink

    Midnight CET

  135. Report fjp73 | June 21 12:17pm | Permalink

    Mrs Martin, not your cuppa char eh 🙂

  136. Report pretzlik | June 21 12:18pm | Permalink

    thanks

  137. Report Captain Mannering | June 21 12:18pm | Permalink

    Readying the micro wave at 900w…..

  138. Report mrs martin | June 21 12:18pm | Permalink

    milk’s gone sour

  139. Report outlaw | June 21 12:18pm | Permalink

    midnight Greek time

  140. Report fjp73 | June 21 12:18pm | Permalink

    Touche!

  141. Report pretzlik | June 21 12:19pm | Permalink

    @NH there was a rumour yesterday on PDX new contracts?

  142. Report outlaw | June 21 12:19pm | Permalink

    actually I like that 3i tip. private equity in a listed security, placeable in my SIPP.

  143. Report fjp73 | June 21 12:20pm | Permalink

    I’m running a prize if anyone can work out the holdings of prudential in PACE, confuses the hell out of me

  144. Report BMAlpha | June 21 12:20pm | Permalink

    MCRO?

  145. Report yogabbagabba | June 21 12:20pm | Permalink

    Fidelity Special Sit : what has happened to Bolton !

  146. Report Phіl | June 21 12:21pm | Permalink

    Ho Lee Sht: Rumour that LulzSec has got hold of the UK census data: http://thenextweb….re-uk-2011-census/

    Totally unconfirmed at present time, but huge news if true.

  147. Report Hamster Ape | June 21 12:21pm | Permalink

    So has the possible CWW bid been mentioned before or not?

  148. Report mrs martin | June 21 12:21pm | Permalink

    will Mr Bolton be waiving his fees in light of his poor performance ?

  149. Report pretzlik | June 21 12:22pm | Permalink

    the question here is not a chinese market peak, the question is who are the good guys in china, sry – who are honest with their financials

  150. Report Pakora Mix | June 21 12:22pm | Permalink

    Riot shields and tear gas look like good businesses in China at the mo for Mr Bolton

  151. Report Phіl | June 21 12:22pm | Permalink

    pretzlik: speaking of which I see Paulson has taken his losses on the chin.

  152. Report fjp73 | June 21 12:22pm | Permalink

    Interesting that anything with the term or association with the Chinese Market has risen around 200%, with the exception of BSST….time to sell?

  153. Report yogabbagabba | June 21 12:23pm | Permalink

    Bolton “long term case ” great !

  154. Report fjp73 | June 21 12:23pm | Permalink

    Fundraiser?@XEL?

  155. Report fjp73 | June 21 12:23pm | Permalink

    Instead of SEDA?

  156. Report yogabbagabba | June 21 12:23pm | Permalink

    iii chat room said fund raising

  157. Report pretzlik | June 21 12:24pm | Permalink

    @Phil yeah, wonder if he made a mistake there but doesn’t help chinese sentiment though

  158. Report fjp73 | June 21 12:24pm | Permalink

    Encore have been assisted by every man and his dog on the board buying a few shares…still looks like a downtrend there ….

  159. Report fanta | June 21 12:24pm | Permalink

    amazing phil

  160. Report fanta | June 21 12:25pm | Permalink

    (lulz)

  161. Report VP | June 21 12:25pm | Permalink

    93.5p NAV on Bolton’s super-fees fund. Took a while but delighted to see him getting comeuppance.

  162. Report Eoghan | June 21 12:25pm | Permalink

    Neil could you post the Bolton Piece?

  163. Report BBB+ | June 21 12:25pm | Permalink

    thank you

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