SPY SmartPay

[Stumpynuts]

http://www.nzx.com/markets/NZSX/SPY/...-MANUFACTURING


Slash outgoings, make bigger margins........
Crush, kill, destroy!!!

But yeah, good to be seing a 25% reduction in staff

[mr.needs]

SmartPay announce a Share Purchase Plan (http://www.nzx.com/markets/NZSX/SPY/...-PURCHASE-PLAN) at a 16% discount, and the share immediately fall by approx 16%!

Does this normally happen when a non-renouncable SPP is announced? Do those who currently hold SPY plan on participating in the SPP now that the purchase plan's discount has been erroded? Is anyone going to buy a share or two before the 21st in order to participate?

Can anyone explain more generally why a company would choose to have a SPP as opposed to say a renouncable rights issue?

[Anna Naum]

BB, do not hold but agree it looks to have potential. Maybe I am missing the chance but it looks to me like they need capital so I am a bit cynical until that is achieved. Past examples suggest amalgamations like this take longer than expected and therefore profits are longer in the making.

SPP suggests they struggled to get outside interest in capital raising. There is something about all this that just does not add up to me. Guess buying the company from the receivers might not have been the bargain they thought it was? Also as a SPP it relieves major shareholders from liability to put too much dosh up, not a good sign to me.

[funpedro]

Agree - something fishy in here me thinks. SPP to fund growth or retire debt they can't service? 40 people out of manufacturing only? These guys use announcement like their own private PR firm. If they were doing as well as they say there's be no need for the SPP. What about announcing to the market all the major NZ corp business of Provenco's they've already lost and not just the win of Mitre 10. Wonder if they'll try and talk things up again soon now the discount for the SPP has evaporated....

I'll be waiting for some real evidence of sustainable revenue before taking them seriously.

[whatsup]

Agree - something fishy in here me thinks. SPP to fund growth or retire debt they can't service? 40 people out of manufacturing only? These guys use announcement like their own private PR firm. If they were doing as well as they say there's be no need for the SPP. What about announcing to the market all the major NZ corp business of Provenco's they've already lost and not just the win of Mitre 10. Wonder if they'll try and talk things up again soon now the discount for the SPP has evaporated....

I'll be waiting for some real evidence of sustainable revenue before taking them seriously.

Turn-around results ann today, just in time for the SPP holders to take up their allocation and the results should make it easier for share holders to make up their minds. IMHO SPY has turned the corner and with prudent management ( which we already have ) it is looking much better than it has for years. DYOR.

[Lizard]

I'm not a follower, so I just took a look at SPY and am somewhat confused by the result. As I read it, the first half revenue of $17.9m only contained 2 months of the Provenco-Cadmus acquisition. This acquisition was supposed to have quadrupled the size of the business (according to the HY report). So, if that was the case, would have expected the second half year to be around double the first half revenue (which obviously it isn't)? Although corporate costs are twice as high in second half, so maybe that is what they meant?

As for the SPP, how much is likely to be raised? Looks as though they could do with a serious wad of cash for managing the increased working capital as well as to re-finance the short term debt (I haven't found who the lender is - SCF or Southbury perhaps?). How serious the situation is probably depends on the commitment of the lender and the major shareholders to seeing this through. Even if they resolve the financing issues, the EBITDA forecast puts it on a forward EV/EBITDA of 3.9 to 6.1 - perhaps cheap at the lower end, but not cheap at the upper. And hard to know if the EV side of the ratio might be getting bigger in order to generate the EBITDA. Definitely, the current share price doesn't seem to be building in the risk that the balance sheet seems to convey.

Right now, and particularly with the shares trading below the SPP price, it looks to me like one to stay clear of. Interested in others views.

[whatsup]

SmartPay announce a Share Purchase Plan (http://www.nzx.com/markets/NZSX/SPY/...-PURCHASE-PLAN) at a 16% discount, and the share immediately fall by approx 16%!

Does this normally happen when a non-renouncable SPP is announced? Do those who currently hold SPY plan on participating in the SPP now that the purchase plan's discount has been erroded? Is anyone going to buy a share or two before the 21st in order to participate?

Can anyone explain more generally why a company would choose to have a SPP as opposed to say a renouncable rights issue?

SPP Closing tomorrow, nothing in it re share price but short term future is looking better all the time with company ann that add up to a co that has turned the corner.
Good management who knows whats required and prepared to back this co with their own cash.

[Dr_Who]

SPY did get PVO at a bargain price. PVO's spectacular fall from grace and all those that got sucked into the hype.

[mr.needs]

SPP Closing tomorrow.

One week since the SPP closed. Does anyone know how much they received?

[Omega]

Have been eagerley awaiting outcome myself. The delay in posting the results of the SPP would indicate that it fell way short of expectations.