Markets Live: Monday, 18th November, 2013

This is the transcript of the Markets Live session ending at 12:01 on 18 Nov 2013. Participants in this session were: Paul Murphy Bryce Elder

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Hi there

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Welcome

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This is Markets Live

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And here is today’s portrait

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That’s Michael Steinberg

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Of SAC Capital Advisors

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he goes on trial today in lower Manhattan

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He’s the most senior SAC-er to face charges

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Steinberg, 41, is facing trial on five charges of securities fraud and conspiracy to commit securities fraud over allegations he traded in technology companies Dell Inc and Nvidia Corp (NVDA.O) in 2008 and 2009 based on inside information. He denies wrongdoing. Dell, which traded on the Nasdaq exchange, became privately held last month.

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That’s from Reuters

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The proceedings will be interesting, i suspect

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11:04AMBlock
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But let’s look at events nearer to hand

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Lots of excitement in Asia overnight

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China in particular

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Not sure whether people want lots of grey on the Plenum

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The Decision

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Only 21,000 words or so

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But over here

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The Footsie was weaker earlier

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Before everyone woke up to this Summers stuff

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Which basically says QE infinity

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Full speech is here http://ftalphavill…tagnation-forever/

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And Q&A here: http://www.imf.org...2013/arc/index.htm

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H/t the reader who supplied that

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So where has the prospect of ever easy money taken us to this morning Bryce, Footsie wise?

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We’re going round in circles, really.

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It feels very micro, rather than macro.

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FTSE flat-ish. 20 points the better at 6712.

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Yes, there are some big individual moves pushign the index about

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Should have mentioned that

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And not much in the way of trends below it.

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Volume looks rather poor across the board, except in the names with news.

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So should we get to them?

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Sure

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Where to start?

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Petrofac Ltd (PFC:LSE): Last: 1,215, down 224 (-15.57%), High: 1,270, Low: 1,202, Volume: 2.29mBlock
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Profit warning.

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Sheesh

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Big one. 2014 cut by about 18%.

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Contract delays in Abu Dhabi and Malaysia

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Meaning 2014 will show “flat to modest growth”

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Consensus was for 16%.

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Which is neither flat nor modest.

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hehe

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Now, a lot of this is on timings.

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Abu Dhabi’s being rephased because it might be bigger.

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Nevertheless, it’s worth noting that some people saw this one coming.

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Such as who?

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Nomura.

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As it happens, I took it in the neck for writing this back in August.

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Big Nomura downgrade of Petrofac, predicting contract delays.

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You were on the money there, albeit a tad early

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Well, Nomura was. Their oil services analyst’s very very well connected.

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Clearly

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And here’s what he’s saying today.

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Petrofac has disclosed 2014 guidance (which is not typical in its Q3 trading update) and had guided materially lower vs. consensus. Although the company has maintained net income guidance for 2013 of modest growth (consensus $650mn) it is targeting flat to modest growth in 2014 which implies net income of c. $650-680mn, 11% lower vs. consensus (assuming a mid-range of $665mn) and 4% below Nomura $690mn. The company has also moved away from re-affirming its target for 2015 to achieve a doubling of 2010 net income ($862MN) and now cites that it is dependent on the timing of awards in 2014 albeit, little meaningful has been awarded over the last few months so the pressure to win before the year-end is high. In our note, Petrofac: Downgrade to Neutral on project delays, we argued that the company needs to win c. $1,5bn in H2 in order to underpin 2014/15 net income growth but that the delay in high margin projects would mean 2014 expectations would need to rebase. We believe the company has sufficiently re-set expectations for 2014 but the risk to 2015 net income is that awards this year are delayed further.

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A key highlight from our recent trip to the Middle East was that decision making getting in government was taking (even) longer. Despite the approval from the top (PM level), disagreements amongst cabinet members and fears around perception on corruption has slowed major decisions down including key investments that need to be made in infrastructure, agriculture, power, oil and gas. With this in mind, we remain cautious around the near term outlook for projects awarded to Petrofac and prefer to stay on the side-lines until these contracts materialise.

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Detail: key moving part in downward revision to 2014 net income: 1) Change in scope of Upper Zakum driving a deferral of profit recognition from 2014 to 2015; 2) Higher net interest charge in 2014 associated with recent debt issuance; 3) Re-phasing of Barantei phase two from 2014 to later years; 4) Delay of high margin project awards in 2013 meaning onshore net margin will be lower (NOMe: 9.9%; consensus: 10.5-11%); 5) Backlog $14.3bn, unchanged from 30th June and expects to achieve awards before year-end of up to $1.5bn.

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And Deutsche Bank…….

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For a TL;DR take.

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Although backlog remains robust in Q3 for us the key negative in
PFC’s Q3 IMS is the bearish tone on 2014E earnings growth; although we had
been relatively cautious on net income growth, particularly in ECOM, reuters
consensus pointed to double-digit growth in net income relative to new
guidance for ‘flat to modest’ growth. Although IES progress is in-line with
expectations this points to near double-digit downgrades to consensus EPS.
Subsequently the achievement of 2015E earnings targets will be difficult with
the ‘timing’ of ECOM awards in 2014E.

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Next question is whether management could’ve been clearer earlier about the contract slippage.

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Cutting your 2014 earnings by a fifth on what look like long-running talks seems a little troublesome.

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@FJP on the right refers to Goldman sticking with its buy call.

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So for completeness here it is.

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We update our estimates, and EPS falls 1%/12%/5% for 2013/14/15E
respectively, driven by lower Onshore E&C revenue in 2013E, lower IES
earnings and Onshore E&C revenue and higher interest costs in 2014/15E.
We still expect a recovery in 2015 in Onshore E&C revenues, helped by
Upper Zakum and further contract awards, and a pick-up in IES earnings in
2015 as Greater Stella and Cendor phase II ramp up. The lower growth in
2014 is clearly a disappointment and contract awards in Onshore E&C are
required to gain greater confidence in the earnings delivery for 2015.

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Petrofac is trading on 2014/15E P/E of 12.1x/9.9x relative to the averages
for E&C peers on 13.1x/11.5x. We lower our 12-month price target based
on 6x 2015E EV/EBITDA to 1516p (from 1577p) due to our lower estimates.
We retain a Buy rating.

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Key upside/downside risks to our view and price target include: a
higher/lower crude price, more/fewer contract awards than expected and
better execution/execution problems in the delivery of large contracts.

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Blimey, that’s an heroic TP

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(@Mo again: for the last bloody time, the show lasts an hour. Do you have chronic ADHD? Are you that guy from Memento?)

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And so to Aberdeen

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Top of the leader board

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The shark keeps swimming.

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Aberdeen Asset Management PLC (ADN:LSE): Last: 483.40, up 56.6 (+13.26%), High: 489.00, Low: 471.90, Volume: 8.44mBlock
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…. you know how sharks have to keep moving forward otherwise they drown?

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That’s Aberdeen.

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Needs to keep making acquisitions otherwise someone will notice it’s a nice but growth-constrained Asian/Global Equities franchise.

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What does it buy? Anything.

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What’s it bought in this case? Mostly a shambles.

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Harsh Bryce (tho i know this is a theme of yours)

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Well, what are fund manager acquisitions for?

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What are you buying?

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Bulk

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You’re buying a client base (who are locked in for about three years, at best ….)

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… and a staff (which can sod off rather earlier than that).

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Now, Aberdeen’s talking about bulk on the conference call.

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“You need a certain amount of size to compete with big Americans” says Martin Gilbert, CEO.

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Do you?

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If you needed bulk, surely the big fund managers would have higher profit margins than the small ones.

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But the reverse is the case.

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The synergies are, at best, limited.

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You can reduce the fountain count in the lobby from two to one. That’s about it really.

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You really don’t like Aberdeen, do you?

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I don’t like fund managers.

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Generally.

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Firms or individuals?

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…. Emoticon

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Well, the acquisition-hungry ones anyway.

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They’re buying, what, three years of secure earnings?

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Why bother? What’s the point of that?

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Show me a good big fund-manager acquisition?

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Anyway …..

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Clearly, I’m in the minority here.

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Think we’re talking about 10% on EPS from this, so that’s super.

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(@PseudoTrader: that’s had a year to bed in. Give it time.)

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Here’s UBS’s new figures.

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The deal is £560m in shares and up to £100m in deferred cash. This is higher than the
£500m speculated in the press, but the £100m cash is dependent on future growth 5
years out rather than asset retention and SWIP profitability is better than expected. We
therefore carry out our analysis on the £560m upfront; as we believe that the
economics would probably look even better should SWIP actually see “growth delivered
by the strategic relationship with Lloyds in the Investment Solutions business”.

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We have updated our merger model (figures 1 and 2). Aberdeen is paying headline
8.4x P/E for SWIP, but taking into consideration the significant cost cutting
opportunities (incremental assets would come on at 55% operating margin, vs ~21%
currently), we estimate that they are paying 5.3x P/E (post restructuring costs) or a 19%
ROIC: we estimate 10.6% EPS accretion in FY15 (management guide the deal to be
significantly accretive). Previous in-market deals such as these (e.g Henderson /
Gartmore) have generally achieved operating margins in excess of 50%. We are
assuming 85% retention of the captive assets (as they sign a “long-term contract to
manage Lloyds insurance funds”) and 75% for the third party managed money.

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The deal gives Aberdeen diversification away from GEM in the long term. We think this
helps Aberdeen become a global player and the diversification is why the likes of
Schroders trade at a premium to peers. The SWIP deal means Aberdeen gains exposure
to UK/European equities (currently the best-selling products in Europe) and better
exposure to UK investors (though a Lloyds distribution deal).

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Aberdeen trades at 11.2x CY14E EV/NOPAT, a 14% discount to peers. Aberdeen
continues to highlight its ability to return surplus capital to shareholders over time. This
could take form in the way of ~£300m in buybacks which would deliver another 6%
EPS accretion.

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Everyone’s positive in fact. Except me.

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Here’s Credit Suisse.

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The deal price is £550m consideration in shares and a potential further
£100m performance related 5yr earn-out payment of up to £100m
dependent on growth delivered by the strategic relationship with
Lloyds. The AuM of SWIP is around £136bn which equates to a
consideration to AUM of 0.4% or 0.5% including the additional £100m. The
annualised revenue of the SWIP business is around £234m and it is
expected that the marginal operating profit margin will be around 55%, we
hence calculate that the deal should be around 12% earnings accretive. The
deal is expected to close in Q114 and Lloyds will not be able to sell their
c10% stake in Aberdeen for 12 months and will have to retail two-thirds of
their stake for at least 2 years.

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FY13 underlying PBT c3% beat on CSe, with higher revenues of £1,079m
vs CSe £1,055m; both management and performance fees were ahead of
our estimates.
■ AuM of £200.4bn was slightly weaker than CSe £204.8bn due to higher
outflows; in 4Q13, net outflows were £3.6bn vs CSe £1.3bn outflows driven
mainly by higher than expected outflows from fixed-income, money markets
and Asia Pacfic equities, although GEM equities was better. The group
notes that the momentum of flows has been biased towards higher margin
pooled funds, which are now 49% of total AuM.

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While you were sharing all that

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madrugada:was wondering what a muppet is

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A term of endearment used to describe BB share promoters on FT Alphaville. Block
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There’s Actually HOT news for muppets this morning

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…. !

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As part of our developing content program ADVFN is proud to announce the launch of

“Hot, Stock Rockets.”

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Hot, Stock Rockets!

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The ADVFN user base love speculative shares. With 6 million unique visitors to the UK site in the last 12 months, tips, news and comment is an expanding area for ADVFN. Hot Stock Rockets is a newsletter aimed at the speculative segment of the investor public. After all how many investors, however prudent, can resist an exciting speculation.

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Hot Stock Rockets ethos is:

“AIM is not about long term investment. It is about searching out cheap stocks…”

The Hot Stock Rockets portfolio features a maximum of 12 stocks at any one time.

Hot Stock Rockets is a team with vast experience of making money on AIM, the London Stock Exchange’s Alternative Investment Market.

Hot Stock Rockets is a monthly newsletter with a main tip of the month.

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Dangling modifier in the second sentence of that first par.

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You’d think, with 6m uniques, they could employ a sub.

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The Hot Stock Rockets team knows how AIM works. With input from an ex market-maker, an ex fund manager and an ex sell-side analyst, plus a team of veteran market writers, they know how this market works and how to make money.

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Who’s the Hot Stock Rockets team?

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Have we found out?

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Not sure immediately, but could guess

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The team has more than 130 years combined market experience. Tap into that wealth of knowledge and vast network of contacts for hot tips for only £5/month.

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Cheap at the price, i suspect

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Hm. You can get 130 years of experience from eight graduate trainees.

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I await to be dazzled.

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11:31AMBlock
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Back up the market.

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Sure

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Capita?

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Capita PLC (CPI:LSE): Last: 971.00, down 12 (-1.22%), High: 987.00, Low: 932.00, Volume: 1.30mBlock
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Oh dear, yet

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yes

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Another CEO gone.

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That’s all the big outsourcer bosses buggering off since the start of the year.

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All off them.

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Several weren’t voluntary, to be clear.

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But remarkable to have a full house.

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Today’s news is that Paul Pindar fancies going back to PE.

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He was formerly with 3I, I think.

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Just to remind … G4S’s CEO quit in May

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Rentokil’s CEO quit in August

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Serco’s CEO quit in October

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Now, shares came off hard at the open but seem to have recovered a bit.

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Conference call guidance was very upbeat indeed.

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And the succession planning looks sensible.

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Andy Parker, deputy CEO, is well known and well liked.

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“the only candidate considered seriously” according to the conference call.

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Ok

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So it’s actualy all pretty positive

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Oh, and Mr Pindar says he’s not going to sell his Capita stock any time soon.

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Believes the outlook for the co is strong.

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Just fancies a punt at something else. Healthcare private equity, apparently.

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(Which has a somewhat troubled history.)

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Anyway, here’s what Merrill makes of it all.

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CEO retirement negative
Capita has announced that Paul Pindar is to retire from 28th February 2014, moving
into private equity. Paul has a strong track record and has been synonymous with
the group’s success over his 22Y tenure as MD and CEO. We view his departure as
negative for the shares.
He is to be replaced by the group’s Deputy CEO and Joint COO Andy Parker and
Dawn Marriott-Sims (MD Workplace) moves to COO.

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Capita has announced that it has agreed to sell, subject to FCA approval, its loss
making insurance distribution assets to Markerstudy and close its SIP administration
business, which are sub scale. These businesses are expected to lose £15m on
£47m sales this year and there are expected to be ~£35m cash costs in relation to
the exit. The net of losses out and slightly higher interest adds ~£13m to PBTA in
2014, for which consensus is £513m and BofAML £520m PBTA. The group’s
actions on Insurance should add 50bps to EBITA margin in 2014.

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YTD contract wins are £2.9bn, including O2 (£1.2bn), MoJ electronic monitoring
(£400m) and Cabinet Office training products (£400m). These and the benefit of last
year’s record contract wins are set to drive ~8% organic growth in FY13, including
13% in 2H, and double digit organic growth in 1H 14

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Capita believes that the climate of austerity remains positive for Government
outsourcing and that the Cabinet Office (central Gov procurement) is keen to move
on from the contract issues which have dogged peers Serco & G4S this year.
The bid pipeline is £4.2bn, the same as when last disclosed in July. Decisions due
over the next 4M include TfL congestion charging (£70m per annum v IBM),
Scottish Wide Area Networks (£17m-£54m), Defence Infrastructure (~£20-30m) and
potentially surrounding local Gov add-ons to the Staffordshire JV. Sales activity was
described as being strongest in retail, utilities, telecoms, defence and justice.
Probation (a £400-500m per annum opportunity, spread across 21 contracts) is not
in the group’s pipeline.

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The shares trade on 13x EV/EBITA and 15x PE to Dec 14E, for organic growth of
8% and EPS growth of 10-13%. This is similar to Babcock and a material premium
to Serco (9x EBITA, 11x PE), where numbers are coming down.

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(madrugada – sure, ?)

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Oh, and JP Morgan’s Robert Plant (not that one) says this about the conference call.

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Profit guidance; management said that the 2014 consensus of £513m
PBT should rise to £528m, so 3% higher, (we have increased our
estimate from £520.3m to £524.7m) due to the benefit of selling/closing
down the loss making insurance distribution/SIP business.

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That’s the key positive, hence the rally.

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 The contract pipeline is £4.2bn, the same as at the end of H1.
Management said that most of this pipeline will be announced before the
end of H114. Management added that there were three large bids
(Scottish wide area, Congestion charging and the Defence Infrastructure
Organisation) that should be announced before the February Prelims.
Capita had £0.9bn of contract wins since H1 and lost nothing and an,
unquantified, health contract in the north of England, left the pipeline so
we think ordinarily the pipeline should have dropped to c£3.2bn, so
showing good replenishment.

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Public sector outsourcing; management set out a positive case for why
public sector outsourcing should continue, saying that austerity will lead
to cost cutting for the next decade and that the Cabinet Office is
committed to savings and using the private sector. Management added
that the news around G4S and Serco is not great for the industry but that
people within the Cabinet Office want G4S and Serco back as active
bidders in the market. The competitive nature of the public sector market
has not changed materially over the last 10 years and management cited
the difficulties of dealing with the public sector contract bidding as a
barrier to entry. Increasingly the public sector is looking at more
innovative was of structuring contracts, which we could see as being a
negative, but then again arrangements such as sharing in extra cost
savings above a certain margin level may also benefit both parties.

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Cheers for all that

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(WIWY — welcome back. behave yourself)

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Aveva Gropu

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group

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read thru that earlier and couldnt quite see why it had fallen out of bed

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AVEVA Group PLC (AVV:LSE): Last: 2,353, down 213 (-8.30%), High: 2,523, Low: 2,281, Volume: 260.31kBlock
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Yeah, there’s a veiled warning in there. Heavily veiled.

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Problem is growth in the enterprise solutions division.

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Which has grown by 5% year on year.

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Which’d be lovely if expectations weren’t for it to grow ~50% year on year.

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Hence, we get the veiled warning.

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Guidance gone to flat revenue growth in 2014.

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Prevbiously it was for +20/+30% YoY

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Looks like contract issues.

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Basically, one Latin American shipbuilder has run out of money.

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And another customer, an oil company, has decided its current IT doesn’t need an upgrade.

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Wallop. Farewell, Aveva’s growth engine.

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Ok, that helps

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Here’s what Barclays says ……

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Revenue of £108.5m (+11% YoY) is a touch ahead of company-compiled consensus of c. £108m (BARC: £109.3m) and adj. PBT of £32.3m is ahead of consensus at c. £31m (BARC: £33.9m), with outlook commentary around meeting management expectations for the FY. The margin 29.8% (+46bp YoY) is therefore solid. However, the revenue mix was disappointing, with ES growth of only 5% whilst EDS grew 12%. Rentals / licence mix was a positive, with rentals growth of 14% outpacing initial licence growth of 11%. Geographically, Asia-Pacific was up 22%, Americas up 9% and Europe up 4%.

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The Enterprise Solutions division (AVEVA NET) grew only 5% off an easy comp (versus 31% growth in FY13), with the division making another loss in the period (loss-making in the prior year, although positive contribution in 2H13 and for the year as a whole). This below-expectations performance is attributed to two specific customers; both a major Latin American shipyard and a major Oil & Gas operator abandoned plans to roll out the solution. Given the level of growth achieved in the FY results and the commentary at the Q1 that the division had continued to see good growth, we anticipate that the market will be surprised by this apparent Q2 slowdown. In addition, management are guiding revenue in this division to be in line with the prior year (we forecast 22% growth), implying a marginal decline YoY in 2H14.

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Engineering & Design Systems performed well and increased by 12% YoY and it has now over 30 customers on E3D. In the statement it indicated that Siemens’ Power EPC division is intending to use this as the standard for all new projects from end-2014. This is clearly a positive but we also expect that this is being mentioned after competitor Hexagon indicated that Shell will standardise on Smartplant.

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Despite management commentary that it is well positioned to deliver against the board expectations for the FY, the tone is less positive. In Q1 it indicated that ES continued to see good growth and clearly this has now turned in Q2 and will decline in 2H. As this is a small division it will have limited impact on the FY numbers, but it is eliminating all upside. We expect that cons. will make small negative adjustments but the stock movement is likely to magnify this. At 27.9x FY14 PE we thnk this stock is priced for perfect execution and upgrades and today’s announcement was simply a little short of this. We remain EW and prefer Hexagon in PLM.

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… And Morgan Stanley.

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Mix a negative today: Aveva’s 1H sales were slightly
below expects (ES weakness), but better margins
brought PBT in line. Growth overall was strong, with
top-line +9% organic and EPS +17% YoY. However, a
lofty rating (25x CY14e) leaves little margin for error, in
our view, and we’d expect the shares to be down today
on the ES weakness. Longer-term, we like the strong
and growing recurring revenues and opportunities in
both businesses, so remain OW.

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Sales slightly below, profit in line: Aveva reported
1H14 revenues of £108.5m, up 11% stated and c. 9%
organic. This was 3% below our £112m estimate and
1% below the street (£110m). However, profitability was
better than we forecast and adj. PBT came in at £32m, in
line with street and slightly below our £33m. Adj. EPS
were 35.2p – ahead of street 33.3p and below our 37p.

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Mix mixed: The revenue mix was positive, with rental
up strongly (+14% stated, c. +12% organic), underlining
the quality of growth. However, the mix of business was
weaker – with the 3D design business (Engineering &
Design Systems, EDS) growing 12% stated (10%
organic) while the Enterprise Solutions business (ES) –
which is smaller and should be fast growing – only up
5% (c. 3% ex FX). The software component of ES was
very weak, down 7% stated. By region, Asia-Pacific was
the star (+22% stated), Americas was solid (+9%) and
EMEA was weaker (+4%).

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EDS strength, ES weakness: In EDS, Aveva spoke of
a positive customer response to the new product, E3D
(30 customers now). Aveva also saw a backlog at EPC
customers growing – a strong sign for future growth, we
think. However, the picture was much weaker in ES.
Aveva blamed financial difficulties at a Latam shipyard
and the abandonment of an ES project at a major Oil &
Gas operator, and now only expects ES to be flat for the
FY. Results have been more volatile in this business.
However, given the scale, we would expect ES to be
growing strongly, so this is a negative despite Aveva
highlighting strong pipeline and market opportunity.

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Now

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What do we make of this?

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That’s China New Energy

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…. Okay …..

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Promising name.

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We noted them a fortnight on the first leg of that extraordinary rise

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This latest gapping is on the back of a contract win, in Hungary i think

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The Board of CNE (AIM:CNEL), the AIM quoted engineering and technology solutions provider to the bioenergy sector, is pleased to announce that it has won contracts with Visontai Bioetanol Fejlesztő Korlátolt Felelősségű Társaság (“Visontai”) and Helvéciai Biouzemanyag Termelö es Kereskedo Kft. (“Helvéciai”) to develop two biorefinery projects in Hungary

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Visontai Bioetanol Fejlesztő Korlátolt Felelősségű Társaság and Helvéciai Biouzemanyag Termelö es Kereskedo Kft? Blimey.

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This company claims to have 60% of the Chinese biofuel production

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Emoticon

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……. Right.

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Through its wholly owned subsidiary, Guangdong Zhongke Tianyuan New Energy Science and Technology Co. Ltd (“ZKTY”), the Group provides process technology, engineering designs, plant manufacturing and operational services in connection with the production of, inter alia, fuel ethanol, edible ethanol, biobutanol, bioacetic acid and other chemicals from agricultural plant materials and waste.

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Does that mean it’s a refinery engineer?

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It was a Nigerian deal that triggered the earlier excitement

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they do the actual refining

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Of Cassava and the like

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Shall keep it on the watch list. In the meantime, well done to Guangdong Zhongke Tianyuan New Energy Science and Technology Co. Ltd for winning deals with Visontai Bioetanol Fejlesztő Korlátolt Felelősségű Társaság and Helvéciai Biouzemanyag Termelö es Kereskedo Kft.

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Oh, house prices.

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-2.4% decline!

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What’s going on?

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Righmove broken clearly

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Me and Izy both bought in October. Crash comes in November.

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Bloody obvious, in retrospect.

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London’s down about 5%.

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Hehehe

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Of course

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What we have to note here — apparently — is that Rightmove isn’t seasonally adjusted.

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And priced tend to fall back in November

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Apparently.

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Here’s a comparison chart

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But while we’re here …………

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Cannacord’s knife catching in Foxtons already.

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For ….. odd reasons.

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What’s new?
On Friday it was announced that the “dot London suffix” as well as similar
arrangements for New York, Paris, Berlin and Vienna, had been approved by ICANN,
the US body that governs domain names.
The Evening Standard commented: “The domain names will have to be renewed
each year for a small fee and London & Partners hope this will generate an income
stream of several millions of pounds a year to be ploughed back into the promotion of
the capital.”
The website mydotlondon.com reveals: “Dot London is expected to go live between
spring and summer 2014”.

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Foxtons Group PLC (FOXT:LSE): Last: 298.25, up 2.25 (+0.76%), High: 300.00, Low: 296.50, Volume: 19.83kBlock
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Foxtons is a global brand. The dot London domain name will provide even more
support to highly successful London brands. Anything that supports London
businesses will in turn support London’s largest and most successful estate agency,
Foxtons.
Tim Hartford, the undercover economist, writes in today’s FT: “As Europe’s only
English-speaking world city, there’s more to the British capital than hot money and
hot air.” In our view he is correct to pose the question “is London’s innovative and
cultural dynamo in danger of slowing down?”.
If the answer is “no” then London’s residential property market has further to rise:
Foxtons is the major beneficiary

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Yes. That “if” in the last sentence is quite important isn’t it?

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I’m really not sure what to make of all this.

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Anyway, they do some actual valuation work as well as reading the FT.

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We value Foxtons with reference to its track record of generating high returns on
invested capital, its ability to grow organically and its intention to return its free cash
to shareholders. Our 320p November 2014 target price is based on a FY15e PE of
21x and a PEG of 1.0x; this valuation is also supported by Quest Modeller using our
forecasts. Higher valuations are achievable if forecasts for 2016 and 2017 are used.
With 8.1% upside to our 320p November 2014 target price and a 1.6% regular
dividend yield and potential for a 2.7% yield on our estimate of the FY14 special
dividend, we see prospects for a double digit total shareholder return. We increase
our investment recommendation from Hold to BUY.

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Analyst there is Robin Savage.

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And get in there quick to register foxtons.london, assuming they haven’t yet.

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11:59AMBlock
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Right. That’s midday and I’m now boring myself.

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Should we push off?

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yes, we are done

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Thanks for your comments, rabble.

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Back tomorrow at 11

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Seeya

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