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Typical over reaction

lse:wsg

#1

So now we know that the contract is with Iran - why do we know? Because the contract has finally been signed off!

So after all this time and effort on both sides a contract is in place with circa 24 million revenue once started. Transformational for the company at current market cap.

They have also announced that the country has another 60 yes 60 airports hence during the negotiations the extension of the scope of the project. Massive if taking all those on in due course.

So a short term political hitch sends this down 25%. Makes me smile. With all the trade deals with various countries involved with Iran - really, is Mr Trumps comments going to be allowed to derail all these companies etc.

This may even be sorted by the time of the results on 25th May. Total AIM over reaction with only 2 million shares traded. The MMs have picked some pockets this afternoon.

And this deal not the only one on the go so happy to be accumulating. Wealth created from the impatient and irrational to the rational and with patience.

Good luck all. Keep the faith.


#2

‘‘The MMs have picked some pockets this afternoon’’

Perhaps they’ll be picking some more first thing tomorrow morning old wise owl… hopefully not but my guess is this will open decently lower than todays close…how low it goes and what sort of bounce from where is the question for traders… long termers less so,granted… and in fairness the more I read the RNS the less worried I am…I’m still reasonably worried though…


#3

I’m standing ready to buy if they do try and drop the price. I see the RNS also clearing the way for directors to buy which will send a strong signal.

When the turnaround in sentiment comes it will be quick and substantial IMHO so happy to enjoy the sun and just wait a wee while whilst it all comes together.


#4

Nice to Michu,

I’m of similar mind-set to you with regard to this stumbling block. I’d be inclined to buy more under @10p but I only sold around one third of my holding when over @23p and have a holding average of about @10p. I’m very unsure now if the contract, despite being signed, will continue to excite the markets in the same way.

Iran is an unbelievably difficult place to do business and usually favours French companies over others if t has to go ‘Western’. It shouldn’t be forgotten that the whole of Iran Air’s plan to add over 100 modern jets has been thrown into doubt also.

This move on the Iran deal was a flagship policy for Trump who is prepared to take action against anyone circumventing his sanctions and this will be a battle of will in the run up to the next presidential election in November 2020. I can’t see anything being settled before then.

I was in Iran in 2000 and Tehran had the most chaotic airport I have ever visited (I’m assured some in Africa are worse). Several levels of security have to be passed through BEFORE you reach airport security. Police, Army and Religious Police all compete with each other to show their powers. I have no idea if this remains the same situation.

Air travel within Iran is very popular as fuel is heavily subsidized, Iran is huge and the roads are some of the most dangerous in the world.

60 airports though? That is misleading I think. Tehran is a very, very busy international airport and there may be one or two other airports have a few international flights and perhaps half a dozen fairly busy regional airports. I’m unsure about the Gulf coast and the oil industry and how that adds to the network.


#5

Hi Eadwig,
Funnily enough I have just posted on Barcplus that 10p would be an interesting price level.
Incidentally, apparently the UK has 40 commercial airports, so 60 in Iran seems to be quite a stretch. The relevance also seems questionable at this point. Unless you, of course, you are desperate to keep the dream alive. Which seems to be an esssential ingredient for AIM.


#6

Damps, “the UK has 40 commercial airports, so 60 in Iran seems to be quite a stretch”

It is often overlooked that Iran is many times bigger than the UK and has a larger population, around 80 million.

With the fuel subsidy in 2000 I paid $15 U.S. to fly from Kerman to Tehran. Internal flights are well within reach of the locals - or were back then, and it may well still be the case. Considering our road trip outside Kerman (toward Bam and Afghanistan) was only allowed with an armed escort of soldiers, choosing a flight between cities may well be the preferred option for many an internal traveller.

Sadly I should add that the beautiful oasis city of Bam was wholly destroyed by an earthquake not long after my visit.


#7

Lovely stories Eadwig and good colour too, thanks.

Alas, upon reflection today and watching the s/p bounce back somewhat from this mornings 10p ish open, I’ve felt its better I halve my position again here this afternoon… so my position here is small now and my interest will, for a while at least, be equivalently small.

This could play out well still but it’s clearly more complication and trickiness on top of the endless similar that forever seems to go with WSG. Indeed I’m somewhat burned out by my journey here so far and am thankful to have made a reasonable profit here overall. And given this key contract is in Iran there are plenty of bets I like more than this now.

Good luck to all holders here. Whatever else, it’s categorically never boring with WSG!


#8

The real worry is the statement “the project will be placed on hold”.
They needed the contract up and running - how long before the lights go out?
Anybody interested in a 1 for 3 rights issue at say 5p? Probably not!

Nogger


#9

Nice to Michu, “I’ve felt its better I halve my position again here this afternoon”

I have to say the more I think about this the less typical the situation seems (and the more justified the reaction) and I may reduce myself next week.

The international deal and compliance by Iran are reviewed every 3 months but I can’t see Trump backing down anyway for home political reasons. Rumours and counter-rumours may well make the share very volatile and tradable again, but its an awfully risky state of affairs as you pointed out.

One thing that isn’t clear to me is the recently announced ‘car screening’ contract worth $4.5m with an existing client in the middle east. Is this part of the Iran deal or some other client?

Is it also at risk or not in other words. I assume most of that contract value will be for equipment that WSG will provide with perhaps a small mark-up, even so it is a significantly large contract in itself which would have moved the share price on its own had it not been over-shadowed by the airport announcement.

I don’t want to pull out as a shareholder completely. It is impressive that a British firm won such a contract in Iran and its hard to see how USA can complain about security of flights, so there must be more opportunity to be had in that country. Sierra Leone is coming back, the ferry business may turn into something worthwhile, in which case it should be sold off, in my opinion.