Watchstone and Six Hundred Group

I yesterday bought Watchstone (LON:WTG) again – this time at 142p. My reason is that I guess that the Slater and Gordon suit against WTG is nonsense. Subsequent to my purchase I was favoured with the following comment from a pal who follows WTG:

“The Slater and Gordon case is cobblers but the CEO of Slater and Gordon had to bring it otherwise he has to fall on his sword. There is no chance of the case coming to court. When Andrew Gretch is removed the next man in will settle at £1-5m to take away aggro. WTG is in no hurry as they can’t distribute surplus cash until the SFO case re Terry is resolved. WTG work to their own schedule but nevertheless it is the key to unlock repayments to shareholders of WTG.”

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Some readers may recall my highlighting my ignorance concerning Six Hundred Group (LON:SIXH) a few weeks back. I could not understand why the shares were so low – around 13p offer – where they languish today. But I still cannot find anything wrong with SIXH. So I have yesterday bought again at around 13p. Results are due out in, say, four weeks’ time. I repeat my very short note from about four months ago:

“SIXH has a walloping pension surplus. On 16th December 2016 SIXH announced an “accounting surplus” of £35m for the pension fund. SIXH also disclosed that using a “much more prudent technical provisions basis for valuation” gave a surplus of £2.2m. I am not sure what these different approaches imply or, indeed, what can be inferred. What is certain is that no more payments will be made by SIXH into its pension scheme.

The business is currently seemingly profitable (perhaps – it is hard to estimate – 2.8p EPS) and tnav is c. £30m in contrast to a capitalisation of 104m shares at 12.5p or £13m. I have bought this morning.”