Whilst I am still convinced that this is a good share I think...

Whilst I am still convinced that this is a good share I think they just tossed their conservative approach out of the window. That has for me fundamentally changed their risk profile and hence it may even change my Investment. Currently its number 4 in my portfolio.

These are my issues with these announcements:

1. You have to be very sure if you are the controlling shareholder at around 61.82% and will be diluted to 50.54% only taking up around 28% of your entitlement. Or if you look at it another way only risking your dividend you received recently and not dipping back into the past few years dividends. The need to be above 50% is compelling so the investment to clawback is not being made. I see that as a significant acceptance that this newer more aggressive route holds some greater degree of risk. So is this so compelling that 50.54% of the bigger pie is far better than 62.8% of the existing business or is it 50.54% of a bigger business or 62.8% of something that is stagnating?

2. For shareholders it would have been better not to have paid the dividends out and lowered the capital raising and hence the dilution we are all sufferring. So why pay that dividend?

3. The results announcements were only 53 days ago and these presentations don't make any mention of huge opportunity.

4. We are heading into Regus's stomping ground at a time when they are also talking of expansion. Are we both going to be burned?

5. More importantly is it that we have to compete there to survive and not let them just cherry pick our areas of competition? Is this a defensive or offensive move?

6. Regus is no longer debt laden and has cash on its books as well. One of their biggest cash holdings however covers lease deposits which are issued in the form of bank guarantees. SRV seem to actually issue cash to cover lease deposits (total around 25M) have 14M as bank guarantees for this.

7. Regus has been also punting the virtual office and has also got these cards that look like credit cards but in effect are customer cards allowing you to access services.Partly service level cards and partly loyalty.

8. So I am left to wonder that after having invested in a conservative company that plans and executes its strategic plan and delivers on promises if I am now investing in the dreams and aspirations of the younger Moufarrige sons or is this a defensive and needed strategy to defend its position against the much larger Regus. Is this a more risky share now , are dividends likely to be cut to nothing over the next 3/4 years as these new floors have to be brought up to profitability and then to add insult to injury is this enough cash for the ambitions of virtually doubling the number of outlets. What if they miss fire or the market miss fires can we end up as a distressed company and get diluted badly.

Yesterday I understood this company today I dont.