Gordon Stein, CFO of CleanTech Lithium, explains why CTL acquired the 23 Laguna Verde licenses. Watch the video here.
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FY2015 are £8.7m. I’m not sure whether the Freebets tax applies to this number but let’s assume it does. 15% x £8.7m = £1.3m additional tax due. ****! For FY15 NPT only did £2.5m B2C EBITDA so this would reduce it to £1.2m. That’s over 50% of their B2C EBITDA going to the tax man in this new tax. In terms of total POC in FY15 it would have paid £3.8m in normal POC plus an additional £1.3m in freebets POC, making a total of £5.1m. So what is clear to me is that B2C EBITDA and revenue is on the decline, and with the introduction of new freebets taxes this business will substantially decline further. The Scheme document (p14) also talks about increased regulation. I don’t know what type of financial impact this will have on the business? I don’t understand the B2B Business and haven’t seen any KPIs coming out of that business. Good to see it is growing but to what extent is that sustainable, I don’t know. At the end of the day it was only £3m so if it has had a good 2016, it can’t be far of paying back. It’s also clear from the Scheme doc that NPT has been engaged with several industry participants during H2 2016 (and I suggested this in my previous post) and this was the best offer they could muster up. The initial announcement took place in early February and there don’t look to be any further offers on the table. So while I am ****ed at having to take a loss on this investment (or any investment), I do think that the business is in a different place to when I bought and it looks like the tax environment is only going to get harder. To that end, I intend to vote in favour of the resolutions unless anyone can tell me why I shouldn’t which aren’t based around emotional arguments that I bought in at a higher price because I am not sure we will ever see those prices again.
Inclined to agree. Below is a post I did on another forum earlier: So I too have been thinking about this and going through all the documentation I received in the post this week and studying the documents located online (http://www.netplaytv.com/offer in case people haven’t seen it) On one hand, I bought in higher than the offer price so will be taking a loss. However, I think now is probably the right time to cut my losses and I am concerned where this share price would be headed if this takeover doesn’t happen. Below is my analysis, I found it easier to write it down and thought it would be useful to share here. - Declining B2C Business (P14 of the Scheme Document): H2 had a ‘slightly disappointing revenue performance from the B2C division due to a decline in net revenue margin (the percentage ratio between customer stakes and the associated net revenue)’. It says this was offset by the B2B business acquired in the prior year, which I think is the Otherside Business. I didn’t buy this share for the Otherside Business. From what I can tell, looking at the Interim Results H1 B2C revenue was in decline as it decreased from £12,748k in H1 2015 to £12,526k in H1 2016. H2 says it is disappointing, but to what extent we don’t know. We also know from the prior year results that 2015 B2C revenue is significantly down on 2014 (going from £27,358k in FY2015 to £25,177k in FY 2014). So this tells me that B2C revenue has declined 2014 to 2015 and further in 2016. Where will it go in 2017? - EBITDA & Point of Consumption (POC) Tax: When I first bought into this business, I think it had just posted £4m EBITDA for FY12 and the following year it did over £5m (FY13). Then the POC tax was introduced. The year before it came in, the business under the old CEO’s leadership seemed to have a significant amount of inefficient marketing spend as it tried unsuccessfully grow market share and posted a profit warning and only posted £3.6m (FY14). Then the POC came (FY15) in and the business posted £2.7m however £0.2m of this was from Otherside so really only posted £2.5m from its B2C business. What we don’t know is what the B2C business has done in 2016. However, from my analysis above we do know that B2C revenue has declined, so I can’t see how this could have increased. - Freebets tax: This for me is the killer going forward. I haven’t seen much commentary around it, so if any of you think different I would be interested in hearing your opinion. The trading statement on P14 was the first that I had heard of this, so I googled this and sure enough there is a new tax due to hit the Online Casino industry from August 2017. So I have tried to quantify what type of impact this might have on NPT and went through the 2015 accounts in detail. I came across an interesting snippet on P28 of their Annual Report which says Customer Incentives for FY2015
Is the offer that unfair? SP was 7.88 for most of January before the Bid - what will it be if it fails??