Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
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I may of mentioned areas of improvement and negated to point out the obvious virtues of this company.
They have a ‘lift and shift’ approach that is low on capital costs and high in margins. The increasing customer base and country scope with relatively fixed costs will enable GMR to churn out the profits. The only question was how to utilise them best and the vision for the future. If the official figures result in a 7% drop then I am at a loss to say why.
Camcorder turned out a very positive note today. The company simply needs to voice a clear future strategy based other than that there may be sellers remorse in a few days. Let’s hope so.
I wonder if general uncertainty around gambling industry regulations is holding back the share price. Otherwise, it’s a great looking growth share - growing revenues, low cost base, increasing cash pile and anticipated future growth.
To be honest I think investors were looking for more and GMR are not recognising a need to push the boundaries. The figures were as per earlier notification so that alone was not going to get the sp to jump.
What I wanted was a vision of the future. Is there an over reliance on Slingo? What else is in the pipeline?
Have they considered a US listing? Have they considered dividends? With a projected profit of £9.2m and cash balance of £15m next year there is nothing gained by leaving the money static - invest, innovate or distribute.
The down sides are the admin costs and wages and one look at their linked in page makes it look at good place to work and get an opportunity to travel but maybe not so palatable to investors.
Maybe a bit harsh but some truth in the above. They are growing both geographically and client wise but get the sense the market is awaiting something extra. Holding and awaiting analyst reports. All depends on the ambition of the directors
Yep opened the bottom drawer, closed back up again!
GOOD RNS AND MASSIVE SELLS ??
AH WELL ANOTHER YEAR THEN
Well done GMR A⭐.
Agree divi would attract passive investors and also agree, may be time to ditch AIM and join the prem markets.
And we go down lol 😂
Well, I want this company to re list on nadaq and get the growth rating it deserves. Div is a bit of a sideshow vs capital appreciation.
I agree a divi would be something
Great figures again but NO DIVIDEND! The SP has been in the doldrums for years and losing investors money. Could have picked up 5% in a savings account. Something needs to change.
Great RNS
RNS indicates huge grwoth and growing cash pile with more to come this year. Sp should rise around 10^% imv.
Full year 23 results in the next 2 weeks. So expect the mm to drop the price before then. I will have a lovely top up if they do. Results will be great again, just look at the last rns. Dyor and glah
Nice mention ii.co.uk 5 Growth AIM stocks to follow.
Fishing excellent assessment in your post. I recommended this share at 11p! It did move up well but has stalled these past couple of years. I expected the SP and market interest to have blossomed once the US States began to deregulate their gambling laws.I.m also surprised that a competitor hasn’t seen fit to take them out and benefit from the accretive profits and business.
I will wait for April results and hope for signs of a dividend or will look to make my money work elsewhere.
GMR mention at 1:01:30
ttps://www.voxmarkets.co.uk/articles/hot-stocks-on-vox-markets-0149557/
Draftkings have just acquired a usa i gaming business - will we now be a target?
Agree with Taser. This is a b2b SaaS business, as good as if not better than most, with higher margins, profitable and strong growth yet the share price hasn’t moved in a decade or more. The profile of a business like this in the USA would be atleast 70p or more. long term holders haven’t seen a penny back and the comms from the board are minimal at best (they are taking £600k plus in salary and bonuses). I hope they read these boards or get a digest from their financial pr firm although I suspect neither is the case.
Considering the increasing amount of business and associated revenue being generated from the States and that this sector will continue to grow is it possible to get a US listing?
Valuations on UK exchanges defy believe in some cases yet as much as I believe it is overdone nothing has changed for years. So with money pouring out of the UK and into more dynamic markets surely it is a no brainier to get a dual listing. I know there are hurdles and costs but the pay back would be huge.
The last few months has seen us yo young between a relatively narrow range even with the results out and as spectacular as they were the numbers pretty much matched two brokers expectations for EBITDA and Cash Balances.
So what will get us out of this rut? At a macro level mooted changes to ISAs may help AIM but unless there is takeover talk or dual listing what is the catalyst here near term?
Just get the feel they need to be a bit more dynamic and with the spare cash either target an acquisition or consider merging to realise shareholder value. A full takeover must be a consideration in an industry awash with big players looking for niche additions. 70p fair?
Surely if there If there is no inaugural dividend (and a token halfpence one would not reduce the cash that much) then we deserve an announcement about what the cash is intended for?
To be fair, I didn't say no divi until we got to £1, just not yet. It could well be part of the mix before then. But the US market in particular still has a lot of room to grow and in the short term I think we would be better off focusing on that.
A divi at some point over the next 4 years if and when growth slows to single digits sounds fine. I can't see growth slowing to single digits any time soon though, certainly not within the next 2 years. Currently only around 13% of Americans can legally access an online casino(according to eilers and Krejcik), a number that will continue to grow as more states legalise. From the same report the market grew 30% in 2023, so 25% growth rate for GMR over the next 4 years doesn't seem crazy to me. From Gaming realms 2022 annual report North American Rev grew 122%, and 2021 North American Rev was more than all previous years combined. We are waiting to go live in Virginia this year as well as Greece (and probably more I'm forgetting) so 2024 already has some growth guaranteed. Not to mention the new partners we've gone live with in jurisdictions we are already up and running in or new games we have added to existing partners.
It is a lot of cash to be sitting on, and that cash pile will only grow if they have nothing else to spend it on so a divi in April could well be what they decide. But my guess is that is still a year or 2 away. But it's just my guess.
£1 per share sales price (£294m) translates to the business needing to get to £23m of EBITDA, based on a 12x multiple, and assuming that cash in bank grows to £20m. (i.e. DF/CF enterprise value of £274m). If FY23 posts EBITDA of £10m, and growth continues at 25% per annum compound, then the £1 valuation is four years from now.... which feels too far out to wait before embarking on a progressive dividend policy.
Investing some cash in improving our ability to deliver for more customers, and shorter time periods, is sensible, but we should be striving to minimize the "Book to bill" time as a matter of business as usual. The value of bringing on-line recurring revenues soonest is often overlooked. (There are 78 recurring months in a year: Slip a project by 2 months, and you loose 23/78ths of this years income). Our games won't remain leading edge forever, and therefore broadening and speeding up the delivery capability would appear to be a no-brainer.
My point regarding the dividend, is that generally incoming buyers attribute a higher multiple when acquiring a growth engine, but as the years tick by, maintaining 20 - 35% EBITDA will get ever more difficult.
When growth slows to less than 10% then it ceases to be a growth stock, and therefore there needs to be a pathway to replace the value of the growth, with an income stream. In fact, whether or not a buyer emerges matters not; - ask yourself why are we happy to stay invested? - because of the current growth rates being posted, and this translating into a steadily rising share price. But, in very general terms, by the time that the growth slows to a single-digit percentage, the SP will level out, and the dividend needs to be 5%+, - otherwise, why invest?.
A 1p dividend in FY 23 would represent approximately a 3% yield, which could plausibly tick up to 5% over the next 3 - 4 years. The business will still get to its £300m valuation, but in the meantime, some of the cash in bank will have been returned to the current patient investors.
I guess my point is that the Enterprise commands a valuation based on a multiple of EBITDA. - Somewhere between 8 - 15 depending on sector , and growth rates etc.
The multiple paid when acquiring cash in the bank is 1!
Also been here since 2017, traded in and out to bank some profit but mostly sitting on 350,000 shares at an average price of around 20p. I agree with your view of the business track record and growth but I don't think a divi is the best thing for us just yet.
My theory, completely made up based on what I would do if I was running the company, is that they will continue to grow to a value of around £1 per share before selling. The revenue growth is impressive, and the future looks good but they do struggle with integrations. From when they sign a deal to when the games go live on a website and start making revenue is still way too long. And they don't seem to be able to work on too many integrations at the same time. As America continues to legalize online gaming and the board signs more and more deals getting our games in front of more players in more jurisdictions this is going to continue to be a bottleneck for us. I think now is the time for grabbing market share by investing in their own capabilities. A divi would obviously help get us to that £1 target but I think there is still some more juice to be squeezed before they make that call.
It is a lot of cash to be sitting on though so who knows. Just my opinion anyway.
Been in this share since 2017... and have traded the ups and downs to now have a free ride on 150,000 shares.
I agree that it is time to start making distributions please, within a declared progressive dividend policy.
There is Cash in Bank, and the business model is ideal for making the initial move now.
The business is Capital light.
Growth is organic, rather than risking our cash on acquisitions.
It also has predictable, and growing recurring revenues and earnings, and with expansion all the while with new games and new territories in the pipeline.
GMR has an excellent 5 year track record of growth in the 20 - 40% per annum - every year - and due to the recuring nature of our income FY24 numbers can already be reasonably relied upon, - moreso than were we making widgets.
With no extraordinary expenditure on the horizon, and continued delivery of the known new business, the cash balance in 12 months time should be in the region of a further £5m on top of the £7.5m in the bank at the end of FY23 (as per the TU).
Each penny of dividend distributed costs c£3m, and therefore to embark on a progressive policy starting with 1p for FY 23 seems both affordable, and necessary to maintain the interests of Long Term holders - particularly as the growth rates will inevitably start to slow down.
At the very least, a bit more insight and colour from the BoD, as to whether the intention is to progress to becoming an income stock, or start to grow further by acquisitions would be useful.
Fully agree nashwan - I posted re this on the 12th of Jan. As I said even a token would do but with £7 Mill in cash there's no reason really why it can't be done.