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Oi -Oi , I think a listing on nasdaq is inevitable , myabe they will announce that move with the next results. Grossly undervalued because the city dont trust them!
Not saying you close the business down! If they did a really massive buy back they would use up cash valued by the market at 28p in the pound approx to buy shares on a pe of 7. They are doing this steadily but imagine if they did this in a big way what a massive impact on earnings that would be.
Ggplyr - it's not so much valuing the entire company off the cash, just that if you take the cash out of the equation (and I sort of calculate it that if Plus stopped dead tomorrow, what would they have in the kitty to pay out their investors - i take your point on needing $500mill to run the business ...........but i'm er, not counting it for my rudimentary thoughts!) is the rest of the company only worth $10 to $15 dollars (depending on differences of opinion in terms of how you value that cash). Surely their trading software package is worth more than? They've already proved it's massively scalable...........and think of the cost savings if someone else bought them (or they bought someone else actually) in terms of being able to subsume them and lay off all the workforce (nasty, but true). I was just trying to demonstrate my thoughts (ineloquently!) that Plus seems to be under-valued presently. If someone said to you - you can buy Plus now, without any cash on the books, for £12 a share you'd jump at it.
there are some novel ways of valuing the business coming out here.
beauchamp, yours makes no sense to me. lets say they sack everyone, keep their $950m and keep the interest income only as the business. how would you be willing to pay £20 per share? i hope not.
value intestor and oi oi, you cant quite value the business exactly how you describe, youre viewing all the cash as liquid and freely available to share holders, but its not. plus need $500m to operate as working capital. a more comparable way to look at it is to take $500m out of cash and pretend its stock/inventories & then do your *** packet calcs.
for avoidance of doubt... i still believe its well undervalued and a very strong business!
looking forward to the counter points ;-)
I can see Plus going all in on the US, joining NASDAQ etc - I'm sure they'd re-rate there (so why not here?) I've always been a pessimist with the way Plus BoD have done things in the past..........but surely now........let bygones be bygones and this should re-rate? Thoughts?
Cash may be able to earn 4 per cent net of tax approximately. If you only value that cash on the group pe of 7 that amounts to valuing cash at 72 per cent below the actual amount!
I calculate that share owners cash per share as at 31.3.24 is £9.68 using £1=$1.30 as an approximation. So the business, in my view, is valued by the market at £10.50 a share if you put the cash to one side. What terrific value. Only employs 565 people at the end of Dec 23, so turnover is more than $1M per employee. I never worked for a company that could achieve that leverage from its employees.
Also - if I divide the $985,000,000 million they've got in the bank by the 79,285,000 (approx) shares in circulation I get $12.40 per share. Surely the business is worth more than $8? (sorry, v basic maths, apologies).
Solid rather than spectacular as you say...............what they don't say is that perhaps Europe is slowing (in terms of acquiring new customers.............but is being replaced (or made up of) new customers from America. They don't split the geographical nature of nw customers............but I infer from their quote here 'The B2C (Retail) business performed extremely well during the period and continued to track ahead of management's expectations. Its contribution to new customers at a Group level is already not insignificant, reflecting the strength of its unique 'omni set solution' which allows customers to onboard, deposit and trade through one platform' that new customer's acquired would be below last year if it hadn't been for America. Cost to acquire customers has fallen (interesting to note) though so perhaps I'm wrong on that. Still, they are debt free and basically generating £100mill a quarter..........and the share buy-backs continue to eat into the limited number of shares out there. What's not to like?
Bearing in mind income from customer trading performance dropped from a wholly exceptional 50million down to 30, the underlying growth was excellent and volatility is picking up and estimates have to go up, leaving a consensus pe of around 7, I suspect. If you look at the business separately from the cash the pe is way lower.
Well, I’d say it’s decent, but far from spectacular. Given recent good run on the SP, I was expecting better, but perhaps being greedy. Liked the outlook for full year (well ahead of expectations), but the Q1 figures suggest slow, steady growth rather than anything explosive. Happy to hold, but more likely to take some profit and hold the rest, rather than add.
What are we all thinking?
For me - I think they'll announce some actual figures against the US market, which should be interesting in itself. And turmoil has always been good for Plus - I'm expecting there to be no surprises (because they'd had RNS'd them right?) on that front, showing progress across all parameters.
What a milestone.....................it's taken alot longer to get here than I (and perhaps others) ever thought but I'm guessing perhaps the fundamentals are more robust now (America being the main one imo).
Just through £20 it appears
Ok, got what your trying to convey.
I believe plus is well undervalued.
However, cash per share doesn't really imply the same. Firstly, they've been buying back shares so all being equal, cash per share of will go up. Second, all this really means is they are not distributing as much cash as they could. They've said they need circa 500mill dollars for working capital, so they could distribute another 400 right now via special dividend if they choose to.
As the business grows they will need to keep more cash though as working capital.
Sorry, the column headings are:
Date (yymmdd)
Shares outstanding in M
Cash in bank $M (that's owners cash, not client cash)
Cash at $1.30 = £1 in £M
Cash per share on balance sheet (owners cash) in £
Happy to be led to believe I am not right but as far as I read the announcements and RNS, doing some maths with cash on the balance sheet (that's owners' cash, not clients cash I think), and the buy backs this is a larger set of calls which I think shows a lot of value here:
Date Shares Cash in Cash a Cash per share
yymmdd O/S (M) in bank $M $1.30=£1 on bal sheet
190701 113.310 $327 251.5 £2.22
191001 111.650 $297 £228.5 £2.05
200101 108.973 $292 £224.6 £2.06
200401 107.045 $515 £396.2 £3.70
200701 105.975 $587 £451.5 £4.26
201001 105.050 $723 £556.2 £5.29
210101 103.416 $593 £456.2 £4.41
210401 101.901 $675 £519.2 £5.10
210701 101.331 $721 £554.6 £5.47
211001 100.926 $767 £590.0 £5.85
220101 100.212 $749 £576.2 £5.75
220401 99.435 $866 £666.2 £6.70
220701 97.568 $995 £765.4 £7.84
221001 95.382 $950 £730.8 £7.66
230101 93.296 $930 £715.4 £7.67
230401 91.510 $950 £730.8 £7.99
230701 82.303 $849 £653.1 £7.94
231001 80.664 $875 £673.1 £8.34
240101 78.932 $906 £696.9 £8.83
240401 78.266 ?? £9.42 TBC
The only bit of poetic licence above is just using £1=$1.30 all the time, which is an approximation.
Anyone concur that cash value per share is ramping up and that therefore the true value of the underlying business is not only not recognised, but the degree to which is it not recognised is accelerating ? Hence, I think there is value, even though the share price is currently at highest ever as I write (I think).
Quite a bit of that cash is regulatory capital, but you are broadly correct that this is a very cash generative business hence all the buy backs and dividends yet cash still keeps piling up.
AvalueInvestor.
I don't understand
I did some calculations about how much cash on the balance sheet was attributable to outstanding shares (which are diminishing) quarter by quarter to
£2.22
£2.05
£2.06
£3.70
£4.26
£5.29
£4.41
£5.10
£5.47
£5.85
£5.75
£6.70
£7.84
£7.66
£7.67
£7.99
£7.94
£8.34
£8.83 (31 Dec 2023)
With fewer shares than has been the habit having been bought back during calendar Q1 (about 666,000 rather than 1.5-2M per quarter in past 2 years), I think the cash per share at 30 March could be at least £9.24.
For me that means that this highly cash generative business (after setting the cash aside) is worth just about £10 a share based on Mr Market's efficient market hypothesis.
I think it's worth more myself. The cash on the balance sheet in the trading update will be very interesting - hoping to see above £9.24.
All my calls are based on RNS statements.
Does it feel different this time? Could we see a slight fall back today, but then a big push into the trading update and perhaps be at £21 at trading update point? Certainly feels different this time (every other time we've got close to £20 we haven't had the American market).....................we live in interesting times.
Sadly, any maniac nymphs haven't found me attractive in the past! ............so I'll just sit in me speedos reading a book or something.......... :)
£20 has been a target for years and with all of the share buybacks really should have been reached a long time ago. However a new dynamic adding $50m to annual revenue is the $2bn+ of customer deposits on which PLUS can earn 2% margin easily like any other 'bank'. With interest rates likely to stay above 4% for the foreseeble future and not return to the COVID induced 'la-la-land' that's a very healthy extra income that should add about 200p to the share price by itself
This volatility is great for PLUS
Estimates please...
im going with new customers excluding US 23,000. Active customers excluding US 130,000.
US.... who knows, be interesting to see whether they start giving a break down of the US revenue.
New speedos incoming and a bumper pack of womb-ferret protectors purchased!
(but call me a cynic............we've been here before and the last lot of condominiums, as it were, perished for lack of use........as the share fell back considerably). Time will tell!