The latest Investing Matters Podcast episode featuring Jeremy Skillington, CEO of Poolbeg Pharma has just been released. Listen here.
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Another positive update, will this share ever come back to life?
Finally some decent news from the company and some evidence that a sensible strategy is being developed. Whether or not the price represents good value - the Broker saying it represents fair value is about as valid as me saying it doesn’t - is subjective, but at least it demonstrates a positive movement to focusing on the core elements of the business.
It does however highlight the complete failure of management to be able to generate a representative share price / market valuation for the company. If this deal represents a value of a non-core part of the Group - and one which you would think the market didn’t really value at all - at £5m and one which hasn’t been factored into any of the company’s budgets then, even after recent sp jumps, why is the company valued at less than £14m??
Don’t forget it’s got more than that in cash reserves, most of which are accessible, and a business in India with £100m+ turnover and that’s before you get to what the Board keep referring to as the future / core of the business in Blink……management recently stated that it thinks India and Blink could be worth as much as £30m each which would give a sp of c. £7…..they need to get out there and bang the drum a bit more to get the market to buy into this and to get more retail shareholders wanting to invest. Central to this is liquidity and at least the prospect of returning to a dividend flow at some point in the foreseeable future.
We got a little mention!
https://zakstraderscafe.com/weekend-bulletin-board-heroes-november-26/8092/
And greed - Is that Clown, Dunce Morrison still running this SP into the ground?
Quote from the Sunday Times last week:
"David Morrison, the chairman of CPP, the publicly listed insurance giant Ogston founded before leaving in disgrace a decade ago, said he had severed ties with the millionaire. The pair had a secretive agreement whereby he served as Ogston's representative on the board in exchange for £30,000 a year."
Is this on top of the £110,000 he took from the company last year??
For doing what exactly? - apart from overseeing the share price fall by over 50% during his tenure.
He needs to go. A grubby back door arrangement with Ogston which has never been disclosed to shareholders. The FCA should be investigating this.
Ogston also needs to go, and the sooner the better - he is dragging the company down to his level by his ongoing association. The company needs to be free of these characters to be able to get on and deliver value to its other shareholders.
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To quote from the above article which has reported on the last RNS from the company: "Hamish Ogston left the Board on 28 June 2013 and since that time, and save for those rights reserved for shareholders, has had no involvement in the management or operations of the group."
Strange then that in 2020 the Board appointed David Morrison as Ogston's representative as a non-independent, non-executive Director. David Morrison then quickly went on to become Chair of the Board less than 3 weeks later.
See both RNS announcements below:
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How does that tally with having no involvement in the company since 2013?
See today’s RNS re: LTIPs.
Closing price today = £1.40
Entry level for LTIP = £3.70
Super Max for LTIP = £9.00
As a long time holder, I will be delighted if any of these LTIPs pay out even if I have just been materially diluted, but I think that the line between positive aspiration and fantasy has just been crossed. I will be happy to correct the record if proved wrong.
Https://www.investormeetcompany.com/investor/meeting/investor-presentation-434
Interesting Investor Meet presentation from the company last week.
Some takeaways if you missed it:
Management think that a £6-£7 share price is achievable in the medium to long term (2-3 years) resulting from a £30m valuation of Blink and a £30m valuation of Indian assets. They think that Blink’s revenues could get to £6m pa which, at a 50% EBITDA margin, assumes a revenue multiple valuation of 5x and an EBITDA multiple valuation of 10x. They obviously don’t see much value or growth potential in the Indian assets as they currently generate an annual EBITDA of c. £8m - £10m and this future valuation would seem to reflect an expectation of further margin erosion.
Continued management focus on the Turkish market seems like a waste of time. Economic and political uncertainty causing such an adverse FX environment and high double digit inflation continues to wipe out any favourable local business performance. The current EBITDA contribution could be lost in a rounding error.
Exiting from Globiva, which at present management deem to be a ‘distraction’, could be a good source of value for shareholders in the medium to long term. BPO business has tangible value based on solid industry benchmarks and the business is managed separately from the main Group which would make an exit a relatively straightforward commercial transaction. The Board should be keeping this under constant review as, relative to current market cap, this is material.
The legacy unwind and close down seems to be on track which is good news from a cost control perspective, as is progress on the IT platforms.
Management have been incentivised based on some fairly aggressive share price targets. If you park the excessive base remuneration for management, including the current options-based STIP which has no performance criteria attached, then the achievement of even the entry level to the incentive would see a decent return for shareholders. Again, you need to ignore the fact that the share price has more than halved in the last 18 months……but to get anywhere near the £6-£7 mark again would be very welcome. However, it's got a long way to go from where we are now.
I trust the management are banging the door down at fellow Leeds based company Jet2 to discuss insurance software Blink. Never will there be a better time. Operators should price software into their seat price with a three way relationship between service supplier and insurer. It enables them to add value and differentiate from competitors and makes it an easy sell to customers to use them rather than competition. This week has shown another example of when travel chaos ensues, how pleased we would be as customers to know exactly what can be done with a simple couple of steps. Knowing we don’t have to chase and speak to anyone. Instead, everything is taken care of and giving us the chance to relax rather than panic. It’s a simple sell and needs to be integrated into an offering rather than an add on when you go click through your purchase. If they can’t get traction now then they never will.
Https://www.insurtechinsights.com/blink-parametric-to-double-workforce-headcount-in-cork-by-2025/
Significant investment in Blink announced yesterday - surprised it hasn't been issued as an RNS as it seems to be a fairly big deal from looking at the assembled dignitaries - surely the second half of this year will be the turning point for Blink from a financial contribution perspective........even insurtechs have to make money at some point!!
Agree with everything that HillparkTC and rnlcat say.
- ludicrous CEO pay
- ineffective Board
- value in Blink but under exploited
- not enough focus on India and realising some value
However, what we have seen in recent days; effectively Phoenix selling 10% to Schroders, should give us some crumbs of comfort that a quality, blue-chip fund manager sees some value here. Phoenix have clearly had enough after 8 years, and who can blame them? Besides, they've got plenty of issues with Dignity to sort out and probably can't be bothered any more. It doesn't create any additional liquidity in the short term, which is what this stock needs desperately, certainly in the medium-long term, but it's the biggest change of ownership for 8 years which must signal something positive.
I empathise with Hillpark comments of 15 May.
It seems ludicrous that quoted companies are happy to remunerate so highly in front of any recognisable targets. Where is the incentive to perform r exceed? Simon Pyper has no track record worthy of note and yet was appointed on a significant front loaded remuneration package. Indeed, two of the non execs are investment banking background which I can only assume clouds their vision when considering director pay levels and voting. I am disappointed that the Chairman who has been in a private equity role is also happy to see the board costs overwhelm the businesses current position. Surely he has witnessed private companies with high achieving entrepreneurs be rewarded relative to their personal risks. Too often in plc world it seems individuals are are remunerated in a way that is risk free and is never aligned to the shareholders they represent. Being the ceo of a plc is a privilege that is too often abused. This company has an overweight board cost adding little or no value and zero personal investment risk. Not too long ago the previous management, who themselves congratulated each other at retirement were seeking to off load Blink as they were too stupid to see its value. This management can at least see that a business with high level IP, embedded into a customer base creating a strong and growing recurring revenue stream is the way to a significant rating. However, they did not invent or launch Blink and are being paid a fortune to oversee its possibility of success. It’s ludicrous that the boards cost base dwarfs that of the revenue stream for Blink when none of them have any matching risk or shown any direction as to how Blink will break into the market. They actually run the risk of Blink being an ‘also ran’ with major end customer bases using alternative but inferior offerings. What happens then? They retire after three years having overseen a further long term under achieving business. As it stands I also note that Pyper remains a director of two other companies. Why is the question and one that the two largest shareholders should do something about. The ceo should be concentrating on this business for which he has ultimate responsibility and yet along with his board have offered nothing.
CPP could be so much more but is stuck in a value trap with a board happy to take the cash and be answerable to no one. Shameful.
I can’t understand what’s going on here.
The Indian businesses account for 90%+ of Group revenue and the vast majority of its EBITDA and positive cash generation. Yet all the strategic focus is on an insurtech business which made £0.5m revenue and lost £0.4m at EBITDA last year. Parametric insurance isn’t new and the market is now awash with competitors and unfortunately the days of valuations being based on revenue multiples are long gone. Whilst there is an acknowledged and real partner concentration issue in India with tight margins, at least the margins are positive, and the Indian market still represents a massive growth opportunity overall. Why isn’t the focus here on growing and diversifying those businesses that already have scale and which generate £150m+ revenue with £8m+ EBITDA and growing positive cash flows?
If, as the Board has stated, the focus for future value creation is Blink, then the Group should have a cost structure which reflects that. The current cost structure is far too heavy - and inevitably bloated due to listing / Plc costs. The CEO took over £400k in short term remuneration last year - plus share options now worth another £400k with no vesting / performance criteria. Over £800k in total remuneration is FTSE250 money, and not at all appropriate for an AIM listed micro-cap valued at less than £20m whose main focus business is only generating £500k in top line revenue and loses £400k at EBITDA.
Not sure what it’s going to take to get the major shareholders to wake up and realise that yet another bunch of overpaid and incompetent Board and management are fleecing the company. Completely crazy, but at the same time very frustrating for smaller shareholders who have zero say, who are not represented by a majority non-independent Board, and whose only error was buying in to the BS in the first place. Further change is long overdue before the money runs out.
Blink Parametric wins new business partnerships and retains key clients
CPP Group (AIM: CPP), a provider of real-time assistance products and resolution services which reduce disruptions to everyday life for millions of customers across the world, provides an update on new business progress within its InsurTech, Blink Parametric ("Blink").
We are pleased to announce that Blink has signed a new partnership agreement for its flight disruption product with a large European insurer, with a launch in Ireland planned for early 2023. In addition, Blink has signed an agreement to launch its first offering into the US market, which is an important milestone for the business, with the US being the world's largest travel insurance market.
To promote growth in the UK market, we have formed a strategic partnership with Firemelon, a leader in providing travel insurance sales and administration systems to major travel brands. The partnership will offer to all travel insurance providers served by Firemelon's Magenta Insurance System, access to Blink's real-time platforms, and in so doing, increase speed to market. The first customers are expected to be operational on Firemelon's system in early 2023.
We are also pleased to announce that Blink has extended contracts with two of its Canadian partners. These announcements follow recent flight disruption product launches with Salaam Takaful Insurance, in partnership with Lloyds broker MNK Re in ****stan and Sanctifly, a global travel wellness brand.
These new business wins are in line with Blink's distribution strategy of partnering with large global travel insurers and seeking to deepen distribution paths into their global businesses and subsidiaries.
Good progress is being made on the programme of work to ensure the Blink business is able to scale effectively. As part of this programme, the business has recently signed an agreement with a global cross-border payments provider to facilitate real-time assistance and multi-currency cash payments to customers around the globe.
Sid Mouncey, CEO of Blink Parametric, commented:
"We are making good progress securing new business wins in new markets, retaining key clients and increasing our operational reach and scale. I am particularly encouraged by the start we have made to 2023 and am looking forward to further partner launches in the EU, UK and US markets in the coming months."
That’s very encouraging that’s they’ve entered the US market
There was an impressive RNS last week I see which predicts better than expected profits
Looking good for back up to year high at least this week if strong volume continues.
Impressive rise today - above 200p for the first time in a long time. Onwards and upwards !
Does anyone know why this is picking up today?
16-Nov-22 15-Nov-22 Buy Simon Pyper 112.00 GBX 19,881 19,881
How many new IT systems can one company have..... must have installed hundreds internally by now bless em.
https://www.lse.co.uk/rns/CPP/strategy-and-change-management-programme-xsri41bvwe00idv.html
Is this seriously the culmination of the best part of 9 months work?
Are they deliberately trying to trash the company?
In summary:
- focus on Blink, India and Turkey
- wind down back books
- put in new IT system
How is this any different from what has been stated over the last 12 months or so?? Lazy, pathetic, shambolic.
No mention of Globiva.
No evidence, despite the sp being where it is, of any of the Board buying in. Why should the rest of us have any confidence if they can't put their hands in their own pockets?
This message is only tagged with 'No Opinion' due to the absence of a 'WTF' option.
I agree that the sp is too low, but imo it is being legitimately held back for a number of reasons:
- no market interest caused by no news flow and a Board which is bizarrely reluctant to get out in front of investors. Perhaps this is because it is a Plc in name only and the real interests of the Board are only to serve the major shareholders. Why bother with anyone else?
- not classed as a reliable income stock due to the suspension of the dividend despite the H1 report saying there is £19.3m of cash - 60% of which is immediately accessible. That accessible cash is £11.5m - or 85% of the current market cap. There is plenty of headroom to maintain a dividend at the current level
- the shares are very tightly held which is causing a serious liquidity problem. Would-be larger investors have a problem getting in and therefore would also have a problem getting out. This, combined with the dividend point, makes it very unattractive to add to a portfolio
- the long awaited 'strategy', or 'change programme review' as it is now being called, is taking far too long for what should be a relatively simple exercise. It's unclear whether this is general incompetence or whether there are internal conflicts / issues / disagreements preventing progress. Either way, it's not helping
- CPP is an Indian business. This latest set of results serve to re-confirm that. It has no place being listed in the UK (or even listed at all in reality) and the UK market either doesn't like or doesn't understand businesses like this.
All a bit of a mess really.....
Are we ever going to see this sp rise! that's really good set of Half year results! why no movement?
https://www.lse.co.uk/news/CPP/brand-architekts-appoints-pyper-to-board-after-innovaderma-merger-sw4syi624ipa2m3.html
Nothing going on here as others have previously commented. Board guilty of being asleep at the wheel. Perhaps Pyper should focus on one job - that of CEO of CPP - instead of being distracted by other appointments. Continued share price erosion - 50% of what it was prior to his appointment as CEO. Shareholders continuing to suffer with no positive news on the horizon given the last trading update. Big shareholders need to wake up as value is being whittled away....