The latest Investing Matters Podcast episode featuring Jeremy Skillington, CEO of Poolbeg Pharma has just been released. Listen here.
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Oh - they have put in four stars. There is nothing rude or offensive about the six letter word beginning s and ending y. The four stars - I see what they have done - it's a four letter word beginning w and ending k!
js - return to highs? No time soon, we are looking at 18mths to 2 years for that, and even an if. The concern to me and many I guess, is whether the business model is sound. The organic growth seems OK, to be growing revenue in a bad year at 15% ish indicates they are doing the right stuff re customers. The acquisitions - I'm not so sure about, they are fairly small and do not appear to be giving synergy benefits? It's unclear what overhead growth is the acquisitions and what is investment into the platform. With a bigger and better platform we may see bigger acquisitions with more sizable synergies. We need definite signs of leverage - ie revenue growth falling to the bottom line without significant O/H growth. They are hinting at going for more mid size corporates, as well as SMEs.
It's a personal choice - to give them the benefit of the doubt and wait another year or to exit and invest elsewhere. They are ambitious (not always a good thing - the overly ambitious usually fall). A lot of investment has gone on over the last two years - for example the new s****y head offices. Without revenue growth and profits, it's all hubris - isn't it?
Refer back to comments from GCI - it's wrong to focus on short term profits. With £40m revenue expected for 2020 and presumably decent growth from there, I think overall they are trying to build a business of quite some size. It's normal for profit growth to be lumpy / roller-coasterish with this sort of thing. My choice is to remain invested. Admittedly not an easy call, and admittedly one I have to be prepared to be proved wrong in. Though I hope not.
The share price is bound to be suppressed without profit growth and also put on a much lower PER. A PER of 10 will put the shares down towards 40p. This could go 'binary' - either a bad call or become a massive buying opportunity. I can handle the risk and take the financial loss if it goes wrong. The loss of pride in getting it wrong is altogether another matter!
Share nicely thanks for your comments, your comments from October below do you believe this can still go back to the highs?
It's a case of waiting and seeing! None of us can say any more than that. I am as confident as I can be that there is no downside risk from where we are, come final results day. This will not stop impatient traders from selling out if the SP does not move upwards soon, but that's traders! That's their choice, and probably their loss. If we hit eps of 7.5p to 8.5p next year, the SP should be sitting at a minimum of 150p. at that time and place.
I'm happy to sit here for 12 to 18 months (unless any negative news breaks to change the story). After all, it's a 50 - 60% return to the upside and little risk downside.
"reinforces the Group's positive outlook for 2020" I missed this line. It does not have the 'feel' of RNS / management BS and lies to the PI that plenty of companies come out with when expectations are not met. Again, the headline of the RNS is very assertive. Reading between the lines - is it the truth or is it a case of I 'Cannot Recommend A Purchase' (C.R.A.P)
I'm staying put. I decided some time ago that I am in here for 4 year's plus time horizon. I think that the investment proposition over that time frame remains intact.
Well, that's a very big ouch!
Revenue in as expected. Overheads, previously flagged as unknown, have come in very high. But the update does explain that investment is going into the platform to increase both capability and volume of transactions - which to be fair is essential to grow the business; you can't tout for customers that you cannot service! This leaves adjusted eps for 2019 to be what????? I'd say about 4.5p
2020 looks promising. Acquisitions already done will add £5m revenue and if organic growth continues at 15% (I reckon about 5% of growth for 2019 was acquisitions) revenue for 2020 should be £40m. If 2019 growth was held back by political and economic factors, this could be higher still. This is growth in revenue of 30% plus. The overheads question then rises again! But with revenue growth of over £10m, less overhead growth, looks like 2020 will be a year of significant growth, and offset 2019 where growth is almost nil. The headline of the RNS is "rapid expansion in 2020" - the numbers I have to hand concur with this.
I would really wish to see accounts before taking any investment action. However, should the share price fall to 40p or less (and with this it would not surprise me, given flattish profits) the buying opportunity presented will be actioned, big time (capital permitting).
good point - PE is quite high so high growth already built in
Horrendous positive TU and sp is at year low!
The reason is the brokers thy have ruined the sp, over inflated broker forecast was missed, Cenkos forecast was for £13m adjusted EBITDA whereas this update implies only £10.7m actual, so it looks like a significant miss.
Email management and ask them to speak with brokers, constantly overvaluing and downgrading the SP...
seems quite positive IMHO - revs up 20% , profit up 30% and good start to 2020. Price initially up and now over 10% down.
Any ideas why??