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If this virus persists, then brick exhibits are a way for families to meet away from their gardens.
Good , we can now see the SP getting back to previous highs.
Best RNS this year!!
New tour @Inverary Castle over October half term. . New customer. Shows that these outdoor socially distanced attractions are in demand.
It is a shame that Paddington was a bear, he would have been a much better bull ;-)
Paddington Near being screened on NickJR tomorrow. LVCG have the agreement to produce a bricklive themed tour based on Paddington. That’s handy. ;-)
Fantastic write up MB10. It's definitely a compelling case to invest at these levels. Eventually the market will see the value and potential here
Very interesting and informative write up MB10.
Let's see where this takes us then.
I've had a couple of buys now around the 10's
Lego rockets at the ready for my twitter account.
A good summary of what has gone wrong here.
Not often on LSE forums will a shareholder point to negatives but transparency and balance is essential in my opinion.
Fully agree the decline started with the private placing. In truth it appeared a great move, sticky shareholders supporting the raise.
In hindsight folk had their noses put out of joint. It led to selling.
Then Riverfort and Clive Morton.
Add Covid into the mix.
Its been hard work, soul destroying and frustrating resulting in all time low SP.
But, and this is now where it gets interesting.
Asset value worth more than Mcap.
Morton on fumes or out.
No lost contracts.
Extentions to current contracts.
A product that meets Covid social guidelines. (I suggest you look at Da Vinci Science Centre, Pennsylvania website).
Buying has outweighed selling recently.
A corner has been turned in my opinion, might not move as quickly as some would like but accumulating here should prove lucrative now.
Part 3 of 3
So here we are, with the growth of the company totally out of kilter with the share price. The market cap is now the same as the £8.5m they paid for Brightbricks 18 months ago. Its less than half the value of the assets, which are not just sitting in a warehouse, they are out there around the world generating cash again. And its less than half the value of the company at IPO where it only had a single event, no assets, no IP deals and no network in place. There are also £10.5m in losses that can be offset against tax. The nonsense of AIM is that I’ve seen cash shells that have less cash, only the promise of an RTO, with people touting that they have previous losses to take account of that are have a bigger market cap than LVCG.
If the company was about to go bust you could maybe understand why the share price was so low. If it was a company making zero revenue and just endless promises again you could maybe understand it. But its a proven business model and unlike hundreds of other companies, their accounts didn’t raise any issues about being a going concern. There are some that complain about the Chairman’s salary, but like that’s the whole reason for the share price decline, but ignore that over the past 18 months he has directly invested £455,000 in shares, voluntarily turned down a bonus, provides the use of his homes for free and has taken a 50% pay cut for 4 months, taking shares in lieu of salary at 20p. They also ignore that he has 34% of the share capital and wants to buy even more. Why is that? As someone in his last throw of the dice before retirement (the majority of his money is tied up in LVCG) how is he going to get his money back out of the company???? Yet the same posters who will tell you that he is “greedy” are also in the next breath trying to say that he will sell out for a pittance. But just ask yourself what his target for a sale is given he put in so much of his own money at 65p.
So the really good news is:
Riverfuc##rs are totally out and they have been replaced by Close Lending Ltd on standard debt lending. They did 5 months of due diligence before lending. Do you think they would have loaned money to LVCG without looking at their books very carefully?
It looks like Clive had dumped his entire holding now. I’ve been tracking the large round number sells and its clear he is out. The price action suggests that too.
This is due a major rerate on the past growth alone, never mind the future potential, and on top of that there are rumours (with some substantiation by what has been said in Interviews) that there is going to be company changing news soon.
So what’s gone wrong with the share price? Essentially three things.
Firstly Shard got a bit miffed that the Feb 19 raise was down via a small group of shareholders denying them their normal fees, so it looks like they called their mates at Milton and got them to sell their holding and dumped 2 million shares on the market last April/May.
Secondly their association with Riverfu###rs. They borrowed money to start the Zoo programme, which is perfectly fine, but last Dec the Chairman made the disastrous decision to enter into an equity sharing arrangement with RF to expand the building programme even faster. This was no death spiral arrangement as RF saw the benefit of the expansion and wanted an even bigger slice of the action, but they wanted in cheaper, so shorted the shares. Hence why we ended up at 30p. The Chairman was pretty naive and thought that shareholders would welcome this agreement. They didn’t. Neither did it help that RF were given equity to help them out of their naked shorting. But when it became clear that RF were going to be replaced with standard debt lending, RF began selling the ESA shares without the agreement of the company to drive down the share price. They sold off nearly 1 million shares.
Thirdly, Clive Norgaard Morton has dumped all the shares he got at IPO on the market, that’s over 4.1 million shares. He has done this while deliberately concealing his selling. There are 7 separate events where he failed to disclose his selling. Some might call that serial market abuse. Looks like he has played into the hands of Shard and RF to help them destroy the share price. Every single RNS with good news of expansion has been sold into for over 18 months by people who didn’t actually pay anything for their shares.
You may think that some of that is a bit fanciful, but see earlier posts for clear evidence of the market abuse that has been happening here.
Long term holders have had to wrestle with the paradox that the business has been growing fast, albeit with an interruption because of COVID-19, yet the share price has declined significantly. So what’s going on?
On the business side, remember this company is only 3 years old. It started with a single event where they were renting a single set from Brightbricks. Fast forward to today and they own the production house, own all the IP for bricklive around the globe, have a partner network in place around the globe on every continent, have diversified their business model, expanded into zoos and business improvement districts, and have the content for their touring shows sorted with multi year IP agreements with billion pound companies to build touring sets for Pawpatrol, NickJR, sponge Bob, Paddington, Peter Rabbit, Snowman and snowdog and Peppa Pig. These are hard won agreements for the most recognisable and popular children’s characters on the planet.
In the zoo and BID touring business, they have a proven model that’s highly cash generative. Take Brickosaurs, it cost around £300k to build, lasts over 10 years and is rented out for £50k a month. It pays for itself in 6 months and after that its just generating cash as there are almost zero operating costs, it gets delivered to site and picked up at the end of the rental and that’s it. Punters cannot get enough of it, and its fully booked to the end of 2022. Its so popular they are building another set. The economics for a Pawpatrol set are even better, costing £60k to build and annual profit of £200k is achievable.
Getting to this point has not been easy, it’s required cash. But every cash injection has been for growth. 1st raise was to buy instead of rent a touring set. Next raise was to buys Brightbricks. A further raise in Feb 19 was to accelerate the zoo touring business. It’s only the recent small raise that was needed to resolve the cashflow problems because of Covid, and that’s only because all the cash was being poured into building touring sets.
Sorry, my post below is inaccurate. There are more tours going on this month than I reported - 8 simultaneous events. The large touring sets rent for circa £50k a month, so that’s over £300k coming in to the business this month alone (that’s more revenue a month than some AiM companies have in a year and indeed more than some have earned in a lifetime). Last month they had over 11 simultaneous events.
Mini Animal Paradise Korea
John Ball zoo
Da Vinci Centre USA
Pawpatrol Koln centre Germany
Plus lots more to be announced.
Bristol Zoo Rental extended. Yet again shows the popularity of these (socially distanced) exhibits.
Brickosaurs was extended too and is booked solid all the way to the end of 2022. So this month they still have Marwell Zoo, Bristol Zoo, Paignton Zoo, John ball zoo, DaVinci Centre, Paw patrol Germany with more to be announced soon. That’s well over £250,000 a month in rentals
Its easy to forget that this is a global company with a network of global partners already in place that was extended this year to include South Africa, Australia and New Zealand. That strategy of getting a network of Southern Hemisphere countries in place is paying off as it allows them to sweat the (20 plus) touring set assets harder throughout the year, gaining valuable revenue streams during the quieter periods over the Winter.
Concur and here’s hoping you are right MB10
Good points Heid.
The websites are crude. The bricklive site lacks any experiential buzz. It needs a single, inviting opening page that excites us about the essence of Bricklive. Fairly easy to fix.
May be a re rate coming but in my opinion their twitter page is poor and their main website page is stuck in the 80s.
Hello ! What the , is that ?!
You want new investors smarten it up.
Learn to centre a tweet at least
Good luck everyone. Pleased to have got in last week. Let's see where this take us all.
It’s been a tough time for long term lvcg investors with the share price still languishing near historic lows despite the recovery. The company is less than 3 years old, yet has seem remarkable growth in that period. Started out with a single bricklive show using a rented set on models when they did the IPO at 30p. Now they own the production house and all their IP in a vertically integrated business, that has diversified into lots of different revenue streams.
They have proved the business model that increases footfall in venues (zoos museums and shopping districts) and proven that model in the UK. They have got a partner network in place that cover the globe, and secured future content with multi-year deals with billion pounds companies who have trusted them with their most valuable IP.
The proof that the concept works is that they get load of repeat rentals. If it didn’t work then why would people come back again, and again and again (some venues are on their 7th rental. Their real challenge at the moment seems to be generating enough product to get out around the world. This has been their problem over the last 3 years, generating cash to build models to rent out. That’s what got them into the clutches of Riverfort in the first place. Many will say this was a mistake, but easy to say that with the benefit of hindsight, but what is clear is that Riverfort recognised the growth and wanted more. So when it became clear that the business were moving elsewhere and replacing RF, what is shocking is that RF didn’t just say “fine then” they actively used the ESA shares to destroy the price. That’s exactly why investors won’t touch companies where RF are involved and it’s clear that the whole shady system of brokers and Nomads is totally corrupt.
But lvcg have replaced all those with a respected lender in close lending ltd who have done considerable due diligence before lending. Not only that, but the share capital has been reduced by 5.7m (7%) yet the share price still hasn’t factored that in. That’s because Clive the serial market abuser (7 failures to disclose in 12 months) has been selling the 4.1 m shares he got for free at the IPO. Now it’s clear to me that Clive, Milton, Shard and RF have conspired to destroy the share price by selling into every single bit of good news about expansion and growth, but you will have to make your own mind up. But destroy the share price they have.
The good news is that Riverfort are out and have no equity to destroy the price and it looks like Clive has sold his entire holding now (compare his declared holding from 13 Jul with the large sells since then and he must be out). Price action on Friday suggests that too.
Most LTH have increased their holdings considerably at this level and have an even bigger slice of the tiny free float (which is even smaller now that 5.7m shares have been taken back). Chances of them selling below fair value is very small.
Massive rerate coming IMO
Apparently zaks short term target is 24p!
Zak Mir gives an overview of the fundamentals in this video charting update.
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I'm holding my golden tickets ... they best up the sell.
MM look to be very very short of shares here!
Any sort of buying pressure and off this will go!