The latest Investing Matters Podcast episode featuring Jeremy Skillington, CEO of Poolbeg Pharma has just been released. Listen here.
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As already flagged in the trading update, the H1 headline numbers aren't great, but the H2 outlook is extremely positive. Moreover, the headline numbers declined mainly due to one-offs including (1) the historic customer base reshape, (2) one-off finance income last year and (3) higher tax charges this H1 relating to prior years. These are all non-recurring. The MMs are fleecing early sellers/profit-takers - down 7% on just £200k traded! Hope not too many get suckered/stop-lossed/panicked into a rash move. The outlook is fine: "The Group has enjoyed a strong start to the second half of 2017 benefiting from the launch of new clients, many of whom had started processing on the Company's global acquiring platform by the end of the first half of the year. The Group is confident that its focus on higher quality earnings driven by its healthy pipeline will yield revenue growth in 2017 and build even stronger profitable momentum in 2018 and beyond." With a $113m cash pile - which will increase greatly in H2 - SCH remain a sound investment imho.
takeover is the reason naked trader bought, and we are the only one in the sector that hasnt been bought out so quite likely, lovely cash too $113m
Worth holding for a takeover or turnaround?
I expect the outlook in next Tuesday's results to be nicely bullish, which imo is far more important than the headline historic figures. Good to see a brief mention in Saturday's SCSW magazine, noting that the share price is becalmed despite SCH being "highly encouraged" by its Tier 1 client business pipeline. Hopefully more coverage to follow post-results.
The new CFO today is good to see, but the other two appointments are particularly encouraging. It seems that SCH are beginning a campaign to get the company better noticed and understood in the industry and in the City - something which has taken all too long. Perhaps this will generate a well-deserved re-rating: "SafeCharge is committed to actively communicating with the investment and analyst community, as well as with potential clients, and I look forward to working closely with Jean and Delphine to enhance this." Https://www.investegate.co.uk/safecharge-int-grp--sch-/rns/senior-management-appointments/201709040700036356P/ Extract: "Additionally, SafeCharge today announces that it has appointed Delphine Bos as VP Marketing and Jean Beaubois as Head of Investor Relations, with immediate effect. Delphine has over 15 years' experience in marketing payments technologies and joins the Company from Adyen, where she was Head of Global Marketing. Previously Delphine worked at EMS Card, a First Data company, and at GlobalCollect, where she led marketing activities. In her new role, Delphine will drive the Company's strategic and operational marketing. Jean has over 15 years' experience in global capital markets and joins the Company from Berenberg Bank where he was Senior Technology Analyst. Previously, Jean worked at Morgan Stanley, where he was Global Equity Portfolio Manager and Small Cap Analyst. Jean will work closely with SafeCharge's executive management and external investor and analyst audiences to continue to build a better understanding of the Group and its investment case."
SCH are securing a new gaming launch in Germany: Http://www.insideworldfootball.com/2017/08/31/sportito-targets-germany-first-euro-roll-dfs-platform/ "01 September 2017 GMT: 08:14 Sportito targets Germany first in Euro roll-out of its DFS platform Sportito Daily Fantasy Sports is to launch its full gaming offering in Germany following the acquisition of a gambling licence from the Malta Gaming Authority. Sportito, owned by ASAP Italia, first launched its fantasy gaming platform in the UK in 2016 and has partnership deals with Premier League Burnley and Championship club Fulham. The Maltese license will open up other European markets for Sportito that is keen to take on the US DFS operators who have been slowly ramping up their operations but have yet to show a full commitment to the European market with limited ad spends and low budget launches. “Fantasy sports is growing really fast in the Europe and Sportito aims to be the number one platform with the best experience ever,” Riccardo Mittiga CEO of Sportito said. “We are happy to expand our business into new markets in Europe for the fantasy players with various preferences of tournaments and sports” he added, “We are a customer oriented company and our team is doing our best to become the first choice in the hearts of the fantasy players.” Players on Sportito get the chance to withdraw their winning with the instant pay out option. Integration with SafeCharge, the best payment gateway provider, assures secure transactions to the users. Additionally, the collaboration with Boku gave the ability to make deposits via mobile. Sportito is the first DFS provider to offer this technology in the European market. Sportito’s game offering differs from rivals in that it offers contests for the players to win cash daily without having to wait a whole season for the payouts – the game is integrated with SafeCharge to ensure secure transactions. Via Boku players can also make deposits via mobile. Sportito game players are free from the salary cap restrictions and there is real time data available for the users to track their teams live."
It's now accepted on Apple as a payment method: Http://www.thedrum.com/news/2017/08/30/apple-accepts-wechat-pay-bid-boost-sales-china "Apple accepts WeChat Pay in bid to boost sales in China By Danielle Long-30 August 2017 10:04am Apple will now accept WeChat Pay as a payment method for App Store and iTunes purchases as it seeks to boost sales in China. The move comes months after Apple and WeChat owner Tencent fell out over Apple’s stance on in-app purchases. In a statement to Chinese media, Apple said the company is “dedicated to providing multiple simple and convenient payment methods for customers within the Apple ecosystem.” WeChat Pay is the second largest mobile payment service in China with just under 40% market share behind AliPay, which has more than 50% of the market. Apple Pay currently has less than 1% of the market. AliPay has been available as a payment method on Apple since late 2016. The move is expected to help drive sales for Apple in China, where the brand is facing increased competition from local smartphone brands such as Huawei, Vivo and Oppo."
From Robbie Burns diary dated 6 July: "The big news for me is a bid for Worldpay. I've held these and other shares in the payments sector for some time. So I also have Paysafe (PAYS) and Safecharge (SCH). I bought all three because I assumed at some stage they would get bid for and the bidding wars might be underway. The chances of PAYS and SCH getting bid for sooner than later are now much higher and have bought more of both Pays and SCH. SCH in particular might go for a very decent price as it looks the cheapest of the three. I wasn't sure whether to sell Worldpay as the price had leapt so decided it was sensible to sell half - I usually sell at least half on a bid - and got a decent price so that banks £2,966 for the website. I kept the rest, the bid looks likely to go through at 380. Now to me it's more a question of when rather than if Pays and Sch are in the money. A Pays bid would see some spectacular gains for me. Let's see: these things tend to happen when you least expect them! I'll look to buy some further PAYS and SCH on any summer weakness." Pleasantly surprised to see I had received a decent dividend from SCH recently. Didn't realise one was due. Good luck and regards CM
Just light hearted attempt at humour bruce, nothing else. CM
I'm a bit slow CHEQUEMATE, but is your comment meant to be sarcastic???
Yawn!. Thanks for the post Rivaldo. Just thought I would re-assure you you are not alone here. To think I could have put my money elsewhere and made a packet!............and also to think I could have put my money elsewhere and lost my shirt!........and trousers! ........etc. Could always be worse. Good luck and regards CM
SCH's Marketplace Manager is a "game changing payments solution for publishers": Http://www.mcvuk.com/news/read/safecharge-a-game-changing-payments-solution-for-publishers/0186278 "SafeCharge: A game changing payments solution for publishers Thursday, August 24th 2017 at 12:16PM BST COO Yuval Ziv from SafeCharge talks about SafeCharge’s Marketplace Manager – a comprehensive solution for marketplaces to effectively manage cash flow and revenue Marketplaces are booming worldwide across industries, including digital gaming. As emerging market trends open up new possibilities, businesses are expanding exponentially. For more than a decade SafeCharge, a global payment service provider, has been evolving with foresight and industry acumen to be in tune with these growing businesses. We believe payments are not just a commodity, but a true differentiator that gives businesses a competitive edge. Our end-to-end platform and our innovative approach to payments provide a seamless experience for games publishers and developers. As a publisher, you are required to manage developer onboarding and verification, enable your customers to pay seamlessly, manage your cash flows and split the revenue between the developer and your platform. The Marketplace Manager, a solution designed specifically to meet the needs of marketplaces, does all this and more. The Marketplace Manager, via RESTful API, enables the distributors and publishers to automate the entire revenue cycle, from easily creating a developer account, managing payments (including split payments) to the very last verified pay-out. The Marketplace Manager manages the entire payments journey while reducing the scope of compliance. Another important part of our product portfolio is the Payments Engine. It allows publishers to easily scale up and reach customers across the globe. Our products offer omnichannel checkouts in more than 150 local payments methods across a hundred plus currencies as well as enable cross-border payments and currency conversion, making it easy for businesses to expand. The Marketplace Manager and Payments Engine along with a range of services offer the most reliable and transparent payment solutions. We look forward to meeting you and further discuss how payments can play a part in your business success. To learn more about our products, write to info@safecharge.com or visit us at GamesCom 2.2 / Stand A-44."
Https://www.safecharge.com/press-releases/alibagames-partners-safecharge-deliver-advanced-global-payments-technology-game-studios/ "Alibagames partners with SafeCharge to deliver advanced global payments technology to game studios. For gamers, the platform enables an optimised payment experience, with all preferred local payment methods and currencies, including a new payment method designed for North Africa, a very dynamic market for gaming. Cologne, 22nd August 2017: SafeCharge (LON: SCH), the leading payments technology company, today announced its partnership with the newly-launched all-in-one video game portal Alibagames. The portal is a marketplace where game developers and studios can place their games and gamers enjoy a room full of tools where they can purchase games and enjoy a massive community. etc" I also note that yesterday Playtech agreed to buy "UK-based trading services provider and brokerage Alpha" for up to £117 million. Hopefully this means another large new client for SCH too (assuming they're not a client already).
I note that the PAYS bid is on a P/E of around 16.5-18 times 2018 numbers (excluding Asia Gateway). SCH have around 60p per share in cash. Based on 20.7p EPS for next year SCH are on an ex-cash P/E of only around 10.1. That implies say 60%-80% upside from here.
Doubled my holding on the news of the WeChat link-up in but it's not done a lot since then. Would love to know more about that.... For instance, are they paid a percentage on each transaction, or a fixed amount/transaction, or a fixed fee pa? I can't believe this won't be big.
Good news - Macquarie have now initiated coverage of SCH with a 350p target.
News of an offer for PAYS this morning. With Worldpay already bid for, SCH is the only way left for the markets to invest in this sector.....
So Paysafe received their offer today (and of course I am not in there) Us next ?
" although the revenue growth to maturity from these long-term Tier 1 clients is taking SLIGHTLY LONGER than anticipated. The Group continues to invest in sales, marketing and product development; strengthening the business for future growth. The Board remains confident that the outcome for the year will be BROADLY in line with market expectations." I have upper cased the offending words which I believe have had a negative affect on the share price today. RNSs need "beyond market/management expectations" etc to give share prices a boost generally. The market tend to over re-act, I guess it is in their own interest. A slow burner this one it seems. Perhaps we need to be more patient. Regards CM
I thought so too, tried to buy some more near the bottom this morning for a trade but they wouldn't have it, too many anyway
Unbelievable. Profits will be "broadly in line", which is code for only around 3%-4% below. Yet here the share price is down 7%! And that's with extremely bright prospects and with the share price being arguably extremely undervalued to start with. Especially given the £100m or so cash pile. There's already been a reasonable bounce this morning. I expect that will continue.
"Solid" trading for H1. Looks excellent going forward with the encouraging "pipeline of new quality business from Tier 1 clients", though results this year may be a touch below expectations, which isn't really a concern. H2 trading may even see any such small shortfall wiped out anyway: Https://www.investegate.co.uk/safecharge-int-grp--sch-/rns/trading-update/201707200700045579L/
I see Robbie Burns has added recently, "So I also have Paysafe (PAYS) and Safecharge (SCH), I assumed at some stage they would get bid for and the bidding wars might be underway, tThe chances of PAYS and SCH getting bid for sooner than later are now much higher and have bought more of both Pays and SCH, SCH in particular might go for a very decent price as it looks the cheapest of the three" The other one of the three is WPAY
Here's a new 18 minute video interview with the legendary Gervais Williams, in which he talks about investing in the best smaller companies. He only tips/mentions 3 companies from memory, and one of them is SCH, around 13 minutes in: Http://www.thisismoney.co.uk/money/investing/article-4684778/Gervais-Williams-tips-invest-small-company-shares.html Some choice quotes: "around $120m cash" "a terrifically robust business" "growing very nicely" "incredibly strong balance sheet" "can take advantage of the weakness of others". i.e undertake acquisitions given its cash pile
Wow - £4m of shares bought back by the company at 270p yesterday. Both a gesture of confidence that the share price is cheap and a nice clearance of stock from the market: Https://www.investegate.co.uk/safecharge-int-grp--sch-/rns/purchase-of-own-shares/201707110700046549K/