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Sometimes you need to switch off from the chat groups for your own mental wellbeing. I know I have to. I’m sure most of the negativity is from people that don’t hold and probably never have, professional wind up merchants with nothing better to do imo
Yeah. I think HH must be a little annoyed at this dreadful SP. He’s not been heard of for some time now.
Sorry mystery solved I just had to scroll through the comments, sorry for my ignorance
Who is this hedgehogath I don’t see him listed as a significant shareholder or a director
Don’t think HedgeHogarth sees it that way.
XP Factory (XPF)
Their latest trading update (18th Jan) failed to address what I really care about - are they on the path to break-even profitability, and proving that they have a business model that can scale profitably?
Lots of information on revenues, Like-for-like revenues, growth rates. Some details on site-level EBITDA, and then really nothing at all below this line in the P&L. Why? I suspect it is a conscious choice of omission because they are horribly in the red, once you go below the site-level EBITDA line.
This is not a surprise. Their Half Year results, where they have to state the entire P&L, showed an operating loss of -£1.6m. I was hoping that, in the seasonally stronger H2, that this would swing wildly into the black and therefore on a FY basis they finally prove they can operate profitably (even on an adjusted level). Unfortunately, they confirmed they are "trading to market expectations”, which if taking the broker forecasts, is still a loss for the FY Mar24.
Quite why they are unable to make a profit, with a chain of 24 Escape Hunt sites and 19 Boom Battle Bar sites, is a mystery. I can forgive them if they had a small chain of less than 10 sites, but there are enough sites now to spread out any central costs, D&A, and interest costs.
The key killer for me, when looking at the P&L, is the huge D&A costs. £3.4m in H1 alone. I’d say the run-rate is probably closer to £7-7.5m/year now, given additional openings and capex investments. That is quite a lot, on a turnover of £44.5m a year. Given this is never going to be a high margin business; they are aiming for only 20-25% site-level EBITDA margins on the Boom Battle bar business, which definitely does not support the level of D&A that is being charged.
So where does this leave me? Still very sceptical if their current business model works. Fundamentally, Boom Battle Bar does not seem a sustainable business model to me yet. For the next 1-2 years, they should be OK in terms of positive cashflow, which will mirror the EBITDA, as they won’t need to invest maintenance and refresh capex for their still-new estate. But I can foresee, from 2025-2026 onwards, that increasing capex needs to keep their estate looking good, would then pressure their cashflows. If they are unable to get their site-level EBITDA margin up to a much higher level.
Lots of investors have gone into this, tempted by the siren song of high growth rates, and a sexy growth sector (experiences). While I think they have created an entertainment format that is a hit with consumers, it remains to be seen whether it can be profitable for investors.
I continue to wait and see on the sidelines.
This time next year!
Hollywood Bowl recently announced decent results and were bullish about prospects. This clearly bodes well for XPF being in the same leisure sector.
Things seem to be progressing well and the newer venues will now start increasing revenues and profits as they become more established. It is only the SP that is depressing! One day Rodders.
Oh well,, got excited there for about 10 seconds.... back to 14p,
God this share is depressing.
Last week wasn't great, hopefully some good news soon with BGF getting involved
Agree - BFT look a great investor to have on board.
https://www.bgf.co.uk/quoted/
Lots of other fairly chunky trades in last few days - looks like some short positions being closed to me.
So now we know BGF Group plc bought the shares, hopefully with that overhang out of the way xpf can finally go up a bit..
The difference of 250,000 shares to make up to their previous holding went through as a separate trade at the same price, delayed reporting from 11.10.01am. May have been done separately to cover the fees for finding a buyer? Negotiated transfer makes sense for that volume at that price.
MFT Capital didn't buy the original shares though, they were a deferred consideration for the original acquisition of Boom Battle Bars from them in Nov 2021.
https://www.lse.co.uk/rns/XPF/issue-of-equity-and-total-voting-rights-a6fosj2xoynxlpm.html
The lock-in for those shares not to be sold was relatively short and only until 15 July 2023, so they haven't sold any until now. TR-1s due within 2 business days to see who took them, but looking at the large after hours trade reporting some may already have been 'Flipped Out' ;o).
Speculation only...
MFT Capital bought 23.9m shares in Jun23 in one block. Possible they have sold out in a similar way? - The 2 "sells" maybe a negotiated transfer of that stake, one sell and one buy for the block.
MFT Capital is a holding company for subsidiaries that operate the Flip Out trampoline parks
Should be a TR1 soon 2 x 23,674,420 sells
Seller is out a bit of blue emerging GLA
I mean what's this all about to start the day?? a UT at 12.75p
05-Apr-24 08:00:26 12.75 10,000 Sell* 13.00 14.00 1,275 UT
I often wonder what causes this ongoing decline, business in good health, cash increasing, growing, strong young company.
But the daily grind of the share price is kind of a drag.
I've never worked in financial circles so don't know the dark arts but the constand drop does seem manufactured
Hedge
I think you have made an accurate summary there, it looks to me rather appealing.
It is all relative Bamboozle
There are not plenty of shares to purchase - most are with major holders.
It depend though how you define ' plenty'
I am sure you will be handsomely rewarded with a little patience. This is a good business, performing well, growing quickly in a growing market.
This will either re-rate when the market for small caps picks up or get bought out at a decent premium this year IMO.
It's great value at 14p; ofcourse there is a chance it may drift lower, but equally we could wake up day and find this compnay in an offer period.
Actually, there are plenty shares there to purchase. No probs. And, with the Ask being a favourable differentiation than the bid, it looks like they can’t get rid of em.
Well, I actually purchase another 50,000 today at 0.141p per share. It was a gamble thinking that the bottom was done. But hey, mug that I am, good money chasing bad. I know I shouldn’t have pressed that buy button but I did. 😡
Nothing new here….
Just some short term volatility in share price. Very few shares in circulation so MMs maybe shaking it up to fill order
New 12 month low.
This is becoming one of those fake AIM companies. Always fantastic RNS’s and ever declining SP’s.
Yep. We should be used to it but instead I’m p155ed off with it.
Any thoughts, HedgeHogarth?