The next focusIR Investor Webinar takes places on 14th May with guest speakers from Blue Whale Growth Fund, Taseko Mines, Kavango Resources and CQS Natural Resources fund. Please register here.
London South East prides itself on its community spirit, and in order to keep the chat section problem free, we ask all members to follow these simple rules. In these rules, we refer to ourselves as "we", "us", "our". The user of the website is referred to as "you" and "your".
By posting on our share chat boards you are agreeing to the following:
The IP address of all posts is recorded to aid in enforcing these conditions. As a user you agree to any information you have entered being stored in a database. You agree that we have the right to remove, edit, move or close any topic or board at any time should we see fit. You agree that we have the right to remove any post without notice. You agree that we have the right to suspend your account without notice.
Please note some users may not behave properly and may post content that is misleading, untrue or offensive.
It is not possible for us to fully monitor all content all of the time but where we have actually received notice of any content that is potentially misleading, untrue, offensive, unlawful, infringes third party rights or is potentially in breach of these terms and conditions, then we will review such content, decide whether to remove it from this website and act accordingly.
Premium Members are members that have a premium subscription with London South East. You can subscribe here.
London South East does not endorse such members, and posts should not be construed as advice and represent the opinions of the authors, not those of London South East Ltd, or its affiliates.
A bullish-sounding tweet from the CEO, who notes:
"There are currently 197 productions in development 22 in pre-production 33 in production. Great stats that show the upward trend in our booming #tv & #film industry is continuing in 2023
Likewise for @FacilitiesByADF who are supplying 19 of 33 shows ??????????????????"
Https://twitter.com/marsproctor/status/1615634936970592257
I can see that ADF worked on 39 productions in total in 2021, and in H1'22 alone they worked on 46 productions. So it's an interesting balance - one would want to see ADF working on an ever-increasing number of productions, and the start to 2023 appears to be good in that respect.
Yet H1'22 saw an increase in productions worked on with lower profits due amongst other things to higher transit costs etc between shorter timeframe productions, apparently to be remedied in H2 given the forward order book containing a much higher proportion of longer term and thus more profitable shoots.
The CEO seems to be happy about things anyway!
Netflix reported rather encouraging subscriber news last night.....
In summary, "Netflix added nearly 7.7m net new subscribers in the fourth quarter of last year, well ahead of the 4.5m predicted by analysts", and the share price surged 6% in after-hours trading:
Https://www.thisismoney.co.uk/money/markets/article-11655613/Netflix-founder-Reed-Hastings-quits-role-chief-exec.html
Of course, this is only one quarter. Frankly there are so many streaming services out there now that Netflix's subscriber numbers are bound to fluctuate up and down and may well trend downwards from their peak. To me the important fact is that the sector as a whole appears set to thrive for some time to come, especially given the competition between Netflix, Disney, Paramount, HBO, Apple TV, Paramount, ITVX, Pea**** etc etc.
Good rise so far today. Cenkos says it should be around 93p.
181,052 buys against 12,003 sells just don’t make sense why price is dropping again today!!
Wonder what’s up all buys today as it should be with everything going to plan and as ADF says business is booming.
Despite the CEO saying the cost of living crisis will have zero impact, try telling the Netflix ex subscribers that:
https://www.theguardian.com/media/2023/jan/01/netflix-to-lose-700000-uk-customers-in-two-years-analysts-predict
Most important from this article is the confirmation that expectations remain in line with guidance with £7.8m adjusted EBITDA and 4.6p EPS for the year just ending and 6.3p EPS for the new year. It would be interesting explanation to say the least if those expectations for 2022 were not met given that we're now only three weeks from the year end.
ADF also state that further acquisitions are on the cards:
"They still have funds of their own left from the IPO to utilise he says and any future deal will always have a deferred and contingent element, so they are very much in the market for another addition that ticks all the right boxes."
Https://martinflitton1.wixsite.com/privatepunter/post/adf-still-in-the-frame-12-12-22
Nice extract - 4.6p EPS forecast for the year about to end, and 6.3p EPS forecast for next year::
""For the first half revenue came out at £12.6m with adjusted EBITDA of £2.6m which seemingly implies a lot of work to do in the second half to achieve the anticipated numbers out in the market from broker Cenkos. This sees a calling for full year revenue of £31.8m with adjusted EBITDA of £7.8m and a profit after tax of £3.5m which in turn provides for EPS of 4.6p. Given that ADF has only recently announced the acquisition of Location One, as a holder of the shares I concluded that if there was any hint on the company not hitting the anticipated numbers, then something would no doubt have been announced to the market at that time. I ask the question in relation to a confidence in meeting that current guidance. Richards says that expectations remain in-line with guidance."
FYI, today's RNS shows BGF Investment's holding in ADF is unchanged at just above 15.3m shares, or now 19.29% - it's just their percentage holding that's reduced as the 3.4m shares issued on the new acquisition were admitted to AIM today.
Funny morning going down now.
Nice start to the week - up 2p already.
Cenkos' new forecasts are 4.6p EPS for the year about to finish, and 6.3p EPS for next year incorporating the new acquisition.
Cenkos note that ADF should trade on a P/E of 15 given its higher net margins and earnings growth, i.e giving a 95p valuation.
Shares being sold are bringing higher prices than those being bought so there could be a shortage of shares to buy!! But great RNS I was impressed with the Company when I was the only shareholder to turn up at this years annual general meeting.
ADF's shares were cheap even before today's acquisition, given forecasts of 4.6p EPS this year and 5.9p EPS for the year about to start - a P/E of only 10.6 (assuming they meet 2022 forecasts of course).
Today's news should prompt upgrades to next year's forecast to say around 6.2p--6.4p EPS, making ADF's multiple even cheaper.
Also some interesting quotes from today's RNS...
- from ADF's CEO : "as the UK continues to experience an increasing influx of inward investment and production and as we see the demand for content reaching record levels"
- and from Location One's CEO : "at a time when demand for our products is at an all-time high"
This looks like an excellent "immediately earnings accretive" acquisition.
With all the elements I like to see, i.e paid for largely from cash, with a further large part subject to performance and the rest payable in shares as further incentivisation for the acquiree. Plus ADF know the company well having worked with them for a long time.
This is "the UK's largest integrated TV and film location service and equipment hire company", so a significant player. Margins are great, with £9.24m turnover bringing in £2.08m EBITDA.
rivaldo the CEO should tweet more often if this is what happens. Great news!
Interesting tweet the other day from the CEO. Let's see if it translates into the promised more profitable business in H2 :o))
Https://twitter.com/marsproctor/status/1596030263833677826
"Happy Friday, another busy week in the life of @FacilitiesByADF servicing 23 x large productions is a challenge but with the amazing #team we are so luck to have, they make it happen. Thank you to all"
Can’t believe not one trade today !!!
People are beginning to take notice, lots of buys coming in for the stock - maybe it's been tipped?
Good to see the price moving up.
Nice start to this week too - up 3p (5.5%) today on around £30k of trades. Either there are larger buys still to be reported, or there's a definite shortage of stock.
Ticking up again on just a £1k buy - perhaps very little stock around.
SCSW have now sent out their November issue, so it should be OK to paste their comment on ADF from the previous issue FYI:
"ADF has released its H1 to 30 June with sales of £12.6m and a reduction in EBITDA to £2.6m, down from £3.8m, although last year’s H1 comps saw a post-lockdown bounce and not the typical seasonal lull in Q1. H2 is more heavily weighted towards large productions and is fully booked, hence it supports the full-year expectations of record adj EBITDA levels in FY22.
Cash balance stands at £16m despite growth in the total number of vehicles at the end of H1 to 550. This is expected to reach 600 by the year end. Cenkos forecasts eps of 4.6p for the year, lifting to 5.9p next year, to drop the PE to 7.5. Hold."
Good to see these on the up again. Anyone know what has happened with ADVFN please? Seems to have been unavailable for about two weeks.
Hi Rivaldo,
These are is not much liquidity with these, so the steady buying and limited sells, means the price action is up.
Maybe Disco Dave is buying in secret! :)
Best
Up another 1.5p already today, and seemingly moving up on almost every decent-sized buy. Likely a lack of stock/sellers around?