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Yes, it depends on the point of view.
A Bad Joke? or a good investment perhaps :-)
Half year EPS was 3p, for the year It should be around 6-7p at least. The SP should be between 1.2-1.4 GBP with a PE of 20 considering the peers. And we talk about a a growth company, next year revenue and earnings should grow without the severe impact of national lockdowns on economy. This SP is a bad joke.
I thought the new CFO was very impressive...CEO in waiting?
Fiasco is a pretty good word for it. Don't think I have seen a more botched director sell down. Surely he could have got a better price than 80p? It seems like something more was happening than CJ just getting sick and that he has taken a hit of several million just to take a parting shot at the company. The story about him getting covid/long covid is only a rumour. I can understand the company not wanting to encroach on his privacy but some kind of explanation is warranted. Unfortunately now the company seems to have adopted a forced liquidation price as its value, but I think that will change as the market becomes more comfortable with the growth profile after a few more results and this all blows over.
In these small caps. it seems to me that it is the few people that trade the shares that make the price. Carl's 10% or so was a hefty wack and clearly someone has been selling for a quick profit.
I think this Benjamin Graham quote is apt:
"In the short run the market is a voting machine, but in the long run it is a weighing machine.”
I don't think they handled the whole Jani episode particularly well. Very reluctant to talk about it. Questions that they couldn't or wouldn't comment on in their presentation. Just a rush to buy 12 million share for 80 p at 40% discount to where they had previously been trading. No wonder the market thinks ok they are only worth 80p according to management. The shares initially rose after the announcement that Jani had resigned and them went into free fall when he started selling.
The dividend is 3.3%. with revenues a bit less than half of AFXO who have about .04% div yield , not that they pay one and a PE of 37 compare to 9. Peg ratio 2 compared to .3. Earnings growth for Afxo 27 compared to 37 for AGFX. Lots of talk about the gap closing between the two companies in terms of trade. Afx had a 2 year start on AGfx. They have only made small inroads into this market which is still mostly handled by banks. So plenty of room to get more share for both companies.
They have impressive backers. I think this sp fiasco says most about greed and poor investor relations.
Vol. Sold 64,390
Sold Value £56.02k
Vol. Bought 208,897
Bought Value £181.74k
It reminds me a lot of Loopup. Strong pipeline, lofty sales goals which they said could simply be achieved by adding new sales pods. I got sucked in while the rest of the market was selling. Have a look at the chart on that one. Painful lesson there that stocks that appear cheap are often cheap for a reason. Saying that Loop wasn't experiencing 30%+ revenue growth.
So yes keeping an eye on this one. Next update in January will be critical. One part of me wants to buy more but the other wonders why no one else is
I can see you have a well-developed "suspicion antenna", which in the lower reaches of AIM is a very good thing! I agree, something's not adding up. Let's keep an eye on this, for clues either way...
Yeah just a marketing exercise. The investor meet pres was similar. Precious few details on numbers and concrete growth plans.
Whats interesting is that Numis has EPS rising from 7.9p this year to 10.8p next year. That puts the company on a 1 year forward P/E > 8, but with growth of 37%. Clearly something ain't right there. I guess the market isn't quite convinced by the proposition of merely throwing people at the market and producing sales.
I was wondering about the dividend myself. I don't really know how they get a dividend of 0.75p... this equates to about £850k, which at 30% would give an implied adjusted PAT of £2.8m. I can't see a single reference to 'adjusted PAT', only PAT which is £3.3m. Using this number would give a dividend 17% higher
I bought shares in mid September and topped up in mid-October. It has not gone well. It's hard to know what to think now. He is relentlessly upbeat, this Harry fellow, but, as you say, the market just doesn't believe him. There are a lot of good questions that could've been asked in the interview, but proactive investors gave him such an easy ride - it's just ramping really.
Also, the announced dividend is paltry. If the Company's dividend policy is to pay out 30% of profits, then an interim dividend of 0.75p a share is hardly impressive in that context.
Looks like mkt doesn't believe the story Harry. SP is plumbing all time lows. Its a little difficult to reconcile the train wreck of performance since IPO (and failure to acknowledge on delivery of lofty promises) with the optimism for the future.
Reaction looks pretty harsh given earnings expectation downgrade of around 10%. Does the market think there may be more to come? Looks like fund or funds drip feeding algo sells pretty constantly since the trading update. I'm a buyer below 80p if it gets there
https://www.proactiveinvestors.co.uk/companies/news/965555/argentex-group-says-business-is-on-right-trajectory-following-record-first-half-performance-965555.html
Gross Foreign Exchange ("FX") Turnover: £8.3bn (HY 21: £5.0bn) - up 67%
· Revenue: £15.7m (HY 21: £11.8m) - up 33%
· Underlying Operating Profit: £4.7m (HY 21: £3.7m)* - up 27%
· Underlying Operating Profit Margin: 29.9% (HY 21: 31.4%)
· Profit after tax: £3.3m (HY 21: £2.7m) - up 22%
· Highly cash generative, with 79% of revenue converting to cash in 3 months or less
· Earnings per share: 3.0p (basic); 3.2p (underlying) (HY 21: 2.4p (basic); 2.5p (underlying))
· Interim dividend: 0.75p per share
Hopefully it won't be like extracting blood from a stone. They have some explaining to do
Hard to work out whether the 80p buyout of ex co-director/founder is the reason for the fall. Questions remain about this whole debacle as they have been less than forthright with the market and seem to have a total disregard for shareholders. Interestingly the complete opposite was the case with AFXO when they hit a problem when their largest client couldn't repay a 30 million transaction. The issue was swiftly resolved with a placing to strengthen the balance sheet and a long term organisation of the repayment of the debt. All Agfx have given us is Jani got ill with COVID , so he decides to sell his entire 12 million holding (is that an action of rationality by an experienced businessman really?) and they don't expect any downturn in the economy to hurt their business. Something isn't right . So what else is it I wonder?
The share price action could all be down to the fact that 10% or so was recently sold at 80p.
It's only an opportunity?
Agreed. Priced to implode is still an appropriate header. The only hope for this is that costs come in below expectations or that the squeeze on net sales margin is temporary. Liquidity is almost non existent, they have been abandoned by the institutions and the market seems to be waiting for more bad news. They have been extremely poor at managing market expectations of almost start-up like growth. However any reaction is likely to be short term. The market will realise that a single digit P/E is pretty harsh for a company that is showing strong growth in customer numbers and revenue in a market that is ripe to steal business from the incumbents
The trading update was a miss, and we have been punished as a result. The end of year estimates will also be missed (barring a miracle) and we will see a further drop as a result. This needs to be on a single figure PER to be cheap. In the long term we should be fine, but I am expecting further drops.
The 40% in the previous year was against the hard lockdown comparative when most businesses were completely shut down. That distorted the H1/H2 split. How are they going to achieve that this year? Is it general market growth or market share gains?
Volume is going to be immense today. 1m shares changed hands by breakfast should see a few per cent churn just today. It seems a lot have had enough. If I wasn't holding a decent amount here i'd be captivated but as it is I can hardly watch
Shares are at a lifetime low, even below the lows of the pandemic last year and well below the IPO price. How many companies can say that?!
This is looking interesting now.
Trading update was OK, pretty flat but heading in the right direction, but the selloff has this priced for a big miss.
By my quick calcs will need around 35% increase H1 to FY to meet target.
Not easy, tho they managed over 40% previous year and almost 10% year before so tend to be weighted to H2 anyway.
If they hit revenue and EPS of 8p then it's on a P/E 10.5x
If they miss by 10% then it's under 12x
If they miss by 20% then it's 13x
Seems a big miss is already priced in to me with the added upside if they get anywhere close to consensus. No debt. No need to dilute. profitable, good dividend. Sentiment awful. May take a while to settle but looks good risk/reward
Take a look around at the market and check the quality of the trading statement against some others. Its just not good enough
https://www.investegate.co.uk/discoverie-group-plc--dscv-/rns/first-half-trading-update/202110140700030716P/
https://www.investegate.co.uk/norcros-plc--nxr-/rns/trading-update/202110140700020124P/
Share price is under siege here. The sell down at 80p has really shaken the market up. Why would he sell so quickly at such a huge discount to the prevailing share price (it was around 95-96p). Initially the market reacted positively with all the staff buys but then it must have seeped in that something smelled bad about shorter term performance. The chart looks horrible now, after a period of consolidation with a recent amount of churn the price has fallen through the floor.
My take on this is that the trading update was weak and the lack of detail on profit expectations makes it seem like they have something to hide. What's with that massive increase in volumes and much lower increase in sales? If its spreads, mix etc they really should say something to manage expectations. Thew focus really seemed to be on getting the market used to the higher costs from their shiny new HQ and tech stack.
They need 58% of revenue in H2 and YoY revenue growth and H2 v H1 growth to continue at 30%+ to hit expectations. That's against much tougher comparatives in H220 which has the 'pent up demand/recovery’ story.
Using the 2019 split of 48/52 H1/H2 weighting would translate into a sales and EBITDA/profit hit of around £2m giving a P/E of 9x. A £2m miss would be closer to 12x. They have a poor record on costs and hitting targets and growth has consistently shifted further out to the right since IPO
Baffles me too! The market in general is pretty bad but cannot understand why this share never seems to progress
Why is the SP falling? It was a decent update. Returning to Pre-Covid profit level our EPS should be around 8p. And the business has been growing too. Interesting.