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Afternoon all. I’ve been missing in action for the last week or so – its been quite amusing catching up on posts – looks like things got a bit heated but I guess we are all here to make (or at least not lose…) money – and when that doesn’t go to plan (for lots of the reasons which are debated here) its easy to see the red mist. Looks like there has been some healthy trading in the last 48 hours which hopefully signals an emerging interest in company shares beyond the large scale II interest referred to by SJL.
Whilst I would have preferred the introduction of a dividend, realistically this would have been limited to 0.1/0.2p at most. What I am now seeking is that the £1m buyback demonstrates its value by increasing the share value way beyond what £1m (or c.0.1p) would have achieved in the form of a distribution. The starting point is 6p a share – and we have spent about £130K on 2.3m shares so far; so have plenty of cash to accelerate the programme. The timing of this may work for us as we enter our final quarter - based on clear evidence we are bottom line profitable (despite the $1.8m payment/s), the upcoming settlement of .London, assumed adultblock take up, continuing strong sales, high renewals, back end negotiations to reduce costs etc. So – I’m looking for the £1m to deliver a 1-2p increase in share price; which to me would more than justify the programme. Time will tell. SB
Yes rampusnik, We seem.to be experiencing a high level of sales right across the portfolio at the moment.highlights ....law will increasingly expand its reach in China now.Luxe ,with its multiple crypto use. and as you say,.fit becoming fit..I'm.alo particularly impressed with the renewal rates experienced by .work..and the continued good sales of .work and .vIp.Q4 looks to be the period in which sentiment will change.Atb
ladies,.. ladies!!
Ah!
That's your problem, ego.
Never judge activity by sell/buy indicators on lse.
The early on are nothing to do with that.
It's the market and it will put itself right as metrics improve.
Your sensitivity to this share suggests you are overweight it or insufficiently diverse.
If you want a divi the FTSE100 trackers offer a very cheap alternative and are heading to an interesting buy opportunity. 4%.
If so anxious here sell down and move on.
3mil each from 9.375p to 18p full vesting.
Any bets? I'm giving good odds.
Toby and Michael bought in :))))))
Wonder what effect would that have. Too bad we'll never know. Have you noticed the 11 x 1 letter shopping domains that went through the other day? 2 letters is about 2000usd. every little helps.
And what is happening with .fit? A lot of nonsense being registered. Consistently top of ntlds on Spamhaus .org. I had high hopes for it. Nonetheless is no. 80 of all domains.
Another vote for dividend from me. Not the most tax efficient but will do good for SP. What level needs to be in April at full year results so they get their shares this time? Is it 7p?
Is that not that damn automated algorithm thingy that guesses based on the value? Wonder if they can correct it as I agree, it doesn't look encouraging if you just glance in.
Hope so.
It's his duty.
Overall shareholder yield should be his #1 priority
The buyback is starting to have an effect on the share price now. Keep these 200-400k buys coming please!
On a separate note, do Tap & Sunday just not like Thread view on these forums? The restarting of threads in the old view does jumble up the forum a bit.
And that's exactly what Toby would say no doubt ;)
Atb
I'm certainly all for getting excess cash out of management hands. It can be a comfort blanket leading to stagnation of burn a hole in their pockets and cause bad decisions in terms of allocation.
My angle is to do it as efficiently as possible with maximal upside to the so and metrics going forward to get the flywheel turning.
In my book tender plus low progressive dividend looks best overall.
They may have a remit or be aware as a tender will probably be via Finncap.
Doubt it's illegal, their remit reads as quite open.
Human nature etc.
Fact is the market rules so at any time the market could take the ball out of Finncaps hands and drive the price higher - it isn't.
What if they are managing the sp as part of a pre-tender process?
Exactly Sunday and then should a tender materialise it might not be a bad thing.
Careful what is wished for as if this is seen to be moving to x-growth for any reason then any multiple applied will compress. A tender plus small progressive dividend is a good compromise. Bigger dividend leading the market to believe the company has no way to allocate that capital to growth will not go unnoticed.
I think the answer Taps, is to average down your holdings ,its what I've had to do in order to meet my own investment targets..
Tap ,
I guess I was talking 12x proforma of what the acquirer would make post cost stripping : have to leave something in it for the next guy , that would equate to 21x actual profits of $8m and that I would consider a pretty full valuation in truth .
Thank you for the reply SJL - let's hope Toby & co deliver on that front now!
Atb
Dandee ,
In truth I do think the perception was that I was a large seller as having sold the 32 million shares at 5.75 , that was rapidly followed up with other bids for similar volumes that I shared with other ICM vendors but ultimately no-one decided to sell at that price so I can easily see how the view may have been established that there may be an opportunity for several institutions to fill up / enter the stock at a cheap price and perhaps that belief has caused the perceived “ overhang “ in the market . I have clearly stated to both the company and also the broker that I am not selling at anywhere near today’s price , so perhaps normal service can be resumed and the shares can start an upward trajectory to what would still be an undervalued stock . The finncap note that was revised with the interims still has the enterprise value target at 17 p and whilst I think that may be hard to attain medium term, perhaps extrapolating out to 2021 numbers may justify something close to that price . Listen , the biggest player on the market donuts was bought out last year for hundreds of millions by a big PE group . Usually these guys are looking for an exit around 3 years and to my knowledge they haven’t done any deals . Again I’m pretty sure being US based they will be looking at a 23-30 x earnings PE if they IPO so it would be a no brainer imho if as part of that plan they decided to bolt on mmx and strip out the costs . As I have said numerous times proforma profits of c $14m after savings would allow them to buy at say 12 times that and then IPO at double that making a fortune in the “ arbitrage “ . That’s 14p a share there
Very interesting post SJL and many thanks for taking the time to go out of your way, clarify with TH and report back. Can you clarify, when you say the disconnect in sp is due to the perception of a large seller, was this Toby just speculating or was this related to feedback he's received from other sources?
if this company announces a progressive divi policy then I will hang around for a year or two more, or maybe longer. By then the sp will be well into double figures I expect/hope. If they can make a real good go of Adultblock and .Luxe then we could really motor.
Tap/ bonum
I would caution against the term “ insider information “ as I go to lengths generally to make sure I am not technically an “ insider “ . “ industry insider Knowledge “ may more accurately describe where I am situated .
Dividend amount and timing ? I think they will consider the buyback ( #fail so far ), tender offer ( not a big fan ) or dividend and I would think now being October that as q4 unfolds and based on stronger cash generation during “ renewal season “ they will likely decide around years end when they know whether they have made / exceeded the guidance and by how much . The die is cast on renewal revenues as % rates are pretty much known now for the more mature TLDs , so any extra free cash will likely come from adultblock , .luxe initiatives , strong new sales and any premium sales from the recently released premium inventory along with any further collections against the bad debt provision . Of the 8.9M or whatever of cash at end of period you need to take off the $2.1 of “ restricted cash “ , the $5.1 of the .london payment that leaves just under $2MM and then add in the net cash from the H2 profit which in h2 should be ahead of the ebitda number so could be over $4mm , meaning imho by years end company could have over $6MM free cash . I doubt they have any acquisitions planned and the business is not needing extra cash for operations so if were me with $6mm free cash I would return half of that to shareholders via dividend . An inaugural year end divi of 0.3p 0.4p a share would be a useful start .and would imho attract a lot of new investors if was indicating an annual yield ( on current SP) of almost 10% . As the SP corrects to almost double todays price that would still indicate a 5% return which I think is more than healthy . I think they should be bold with this and put their marker down so that new investors could buy in for 2020 with the expectation that at 10p a share they would likely get a predictable return of around 4-5% per year , and for those who got in at 5-7p much much higher . I was fortunate enough to buy AAPL shares back in 2006 and it took them awhile to start paying dividends and with today’s rate it equates to an annual payout almost equivalent to 100% on the original buy in price and matched against this eras low interest rates imho anything paying 2-3% annually makes “ holding “ far easier .
What feedback did he give on Dividends - will we have 'conveniently' wait an inordinate amount of time for any such initiative to be implemented?
I forget exactly how long the business review took but are we looking at a long wait & subsequent duration, for the 'discussion process' to take place and be concluded?
Thanks for that update SJL and good to get clarification on certain of the points previously discussed on this BB, as well as afirmation of your own comittment to push for the initiation of the Dividend. As Sunday points out, we can intellectualise the 'theoretical' reasons for not giving a dividend, but we know that such dividends would attract a great deal of positive sentiment to the stock and hence new waves of buyers.....and beyond just a dry look at metrics alone.
Enough of intelectualising stooges - let's have the jam!
Atb & have a pleasant day all
Thanks for the update and good to know that you feel the business is on course.Im certainly with you on the dividends debate.Its the most understood and desired measure of success by the market.A dividend will attract much needed new investors and ,I believe a high level of dividend payment is reinvested too.
It will be interesting to see how Adultblock and.Luxe perform in the next quarter,critical ,I think to the raising of guidance ,which Toby has mentioned.Im of the opinion that we will hit the $8m figure ,year end with tld momentum and the innovation projects .
Interesting to note your views on the current SP ,it really cant stay at this level for long given all the interest in your shares and company performance.ATB