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What happens to SBIZ shares that were held during the rebrand?
Assuming that they will just have a different ticker / name now ....
Hopefully the share price finally starts to move up again.
Slater takes 6.1%, great news.
Must see value at this price.
There are some huge buys and often quite regularly for this share, but the share price hardly ever seems to rise.
Why?
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I don't have any position here any more but I follow the share to a degree. This was posted earlier today about SBIZ on Stockopedia.
SimplyBiz (LON:SBIZ)
Share price: 200p
No. shares: 96.8m
Market cap: £193.6m
Interim results
SimplyBiz (AIM: SBIZ), the independent provider of compliance and business services to financial advisers and financial institutions in the UK, today announces its unaudited results for the six months ended 30 June 2019.
The headline figures look great, but the growth has almost all come from an acquisition. Organic revenue growth was only 3%. Net debt looks a bit high too, so I'll check out the balance sheet below.
Very good adjusted EBITDA margin, of 23.4%
Note that exceptional costs are very high, at £3.0m in H1 TY, and £3.8m in H1 LY - that's worth checking out, to determine how exceptional these costs really are.
Outlook - sounds fine;
Trading has continued in line with the Board's expectations, since the end of the period. The Group remains on track to achieve market expectations for earnings for the full year.
Stockopedia is showing 12.6p forecast EPS for FY 12/2019, giving a PER of 15.9 - probably about right.
Balance sheet - this is where it goes wrong for me. It's very top-heavy, with £106.6m intangibles.
NAV is £63.3m, so once we write off the intangibles that becomes heavily negative, with NTAV of -£43.3m
It has £11.6m of cash, and £41.5m of debt, giving net debt of £30.1m - that looks too high to me. Although the acquisition RNS in Mar 2019 indicated that net debt should reduce to under 2 times EBITDA by the end of 2019.
Given that revenues are recurring in nature, then maybe a stretched balance sheet doesn't matter that much? Although it makes me uneasy, as there's no cushion if anything were to go wrong.
Cashflow statement - it doesn't look very cash generative. Maybe there's an H2 weighting to cashflow? Note that £930k of development spending was capitalised in H1 2019, more than double the prior year H1 comparative.
My opinion - for me, the stretched balance sheet puts me off.
Did SBIZ over-pay for the large acquisition earlier this year? It seems to have been an aggressive price to pay.
I like the business model though, of providing subscription services for financial services companies. That makes obvious sense, given the complexity of regulation.
So I dug up my charts to have another look. It doesn't look promising imo but thought I'd share anyway. As I said, I hold no position and probably will not again.
http://www.chartupload.com/viewer.php?file=16929435927134004115.png
hmm this has dropped more than I would have liked. Hopefully, it will bounce of the round number which is re-enforced by the 50-day moving average. I will double down at this point if presented.
moving up on sells? hmmm. Order filling or just confusing spread. Live price is 212
Will add as it goes up
Next issue of SCSW tomorrow by the looks of it.
So SBIZ will maybe get covered given that it has issued strong results and made an earnings enhancing acquisition since the last issue.
And in SCSW in June, July, Aug and this Feb. Mahe bid for Lighty get mentioned again this month given the bid for Lighthouse (LGT).
GS
Just been tipped here: https://masterinvestor.co.uk/equities/the-simplybiz-groups-simply-wonderful-acquisition
Covered here: https://www.stockopedia.com/content/small-cap-value-report-tue-5-mar-2019-bilb-swl-sbiz-deb-454633
Bought by NT: http://nakedtrader.co.uk/?id=499
Great results here. Sadly I sold a few days back in the 170's.
Not a lot more upside according to the Nomad Zeus Capital.
"Valuation
The current share price of 180p (i.e. Market Cap of £138m) which
is similar to that at IPO, implies a prospective 2019 P/E of 14.0
(PEG 0.86x) falling to 12.0x (PEG 0.75x) for 2020. This valuation
is based on what we believe to be prudent forecasts.
At a “potential valuation” of 202p (i.e. Market Cap of £155m),
SimplyBiz would trade on 15.6x and PEG of 0.96x, falling to 13.4x
and 0.82x respectively in 2019.
Assuming SimplyBiz is able to invest £4.5m a year on bolt-on
acquisitions, we see scope for 2019 EPS to rise 10% to 14.2p.
Applying a 13.4x to 15.8x enlarged 2019 P/E multiple, we believe
SimplyBiz could be worth 190p to 225p a share."
Nice to see a big named contracted.
Anyone any idea as to the value of the contract though?
Simon Thompson’s view:
implyBiz (SBIZ) listed its shares on London’s junior market
a few months ago and, with a market value of £145m, has
slipped below the radar. It’s worth exploiting, though, as there
is a real opportunity to lock into an investment that has the potential
to deliver a 50 per cent return over the next few years, in line with
anticipated EPS growth. A shift in the IFA industry towards direct
authorisation, and the need for financial intermediaries to comply
with a raft of new legislation means that an increasing number are
seeking the services of companies such as SimplyBiz, who provide
compliance, business and technology services they need to carry out
their business. The company makes money from product providers,
too, so profits from both the ‘demand’ and ‘supply’ side. It’s a winwin
business model investors are likely to warm to.
Bull points
n New legislation driving growth.
n Market leader.
n High barriers to entry.
n Low attrition rate of clients.
n Non-cyclical revenue and profit streams.
n High recurring revenues.
n Operationally-geared.
n Highly cash-generative.
n Substantial boost to pre-tax profits from paying down borrowings.
n Progressive dividend policy.
n Low-cost bank facility to facilitate earnings-accretive bolt-on
acquisitions.
n Senior management heavily invested.
Bear points
n UK economic uncertainty.
n Liquidity.
n Risk of housing market downturn.
for those interested, I had set a target buy price alert at 150p based on this company being listed this year and so often I see sp taken down below the listing price (170p) which I presume is stops being taken out.
There have been no ii's selling but plenty of bod buys so the sp has been taken down purely on pi sells.
I have presumed a stop loss set of 20% for those that bought at 170p which takes the price to 146p which coincides with a downward trend line. Take into account a slightly higher spread due to limited stock available and I have come up with 150p ish price to buy.
Regarding limited stock, this can make the sp more quite quickly upwards but also explains the drop on low pi selling and low volume.
http://www.chartupload.com/viewer.php?file=25471904406388005755.png
atb
took the bullet this morning at just under 150p. Wish i'd bought more with £30k bod buy just going through. Another order set at 149p, not sure ill get it though.
Fair points 42trader but the increases in profit and revenue on the interim statement suggest far more to me than just promises,
Yes good report and also a good review by ic. There is some support at current price which it could bounce off but this is the start of the 10th week in a row of the sp dropping. Generally I prefer to avoid newly listed companies as they are often over promised.
Excellent last report. Dropped on general market malaise and volatility. Topped up today.
in IC recommended today as a "Strong Buy"