Member Info for AAVanMan

Matt, you're right, the institutions loaded up at 1500 since it was nearly 24% higher and closer to fair value. I agree with their approach. When you compare CER stock to something less trend you can find better downside protection like KNOS or even GAMA where the risk reward is not the same due to pedestrian growth, but on valuations they are possibly better in the long run. It is therefore key to add to CER cheaply as possible. I think we are nearly there.

Slight fall to near enough recent lows at 1170 p, GAMA now sub-15× forward earnings, > 89% recurring revenues, mid-teens growth, strong margin and cashflow leverage, and a clear M&A/institutional re-rating story looking strong. Forward P/E sits around 13×, offering a margin compared to its 15–18× peer group multiples. PEG of just 1.5× (forward P/E ÷ ~10%–12% growth) remains within many GARP investors’ “reasonable” zone of 1.0–1.5× and there are not many of those!

If you are confident then this is a buy but at 33x P/E today, there’s little margin for error, any slip in growth or telecom spending could see shares re-test the low-1200 p area. I would want a bit more cushion, watching for a pullback toward 1 400–1450 p (25–30 x P/E) might offer a better risk/reward.

Even before today’s drop, CER was trading at a premium. Simply Wall St flagged it as ~21% overvalued, with a full-year PEG of ~1.6x, needing sustained high growth to justify that level.

"CEO Louis Hall is planning a secondary share placing, putting at least 1.3 million shares at 1500p each on the market" - yeah fair price. Sorry I sound like a ***** but going on valuations CER was too high.

Other than it was and still is massively overpriced on a valuation perspective meaning anything small will create large multiple compression like today? Not sure what it was, cant simply be UK data.

The financials sector in general appear to have recovered especially in Europe. Without this bid, we might well have reached a 3000p price. There will still be buyers even if the bid fails.

Liontrust mates must be happy!

Platforms are reporting much lower yields than reported. Why is this? I make it 9.06% yield at £1.1440 a share today. Based on 2.59p*4=10.36p a share

Why hasn’t the takeover price been disclosed yet? Could this be to allow for buybacks or other strategic moves?

Given Alpha Group’s strong earnings growth and net trading income (NTI), the fundamental valuation likely provides solid support—meaning a failed bid might only result in a 5–15% pullback. That said, Corpay has both the resources and strategic incentive to pay a premium.

While I’m admittedly bullish as a holder, £16–£18 per share seems a reasonable expectation based on comparable deals and synergies. That said, I’m just as comfortable holding long-term if the bid falls through, given the company’s underlying strength.

I would look beyond the simple index rebalancing in 20 days time. GAMA is a classic GARP stock because it combines steady double digit EBITDA growth with a reasonable valuation. It trades on a P/E around 16 and a PEG close to 1.2, which suggests you're not overpaying for the growth on offer. The business has strong free cash flow, minimal debt, and good visibility thanks to its recurring revenue model. While the UK market remains soft, European expansion, particularly in Germany is accelerating, and guidance has been reaffirmed. The share price drop looks sentiment or rule driven, making the current level a potentially attractive GARP entry.

KNOS is high growth, but still overvalued at current levels unless growth accelerates. This is why it is being punished. Should be good in the longer run.

Johncut - only that these reports are being punished, BYTE as an example though it was good. I still hold KNOS too and will buy more on anything similar. Sold of of CER but again will buy back in on dips.

Post by Mr Scruff on ADVFN Forum:

The March statement acknowledged softness in both UK and Germany.

Now, the April update explicitly excludes Germany, even highlighting positive trading in Europe due to acquisitions.

If anything, this is an improvement - yet Gamma fell sharply.

The March RNS already warned of UK challenges. The April wording ("ongoing softness... continue") isn’t a downgrade, it’s a restatement of existing conditions.

"Prudent actions to manage costs" is standard corporate language and not a profit warning. If margins were collapsing, they’d likely have issued a formal guidance cut.

If Gamma was trading at a low multiple, a 13% drop on no material deterioration suggests market irrationality.

Either:

The market misread the RNS (seeing "softness" as new bad news when it wasn’t).

Or, liquidity dried up, and a few panicked sellers (or other entity as hinted) triggered a cascade.

Am I missing anything from the RNS. I am not an emotional investor, been doing this for 30 years and I know how to read a RNS subjectively. This has however annoyed me. This could be a great buying opportunity for new investors, assuming Germany remains strong and UK stabilises.

Added again at the end of the day. Good to see Allianz adding as they are investor with a focus on quality and value.

Same. I like the strong buys reported out of hours. I did not that there was a one off sell trade reported at something like 1039p!

Heck! I am not hanging around for the KNOS results on Monday, so sold there and started adding more to GAMA here. This has happened all the time, MGN at the start of the year, then recently CKN where it fell and recovered quickly. As long as the balance sheet and sheet growth remains strong.

Punished on softness in the RNS but thats all known about and everything is within range. Market wanted improvement. Over reaction. I have just added at 1115.7477p

Inclusion for FTSE indexes in next month :-)

https://www.tipranks.com/news/company-announcements/gamma-communications-reports-positive-european-growth-amid-uk-challenges

Gamma moves to Main Market, expects financials within forecast range

Gamma Communications sees strong European growth from German acquisitions.

Gamma Communications plc has reported positive trading in 2025, particularly in continental Europe, driven by the strong performance and integration of recent German acquisitions, Placetel and STARFACE. Despite challenging market conditions in the UK, Gamma remains financially robust, with a net debt of £21.2m as of April 2025. The company has moved its listing from AIM to the Main Market of the London Stock Exchange, making it eligible for inclusion in FTSE indices. The Board expects Adjusted EBITDA and EPS for the year to be within market forecasts.

Appologies, as new investor I am still catching up with this one.... So, Starface is clearly a profitable business. According to Gamma’s acquisition announcement, it’s expected to bring in around €44 million in revenue and about €15 million in EBITDA for 2024, which means a healthy 34% margin. That kind of performance points to a company that’s well run, with good cost control and a solid business model. Gamma reckons the deal will be earnings accretive by 2025, so it should boost their overall profitability. In short, Starface looks like a smart, strategic fit, a strong addition that should help Gamma grow its presence across the European cloud communications space. the next set of results will be really interesting when including this acquisition.