Member Info for Agricore

Jatw, I disagree wth your comment "an eclectic group of products with limited direct synergy"

These are the synergies VLG are achieving:
> Synergy of administration - usual duplication of accounting, systems and administration can be eliminated
> Synergy of production - spare capacity in Sweden and Italy mean products can be manufactured thereby reducing fixed cost absorption and what was previously outsourced production.
> Synergy of distribution - sales opportunities to new customers, cross sell to existing customers of each product, potentially better terms with distributors

Synergy is why Singers forecasts an increase of FY2023 PBT of £1.4m (from £5.2m to £6.6m) compared to September 2022's forecast. VLG have previously achieved synergies in their other acquisitions so it's reasonable to believe they will with HL too.

For me the other telling statistic is the increase to operational cash flow growing on a forecast £6.7m in FY2022 to £12.3m to FY2023. Good cashflow in a defensive share, what's not to love?

Even with the recent share price rises this remains on an EV/EBITDA of 4x compared to its peers at 10x-20x. Leaving aside comparisons of better order book growth and the cash generative attractions of VLG, relative to its peers, it remains undervalued by about 2 and a half times.

Last year's business update and trading update came 10th Jan and 31st Jan. I'm expecting we'll see a spike upwards when we see the FY2022 update.

GLA

https://www.bailliegifford.com/en/uk/individual-investors/literature-library/funds/investment-trusts/shin-nippon/half-yearly/shin-nippon-interim-financial-report-july-2022/

An interesting range of industrial and technology businesses. One has to think 2023 could be a better year for BGS with Chinese reopening, Japanese reopening and SE Asia and India still growing strongly.

Just looking at the IPO web site this news feed is worth a read (clearly not all portfolio news is making it to an RNS)

https://www.ipgroupplc.com/media/portfolio-news/all

Investors Chronicle list this as 2nd highest upgraded earnings for the next 12 months (as at 14th December 2022).
https://www.investorschronicle.co.uk/tips-ideas/2002/01/02/latest-update-companies-smashing-broker-forecasts
They claim NTM (next 12 month) earnings are estimated to be 24.1p. It was 7.4p a month ago and 7.1p 3 months ago.
That's a 225% jump.
This is based on however many brokers assessment. (I'm only aware of Edison covering IPO).
Another reason why 56p is ridiculously cheap. The last NAV was 136.7p and there's been a 1.5p uplift since. (RNS 2nd December)

GLA

I think what people (and the market) are missing here is a simple word: Risk.
Do you think that a little tinky start up company like Saietta would have secured JVs with Conmet and Padmini if each of these hadn't done extensive due diligence? These are not tinky partners. They are large conglomerates whose first 2 words would've been "no way" followed by "Let's due diligence the XXXX out of this little company"...... Where you read "Due Diligence" you can also read "Reduced Risk".

Can't you?

Would Tony Gott have joined Saietta and staked his reputation of ex-Bentley to be made a laughing stock without his own due diligence?

And so if you can with a high degree of confidence assume that Cannacord Genuity are even approximately right then this makes a smallish loss FY2023 (YE 31/3/23) then EV/EBITDA for FY2024 (which starts in just over 3 months) is 6.6 and FY2025 (which begins in just over 15 months) is 1.8. Also (importantly) turns operationally cash flow positive in FY2024 and FCF from FY2025.

In other words we have a proven product, quality management, a sufficient cash runway, a proven technology, with proven partners with an enormous and growing market demand. If you can tell me where is the risk then I can feel badly about making this my largest single position.

Otherwise all this noise about needing big buyers and needing news is..... noise. Buyers of whichever size will recognise the value here. The news will come. I think Tony and Vic are an extremely strong management team and lead an incredibly talented group of design and industrial engineers. I am delighted to have been able to top up today at 56p.

Happy Christmas and thank you Mr Market for this gift of bargain priced SED shares.

https://www.youtube.com/watch?v=3uEfUhKS31s&t=11204s

Today's update tells us that the portfolio change is net $3.1m (+$2m Hugo + $1.6m Muncher - $0.5m Usual Wines).
On June's NAV of $210.1m that's an uplift to $213.2m. Today's rise has taken the market cap to $93.7m.

So a discount of 56% to NAV where today the NAV has been updated to "current". Hybridian have profiled some of its new investments in climate tech. Meanwhile the peers to BOLT (Uber and Lyft) are largely the same price as 6 months ago. Backblaze is back to largely the same place as 6 months ago too. In other words the current discount to NAV is substantial - and higher than other PEs who haven't disclosed an up to date position.

Other VC/PE funds like GROW and CHRY are now beginning to recover so I think we will see a recovery here too. Historic this was at a premium to NAV. A couple of realisations above their holding price should send this on its way. I dare say we'll see an IPO of BOLT at some point in 2023, or they'll get taken out by Uber, Lyft or someone else. They are quite well established in 45 countries in growing markets in Africa, Middle East, Central America and Eastern Europe etc so an interesting play that's not dependent on the current "western world" economic cycle.

Backblaze is growing fast, and addressing a growing market (albeit lots of big companies Azure, AWS etc in this space). But lots of people like using the little guy. Backblaze seem to offer a professional and straight forward service and the key point is because this is publicly listed really one should consider it "liquid". This is $19.55m. We also know today that TMT have $10m cash.

So we therefore can calculate ex-cash and public listed items the net discount to NAV is $213.2m-$10m-$19.55m / $93.7m-$10m-$19.55m = $64.1m i.e. a 65% discount to NAV. Or assuming BOLT is fairly valued at its current $74.3m (given that there are read acrosses from Lyft and Uber) and could be liquidated at that price, then essentially each TMT share would be $0.30 of cash, and you would get a share of $109m worth of other investments worth $3.45 each.

When it's put that way today's stock price is incredibly cheap isn't it?

https://edge.media-server.com/mmc/p/dxgk6h46
Q3 investors call.

Current yield is 11.3% and is 0.98x covered this year and 1.00 next. Realistically the dividend increase from 6.6p to 6.7p probably won't happen. The discount to NAV is 40.4% (58p vs 97.3p).

The question to ask yourself is this. Do you seriously think interest rates in 2027 will be such that debt costs much more than 3.5%? It might be the case that interest rates start falling next year. But if they don't then I find it hard to believe we have years of high interest rates ahead. Governments simply can't afford high interest rates. Will the economy be in a permanent wage spiral once unemployment rises? Will commodities revert to their super cycle? Not seeing any sign of that, are you?

Also do you consider rent reviews won't increase in any case? These grew by 3.3% in H1 2022. 48% of RGL is EPC A-C and that proportion's growing through acquisition and refurbishment. There will be plenty of firms renting an office compared to buying one via a mortgage.

Finally if I'm wrong and if interest rates catastrophically rose for all of the next 5 years and beyond then dividends could be suspended and about £35m-£40m of FCF could be directed at paying down debt (debt is £300m so 8-10 years worth of income at today's earnings would clear the debt), even assuming that some property realisations couldn't be made to repay debt. Even assuming inflation doesn't increase income while debt remains fixed for 5 years. Debt interest is £8.5m a year in 2022.

The "must pay 90%" is subject to solvency rules.... this is why many REITs suspended dividends in 2008/2009.

In other words whichever way you look at this I can't see why this is down at 58p. It feels like an absolute bargain. I had the same sense about Imperial Brands which I bought at £12 and yielded over 11% too. Rode that up to £19 and I think it's kept going since.

GLA

To view Shore's research you need to subscribe to Research Tree or similar. They have released a revised estimate of $120m for FY2022 so we'll see who's closer in a couple of months. I do agree with their analysis that there's a $2m FX headwind (which I previously said should unwind to a tailwind in 2023).... They conclude by saying: "BATM presents a profitable, high growth opportunity to investors across a span of technologies, these moving towards potential market inflection points."

GLA

And a FY2024 EV/EBITDA of 2.5 (based on forecast Fy2024 numbers which could be seen as conservative if either Cyber, Edgility or any of its Molecular Diagnostic products start to show serious traction). In other words there's multiple shots on goal here on top of the "steady" distribution products.

I've been seeking to decipher the numbers. My estimate on the outturn will be $125m (VS Shore's $146m forecast)
Based on: Network & Cyber - static in H2 so $14.1m H1 doubles to $28.2m forFY2022
Health: Diagnostics - speaks of a $25m "miss". H1 was $6.9m assume halves due to declining Covid to $3.5m. However non-covid low $xxm's so assuming $11m makes $14.5m H2 or $21.4m
Eco Med TU says "in line" so 20% growth H2 takes this to $4m H2 plus $3.3m H1 = $7.3m FY2022
Distribution also "in line" so assuming 0% growth takes this to $34.2m H2 so $68.4m FY2022

.... However FY2023 starts to look much rosier. Based on the trading update today of progress in diagnostics, cyber and networking all due to drop in early 2023. Revenue of FY2023 $170m and EPS of 2.6c is achievable (i.e. reversion to Shore Capital's estimates).

I'd point out too that on a constant currency basis the current share price is being hammered both by shorting but also by the $1.22/£1. I foresee the pound weakening from here against the dollar. I see based on a reversion to dollar/pound near parity and a FY2023 EBITDA near $25m, then a forward EV/EBITDA of just 3.6 makes still ridiculously cheap. There will be short covering at some point. BVC is perfectly able to withstand a reasonably poor 2022 and as they themselves point out, they own IP, cash, assets - so this isn't a high growth stock running out of cash. In 2023 it's cash generative once again.

gla

https://www.**********.co.uk/articles/venture-life-continues-to-go-from-strength-to-strength-f0d266d

Great interview:
1. Synergies of HL acquisition
2. Supply chains easing
3. China has stock - online doing better than online

Comparing SLP and JLP is hardly an identical comparison.

SLP is an established miner. It mines existing mines. Its cost of production is high. It is not expanding but optimising cost at best. It pays out dividends.

JLP is a tailings processor. It doesn't mine. Its cost of production is low. It is expanding rapidly into new locations and metals, which diversifies risk. Expansion means there's no FCF for dividends.

Quarterly updates vs Semi Annual updates. The inverse way to view this is that if you have faith in JLP's management and capabilities then at current prices it's attractively priced and there's an upside waiting at next update. There's definitely - and against all odds of general doom, recession and Chinese lockdown - a rebound occurring in metals particularly copper and PGMs. I think that's an incredibly bullish sign for the future price levels, and for JLP

GLA

$69.17 x 618,750 shares = $42.8m = £35.1m
Market Cap of TSL at close was £30.7m so a 14.27% uplift (35.1/30.7) on a 28.5p share price = 32.57p per share that you hold.

Not a great outcome but it could have been worse. Chair Powell's interview caused SQ. to bounce earlier this week. It's a slightly over break even for me as I averaged down earlier this year.

GLA

Great analysis Rivaldo - I agree with everything you wrote except for the peer analysis. Healthcare Peers are generally on a 10x to 20x EV/EBITDA not a 12-14x (Source: Singers)

Interestingly, (based on NTM 2023 forecasts) a 10X would equate to a VLG share price of 85p and 20X would be VLG at £1.70. Singers see an 8.5X (72p) target meanwhile.

While I was delighted with the update, the disappointment for me today was the lack of commentary in the RNS around China/Samarkand relationship. One has to assume that the containers of Dentyl etc are still sitting in containers in Shanghai, like forlorn Arks of the Covenant, while covid zero rages on in China.... apparently.

Today's huge rise is not that much of a surprise, but it is certainly a delight.

There's a number of investors who've been on here for months (you know who you are) and we've had a torrid time until today. Today's influx of Johnny come latelys and the buzz of excitement is nice to see. So if you are a Johnny, then keep reading down this thread which sets out quite a lot of the rationale for the long-term prospects share beyond the Taiwan excitement. It probably helps you decide whether you flip the share for a quick gain or hold - like us LTHs - for an exciting growth share which is becoming cash generative, meets a huge need, is evolving upwards in efficiency, downwards in cost, but even in its current form is competitive..... and thanks to the US's IRA (Inflation Reduction Act) is massively incentivised too.

If you're a fan of lithium batteries and unsure of what a Vanadium battery is then watch this:
https://www.youtube.com/watch?v=yIH9ED0j5dQ
It's a lithium battery burning. Vanadium Redox Flow Batteries don't burn baby......... but IES sure is *****ON FIRE! ******

GLA

This Proactive interview is interesting/relevant to ATM although the guy is from 1st Tin:
https://www.youtube.com/watch?v=PclSEwBV7gk

His accent is great too.

You'd have thought heads would've rolled over the 2022 performance:
https://www.hummingbirdresources.co.uk/about/board-management/#senior-management
The COO for example "Anthony brings a wealth of operational and African expertise to the senior management team with a focus on supporting site in driving operational performance improvements at Yanfolila"
Apart from the basic grammatical error on the HUM website, what expertise has he provided exactly? I could've spotted the risk posed by clapped out equipment better than he did ...... and my experience is solely from watching 13 seasons of GoldRush!!!!

I do feel fairly positive about HUM (it's so bad that it can only get better) and the recovering gold price will help too. The NAV of 50p makes this astonishingly cheap. Plus I remind myself the importance of looking forwards not backwards. The coming on stream of Kouroussa will make a huge difference in 2023.

GLA

This is a very interesting article that covers the legal status of vaping in European countries vs India.
Well worth a read:
https://blog.ipleaders.in/is-vape-legal-in-india/#:~:text=The%20objective%20of%20the%20Act,and%20advertisement%20of%20electronic%20cigarettes.