The latest Investing Matters Podcast episode featuring Jeremy Skillington, CEO of Poolbeg Pharma has just been released. Listen here.
3 months on and looking at ED's forecast for 2024 and 2025 no sign of reduced amrortisation per Christopher Mills. The BS shows £153m on the books so called "aggressive" amortisation has 7+ years to run!
The improvement in FCF forecast is happening however. That's a positive. But that cash has a tall mountaian of debt to tackle. 63p fair value seems a distant possibility.
Https://open.substack.com/pub/theoakbloke/p/knives-to-digital-nine
Peregrine, don't know which other board you mean, and of course the dividend is currently suspended (not being paid). But I believe you are correct in your view that the news on Tuesday was positive - the impact is explored here: https://open.substack.com/pub/theoakbloke/p/nice-to-digital-nine
Grow will have done due diligence and has co-invested with FWD via its fund of funds and did this deal because it was in its best interest, so the idea that a poison pill is being foisted on grow is a nonsense.
Fwd on the other hand had liquidity challenges and clearly floated at exactly the wrong time. Grow is a lifeline and this is why the 9:1 ratio is going to be accretive for grow shareholders
It’s superb news. Forward has a really exciting portfolio and the problem there has been liquidity and spread. Nick the CEO of forward is a very shrewd operator and it’s worth hearing him present.
GROW have invested in FWD via its fund of funds, so it’s a known quantity. FWD is on a massive discount to NAV (65%ish) so the deal is accretive in value
@The Trots,
I hold DEC in a SIPP at aj bell and a SIPP at ii.
Neither apply withholding tax. I previously held DEC in an ISA at ii and they did withhold 15% of the dividend
Hope that helps
Rofert - 45p a share - see https://open.substack.com/pub/theoakbloke/p/dont-chry-for-me-argentina
Boyg
In my article:
https://theoakbloke.substack.com/p/bell-issimo
I’m working on a Discov-r 500 units a month US and 125 via innomax in Q4 rising in Q1 next quarter. With the same level for X-plor.
So I’m assuming 33% less than you just because of gearing up takes time
Https://open.substack.com/pub/theoakbloke/p/nein-to-digital-nine
If you are a a TEK shareholder you should be bothered. In a good way.
From a commercial perspective the stand represents a 10%-20% uplift in revenue and margin per customer. An upsell opportunity. $35 revenue and I estimate $15 margin. (or $25 and $5 in a Black Friday i.e. discounted sale).
If all the existing 18,000 Lucyd wearers went and bought this would drive $0.63m revenue and $0.27m to the bottom line.
Useful but not substantial.... clutching.
On the basis of my 2024 and 2025 LUCY sales forecasts of 366,000 units would be revenue $12.8m and $5.5m bottom line over the next 2 years. So the profit represents 2.5X the value of TEK's holding in LUCY.
.... and then there's 2026 and beyond :)
Is TEK still clutching? Or is it a shrewd move?
Now of course not everyone is going to buy one. And of course discounts will and do happen.
Let's say 25% do, and at an average $6 margin (ie 90% sold are discounted) that's still $0.58m ADDITIONAL forecast net profit by end of FY25 - or 25% of the current value of TEK's share of LUCY. Should you give a .... ?
Moving from operationally and speaking now as a Lucyd owner/wearer, the same way as I no longer use a charger cable and I always use a wireless charger stand for my iphone, this stand is attractive to me. Would I pay $35 plus international shipping ..... tempted but probably not. If I were an American and I pop in to a shop where they sell these, or I'm on Amazon and see one of these? Yeah, I'd buy it. That's why I think 25% will. The USB cable connectors work fine but the convenience of this is useful. Even just having the little light that tells me when they're fully charged is very useful. Think, how many of you put your glasses on some sort of nightstand in your home - or would want to?
Back to analytically, this is just 1 example of cross sell and up sell. I would yet again remind people that if you can find ways to provide useful tools and software to a user base you can generate new revenue and profit streams - like Apple do with their iphone store. This is a recurrent theme with all of TEK's investments, and is a huge store of hidden value we will be grow to appreciate, now, (for some) and over the coming years for others.
GLA
The axing (sorry resignation) of the FD comes as no surprise.
In a number of past presentations, she came across as inept. I've worked with many FDs over many years and I didn't rate her. In my opinion Craig found a misdemeanour which gave him grounds for immediate dismissal. Clear your desk love. I'll give you the chance to resign or I can fire you on the spot - your choice. Resign? Ah, wise choice. Retain some semblance of dignity. The RNS to announce this is going out in 10 minutes and so are you, so close the door on the way out.
As squirty says, there's no need for external review, and no need to mull over whatever it was. It's immaterial.
Meanwhile Craig continues to shape BMN into a stronger machine able to move forwards into a much brighter 2024. Whether it's a tailings dam or an inept member of staff he's clearly a man of understanding the problem then taking action. Just what we need. Just what BMN needs.
GLA
I see today Fair are in the top 10 for 1 Month and 3 month performance for ITs. Number 9th I think
Dgi9 and SOHO of triple point in there too. And amedeo
Boyg, I don't wish to sound rude but you've pointed out before that (in your words) you're not a business person.
Your assertion that without news this will drop to high teens is extremely unlikely. Not to say fanciful and unhelpful.
BELL's share price is almost back down to where it was in May. But what's changed since May?:
-> X-Plor has been releasd to the market
-> NAV is up 1p a share. Do you really think this will drop to just 1 x book value (or lower) which is now at an estimated 19.58p share?!
-> Received an £8m shot in the arm - liquidity.
-> 2 new NEDs from TMTA who bring skills
-> A highly experienced Head of BD who's already more than proven his worth. Mr Bob Fary.
-> Unit selling price for X-Plor has been raised from $2500 to $2750+ i.e. net profit margin per item sold is up $250/unit or more and rev share with Innomax up a forecast $25/unit.
-> $15m of orders received including many for the (much) higher margin X-Plor
-> A $55m 10 year royalty agreement (plus profit share), with a $213bn turnover Chinese manufacturing giant who work with Apple.
-> Product launch in Hong Kong with an addressable market worth £75m in profit in royalty and rev share. That one territory alone is worth more than 2x today's market cap value of BELL.
-> Its ability to be a great option due to its inclusion for CMS E1390 (stationary) and E1392 (portable) reimbursement codes
-> It will also produce nearly three times as much oxygen by weight than its dual flow competitors.
-> Its distribution agreement with McKesson - Europe's largest and US's 3rd largest pharmaceutical distributor.
-> Survived a short sell attack from a popular website which earns a crust by promoting shorts (and some longs)
There may be some other points for the past 6 months but I think I've listed most of the progress.
Why would any of the above mean the company will be worth 25% less than today in the next few weeks?! I don't say fanciful and unhelpful for no reason, Boyg.
These articles provide further detail/substantiation to the above points too:
https://theoakbloke.substack.com/p/bell-onging-together
https://theoakbloke.substack.com/p/bell-issimo
https://theoakbloke.substack.com/p/bell-kong
https://theoakbloke.substack.com/p/bell-lunder
The fact it's even down at 25p is a minor miracle in my opinion. Completely overlooked by the market.
GLA
Beginer, Yes asset sales certainly can be.
But to be credible, you also need to analyse whether that's the case here rather than just make a short glib statement. Glib statements are just that. Kind of like a launching a sucker punch rather than proving yourself in the ring. You speak about keeping things quiet, but you're quiet on the analysis.
Where do you present the merits or demerits of the asset sale? Where do you consider the synergy and/or the anergy? The way the decision shapes the future, positive or otherwise? I'm sure you're well versed in business strategy so you would consider aspects like core strategy, whether an asset supports that, or is superfluous. You'd consider the cash impact and cost model - yes businesses do live within their means and sell assets to manage cash.
Every wise business leader spends every waking day with an eye on survival.
The doom narrative has gone Teits Up?
My perspective is the macro story is already nailed on. With large spikes from October 2022 dropping out and being replaced by October 2023's numbers tomorrow. Fish in a barrel!
For me the micro story is far more instructive for RGL.
As a further example, I see British Land reported yesterday: "The fact that BL is managing to let its ground at significantly above market prices may also be a sign that market rents, which underpin book value, will soon be revised. We can therefore expect book values to stabilise in H2 23 or H1 24, thanks to the stabilisation/increase in nominal (office) rents."
Do we know another REIT, maybe a Regional one, reporting similar upward rents?
Goat,
I can't speak for PDub's thesis.
But I struggle to understand what you mean when you say "sort quasi asset valuation" and what that might be?
When you say "assets seem to be being sold off... which isn’t the hallmark of attractive investment proposition" I'm not clear how or why the sale of an asset is a hallmark of anything, per se. Businesses sell assets all the time, that's normal, it's not a hallmark. It's usually based on a strategy - as it was for BMN.
You end with "I suspect we will shortly see another round of dilution." Is suspect the right word? Or did you read an RNS (as we all have) that BMN is currently refinancing its debt in the next few weeks and that convertible equity is part of this.
You ask for an investment thesis and a valuation model. I hope you find this useful:
1. BMN's clever restructuring that increases asset valuation and minimal dilution. Thesis here: https://theoakbloke.substack.com/p/bmn-eck
2. 5 drivers to value at BMN. Thesis here: https://theoakbloke.substack.com/p/bushveld-5-more-drivers-to-value
3. 9 more drivers to value at BMN. Thesis here: https://theoakbloke.substack.com/p/bushveld-minerals-value-trap-or-up
4. BMN's SPR deal. A specially pleasing result. Thesis here: https://theoakbloke.substack.com/p/spr-specially-pleasing-result.
Congratulations too on your 42% gain. On your punt. Clearly for all your apparent bearishness you seem to have followed some kind of investment thesis too. Why don't you share yours too? Or was it just a punt?