Morning all,
A decent and expected set of interims posted for a growth company. Few observations and a few things that go through my mind when reading them...
1) Anyone who follows several companies will know that interims have a pretty prescribed format - they also need to be published within a certain timescale. Some people have said they are bland and that the RNS was unnecessary.... well... Interims are pretty bland statements usually (the relevant authorities apparently look dimly on anyone who provides interims by using interpretive dance or a laser light show) and the RNS was necessary as the company would have been obligated to put it out by a certain date.
2) This is a growth stock - generally you have two types of early stage companies. Slow growing but making a profit, or fast growing and not making a profit - sweeping generalisation however generally true. Alpha is investing in future growth and that's why I personally invested. If I wanted to invest in a slow growing company, I would pick one from the FTSE350 not a micro-cap. I've invested in growth because that's where I'm confident that my £100 can turn into £1,000 - I'd have invested elsewhere if I wanted my £100 to turn into £110.
3) The Guernsey acquisitions revenue/fee's will be consolidated into the next set of interims, as well as full year accounts - next year the company will receive the full benefit of the Guernsey acquisition (this year will be partial, maybe a quarter worth) - this will be transformational for revenue, gross profit and net profit - we've known for 6 months that's a significant inflection point for the company.
4) The newly announced interval fund should have an immediate positive impact on fees over the next 3 months and a larger more significant benefit to next years numbers - the fee structure for this fund is 1.5% of what could be a substantial number. We'll need to wait to next year to see any meaningful impact I would think..
5) The company has reiterated that they are not expecting a placing unless it's to deliver a value accretive acquisition/deal - great news and in black in white for even the hard of thinking to understand.
If you look at any early stage and fast growing company, they are generally loss making - Amazon is obviously the one that everyone uses as an example, it's ubiquitous - they took almost 10 years to make a profit, not because Mr Bezos woke up one day and found the secret sauce of profitability... but because he had reached an inflection point in scale and growth.
Amazon could have been profitable from Year 2 however if that approach had been taken then Mr B would today probably be running a very good online bookstore and we would all have to drive to B&Q to pick up that bag of nails, we'd also probably have less cardboard boxes in our hallways.. Bezos made the right choice
I'm happy we're investing in growth and looking forward to the impact that this growth has on both the top and bottom lin
Agree - think we had all been wanting Alpha’a offerings opened up to a larger investment base but thought this might be a 2023/4 deliverable. This could be huge.
Great news and could see AUM build significantly, even better that Alpha keeps the full 1.5% fee - that’s almost twice as much as the boagf I think, so the fees from the $7m will be almost as much as fees from $14m of boagf.. - that might have a multiplier impact on gross profit (need to think through properly).
The fact that transition activities have started with the insurance company, and perhaps more tellingly their suppliers, would suggest the acquisition is complete in their eyes - you tend not to tell your suppliers until everything is done.
Will have a proper read through when I’m at my desk.
Thanks StockAlchemist - I think it's BarclaysHedge we've had the awards on, they aren't linked to Barclays as far as I know. Initially we'll need some of the smaller institutions and family offices on board, those that specialise in the £10m to £50m mcap stocks - when we're north of that mcap then it widens the number of institutions who are allowed to invest - I'm assuming someone like Barclays wouldn't invest until your mcap is in excess of £1bn - could be wrong.
Raaydaar - You could be right, however, I assume that the insurance companies will hold some shares, funds and funds of funds that are correlated assets - again, I could be wrong but that was my understanding.
Regardless of the above, we're moving at speed in the right direction - I think a lot of people here invested when the AUM was around $10m - we are many multiples of that now and about to take another leap forward. We now just need the shareprice to wake up.
Good to see some insightful posts over the last few days etc, some really good points made.
Few observations from me..
On the buys and sells - Think it's important to remember that what is reported is really just a guesstimate based upon an algorithm, it's often wrong and the accuracy of the reporting will vary wildly based upon whether someone has used an app to buy or whether they have called a broker.
In the current market, share prices are hard to move even with good news - a lot of people who perhaps bought in at 3p are now selling into any rise and therefore keeping the price down a bit.
I usually find that using an app to buy shares in a company with limited liquidity isn't the best approach and you invariably don't get the best price, much better to call a broker and initiate the trade that way - this also is a good work around if you keep getting NT's when you try and buy - The broker can put the price up on the screen to free up more stock. The cost to trade may be higher but depending on the volumes you're buying it can often work out cheaper overall.
With regards to news timescales.. Alpha has a habit of taking all the time they have given themselves, although appreciate that many of the comms releases will be dictated by a 3rd party.. eg. When something is signed, or how quickly they must release market sensitive news. I don't think they'll release anything on a Friday as that's generally bad practice.
AUM once deal completes - there was talk of $1bn AUM however I think that's unrealistic, I've invested in a few bigger asset managers and their AUM has reduced by 20% or so in some cases due to the market conditions - mix of the underlying asset prices being depressed and people withdrawing funds due to fear of a market drop. This shouldn't impact BOAGF as it's uncorrelated but may impact the insurance company assets as they will have exposure to equities - if they're fully invested in oil & gas then we could hit $1bn however that is highly unlikely. We also need to consider currency fluctuations - if anything is priced in sterling it will have an impact on an AUM that's usually quoted in dollars. That's just the market - in 6 months time hopefully both sterling and the stockmarket are in more positive territory, all depends on Russia/price of energy/inflation/etc etc. Our AUM will obviously increase substantially but impossible to predict by how much, a lot has changed since the initial announcement.
I don't believe warrants are being executed for the same reason as others have pointed out - people will tend to wait until the shareprice is far in excess of the warrant price, I also believe the company would have to declare that a warrant has been exercised. Could be wrong but that's my understanding.
My tuppence for what it's worth. I remain very positive on Alpha and believe the company will end the year looking very different from how it started the year, it just needs some patience as the StockAlch
I've been ignoring my portfolio over the past few months however saw a couple of LinkedIn posts and tweets so thought I'd check in.
Hello everybody - good to see some new as well as some familiar names.
Is Giles still with us? Hopefully sunning himself somewhere..
Great to see much more volume coming through the share over the past week compared with previous, that's quite a step change and it's obviously had a positive impact on the spread - down to circa 3% from about 20% before. Even if you're convinced a share price is going to 5 or 10x there is a psychological barrier to being hit by a 20% spread! The decrease in spread is probably one of the reasons why we're starting to see some chunky transactions.
Looks like the share price has doubled from recent lows - reading through the RNS's it sounds like we're going to find out about Guernsey by the end of this month... any day now.. (this doubles AUM and therefore possibly doubles Fees and Revenue), then there was also mention of a significant development within the Fund business... Alpha has a history of being quiet and then hitting us with some amazing and transformational news - that will be interesting to see, could be another few days or a couple of weeks on that, depending on how you read the RNS. Hopefully they'll leave a gap between the announcements, only so much good news we can take at once :)
Since I doubled down on my investment a year or so ago the Revenue has gone from £80k to £2.65m, that's a substantial increase and I expect it to at least double this year - accounting for partial year Guernsey contribution and the BOAGF at the increased investment levels. I'll need to sit down and do a rough calculation for future year revenues (based upon $2bn AUM) however next year obviously benefits from full year contribution from Guernsey plus whatever other increases to AUM are achieved by their buy or build strategy. Could be another significant bump in revenue, this coupled with low operating costs means that Alpha could be very close to generating significant bottom line profitability.
I'm not entirely convinced by Arden Partners, I can't see what they've done for Alpha so far - they are the broker on one of my other small cap investments and they've been similarly useless. Hopefully they wake up soon and start earning their money.
Comms seem to be improving overall and I thought the brochure was a good step in the right direction, hopefully it's being used to introduce new investors to the share - although obviously it's difficult to get people to invest at this time (especially in high growth but small cap shares) due to external macro economic factors.
Excuse the brain dump - in a rush but wanted to check in, will write more once I've had a proper chance to read through everything again.
My initial price target remains 20p+ - We won't get there overnight however edging closer to recent highs would still be a great result for all long term holders.
What video did they not get out on time Daisy? Assume you didn't see the one they they published yesterday?
I saw it on Alpha's LinkedIn page - Looks like lots of communications coming up, could be interesting.
Yeah - have been in a decent selection of their bars across a number of their brands.
I like how they keep differentiated from the mainstream multi site operators - they are noticeably busier than their peer group and the bars have a real energy about them.
The writing of the note doesn’t take long - it’s the research which needs to be carried out to support the note.
That research will include industry research, competitor analysis, peer group analysis, interviews with company execs and advisors, review of financials, etc etc. then everything needs to be challenged and ratified before being published.
Hopefully it’s coming together however there is absolutely zero (ok, limited) point publishing it in todays market conditions.
It would be a waste to publish something that could move the dial into a market which is largely devoid of investors.
IMHO, best to give sometime for market sentiment to return and then start publicising positive news. Otherwise it’s like ****ing yourself in a wetsuit, you get a nice warm feeling but nobody notices…
Bob
Hopefully they won’t publish any good news until investors have returned to smaller companies, otherwise they will waste the good news and receive limited shareprice reaction.
The better move would be to wait until markets are more buoyant, then we can all enjoy the upside.
Agreed. The risks of contagion across the markets is significant, this will only rise as the conflict continues for longer than originally expected.
50% decline from here sounds a bit far fetched, hopefully doesn’t come true
I agree, although think I called the bottom before… just to watch it continue to drift… might top up
I’m holding but it’s not exactly a jewel in the portfolio…
Well said Hexam, as long as PI’s are allowed to participate in the placing then there may be upside.
At least they seem to be able to pass on increased ingredient costs to consumers, everyone seems to be doing it for protein.
Ward has no experience in the Insurance industry.. Apart from his time working for one of the UK's largest (FTSE 100) life insurance companies. That could come in handy.
Posted earlier but LSE seemed to be having a hiccup.
So...
Company makes money through it's fees which are based on AUM.
AUM has increased from $10m to circa $340m since 2020. That represents a compounded annual growth rate of circa 480%. That makes the company one of the fastest growing asset managers in Europe, possibly the fastest.
Company has now publicly announced its strategy to get to $2bn AUM by 2025 - based on the above CAGR they could actually achieve that in 18 months however as companies mature and grow CAGR rates naturally reduce - a 2025 timeline seems achievable based upon what they've done so far.
The BOAGF fund has grown by circa 10% ($4m) in January and February alone - great result and strong growth.
A fundamental game changer is their mention that they will open the fund up to smaller investors - that could bring us phenomenal growth, it's underplayed at the moment but if they can sort out distribution then that could turn the taps on from an investment inflow perspective. This is potentially huge.
The company has stated they have a strong pipeline of acquisition targets and are going to update us next month... interesting.. they also state they won't need further raises or placings to support future acquisitions. That's significant and very positive.
The insurance company is now integrated and has started to write policies to support their strategies - first $5m this month. Impressive.
They have given us some detail on how they're going to improve shareholder comms - this was expected and obviously much needed. Great step forward and I'm sure we all look forward to the output from this.
They are going to target institutional investors - this is huge, we need some professional investors who know what it takes to build a company and create strong shareholder value.
Massive step on again over a relatively short period of time.
It’s ok Daisy/Candi/Little Dave,
I wasn’t expecting you to have any shame, your type never do.
You do realise that the share price is only one variable in the company valuation equation?
The company is circa 4 times more valuable than 4 years ago, it now has more shares in circulation. Maybe we should ask GS to do a 10 to 1 share consolidation - you’ll probably think the company is 10 times more valuable. You’ll still be furious of course…
Can’t believe I’m trying to reason with little Dave.
I need to remember my own mantra…
Never teach a pig to dance, it wastes your time and annoys the pig.
I’m going back to ignoring little Dave - although thanks for giving the rest of us a laugh.
Hope you’re ok X
If there is no news on Monday then I think we should all start giving Daisy/candy/little Dave (or whatever else they are calling themselves this week) a bit more respect.
They might be right!
Ok, they weren’t right when he/she
- said that Ward was selling down his shares - Turned out he wasn’t and instead started working with the company.
- said that Ward was buying shares and that there would be a TR-1 last week - no TR-1
- said that Gobind was always on holiday, when in fact it turned out Gobind’s wife worked in travel and the person they thought was Gobind was someone half his age. Bit freaky that little Dave was stalking Gobind’s wife in my opinion!
- said this stock was going to plummet and it’s since gone up
- said that Danny had left the company but then Danny gives an update on the fund
- etc etc etc too many others to mention
so… Candy/Daisy/little Dave haven’t got a very good track record of predictions/telling the truth - however, even a broken clock is right twice a day and they definitely sound like a (broken) ****.
LSE’s very own Nostradamus/mystic Meg/Russel Grant has predicted that there will be no RNS on Monday. Their alter ego has said if there is an RNS it’ll be announcing another appointment and that the share won’t go up much as all the traders (how you can trade this share with the spread I don’t know) will sell Monday.
So… it’s the final countdown.. in 48 hours time we’ll know whether Daisy/Candy/little Dave have one ounce of intelligence and integrity between their split identities..
For them it would be very embarrassing to be proven wrong again.. I think they’d have to disappear in shame.. or create new accounts and post from them.. or they’ll just ignore reality and continue posting crap.
To me, it feels like things have changed and progressed at the company - if there is an RNS on Monday that will solidify my view.
GLA
Little Dave - You’re the only person here who thinks your constant complaints and false representations aren’t damaging the company.