Member Info for bravo1

The note Monet's referring to is on Research Tree, a £25/mth subscription service; is worth it if you're investing in SMEs. FYI broker notes aren't RNS'd.

They're out next week 7th May @ 1300 BST, followed by investor webcast at 1400 BST. Registration details are on the RNS.

Zeus, house broker, put out a note yesterday splitting out the EBITDA for the three business lines, their 24E for DIS is $19m and they are valuing it a 10x multiple which, from my own quick research, seems to be significantly below that of their much larger peers and I presume the likely acquirers. The note states that TIG "would consider offers for their various businesses".

Looks like a de minimis deal for a small number of large competitors but maybe too small for them to be bothered, wouldn't move their dial. Time will tell....

Apologies for typos in my earlier posts....

*Assuming OP is NOT inextricably linked to OM's growth strategy

*ARR NOT AAR

Contd....OP GP has increased by ca 22%, and at an increasing rate recently. So in the OP business, they can show three years of improving numbers, high client retention rates, sales/GP is majority AAR; a positive narrative to present in a process to peers who are potential consolidators and significantly more highly valued.

Selling or trying to re-list the group which has just put out a revenue warning in its largest segment is a less attractive option, would consume even more management time, so unlikely to be the Board's number one plan of action, though that could change of course dependent on future events.

But for now, I think management's plan is to try to deliver the revised ebitda to try to put a line under this, be able to demonstrate progress in fixing the problems in those areas asap, whilst having a back up plan to sell OP to realise value for shareholders should the operational 'turnaround' look more prolonged. But to address your questions directly, I presume Kestrel continue to buy shares, recently at high volumes, as they think they are cheap! In terms of where I think the share price will be short term, I don't think it will do much until the year end update at the end of Jan.

GGG,

Apologies for late response.

To my mind the disclosures, narrative, tone etc in the IMC presentation from November represented a logical response to the issues they face in the Search segment and Shinez as well as the current valuation. Basically, they will be/are addressing the operational issues, are confident they can fix them (in time) whilst at the same time they will put together a plan in 2025 which will address the issue of having two business streams which are attractive to two different investment styles. The latter means a potential sale of the OP segment, assuming as I raised earlier it is inextricably tied to the growth projections of the OM segments. But I assume they have already determined the answer to this is No, or why leave it on the table so openly.

From my own (basic) research, it seems likely that enough peers in the OP space would be interested such a consolidation play, to create an effective process. Since TIG started disclosing OP numbers as a segment in 2022,

IWTO, agree with you on both the buyback process and the likelihood of a rapid disposal of the group.

For others who may not be that familiar with Kestrel, I was invested in the Kestrel Opportunities Fund for a number of years prior to exiting in 2021 and I then invested directly in CNIC/TIG and IQG which looked like the two best bets in their fund at the time.

KOF will have taken a big hit from the TIG sp drop since August, it's a small fund and my best guess is a resultant 10-15% drop in the fund value, however investors are contracted to long exit notice periods precisely to prevent them having to fire sale illiquid assets.

Having said that, this will have been a nasty shock for them, and the CEO's disclosure at the last presentation that they are considering value creation events specifically selling the OP business, is imho a more likely step. Provided the OP and OM can be operationally separated easily, given valuations of some listed players in the OP market, you'd be disappointed if they couldn't run a successful process to this end. And it would leave the OM business in a position to shed some central costs and the MT focused on fixing the OM business.

FWIW I don't really see the similarities with IQG. It was on a great upwards trajectory but only just through positive EBITDA, and barely profitable at the EBIT line; to max their market opportunity before the competition caught up, the business required significant equity support from a long term investor. And to be fair to Kestrel, they sold at 7x historic sales and enabled pis to stay invested in the new vehicle. It is against their long term interest to alienate UK's pis.

All IMHO; DYOR etc.. I could be wrong, I have been numerous times in the past!

As Jamie Boyton and Brian Rudd hold 17% between them, arguably their capital allocation decisions look more aligned to the long term growth of the business for the benefit all shareholders. IMHO obvs.

According to SharePad, Tencent filed a TR1 on 29/2/24 @ 7.34% holding (though I can't then find an RNS to that effect on Sharepad). So I suspect today's RNS is simply a delayed notification on a reduction in their holding as a result of the recent Novo+ placing.

FTM, the RNS stated a recording would be made available; but following the link just now, the slide deck is there but no webinar recording. It is worth a watch, you could chase their comms agency for a link.

It's all relative. SEYE share price is off 24% on Stockholm market today. And as RWB12 flags, our share price weakness is likely concern over sector given SEYE's presentation.

Any offer would require Kestrel's agreement as they hold over 25%. The fund is not a retail fund - high minimum investment plus a 12 month notice period to exit - so they are unlikely to find themselves in a position where they require immediate liquidity. Doesn't mean they won't sell - they almost certainly will at some point - but they are unlikely to bail out at the first sniff of a low ball offer. All imho and to confirm, I've no interest in Kestrel or its fund but am a holder of CNIC.

How do share buy backs increase eps artificially?
EPS = earnings per share, so reduce the number of shares (the denominator) and for the same earnings level, the EPS increases. It is just maths.

Sacking the messenger?

Just register (free) on www.investormeetcompany.com, and then register for the PLUS presentation on Wed 16/2 at 9am. You can join it live or the recording is normally available within 24 hours.

According to ShareScope they were holding 3.7% at end Aug 21 but nevertheless this is a significant vote of confidence from CS. Annoying that TR-1s are so poorly completed... when they are completed at all...