Member Info for buyout18p

Bakky, Toby is trying to present for sale (hopfully) an annuity based company where sales through the automated channel including renewals, cover all gross and operating costs and make a bottom line profit in addition, it is vital that acquirers can see reliable revenue in advance of any trading period, this minimizes the risk for the acquirer, he reckons he will be there by December 2021, that's the plan, I am hopeful it will work, I am concerned the sales will not there, we will see..........

Well a sale at the right price would clearly be beneficial to most investors, there's no divi to live off here! I am sure the board have had several low ball enquirers so there will be known candidates but we need to be able to demonstrate our revenue streams through the channel are solid and predictable, we are well on the way to doing this, the problem is that the company has been run by muppet' who have staggered from 1 crisis to the next, we need credibility, they won't want to pay a good price for a company with form as an 'ongoing accident', we need to steady the ship for this we need a leader with some gravitas who commands respect, not quite sure if we have that currently, it won't sell at a decent price otherwise, Toby's plan has merit but the company keeps tripping up in public and looks like a basket case, just one glance at the sp screams disaster at you......I can see the II's having this concern as I am sure they are looking to sell there may be some discussions taking place as we speak..........Huckster

Well obviously I echo the concerns posted here, someone must be responsible for this mess, a mess, it must be recorded as a mess on top of years of bad governance, whether changes are made in the management team or not we need to see a clear commitment to improve together with some acknowledgment of the errors. There should be some suspension of benefits for those responsible and for me most importantly some realism as regards any effect this will have on the 5 year plan, if the II's stay intact and the 5 year plan remains credible we should recover. My fear, like others, is that A block is affected, as far as I can see A block is about the only thing going for us at the moment. Sales through the automated channel is a great system, effortless sales and predictable revenue! that's all very well provided the sales are actually there, as far as I can see our sales during the covid era seem to lag well behind those in our sector by some considerable margin, this impacts on both revenue and profit, the question is can this team actually achieve any of their stated promises and goals or is it to be just a series of own goals?.......not happy ......................Huckster

So very glad to hear it, have had enough dubious news already, I do think that sp wise we will overcome this unfortunate oversight fairly quickly, one is led to wonder however if there will be any 'little chats' between the II's and Toby, it could be that one or two of the II's are slightly less that totally impressed with the performance that came to light yesterday, how many strikes can Toby get away with before he is out? or are we too near to some sort of perceived recovery to bother?......Huck

Does Growth Match The Low P/E?
In order to justify its P/E ratio, Minds + Machines Group would need to produce sluggish growth that’s trailing the market.

If we review the last year of earnings growth, the company posted a worthy increase of 5.5%. Although, the latest three year period in total hasn’t been as good as it didn’t manage to provide any growth at all. So it appears to us that the company has had a mixed result in terms of growing earnings over that time.

This is in contrast to the rest of the market, which is expected to grow by 7.1% over the next year, materially higher than the company’s recent medium-term annualised growth rates.

In light of this, it’s understandable that Minds + Machines Group’s P/E sits below the majority of other companies. It seems most investors are expecting to see the recent limited growth rates continue into the future and are only willing to pay a reduced amount for the stock.

What We Can Learn From Minds + Machines Group’s P/E?
The softening of Minds + Machines Group’s shares means its P/E is now sitting at a pretty low level. Typically, we’d caution against reading too much into price-to-earnings ratios when settling on investment decisions, though it can reveal plenty about what other market participants think about the company.

We’ve established that Minds + Machines Group maintains its low P/E on the weakness of its recentthree-year growth being lower than the wider market forecast, as expected. Right now shareholders are accepting the low P/E as they concede future earnings probably won’t provide any pleasant surprises. If recent medium-term earnings trends continue, it’s hard to see the share price rising strongly in the near future under these circumstances.

Don’t forget that there may be other risks. For instance, we’ve identified 4 warning signs for Minds + Machines Group (1 makes us a bit uncomfortable) you should be aware of.

You might be able to find a better investment than Minds + Machines Group. If you want a selection of possible candidates, check out this free list of interesting companies that trade on a P/E below 20x (but have proven they can grow earnings).

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Why Investors Shouldn’t Be Surprised By Minds + Machines Group Limited’s (LON:MMX) 25% Share Price Plunge
Simply Wall St October 10, 2020
Minds + Machines Group Limited (LON:MMX) shares have had a horrible month, losing 25% after a relatively good period beforehand. The drop over the last 30 days has capped off a tough year for shareholders, with the share price down 17% in that time.

After such a large drop in price, Minds + Machines Group may be sending bullish signals at the moment with its price-to-earnings (or “P/E”) ratio of 14x, since almost half of all companies in the United Kingdom have P/E ratios greater than 19x and even P/E’s higher than 38x are not unusual. Nonetheless, we’d need to dig a little deeper to determine if there is a rational basis for the reduced P/E.

Earnings have risen at a steady rate over the last year for Minds + Machines Group, which is generally not a bad outcome. It might be that many expect the respectable earnings performance to degrade, which has repressed the P/E. If you like the company, you’d be hoping this isn’t the case so that you could potentially pick up some stock while it’s out of favour.

SS, I would still trust Toby, an OK guy, its whether people are confident about his ability to run the company in order that there is some benefit for the shareholders, OK, this should not be terminal its just another bump on a very bumpy road, not quite like our competitors, atb Huckster

mmm.....it's the II's that worry me, they have made a considerable investment for sound reason (one hopes) and to find out the chief finance officer is a total muppet is potentially very damaging, there needs to be decisive action now to show that the ship has a captain who knows exactly what course MMX is on. Toby, we think is straight, a man who doesn't take risks, almost too conservative is all over the place here, needs to get a grip, and do it right now. I just hope this is not the tip of an unstable iceberg and just the work of a muppet who is no longer with the company.

How much more ****e are we going to have to put up with? where does this end.

Just picking up om SB's point on H2 revenue, for me sales are always critical, they are the base factor of revenue, DUMS and bottom line profit, obviously I am hopeful H2 will yield the increased sales as has been the trend for this business for some years now. I am like us all hopeful about A block which I see as our only hope of strong revenue growth in the foreseeable future. It is worth remembering that the downside of 12 monthly billings for channel sales will now help the H2 sales, in other words H1 sales will continue to be billing throughout H2, so we should only see the 5% fall in sales due to the billing system for a short period that is up around now, this could turn out to be a reasonable year, I see Toby's point that 2021 will be the first full year we see the settled effect of through the channel sales. Its all wait and see and just suck up the **** investor value/sp......Huck

Yes, I think we are all on the right track, look at it the other way around, what the hell else could be happening other than awaiting a tender offer, surely the II's could force a divi if required, why haven't they done it? They could pull out, they could just say this was bad and put money into SKG that has gone really well, they could have eased Toby and Michael out! It has got to be said, we have got things wrong before eg the review but it is very difficult to see any other way of this share succeeding other than a buyout, once the revenue is completely predictable via the channel and there is no risk it must happen. I imagine Toby knows between say 3 companies who it is.............that will be the day!...........Hucks.

Yes, it seems pretty clear to me that the more shares the company can buyback reducing the number of issued shares the more valuable the shares are, it's like a reinvested divi, nice and clean for the II's, the more little guys the II's can dislodge the better for them. It must be recorded however it also benefits is PI's in the same way, only a tender offer from outside will make this right, there are not shareholder benefits at all that i can see until sale time.....a hard place to invest, you have to be pretty steadfast, almost stubborn...............Huckster

Are you saying if they sold say 20,000 Ablocks at c.$400-500 ? that is a lot of money, game changing maybe? ....if they sold 50% of the 65,000 possibles that would be say $ 14,000 M.........Huckster

I posted at 10.48 without seeing SB's post at 10.26, interesting how the opinions are in line. This Saars strategy may have come from the Board but going forward things are being run by the II's, the whole buy back, tender offer thing will benefit those with the largest number of shares, the II's are not looking for a Divi, they have their eyes fixed on max profit at sale. We PI's are being treated like Labrador plop, no shareholder value at all! The tender offer will not be at much of a premium so I am staying put, the II's know that sooner or later there will be a tender offer from a larger fish looking to profit from what MMX have achieved so far. I don't want to sell at a loss only to see a few months later the company sold at a market cap of $200M.....sick....Huckster

The tender offer and buybacks are essentially the company using liquid cash to reduce the number of shares. The benefit to us PI's is minimal and cannot be called shareholder value albeit the value of our shares rises very slightly (same market cap, less shares) but for the II's it makes a significant difference, just considering if this is coming from the II's who don't want a divi, it adds up......Huckster

Flat trading compared to H1 2019, slightly muddied by monthly channel billing.
Reneging on Divi, I am not happy about this it undermines confidence in the BOD
Tender Offer, terms will be unacceptable to real investors, just a way out for the skeptical, good for II's
There is no real prospect of shareholder value yet
Company seems moribund, sit back for channel sales and hope A block takes off
As SS says we are becalmed and rudderless waiting for das boot, meaning ripe for takeover.
Underwhelmed, OK but not great.....Huckster

SB, so very sorry to shock that Presbyterian soul of yours, never the less we should see signs of what is to come very soon now, you know it makes sense.............Huckster

Yes SB, as we get nearer the end of the 5 year plan there should some clear indications and signs that strands of the Saars 'through the channel' process are starting to work. our fortunes are not going to change suddenly on the last day of the 5 year plan, things are going to gradually improve and clearly indicate our direction of travel, that time is now, so I hope you are right that there is decent news on the horizon. The board should not be able to conceal the actualitee for much longer (if that is what is happening) we should now see some tangible progress in the companies results, so this is a seminal set of results and Q3 update in my opinion........Huckster

only 3 days left

We know pretty much where we are with these results, Sales are clearly not great, the number of DUMS has hardly moved in six months but it seems likely the average DUM yeild is a little higher given that it is .vip is losing registrations...OK but not great. Adult block has stalled a bit due to COVID 19 but may improve in H2......OK but not great........The Saars project has progressed giving us a high degree of revenue predictability that should show more clearly in 15 months time...................., OK but not great . We will hear about the Divi this month, very likely to be a very small inaugural Divi............OK but not great. General fundamentals are OK, we are into small profits and are debt free (as far as we know) .....Ok but not great. Our II's are still on board, that is good. It is most certainly not the time to release the balloons and light the fireworks in celebration but at the same time I don't think we have cause to panic. Perhaps rather unsurprisingly I think the results will be OK but not great, there will be the usual positive spin and b/s accompanying the results but I think we are now old enough and ugly enough to discount that stuff these days.
There are my thoughts...................atb Huckster