Member Info for cryptonomicon

Results looked pretty good overall. Profitability was flat despite revenue growth, but they expect the acqn to be 20% accretive to eps in FY25. I mainly focus on FCF which was £8.3m. if Randlab can contribute say £3m of free cash flow then the FCF yield for FY25 could be around 7% (£11.3m on £160m market cap) which looks pretty attractive.

Stocko has PE of 16 for FY25 but don't think PE is the right measure here as the amortisation charge is high which artificially depresses E.

GLA

It's hard to think of any more attractive investment opportunity than buying back the company's own shares at this lowly valuation.

Liquidity is pretty low so it may spike the price, but then that's kind of the point really - get the SP back to some sort of fair value.

GLA

Agreed, these are ridiculously cheap, esp when you factor in £22m of net cash.

Incidentally, stocko had FY24 eps at 57p so i'm expecting maybe 60p now (H1 was 27.6p). Tempted to buy a few more.

Suspect a lot of businesses are sat on their hands waiting for the budget before they commit to any capex. Hopefully once the budget is out of the way we will see an uptick in new projects. Happy to wait for the outcome of the strategic review.

The dividend yield is around 4.4%. I suspect that will be higher than cash rates within the next 6-12 months, so depends on your timeframe i guess.

Agreed, thought the results looked fine. I would think the GBP:USD exchange rate was a headwind also.

Couldn't resist a cheeky top-up. GLA

I can't see a presentation online, so perhaps Rivaldo attended one in person?

It does state in the interims that: "Zeus has been appointed to advise us in this process. Our intention is to reach a conclusion to this review this year."

Given that there has been previous interest in the company they will know who to talk to and this should be a quick process. I'm assuming they've already put together an Information Memorandum and set up a data room.

Hopefully we will see a few competing bids. GLA

Can't see anyone selling their shares without a decent premium. If that can't be achieved then buybacks to resume i guess.

The company is too small for an institutional investor to build a stake that is meaningful to them. That plus the fact that most UK ii's seem to shun the UK market anyway is the reason for the SP being where it is. A trade buyer could pay £2, strip out a few back office costs and it would be a great little bolt-on. Very little downside from here, upside likely to be 50-100% best guess. Hopefully some of those who have approached the company in the past will be back soon!

Certainly easy to get to £2 per share here.

I put EBITDA at c. £1.4m. 10x's would still be cheap, but gives £14m EV plus a normalised cash position of say £2.5m for £16.5m total.

Let's say 8.5m shares to allow for dilution from share options, gives £1.94 per share. Still a bargain for someone.

It's a shame that a sale is the only way to realise value in these markets, but that is the reality. I've topped up this morning. GLA

Nope, the markets are just kind of broken really. It was a really solid set of results and an unexpectedly chunky increase in the dividend.

Can only think some algo picked up on the fall in headline PBT and started selling. There seems to be very little actual analysis of results these days, because to me these numbers looked very healthy - revenue growth, margin expansion, cash generation, strong balance sheet etc. I expect the SP will recover over the next few weeks. GLA

Looked good, and the outlook seemed pretty bullish so be interesting to see if the market takes any interest. FCF is just under 17% of EV which seems outstandingly cheap if the company does start to grow again.

Decent update given UK weather this year. Full year outlook unchanged which puts them on a PE of 16.6 according to Stocko. Seems decent value given good cash position as well.

Found the commentary a bit too corporate though i.e. all good news. If soft drinks are up 7% and overall revenue 5% up then something has gone down. Why not just tell shareholders and then say what they are doing about it.

Contrast that with e.g. GAW where they just tell it like it is. I know which of these two holding has done better for me!

Looked good to me; slightly ahead of the TU as you would expect from these guys. FCF yield is around 5% and growing which seems good value versus base rate similar and due to fall.

GAW don't do dividends like other companies (in a good way) so expect some confusion around a "lower" dividend. Absolutely meaningless of course as there will be 3 or 4 more over the coming year of varying amounts.

Like the straightforward commentary, nice and honest. One of my top 3 holdings.

Yes, my understanding is that shares bought today qualify for the special dividend.

Completion of the deal is expected first quarter 2025 so the current price really just reflects the time value of money. Roughly speaking if you sold your shares today at say £12.66 and stuck the money in the bank, then that might be worth in the region of £13.15 in say 8-9 months time.

* BAG trades at around 10

Based on Carlsberg's (rejected) offer for Britvic this is worth nearer £9 (e.g. Britvic is valued at around 15x's EV:EBITDA by Carlsberg, if my maths serves me correctly, whilst trades at around 10 according to Stocko).

Feels the company is back on track. Today's RNS is excellent news.

Might be a little wait for £20 but i would think £5-£6 could be reached really quite quickly, and who knows after that. As i've said before, once this starts to move it does so very quickly.

GLA

Bella, agree that does happen and i've also seen some very late TR1's (over a year in one case haha). However, equally Avacta were still publishing Conifer's stake on the avacta website when it went below 3% so they could get that info from the registrars and show it on the website if they chose to (unless it's hidden across various nominee accounts i suppose).

History would point to it all being typical AS flannel, along with the 40 day rule that i've never come across in nearly 40 years of investing in UK stocks.

Hey ho. Hopefully the company is busy maximising the value of its assets, if not maximising the value per share (AS doesn't seem to appreciate the two are not necessarily the same).

Still don't understand the reluctance to do small licence deals. Maybe that would have been better for shareholder value?

Bought back in last week; cash much better than anticipated and sensing that they are listening to players a bit more, so hopefully the games will be more engaging.

Free float is small so when this moves it really moves. It's been kind to me in the past so maybe history can repeat itself (at least to some extent).

GLA

AS was last re-elected in June 2023 so will probably not be up for re-election until 2026 i would suggest. If people want rid of him they will have to requisition an EGM. Personal view is that it would be positive for the SP, but who knows?

Shareholders can vote against directors' remuneration at the AGM, but guess what - it's purely an advisory vote. Nothing changes.

The SP will drift until there is really compelling data released and/or a licence deal (the two are intertwined in reality).

Despite what the pom pom girls on X are no doubt saying, it is very unlikely that any deals are imminent. Only an idiot would raise money here at 50p if a deal was imminent. Oh hang on....