The latest Investing Matters Podcast episode featuring financial educator and author Jared Dillian has been released. Listen here.
I rarely post here, but I happen to read this thread today and there are some good points being made about what needs to happen - delivery.
I agree with the view that the "at least" number for FY26 is low ball, especially when you consider it is 3 years away.
I watched the post result presentation and while the projections ahead are to be welcomed, I do think that the FY26 revenue number seriously understates what they need to be doing. In the Proactive interview after the recent trading update, McGlone was asked the "golden question" if SEE could keep up the current level of growth and his reply was "we believe we can". (3 mins 20)
https://www.youtube.com/watch?v=S8E4fqL3Tng
That rev growth was 48%. It is therefore not unreasonable to expect continued rev growth of at least 50% per year for several years to come, especially if you believe the "inflection point" argument. Quality growth companies, especially those that claim to be the leader in their field, deliver consistently high revenue increases during the "growth phase".
So, at 50% rev growth per year, here is a five year projection.
FY24 $58M + $29M = $87M
FY25 $87M + $43M = $130M
FY26 $130M + $65M = $195M
FY27 $195M + $97M = $292M
FY28 £292M + $146M = $438M
I make no mention of profit as until it arrives it's difficult to project on what it will be and to what degree costs are kept under control in an inflationary world.
At 50% rev growth, the "at least" figure is hit in FY25, not 26. That "at least" figure in 2026 implies a lower annual rev growth rate over the next three financial years, which would be poor. Reading between the lines, they must be under cooking their expectations or they really don't know. Investors should hope it is the former.
I don't think a 50% revenue growth rate is unreasonable to expect considering all the jam tomorrow that has been predicted, although it has to be said judging from the presentation there is now a lot of "not known" talk about delivery times. It's unfortunate that consistent delivery of contracts has been poor. Long periods of no news on contracts and you get a share price on AIM like now - a 2 year downtrend.
It's worth noting re share price valuation that every penny a company makes will ultimately be measured against every share in issue. The millstone around SEE's neck is that it takes a lot to shift the share price in "risk off" times when you have 4.156 billion shares in issue (4.5b post Magna dilution to add). There are 10/11x more shares in issue now than 10 years ago. It matters, as each 1p move in the share price is currently equal to £41.56 million of market cap (£45M post Magna share dilution).
My guess, at around 50% rev growth rate and decent profits, a $1billion MC, share price of around 20-25p is doable in 3 years, but that will only happen with financial delivery. It's "Show me the money" time.
Outside of that, pray for a bull market.
Hey Lewbo
Confused about what exactly? Certainly not about market cap, financial fundamentals, dilution, the number of shares in issue and the relationship to price. Prove me wrong. 6.15p tells me that I'm right. Market does not want to pay a premium right now. It might at some stage in the future. True or false?
Check the details? What details exactly? If any detail I've posted is wrong I'm happy to check it out.
As for the quote it was a bit of a joke, but it looks like it went over your head. Really:)))
Wilson63
No insult intended. I did actually wonder if you had hit an extra digit on the keyboard by mistake. Anyway, if 20p is a retirement figure, that should be doable in the event of a bid, but also possible if See improve their own financial bottom line over the next few years while avoiding further dilution.
The Magna deal shows they are prepared to pay 10p for new shares, so one assumes they think that right now See is worth at least that much. Chances are they may be positioning themselves for a bid at some point. Others may do the same if the auto order book gets to a billion. Throw in fleet and anything from aviation, then 20 to 25p valuation, a market cap of around a billion is doable in 2-3 years. A lot needs to go right though. Alternatively, find a time machine and party like its the mid 1990's..
"Valuations were based on earnings and profits that would not occur for several years if the business model actually worked, and investors were all too willing to overlook traditional fundamentals."
https://www.investopedia.com/terms/d/dotcom-bubble.asp
Question.
I have an investment here, I like the tech (I've not always liked the company strategy to be honest, but there you go) followed See for about 9 years now (anyone remember the Samsung hype? Whatever happened to that?)
I would do very well with a share price of £1.00. Would love it to happen. I know some of you would do very, very, very... well at that price, but I also think that I know what drives a share price higher. Not sure others do. Sometimes it's speculation and ramping, but for the most part it is numbers - real money numbers.
Here's a clue.
£1.00 share price with 4.5 billion shares in issue (post the next Magna dilution that is). = market cap of £4.5 billion. That market cap needs to be justified.
For those predicting such a price, justify it with financial numbers, revenue/earnings growth, profit/loss, etc. You know, all the things that lead to a meaningful higher price of a company. I doubt whether speculation will do it. Why would anyone pay that expectation premium for See? A company that hasn't always delivered as expected (go on, be honest about it, they haven't have they).
I work on the basis that the number of shares in issue is important. It matters. Unfortunately, See have been a serial diluter, around 500 million shares in issue when I first came across the company, 4.15 billion now - 4.5 billion (post Magna).
A quid a share? In what way is it "prudent"? At least talk of £3 quid a share seems long gone. mind you, for the one who said £2.40, can I have a glass of what you are on! £10.8 billion market cap. (post Magna dilution) Blimey!
For what its worth, I think the price in 12 months could well beat previous highs of 12p-13p provided a few contracts that pay in the here and now start to be delivered. Provided revenue "exceeds expectations". I'd like to see several years of at least 50%+ annual revenue growth rather than the current 15-20% growth rate, which is actually poor for a growth company (many ftse100 and 250 companies achieve that with less risk attached). And profit.
Provided an aviation contract or two turns up - still waiting. Provided fleet gets its act together - we just had another year of a production problem that the company kept quite about .
A quid a share? Maybe in three to five years, with no more dilution, revenue 5-10 times what it currently is and a decent profit each year, then maybe so. Its possible, the tech is good and wanted. If I was writing See's school report I would put - Could do better, no, should be doing better - for investors that is.
Happy New Year.