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Yes, as the market leader this is good news. With the OH acquisitions now nearly integrated, I would expect an investor day later in the year, so we can more fully understand the benefits.
The volume has remained well above average for 5 sessions now, so people clearly buying the potentially more favourable inflation/interest rate expectation and the likelihood that this may unlock a PE deal for TIC….
Yes, agreed, just need to be patient for the TIC deal.
The AI piece I have pasted below; it’s from Corestream on LinkedIn:
AI continues to be the hot topic. We were an early adopter at CoreStream but focused on a single use case we knew would add value to our clients and partners; evaluating how effectively controls are written in relation to the risk they are mitigating.
Fast forward almost two years and we are about to undertake a pilot with Google, looking at AI powered content search of policy, procedure and process content, and the ability to scour the internet to provide a view on emerging risks for our clients and the third parties they work with.
Alongside this, we recognise the risks of adopting AI in a commercial setting, both in GRC activity and beyond. In response to this, we are launching our "AI Risk Manager" that supports organisations in detailing, assessing and continuing to monitor AI models they have in use. Models can be associated with Risks, Controls and a benefit analysis to justify the increased risk exposure when utilising AI. More on this soon, but please do reach out to discuss or arrange a demonstration.
2 days of big volume following the inflation data. A number of small cap fund managers suggesting we could be close to the inflexion point for aim (ref interest rate outlook driving by prices).
On other news, noticed that Corestream have signed an AI pilot with Google - clearly they are looking to focus on this more and I will be interested to see what Vinciwork’s plans are to embed AI further in e-learning.
Looks like you just called it! Lots of trades in the last 90 mins for sure - let’s hope that tic deal pops up next week….(ever the optimist)
Morning, maybe, but probably more the general UK macro outlook impacting. Aim 100 now at 5 year low; consistent decline this year so far, so the fall is just in line with the market
Interesting interview: Paul Hill and Odyssean Capital on Vox (c.6 mins in to the interview) ref change in PE attitude in last month or so. Now less likely to take private a single asset but would now look to buy an asset that would complement an existing asset and where synergies can be extracted.
Implications here re TIC deal: Interest rate levels starting to curtail PE activity; potentially smaller PE pool looking to do a deal.
https://www.stockopedia.com/content/fund-manager-stuart-widdowson-of-odyssean-capital-highlighhts-16-stock-ideas-971255/
Interesting interview: Paul Hill and Odyssean Capital on Vox (c.6 mins in to the interview) ref change in PE attitude in last month or so. Now less likely to take private a single asset but would now look to buy an asset that would complement an existing asset and where synergies can be extracted.
Implications here re TIC deal: Interest rate levels starting to curtail PE activity; potentially smaller PE pool looking to do a deal.
https://www.stockopedia.com/content/fund-manager-stuart-widdowson-of-odyssean-capital-highlighhts-16-stock-ideas-971255/
…Tuck away!
My view is that the interim ceo will need to reduce leverage (now over 2x) and will achieve this via a strategic review and subsequent sale of some of the businesses. The group is trading on 7x PE and c6x ebitda, and records management division alone is worth significantly higher. Institutions will be pushing to maximise this hidden value; PE will be interested for sure. Marlowe will not feature as equity and debt financing will not currently work for them and strategically they have moved on to focus on higher growth/ margin software.
I believe this is probably one to
Hi,
I don’t think it matters too much as we need to wait for the TIC deal, as that will be transformational if it gets away.
I still believe this has a high probability of occurring: One thing we haven’t discussed as a result of the deal is the shareholder base / strategy….
1) the timing of the GM in June to approve divis or buybacks, must be connected to the wider strategy / planning re the TIC divestment and subsequent software M&A. The divestment would make the business unlevered (at least initially, on completion) and therefore able to attract a different type of shareholder if it pays a divi (or appease certain existing shareholders who would like a divi).
2) Ashcroft: there could be a point soon when Talisman starts to exit(?), which will improve wider liquidity.
3) Whilst the current register includes many AIM specialists the next stage strategy may well be to aim for ftse250 at some point and a broader shareholder base and a divi would fit this aim.
Now that the prelims are out, any would be acquirers will hopefully be able to sharpen their pencil on the price and realise what a good business they will be getting!
Yes, that sounds a good plan. So putting that together, on a 6 month view, there is the possibility of say 20% downside ( much higher interest rates, recession, no Tic deal), 25% upside (if Tic deal), or 75%-100% upside (whole group).
Thanks; yes, the broad consensus (brokers and press) seems to be that business is moving in the right direction. Berenberg cutting the price target on the basis of lower multiples has made me ponder that 14x for Tic may be a bit rich at the moment? On the other hand, getting the numbers to work for a 22% roic division must still be attractive even with interest rates at 5% or higher.
One thing from the presentation today was clear, in that (like you regularly highlight) the working capital requirements and restructuring costs are heavy in tic, and selling this would leave us with high growth high margin businesses and refreshed capital structure with a clear angle for international growth in the future.
I’ve said before, the CEO is a serial m and a person and selling tic will enable him to crack on with all the software deals he will be engaging with, without having to wait potentially ages for the markets to recover /ability to raise equity.
Timescale wise, I think I was a little aggressive previously: Marlowe say that it takes4-6 weeks from heads of terms agreed to completion, for a small bolt on. So if Rothschild were handed the mandate in end of May ish we won’t even be at HOT stage yet, so therefore a couple of months off completion / announcement?
Either way, worth holding to see this play out….
Likewise - not my thing either. Yes, let’s see what tomorrow brings.
I am currently looking at Volex - any thoughts on that business?
Ok, thanks. I have an IG account, which if you search up Marlowe, they have a ‘client sentiment’ section so you can see by the hour, day, week or month the cfd activity and whether these are buy or sells. Cfd trades are usually round numbers of shares (as opposed to retail punters investing via say HL a set £ value) so you can then reconcile that activity to the trades going through (under the trade section on LSE for example).
Fair enough re your sentiment - I hope and expect there will be a sale, although whether this is tomorrow is anyone’s guess.
Doesn’t look like the share price drop is necessarily indicating no deal; more likely low volume cfd trades (i.e 7 of the 10 trades today so far are 1k, 2k or 4k cfds) purchased since the Sky article, that are now being sold due to margin calls.
We will find out shortly, either way.
Any more info on your industry insight?
Either way, we will find out tomorrow
Ok, thanks, that is interesting to hear. However, I am surprised, with 2 days to go to the results, that the market still appears to be assuming low probability of a deal; or maybe it’s just that a deal is some way off? If I was Marlowe, I would be dovetailing it alongside the results….
Ah, ok, good point. Bank’s loan loss provisions are a fair proxy for this kind of thing and at the moment they are low but definitely worth keeping an eye on in Q2 reporting season in another month or so
What was the point you were interested in re the debtors?
I think debtor provisions should still be manageable - the credit environment is still fairly benign although will surely be tougher in their H2 given the interest rate hikes.
From a share price point of view, I would imagine this is all going to be driven by the TIC disposal in the short term.
Results being published this Thursday which is a day later than previously scheduled - increasing the chances of a sale of TIC at the same time? I see the numbers will be unaudited - this ties in with a new auditor (announced last July) so probably their work needing a few more days to complete.
0.4% / 400k shares of borrowed stock returned to Capital as per the RNS last night - confirms further short closure