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Thanks for this mark.
2020 Revenue forecast of 757 doesn't seem to make sense in liberums forecast.
H1 Revenue = $564m
H2 YTD - Quote for interim results : "Customer Income so far in H2 2020 is more than double that of the prior year"
I make this about 100m for 40 calendar days, based on 2019 Q3 revenue of $110.6m
So only need to do 100m to in 140 days to hit liberiums forecast??
Regarding tax "Accordingly,Ā Plus500 Ltd's Corporation Tax rate for these three financial years has been reduced from 24%, 23% and 23% in each respective year to 12% in each of these years. Over $100 million of initial repayments and cash savings are expected to be delivered, with a c.$47 million rebate already received from the ITA in July 2020."
I had interpreted this incorrectly - I had assumed the Ā£47m related was a rebate relating to 2017, 2018 & 2019 and the rest related to 2020 & 2021. Looking at the tax over 2017, 2018 & 2019 the $100m is for these prior periods.
How much do you pay for app annie? - I did look at it a while ago but it wasn't very transparent on pricing, so went about it using google play reviews rather than installs. But yes, actual installs would be a better KPI.
I've looked at 1 star google play reviews (companies might manipulate/pay for 5 star reviews but not 1 star reviews).
in 2019 the average number of 1 star reviews/day = 0.6.
In July 2020 (first month of Q3) there have been 1.6 reviews/ day - this indicates new customers is still very high within H2 of 2020
I think Liberum's H2 is very low.
Googleplay reviews in 2019 averaged at 2.3 reviews per day shown by quarter below
2019 Q1 =2.2
2019 Q2 =2.4
2019 Q3 =2.6
2019 Q4 =2.1
The first 35 days of Q3 reviews/day = 3.6 (c50% more than 2019)
Reviews are strongly correlated to new sign ups. So more people are signing up than usual(for info 2019 Q2 hit 9.7/reviews per day)
HI 14cr- I'm struggling to understand your post/terminology. Apologies for my ignorance but could you please explain a few things.
"Gold has returned ~10% (on 20x leverage) MTD, but PLUSā net position has only been ~25% (vs most stocks: ~90%+)."
what do you mean by plus net position has been 25%? 25% of what? & the vs most stock ~90%?
Re the tesla comment - are you saying plus may be very exposed to Tesla?
By changing assumptions but not the numbers!
I'd originally figured that $300m was available for distribution, so 50m in buy backs, leaving $250m.
$250m/106m shares = 2.35
I hadn't adjusted for the free float vs shares in issue either.
At the half year id say they are sitting on $550m- which is probably $250m more than they need for working capital and risk buffer. So maybe $50m buy back & $200m for dividend, so that's $2.35/share available to dividends- less the with holding tax.
I don't see what reason they'd have to sit on cash balances much higher than $300m. They can't do anything with the cash.
Hi Mark,
quote - "IG Ā£11m revenue from bad debt Vs Ā£0m PLUS due to negative balance protection"
That's true (although its a bad debt cost rather than revenue, I initially read your post to mean they are reducing a bad debt provision by 11m for it to be revenue) but I dont really see what it means for PLUS. On the flip side the marketing cost as a percentage of revenue is 24% for the last 4 years for plus, where as its only 10% for IG. They are just different business models so I don't see what we can infer from the absence of bad debt in plus.
Hi Daimawr, I agree with your revenue forecast of $900-950m, EBITDA seems a little optimistic though. If revenue is 950 I make EBITDA more like 675, which is still decent. What are you making the advertising costs for the year?
How does the wildcard saga affect plus?
I am not sure about the logic of mean reversion, (unless I am miss understanding what you mean). I don't think it follow that plus will recover this loss... if you toss a coin and it shows heads 2 times in a row it doesn't make your next throw more likely to be tails. Should this not be the same logic for the customer gains? i.e. that loss bares no impact on the loss or gain after that trading update?