Member Info for ggplyr

I'm making it a net tax credit of about $40 mil.

Made up of
47 mill received in July 2020 relating to 2018.
Estimated rebate of 53 mill for 2017 and 2019 to be recognised in 2020. ( Not sure if they've had the cash but I assume they will accrue it)
A tax charge for 2020 of 61 mill (ebitda less a bit of IDA @12 percent tax rate)

Anyone agree/disagree?

@Retired banker
What trading staff are you referring to?

Where is the 109m trading loss coming from? in 2019 93% of revenue came from Customer income, 7% of revenue came from customer trading performance. (PLUS was a "winner" that year)*

What is IGGs hedging cost? I think simplethesis said a while ago its 25% of revenue (could be wrong here). if i haven't dreamed up this number and PLUS did the same it would be sitting on 750m of revenue not 872m on this year. So sure its more volatile, but all in all, its cheaper they way they are doing it in the long run, and this was a bad year for customer trading performance.

*see annual report 2019 page 29 under Revenue

Regarding the tax rebate, this is not included in the EBITDA of $515m

Regarding the short term investment and cost - to get to 515m of EBITDA I estimate they have spent an additional $60m more than I was expecting. Its easy enough to have a go at calculating it yourself, look at the P&Ls of previous years and half years, decide what costs are fixed and what are variable, and see what you get to. Note - They are making the point this extra spend is in this financial year, but the benefit (i.e. revenue) comes in later years.

Regarding them not being transparent/mirky, I agree they are not transparent at all. I believe this customer trading performance was known at the Q3 trading update, its also material and investors would want to know. Also given the materiality of the tax rebate, I think they could have also stated profit after tax for this current trading update.

That said, revenue still strong, the world is still uncertain, still more positive to come from PLUS

I agree with most your maths. Although tax losses aren't infinite, so your 2m/per year will need tax taken off. I haven't looked at the tax losses but I'd assume they are probably wiped out by tax charge on the 2020 and the expected 2021 pbt if it really does achieve the 70 odd mill of cash. (I'm not sure whether the 70mill is pre or post tax)

So your 27 becomes 34 at a 20 percent tax rate. Is a p/e ratio of 34 in this industry that normal? If so why is it higher than than other industries? I've never followed this industry before.

RE: your point on covid testing required on an ongoing basis on a material basis? Why is this the case? I've had a tetanus jab about every ten years, I've never had a test to see if I need the jab. Why bother?
I'm sure there will be testing in a year or twos time, but it's not going to be anywhere near the current volume.

Also the bulk of the valuation comes from one product, testing for covid. While I read in news that the rapid tests aren't as accurate as the tests this company does. Its a big race for a rapid test that is accurate, if this comes in say 3 months time and can be done cheaply then their primary revenue stream dries up pretty fast.

I saw this so tool a look. It's had an exceptional year. Will be trading at a p/e ratio of 13-14 for the year. But a huge amount of this is driven by covid testing. The NHS contract (they only have one other contract) hasn't not been extended and won't be until feb.
They did 1million PBT before covid, looks like they can expect an ongoing boost from covid who knows quite how big, but really, in a years time following full vaccination its going to be back in the ball park of what it did befofe fore. So maybe next year they might do 30/40 mill of profit. Then maybe they do 3 mill profit a year (three times prior year). So unless I'm missing something, this is massively over valued.

Also 2019 was the only year they actually made a profit according to the IPO documentation

Sale of shares by one of the founders of Plus has spooked people. He still holds 4.24% of the shares from 5.07%.
He's no longer a director. The actual directors own 2.2% of the company, they haven't sold anything. I would expect the directors to have more knowledge of the company than a founder who know longer works at the company.

I'd imagine this years trailing P/E at the current market cap will be about 14. People turned to gambling for entertainment when there wasn't much else to do, I suspect another 6 months or so of heightened revenue until covid ceases to impact peoples lives . Some newly acquired customers will continue to gamble but the current revenue is probably at its peak which in my opinion will decline. So if a normal year going forward is 75% of this years revenue thats a forward P/E of about 19. So id sell a good chunk if i was the CEO too.

There hasnt been a stellar rise because nothing has changed.
Trading update for the half year issued on the 8th of October:
CFD net trading revenue = 200m
Stock broking net revnue = 26m
Operating costs = 80m

This is exactly the same as the results issued today, slight difference is todays full year forecast is revenue of 370m, vs the october update of 330m. But even this isnt new information - their forecasts are on the cautious and assume that trading returns to pre covid levels immeadiately. And there was a decent SP rise yesterday.

What has changed since the trading update on 8th of October to todays result?

Thoughts on potential capital gains tax changes in the uk?
Likely to drive people away from trading shares to onto spread betting?

I've not received the divi in halifax or hargreaves lansdown

It's assumed that vaccine means return to normal, (short term correction today, no more volatility tomorrow). Anything that benefitted from covid (plus, zoom, just eat) is going to go down on news of a cure/vaccine

It's also believed plus customers tend to "win" when markets move up, although I've read elsewhere they are more balanced lately.

I'm not sure whether the excitement is a little premature...here's my maths from pfizer's publications....

94 people have got the virus who were part of the trial of 44k people. 50 percent were given a placebo. Pfizer assume the odds of getting the virus in a year for an individual is 1.3percent. it's being going for a little over three months. So without a vaccine then 140 people should have contracted the virus (1.3percent x 44k x3/12 of a year), so it's significant but probably too small a sample size to say how effective it is.
Crudely if it's 100 percent effective then 70 people. Where as it was 94.
((This is all very high level analysis with tiny data sets))

Couldn't see anything on it's effectiveness at different ages but I did only skim read it. (If it doesn't do much for over 60s for example then it won't be very effective at stopping the NHS and other countries health care systems from being "overrun"). Being able to successfully vaccinate the older population is very important as it's the old people likely to be require hospitalising. So the fact they haven't mentioned it's effectiveness in the older population means the data is too small to draw conclusions yet. It was intended that 40percent or the people were over 55 years old so with more time this should become apparent.

Source of most my info....
https://pfe-pfizercom-d8-prod.s3.amazonaws.com/2020-11/C4591001_Clinical_Protocol_Nov2020.pdf
So in the mean time for plus, further volatility is my guess.

any ideas why down 5% today?

What's SD?

The 47m is within the 723m, it would be terrible accounting practice to state your cash balance but exclude some cash you own.
They are sayig 150m to be recognised in 2020 & 2021, but that doesnt mean the cash isnt already recognised at Q3. The P&L impact hasnt been shown anywhere in the accounts yet, but thats because they havent stated a P&L, only EBITDA (which doesnt go down the P&L to the tax line).
If you are updating forecasting models be sure not to double count this $150m. within the 150m is 2020s Q1-Q3 income tax saving, where as previously i believe they were only referring to rebates rather than savings.

I dont quite understand why they are saying it will be partly recognised in 2021 though given the 150m relates up to 30 september 2020, i can only think this is because they tax liability isnt settled (in cash) until 2021, but it would recognised in the 2020 P&L.

But yes large dividend and or share buy back coming i'd assume. Although I also assume that the cash they want to keep is proportionate to current customer balances on account, with deposits being in the region of 2-3 higher than normal then the cash balances are going to want to be higher to weather out volatility given they don't hedge anything

I read it as another $103, $150m in total with $47m already received in July (and so in the $722.9m).
It would be nice to see it in a forecasted cash flow statement so its clear.

Erm, you're a bit late to the party Notrac... that's exactly what PLUS have said when they confirmed the forecast is in line with current analysts' consensus forecasts.