Member Info for ggrantsu

I'm not entirely sure why so many people here are obsessed with GAAP profit numbers...it is honestly a terrible way to invest to be looking at those numbers. Free cash flow is the sole valuation determinant of a company...people need to get this into their heads and for it to be firmly front and centre. No other metric matters I'm afraid...can be good to pick up stuff on cheap earnings multiples but earnings can be completely manipulated and they in many cases are useless.

CentralNic excels on the FCF front...it is a scandal where it is trading right now...only way I'm looking at it is that its such a steal that I'm viewing it as a gift to pick up as much as I can at this level.

Business could potentially do $1bn in revenues this year...will have to wait and see but it's not out of the realms of possibility. Also on margins...this is something that is reasonable currently but should ramp up significantly. The business really benefits from operational leverage so volume growth should exponentially improve them.

I don't know what the catalyst is here to get these to a fair price...but I can safely say as someone who every few months screens the entire AIM and FTSE markets that I have yet to come across anything so undervalued.

as usual shearclass...your comments always very useful. and you are spot on...this is a revenue growth play and any faultering on that front with failure to release new games which build decent franchises...you have a failed growth story because even 'average' top line growth will not offset all the other headwinds.

this is why its hard to invest...very hard to forecast the top line prospects because very difficult to gauge the success of new games etc.

well....now we are moving into the 30s anytime now...

good report released by zeus on researchtree few days ago...looks at UK and EU gaming sector...the conclusion of which looking at all the numbers is that TB is way way way way undervalued vs. literally every other name. However...are we missing something more serious? I just don't know...but at these multiples of value its starting to get to stage where it is worth just taking the risk from valuation standpoint...

Interesting to finally see some discussion here!

Completely agree that VK is not key part of investment case….but find it very hard to believe they will not get a settlement after therium case last year…really not sure what could drive a market. Belief they will lose??? Thoughts?

this has been a fairly fascinating share to watch...i've never spent so long deliberating over something in the market. in many ways...there are a lot of pluses here. if alex executes long term from here...the opportunity is huge. no doubt at these levels it could be a 10 bagger over the medium term...and generally having a high conviction founder leading the business is a good thing.

however...there are a lot of moving parts here...something this forum has done an excellent job of debating about. certainly helped me with my decision making here. potential pitfalls:

1. the business is now generating a lot of revenue from past titles. that is fine but not going to be the key determinant to success here. tinybuild need some home runs with own IP developed games that can be built into franchises. that's what would make this a bagger and actually mean the cash spent has been a good strategy. they might be able to succeed...but HN 2 has clearly not been a huge success - most evident as Alex never stopped talking about it and I got distinct impression in results/presentation that he was trying to not focus on it.
2. gaming is really consumer taste sensitive...a few wrong moves or bad titles and suddenly everyone just leaves you. very little actual consumer loyalty and its a hard business to analyse in that regard for PI's. This and the above point make me most nervous. dodgy shareholder dealings and more cash being spent on investment I can live with...but if the games aren't hitting consumers in the right way, this share will be down the toilet.
3. as well pointed out today on the forum...cfo is clearly out of his depth (which may be how alex wants it)...thats a real problem when you have a very capital intensive business which has ramped up investment, both in headcount and game development AND acquisitions. wouldn't take much for things to really get out of control.
4. shareholder disclosure has been really poor and the COO leaving abruptly seems honestly a bit suspicious. may be nothing at all...but if he's left and sold shares at these gutter prices, it does really worry me. stock is now crazily valued vs. the other gaming companies, and is at lower multiples vs. devolver etc...and at very hefty discounts vs. T17. any insider selling at these levels or under even a quid just makes me really question whats going on internally.

for all of those reasons i'm going to hold off until more clarity on how there games are being received. but one im going to be watching daily and best of luck to those who are invested.

I said FCF is whats relevant....exactly what Buffet said is sole fundamental driver of value...I repeated it like 5 times in the comment. FREE CASH FLOW - just to be clear, something which CNIC print like the Germany hyperinflation.

It's pretty astounding...basically back up to Morbid included levels. Amazing job in this environment...

Very very nice to see Slater topping up...perhaps taking advantage of these RIDICULOUS levels we are at...wouldn't surprise me as the son of famous small cap growth investor, Jim Slater. His book, the Zulu principle...almost defines CNIC down to the tee. And the Slater's don't look for 5 baggers....invest with an aim to find the 100 baggers of the future.

It's a great testimony to the opportunity here who we have as shareholders....Kestrel, Herald and Slater...very different to the usual large institutional who I would pay absolutely no attention to...all boring and undifferentiated. However, the three in cnic are all very small sub sector specialists who look for real asymetric risk-reward on the upside and have a good record of delivering...particularly Herald.

Cannot believe we are down at these levels...but a god given gift for those with cash on hand.

Sorry Monty but you are entirely focused on the wrong thing here....its FCF which drives value...and CNIC is almost unbeatable in that regard. Their accounting loss is from my standpoint entirely meaningless and driven by different tax jurisdictions/intangibles amort. etc etc. FCF and cash generation is what drives a DCF and the only real measure of value creation. If you want to pick your investments by looking at non-cash measures, go ahead, but it will be a pretty futile way to pick winners.

some absolutely monster sells been going through today...maybe we are finally getting some clearance? it is crazy to think some fund manager thinks that this thing isn't demonstrating exceptional value....very odd

we must be getting very close to a VW settlement now....the effects of which would be truly transformational...and it is still being completely missed by the market!!!

Painful to have stood on the sidelines since the lows on this one...amazing well done to holders. Great little company.

Really is so intriguing this...we are either looking at a potential short term bagger opportunity or a horror story...really hard to tell which...but all the numbers from company we have so far tell us all is fine. Perplexing.

Interesting choice of words also...'materially'...the board and institutions aren't looking for 50p higher here....they see the value here is north of 5 quid.

hats off to the board here....good to know that this isn't some stitch up. Would love to be fly on wall with company's call to slater - the son of jim slater who wrote the Zulu Principle. He would have told them where to stick it...and clearly others did also.

Very good news and I'm buying back in today.

hahaha...yes drivel...couldn't make head nor tail...

out of interest daddyAIM...do you have a personal view on why SP is reacting like this to continued exceptional news? im not so fussed as long term and patient with this multi-bagger....but is still extremely odd to have days like today over and over...

Haha apologies I didn't mean to snap...probably a little irritable given the SP performance today. However, we are not in a Kape position here with a dodgy shareholder structure. Royde will be in this for the long haul no matter what the short term movements are...and Slater and Herald go for multi multi baggers. And very funny...Zulu principle is basis of most of my decisions as well...feels like the book is written for CNIC (particularly the follow up book he wrote - Zulu principle for growing companies). Jim's son who runs Slater investments will be following his father's ethos here: shareholders of fast growing companies need to stick it out, be very patient, and let the rewards flow when they do. Herald run by Katie Potts will also see the value here.

Jim Slater didn't make his millions and millions by being impatient. This business has got the equivalent of a rocket launchpad underneath it and it will come good....struggle to see how they don't get to a billion in revenues this year. Company confirmed that first two months have been dynamite.

Well that clearly won't happen will it...Royde isn't holding 23% to sell out for a small premium - neither is Slater Investments (son of high growth investor Jim Slater) and Herald...

I've stopped thinking about EVR as just too depressing....got my private equity bonus (im junior level) and invested it all a week after getting it into EVR. Lost it all and had to take on tons of debt last year to get through living in London etc.

It is truly corruption at the highest level what has happened here. Saddens me so much to read stories of even more money being put into this for childrens futures etc. I was doing it so I could pay off my mums mortgage and pay for my wedding...

People need to seriously have a think today about what the valuation metrics are now for this...the 4.5x FY24 EBITDA is not really realistic but that is on the most conservative of forecasts by Zeus who even admit they are expecting upgrades....

We are now really looking at a company who could do a billion in revenues this year...if they have a good 23 and 24, we could realistically be talking about being able to buy this company on 3x FY24 EBITDA. It is completely crazy...and it is being completely missed by everyone!!!!