Member Info for Ghostrider007

A warrant isn't a warranty and ABB need to pay £4m for their shares, they just have 2 years to do it.
That would be £8m in total.
Its a great deal.

Its the S Series which is the next gen system. The whole point, and the reason for the radio silence, is that ABB/AFC are accelerating the new system. AFC were expected to launch a 10 kw S Series unit in early 2023, its now going to be a 200 Kw system. Its a game changer and opens multiple new markets.

LOL - Lekan is the reason the shares are below 2p. He has destroyed the reputation of this business and £m's in shareholder value. I'm a shareholder on the basis that someone else comes along who can run the business efficiently and in a law abiding manner.

Thanks Beth,
But - surely priced in at these levels?
And, looking at the most popular markets on the Plus platform, it looks as if Plus could have done reasonably well over the last month? Particularly if their targeted hedging strategy has been a success.
Looks more likely that the buy-back was propping up the price and a bit of a new flow hiatus has led to the drop.
I agree with you that is remains a good hedge. 1400p looks like a decent support level as well.
ex-Div on August 8th, quietly confident shares will be above 1500p by then, if not higher.
Thank you again for sharing your thoughts.
GR007

Morning all,
I still have a significant holding in Plus and am continually surprised by the continued underperformance.
I consider £14 as my re-entry price and am likely to buy more shares below that level.
Any reason I shouldn't ?
Next news?
Many thanks
GR007

Many apologies all. I didn't mean to start a negative thread. Thank you again Yuri for reminding me that the debt is unsecured.
Which would change things considerably.
Just to educate myself. What will happen to the debt when it matures, and if Amigo can't refinance it?
Hopefully not an issue but it would help me to understand this point?
Still positive!

Very interesting, thanks Yuri
Seems fairly clear to me (and having had a further dig).
- Net debt unlikely to be less than c£150m before SOA 2 judgement.
- SOA 2 will be approved c£50-75m upfront.
- Creditors debt for equity (eg. existing shareholders diluted to c5% of enlarged).
- £50-100m fundraise.
My mindset is that this would be worst case outcome for shareholders, but even so - I would happily back the fundraise and think Amigo could be a £500-£1b business again very shortly.
Key risk is the terms of the debt for equity and the price the new funds are raised at. Risk of transformational dilution is high, but only option is to buy more when the time comes!

Sorry if this has already been covered on a number of occasions, a lot of posts to go through and apologies if it is answered elsewhere. I am a long(ish) term shareholder and very tempted to double down and take some risk.
I am struggling to get to grips with the balance sheet, as I can't access broker research (Mifid II is a joke), which seems to be the essential factor in understanding the company's solvency. My questions are possibly too basic, but any insight appreciated:
- Assuming loan run off continues - how much operating cash do we think Amigo has at the y/e?
- How much debt does Amigo have and when does that debt mature?
- What is the net cash / net debt figure at Y/E?
If I was the FCA I would be looking closely at this and basing my judgement on what Amigo can afford to pay now, not what they 'might' be able to afford to pay over the next few years.
The counter balance here is that I assume Amigo's creditors may have certain rights available to them and may consider forcing through a highly dilutive debt for equity, or something similar. But, in doing so they run the risk of being left holding the baby and inheriting a time consuming and costly fight with the FCA.
Based on my limited understanding of the balance sheet, but having a professional understanding of these type of situations, it seems fairly clear that the FCA think Amigo can afford to pay more, Amigo's creditors will be circling and the B.O.D will be spinning plates like a party entertainer.
Only certainty for me is that SOA 2 incorporates a much higher upfront payment, leading to an equity raise and a refinancing. Either way. If this was on the table and presented in a attractive package I would be very, very interested in putting some more money to work.
But, unless the balance sheet says otherwise, insolvency is highly unlikely. Its a poker game and Amigo are doing there best not to play their cards too early - a game you can only play if you are new to the business and have little or no skin in the game. But, if it works, fair enough.

I concur. Solid growth profile and hard to find better metrics for a business of this size and quality.

Like this a lot, thank you for pulling together RB..
Hopefully the "targeted" hedging strategy has Bitcoin in mind. Agree it is pretty crucial to our Q1 outlook.
Quietly optimistic. Resistance at 1400p but hoping we break through it .

I know a different business, a different industry, a different everything. Don't shoot me down..

But, I note the bid for Gamesys today, from Bally. Valuing Gamesys at £2b (which actually looks a bit lowball on first reflection).

In 2020 Gamesys did £206m EBITDA v Plus £375m.
In 2020 Gamesys had net debt of £312m v Plus with £300m+ cash.
In 2020 Gamesys had net-profit of £131m v Plus with £350m

I know they are different business, but there are similarities, and particularly with the way they are being labelled as Covid beneficiaries/one-offs.

Plus can't be compared to Gamesys, I know. But, if you look at the simple fundamentals, its hard to find a company as cheap as Plus that hasn't eventually been bid for.

Applying roughly the same multiples as Gamesys to Plus would imply a Mkt Cap of well over $3.5b.

You never know?

I had heard on the grapevine that one of the possible issues weighing the share price was impending changes to leverage ratios under ASIC (Australian regulator). And, also changes to the way Plus issues incentives to retail customers, bonuses and rebates.

I received an email from Plus today setting out changes to leverage ratios under ASIC guidance. As an example, whereas I could previously lever Major Forex positions 1:300, under the new regs I am only able to get up to 1:30.
Similar/smaller reductions in most key markets.

But, of interest to me:
1) no RNS explaining this. So either I missed it or they don't think it is worth announcing.
2) I hear that in practice Plus were operating at around the revised leverage ratios anyway. ie. there was no chance of getting 1:300 even if it might have been advertised.
3) anyone who wants higher leverage can be transferred to a less onerous jurisdiction like Seychelles.
4) shares largely unaffected.

Plus are also no longer to promote themselves with free trades. I was offered £250 in free trades last week to entice me back to the platform. But, as of this week this practice is no longer allowed.

TBH - none of this seems material and the fact the shares haven't been negatively affected is the most important thing.

Good times ahead for Plus I would imagine. April 17th Trading Update will be interesting. As ever, book performance the key optionality. Rest of the business will be fine.

Because the Board think it is the best use of excess capital generated. Would I prefer a larger dividend? Probably. Are we seeing the benefit of the buy-back? No...But - the shares are cheap and if this helps enhance earnings - why not? Better than sitting on the balance sheet achieving nothing and largely ignored by the wider market.

Schroders TR1 out. Now +5%.
Assuming the PM is Andy Brough. He is one of the longest standing and most successful UK fund managers there is.
A great endorsement for the company.

Thanks both..
Yes - on reflection, anything over $0.5b would be a bit optimistic, and I agree that the overall book size will shrink as customer losses increase.
But, I would still expect customer income to be significantly larger than Liberum are assuming and its hard for them to set expectations with the market as volatile as it continues to be (good for Plus).
Plus will perform well in a down-market, which is part of the reason I own it, and with the VIX currently well above 25 I see no reason why commissions and non-book related revenue doesn't remain high.
rHatton - all points understood and I get exactly where you are coming from, but Plus have added 100,000's of new customers in the last year so hoping for the numbers to be juiced up a bit since then.
I'm not hearing any bad news with this one and still struggling to understand the rating..But, with markets getting hammered we're not fairing too badly relative to some.

Possibly a stupid question, and feel free to shoot this down.
But - if global markets continue to weaken should we be getting very excited about Plus's ability to generate material book gains this year .
Most CFD/spread providers state that 76% of customers lose money. We also know that 90% of customers are typically "long".
Plus 500 stated in their prelims that they had $2.9b of customer deposits.
Given the massive increase in deposits, in the event of a prolonged correction, could Plus be looking at $500m-£1b in book gains this year?
Is there a more calculated way of expressing this? Open to all suggestions.

Liberum have introduced new 2023 forecasts today. P/T +1800p or 40%+ upside. On Research Tree.
Still think 2021/2022 estimates are very light.
Market down, Plus should be up. Bought some more.

Interesting point on cash ST. It would be good to understand how much of Plus's retained cash is potentially "at risk". I would assume their targeted hedging strategy should mitigate serious damage being done.
I would assume they are having a very good week or two on the book?

Interesting point and agree completely. With businesses that have either substantial cash or debt I prefer to look at EV ratios , which look RIDICULOUSLY cheap in the case of Plus (EV to EBITDA <1x).
I still own and will add more if it weakens but , I would have preferred them not to start talking about acquisitions, and particularly not in new products.
If I was Plus I would keep running the business as they are, keep adding customers, keep generating cash, keep buying-back/paying out and eventually the share price will begin to reflect the value being created, particularly if the FCF yield stays above 30% and the dividend yield remains at or around the 8-10% range.
If the price doesn't start picking up I'm sure some US competitor on a massive multiple will start sniffing around.

Simplethesis. This is excellent, thank you very much for taking the time to deconstruct the assumptions in the Cannacord note. I couldn't agree with you more.
The whole argument has suddenly distilled into three key narratives:
1) Will Plus lose a large % of the customers they won in 2020 in 2021? Cannacord think so, I'm not so sure.
2) Will book losses normalise (Plus traditionally wins c70-80% of the time v customers)? No crystal ball here but given most customers are long the bubble does burst Plus will surely recover the money they lost in 2020 (Q1 2021 potentially).
3) Perhaps a combination of both the above, but both Cannacord and Liberum are suggesting that Plus c2023 will be a materially smaller business than Plus c2020. I think we all agree it will be smaller , but it is very difficult for any of us to accurately gauge the level of decline at this point (its pure guess work). And, the current share price is hardly factoring in rampant growth, far from it.

Sell-side analysts are not really paid to get it right, they are paid to generate commission. Plus is quite illiquid and doesn't need to raise money, hence the likes of Cannacord won't be able to make any money out of them. As a result it won't be a priority and the analyst is likely to be going through the motions. Which is fair enough as his bread is buttered elsewhere...But, like you say - possibly an opportunity for others who do follow the company a little closer.