We would love to hear your thoughts about our site and services, please take our survey here.
Quite impressed by the speed of the sale and above all the valuation is at top end of range. Watch closely for the next triggers which could be the announcement of a 1.2 p dividend in july now that they have cleared up the debt. there is alsos significant upside from the restructuring of the gas division. At 6x 09 earnings, there is still some way up to go for Spice.
I just find it funny that the guys at IC recommended the share hen it was at 30 p in September and 40p in april 2009 ( hailed as good value !!) Now with the capital raising at 13 p and an operating profit + demand which have fared well in H2 , I do not understand why it should become fairly priced and more expensive than when it was at 40 p.
In previous mail, I said that Q1 results would be crucial for the company and they were poor not to say frightening !! I sold my small position asap at the beginning of the trading day luckily without any loss. *** On a seasonal basis. Q1 is supposed to be the best quarter for Leisure and Gaming. When you look at their history, you see that most of the profit is realized in Q1. It came as a shock to me to see that EBITDA was nearly divided by 10 to 200k which means that the company was actually loss making in what is supposed to be her strongest quarter. *** This compounded by the huge investments undertaken this year make me doubt of a profit this year. That is a severe blow to our house brokers who were predicting a 2.4p. *** The company is blaming bad sports results to explain this poor set of results but when you look at competitors they have done relatively ok so I do not understand this underperformance which has been lasting for now a year. Q2 , Q3 and Q4 only generated a tiny gross profit and the company was blaming one time the bad weather, another time favorites wiining matches. This excuse is not credible at all. *** LNG is a relatively risk company having some problems with the DOJ and its Employee benefit trust. Moreover, they have announced that they want to expand to other Mediterranean markets which will blow some cash in the first few years. remember how the company struggled until 2008 to generate a profit from Italy. *** On a valuation basis, EBITDA over the last 12 months has been only 900keuros which would lead to break even once the finance cost tax and depreciation have been taken out. With the group unlikely to generate a profit in 2010 , I decided to sell my shares in LNG. The investment into new markets is risky especially that LNG's business models operated on an outlet base. Do not forget that the betting competition is already fierce as Ladbrokes pulled out recently from the Italian market. All betting actors are talking about expending into new markets !! At current valuations, the company is richly valued and there are much better companies in the sector.
Hats off for Martin as One thing is for sure is that the management seems quite efficient with dealing this disposal issue. The advisor was only appointed at the end of March and they already have found someone to make discussions. that is really fast considering that there was the Easter break. Such things usually take months. If Martin towers can get this right, it will give a strong confidence sign to investors. When the news was announced, some people were putting buy orders up to 46 p on the system which tells u the potential of Spice.
When you look at the company valuations, 40p is less than 10x 2010 earnings so this does not seem expensive to me. That is also roughly 7x EV/ EBIT which is still below average multiples in the sector seen in previous years. If the economy recovers and we start seeing some organic growth + strong cash flows , investors will be willing to pay such a price. I guess 40 is a 12month TP.
As the AGM is due around June 2nd ( source company website), I do not see any big uplifit in the sp before that as the capital increase will not take place before June. The market will wait to see how the capital raising is going on as there is always a risk ( although minimal IMHO) that it does not go through. We have the example of Travelzest or Cosalt. As I said the company is cash generative, has seen some momentum in H2 and the vendors ( david Morgan & Co) have now a significant interest in the company . After the capital increase, the share price should progressively go up to high teens low 20's as it is really cheap. No one has issued any forecast for 2010 yet so the market is in complete dark at the moment but as I told you previously, I am confident in at least an eps of 4p after dilution. The main catalyst could come in August when we have H1 numbers and the benefit of the economic recovery kick in. Investors will be relieved about this capital raising thing and see that things are actually improving at TMMG. I have already bought some shares last week at a good price and think the shares (like any AIM share) will remain very volatile so I am prepared to step in if there is another selling panic. Let's not forget that the advertising sector has recently taken a hit ( look at DIGI) as uncertainties about the general election remain.
I was the only one in the forum to predict a capital raising ( i remember alfista and co mocking at me ;-)) but the terms turned out to be much better than expected. Also I did not see any margin pressure in H2 results as primarily declared by the company. From what I understood from the current capital raising is that most of it would be subscribed by the vendors of the recent acquired company. Interesting to point out that after the current capital raising, the vendors will gain effective control of the company. Hence the recent board changes with David Morgan becoming chairman. It is in their interest as well as the bankers interest that the capital raising succeed. The company is generating 6m pounds of operating profit so it is likely that they get their money in the end. The situation would be different if the company was loss making. H2 operating profit was also up from H1 by 3.1% that is a great positive sign to me. For me the board changes are a really positive move as the former management was pretty rubbish they did not consider making a capital raising when the stock was worth 30 p as there were some obvious needs. David Morgan is the founder of Bray Leino and is utterly recognised in the marketing universe he has a very good track record. That is a positive move to regain the trust of the market. On an operational level, the company is probably trading on 3x PE 2010 ( wait for the house broker to release its numbers !!) and we can already see some positive momentum in H2. the banks also were granted options in TMMG at 10 p so it tells u how much they think the valuation is cheap at the moment. The next months will be tough if you do not have the required nerves you'd better sell now. But I am confident that those who will hold on to their shares will be greatly rewarded in the mid term.
As you all know my only concern before today was a likely Rights issue. Now it seems that this is not as bad as expected. Moreover, the operating side remains really strong and the uplift of business conditions is a good sign. margin remain strong and at the price the valuation is undemanding : I bought some shares yesterday looking for a 40p price target within 6 months. I am now waiting for any dips today to reinforce my position. Do not know what the stock will do in the short term but I am confident that it will move upwards in the mid term
*** the results came ahead of my forecast regarding the operating profit : 3.1 m in H2 vs 2.5 m forecast that is good news *** the impairment of goodwill is much less than anticipated at 4m pounds. *** The group is seiing an improvement in its business pipeline which has impacted temporary its cost base. H2 has seen similar revenues tahn in H2 which would make me think that the worst is behind us and taht the group should benefit from the current economic uplift. *** The announcement of a rights issue is likely to alleviate soem of the concerns about the group financial position. The raising of 4m pounds at 13p a share is a good sign to the market although it will dilute significatively the number of shares from 40 m to 70m. Following the better than expected operating profit, i revised my forecasts upwards from 5 m operating profit to 6 m which would make an eps of 4.5p taking into account the recent right issue. That would put the group on a less than 4x times 2010 earnings which really cheap especially that the group has become less risky after the right issue. On an Ev/EBITDA the group is actually trading on 4.6x EV/EBITDA 10 which gives a significant discount to peers. That is a buy and We can look for a 40 p price target as the group could report better than expcted results in H1 as the economy is improving.
What I was fearing has actually come. I might have been the only one to have spotted it in this forum but the group will be doing a Rights issue as of today. That was pretty obvious that it was going to happen although people were accusing me of deramping !! here are the details : As a result of the above, it is expected approximately 22 million new ordinary shares will be issued to those vendors at 13p per ordinary share ("Vendor Shares"). Based on expressions of interest received by the Company so far, a total of approximately 8 million new ordinary shares ("Placing Shares") will be issued at 13p per ordinary share in a placing to satisfy the cash payment for the balance of the loan notes outstanding and provide working capital. The Placing shares will be subscribed for by a number of the vendors involved, as well as other shareholder employees of the Group and other investors. I am actually looking at the resulst and will provide you with my analysis. At first glance teh rights issue looks better than what i had feared as we have the issuance of 30m shares at 13p. The discount is not as steep as expected.
I am just trying to build a constructive discussion on this forum. Because being blindly optimistic as you are will not make you rich. Do not you think that if there were so many buys, the sp will have been going down like it has done. Do you really think that the stock is trading on 1.5x PE that some informed institutional would be selling at this price? Come one man open you eyes and you will see that things are nnot so rosy. I am not recommending anyone to sell, my reco was a hold. I am just telling everyone to be careful if this share has been divided by 3 in 6 months that is for a reason especially as stock have been rallying since.
It seems that some people are selling ahead of the results , probably betting for a right issue on Friday. If you have followed my previous posts, the results are almost known as the board communicated on the operating margin and also disclosed roughly how much goodwill would be impaired. it also said that the revenue had been similar in H2 to H1 levels. It is therefore easy to work out the P&L. The only source of uncertainty is : -WIll the direction announce a RI issue on Friday in order to pay back part of its enormous debt ? IF so at what price and how dilutive will it be? If the company is going to raise some cash, it will have to raise several millions which will involve the creation of a big proportion of new shares. This has to be approved in an EGM as many shares would be issued !! Therefore the company would likely announc eit this Friday if they do a RI . Another question is will existing shareholders be able to participate. If you have a position in TMMG at the moment, it means that you are comfortable with these points I have raised and that you have a few that no RI will be announced on Friday.
The group trading has been disappointing recently as Q4 and Q3 did not generate good Gross profit. Moreover, the group invested heavily in new infrsatructure which should bare fruit in 2011. Q1 figures will be key as most of 2009 profit was generated at Q1 and people will look carefully to see if there is an inflexion compared to Q4 and Q3. The group should benefit in Q2 from the World cup and the opening of the Italian casino games. let's not forget that the group has a strong foothold in Italy. I recently bought a small line around 7p as the group has recently sold off and could easily go above 10 p should the results turn good. Q2 should have some catalysts to support sp. However, as many investors, I am not really convinced by the 2.4p eps forecast by consensus as there is significant downside potential (weak trading and investments). If we annualized the profits made in the last 3 quarters we have earnings well below 2 p. At this price, i think some weak 2010 prospects are already factored in and the group has growth potential as well as is a good target for a Party gaming when the Doj settlement arrives. And above all, the sentiment accross small cap is improving a lot which should help small caps like LNG.
I am also not too worried about the litigation as it also did not appear on the annual report. Moreover the litigation concerned ACMh at the first and was dismissed by the justice it would not be coherent to make Argo guilty. We have a company with 23p of net cash which generates positive cash flow and is distributing a div. If this ompany was trading on the official list it would be trading at least at 30 p. If we have buy backs at the current level, the net cash could go up to 25 p so you see there is still someway to go. I guess the only problem is that the stock is not well known by the public not even commented by financial newspapers. Moreover, it is positioned on the Emerging markets space which is quite trendy at the moment. Unless there is another big financial crisis, the downside seems really limited to me.
Economic growth seems to be back with finally a 0.4% in UK in Q4. The US economy is finally creating jobs all indicators which points out that the worse is behind us. The stock market is having new highs since March 09 and mony is flowing back into the stock market which shoulkd be positive for small and mid caps. Retailers and pub companies which were among the biggest sufferers of the crisis have seen their shares rising recently. So ask yourselves, is it really time to sell TMMG as it is now at 17p and that it is just a matter of months before the company turns bullish again ?? Even if there is a share issue, my forecast have shown that the company should still be trading with a one single digit PE fro 2010( not including the benefit of better economic conditions!!). The exemple of Cosalt has shown that if there is a big capital increase, it is likely that the company does an open offer which means that shareholders will be allowed to participate (with some shareholders guaranteeing to buy the unsold shares.) Therefore there would not be any dilution for existing shareholders :-)) Currently Buying: Argo Capital, Symphony,Speymill Group Selling: Southern Cross Health Care
Hi all, it seems that some major news was released on the 1st Of April (!!0 regarding the impending claim from Cascade against Argo. It seems that it was one of the major reasons why ARgo was trading well below its cash assets. Would be interesting to hear your thoughts on that ? --------------------------------------------------------------------------------
the company has decided to buy back up to 2M$ of shares (that is around 13% of share capital) the more the sp will fall the better it will be for existing shareholders given the discount to nav.It will also enhance eps for shareholders. Moreover, I do not see any point of selling now as we are getting 1p of dividend that is more than 8% and the company will distribute progressively all the cash. To update you on how the beginning of this year is going, the company had 66 435 units of Argo fund ( valued 14.343M at end of dec) and fund is roughly up 1% YTD ( end of feb) If markets continue their run as it is the fund could have an overall performance of 5% this year => profit of 700 k$ (460 K£ which makes 0.6p ineps !!) If the fund makes 10% this year ( average annualized performance of the fund is 9.6% !!), you have an eps gain of 1.2 p. The good thing is that half of the cash is invested in the Argo fund which should generate good returns so the discount to cash is unjustified.
SYG will be a clear winner of SDIC as the group wants to use Goal , Speymill; subsidiairy for all its buildings. A the present time, Goal was managing 41% of the buildings so the turnover of the subdidiary could be nultiplied by 2.5x !! Base on the H1 report,Goal had an annualized turnover of 18.4M euros with a segmental profit of 1.8M/ 9 i have just multiplied by 2 the half year data) If you multiply this values by 2.5 you see clearly that SYG's profit could increase easily by 2 M after tax. that is currently less than 3x the actual group market cap. I think that current share price has sunk so low that now the only risk we have is that the stock goes bust but this is unlikely in the short term as the company did bot issue any profit warning. A tie up or a merger with SDIC could also be on the cards gioven the following sentence featured in SDIC's report. "Amongst those discussions are potential options which may be available to SDIC, such as recapitalising the Company and/or internalising the management, investment advisory and property management functions."
The company will start buying shares from tomorrow and the maangement will be allowed as well.
is that the company is going to do 2m USD of share buy back from april 1st and is distributing a dividend so basically investors will have access to the cash. All this will sustain the sp and be sure that if the sp goes back to 8 p the company will be buying aggressively which will enchance the NAV per share. The discount to NAV should not exist.