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Even if JD went on its own it wouldn’t give an extra value to shareholders (unless yanks buy up the shares post list)
If the minimum Nasdaq share is to list at £5 JD would just consolidate the share count to c4 to 1 so take all your shares off you and give you one share back for every one you owned (I’ve used a crude 4 to one but forex and share price on the day unknown)
Your holding would be worth exactly the same
At Falcon that’s not correct. The share values are but they won’t inflate the value of the business instead they would just consolidate the share count
Your holding would be worth exactly the same. It’s only if the yanks want to value the business higher
With the high volume though and the business changing fundamentally I think funds will just sell into the buy back. It also gives some of the shorts wiggle room
All my shares are in an ISA. I think you’re right though that it will be buy back as Lord Ashcroft won’t want to have a big tax bill
At 8,000 - 9,000 shares a day they won’t complete the buy back for three years!
Maybe pay some as a divi
Good points. I noticed this the other day when the short interest also increased
I think the market is perhaps having a bit of mistrust re the TICC business given that’s where all the restructuring costs have been sitting
Just needs a few good updates. I hope the cash return is a divi and not a buy back
Move revenue now in the US than anywhere else? Time to propose moving to the US markets
Today was a quick way of accelerating that
exposed in first question!
“what extra are you doing for coke and disney”
turns out it’s some extra photos for disney and nothing at all for coke! why do thg keep selling b*ll**** to investors!
if you’ve nothing to say it’s better to say nothing! and it’s embarrassing that these were the best case studies to show case
Can someone share the info around the loss of Homebase
I was thinking whether to buy back here but that would make me nervous. I stand by what I said THG would be better mothballing Ingenuity and just being Nutrition
Beauty just sold to a retailer (probs where they got Dermstore from - anyone see the Dermstore impairment! Not a great Ingenuity case study)
Customer means corporate accounts. Each corporate can have hundreds or thousands of employees so your KPI need adjusting just a touch
Great summary. Not sure how much of an impact the OH contract loss was but think it’s a dent
This just need a few good quarters to get confidence back in these two core businesses but I’d be happy to see them sold for the values below
Annoyingly my first tranche of shares was 750p(ish - and I’ve averaged down now). But valuations I don’t think will come back for a while
Was in London today with a PE fund. They were not very positive on Marlowes M&A team so I’m hoping it’s organic growth for the short / medium term
Sorry to clarify I like buy and build. I work in it
My point for begbies atm is the market in insolvency is up atm. I wouldn’t do deal at the top of the market. This period should be of sufficient growth organically
Also larger admin are far better margin than high volume cvls. If begbies buys smaller insolvency firms you buy more low margin cvls
I’d rather focus on organic growth or acqihire at the bottom. Pick up scale when the market is less boyant
I also think constant dilution isn’t attractive for investors
Tbh id like them to pause deals. Maybe focus more on hiring bigger players. Id also like to see more shares being bought back to offset the dilution we’ve had over last year or so
It’s a shame neither here or FRP have upgraded. You’d be hoping some large admins would be flowing through now
Will be interesting to see if the other shorts close now. Presumably their investment case has gone ie there’s no fundraise risk now?
Tbh over the weekend I thought about this deal and tbh it stinks. I think we’ve been desperate sellers and Alex has stolen some jewels for a song. Ideagen bought for £1bln I’d have liked to have seen a bit more for this division
The 16.2x implied multiple means a £26m EBITDA. Last year this division did £50m so I’m keen to understand the bridge. As far as I can see £8m capex deducted means OH must be £18m EBITDA. That feels about right?
If you backward solve it the other way it also seems to work. Obviously OH lost a large contract recently so maybe £15m EBITDA is now the run-rate
£150m divi + £60m cash + £150m OH + £350m TIC gives £710m EV which should be mcap given no debt. Any discount now is presumably the markets concern around TIC (quality of earning due to large integration costs) and the OH business (as it lost a large customer)
A good update and this should recover the discount. Even better is everything is sold
Blackrock got stung it seems. Increased on 20th and 21st! They have now unwound their short (or below the threshold). The issue for the short is 1) not much liquidity in the stock and 2) they will have to have cash on hand to pay the divi!
Still more shorts to close and hopefully they do. No reason why this business can’t be double the size as a standalone TICC business. Let’s get OH sold to a PE firm. The two don’t fit together
That’s how I see it!
Mcap is c.£500m of which £150m is cash. There should be about £60m of cash which is (cash the business already had, £30m and what’s left from the £405m after divi and debt paid). So of £500m you’ve £210m of cash!
That leave the remaining businesses which shouod push out £50m of EBITDA and £40m of FCF valued at £290m. That’s clearly not right
OH businesses trade at 10x multiples so if you carve that out the TICC element is pretty much valued at £150m! Given what Inflexion paid for Phenna group that’s clearly not right
Shame Inflexion didn’t buy the lot
Sorry my numbers were wrong. TICC EBITDA is c.£40m so it’s c.£32m of FCF
£40m on a poor 8x EBITDA multiple is £320m. £75m of cash and £150m for OH. £545m
I think this shows shares are undervalued here especially as that FCF builds and builds
Plus £75m (ish) from paying down the debt and the £150m divi
Let’s get TICC sold for £300m now!
Adj. EBITDA is £35m. We know capex of TICC is c.£10m so FCF is now £20m per annum. They probs have a bit more to spend re integration but this will pass
Assume no growth that’s a £20m FCF so it’s reasonable to say it’s worth £200m or more!
Add to that OH which is £10m EBITDA so lowly assume 10x
That’s the remaining businesses worth £300m
I think it’s better than that. It leaves with TICC (£35m - £40m EBITDA). Let’s say this is worth £300m to a French PE
We are also left with the OH business which is £10m - £15m EBITDA and should be worth a 10x multiple
So your share price today could be £405m plus £300m plus £100m so £805m!
Tbh this is still short of the £10 a share all time high but the world is a different place now
I do think the French deal is real as I don’t see why they would return all the surplus cash. Surely you’d say and we are keeping £50m/ war chest for M&A
Well that was unexpected but a decent result. With the shorts (and JP Morgan again with awful timing) this will pop. The business will still either need to sell OH or TICC as they don’t belong together so the £300m for TICC may still be on the cards!
Tbh Inflexion have had a good deal when you consider HG paid £1bln for Ideagen with similar EBITDA