Member Info for HedgeHogarth

DrDeo - Tuan is not being a dick, Tuan is a dick

At least we ALL know this and disregard anything he posts on here

HT -can i have your permission to desribe today's trading and price action as 'perky'

Disclaimer: IMHO HT is frequently grumpy, but not a troll. I genuinely believe he is a LTHer of Hemo and well researched, but also beleive him to be a trader on the side based on his pattern of posting on here and on Twitter. I bare him or her no ill will and have respect for them. I'd actually like to have a proper chat with him/her one day given our mutual interest in this company

The general abuse and ganging up on Jambone and other posters who dare to declare their faith and get excited about the potential here has been disusting

Sadly there has seemingly been a small band of shorters who have been doing all they can to manipulate the narrative and spread their poison here

Ofcourse the key thing for this share is an update from the business and some news of a commercial deal. However, the SP has been between 1.4p and over 4p ahead of that update. An SP of 1.5p is no more right or wrong that an SP of 3p on this share. It is high risk as with many micro caps - but the rewards here are potenially huge and why many were happy to pay up to 3 or 4p.

Wow, the day has seemingly kicked off with a few sells...

70% of shares are with IIs, founders and PE.

Does not seem many PIs have any patience anymore

As another poster has stated, the mCap here is under £14m . Whilst this had a small spike yesterday it - it still has has about another 30-40% to go until it returns to the pre-takeover period level of 18/19p.

I'm invested for two reasons:

1) Most importantly, i believe in the company, I was confident it would deliver a strong FY23 set of results. Thankfully my research and 'read' on this company proved to be correct; infact the results came in better than i anticipated. They are doing a great job of managing their portfolio to dial up on some key metrics.

2) They say you should never invest in a company on the hope that it will be taken over. However, the company ahve declared their intent to sell the business. Most of the PIs have held on firmly to their shares. The company is alive and well - the doomongers wanted people to think this was a broken business, but that was just a fabricated story to meet their agenda. The main shareholders will not be parting with their significant holdings on the cheap - whilst I expect the acquirer to secure a good deal and bag a bargain - It won't be for less than £40m, infact i expect it to be at least £50m

GLA

Still here HT being patient

Hoping on hope that my MMAG investment delivers a handsoem return in a timesacle that allows me to re-invest into Hemo.

Very little to add or discuss on the Hemo front - I'm waiting for the news of either IND submission or clincial hold lift like eveyone else.

Just being patient

Redoliv - the challenges with growing the Rental business were clearly addressed by Steve and the CFO as part of the Q&A in the interim update Investor meeting.

They will only favour selling the Rental proposition to better quality customers like Corporates. They stated their strategy was to sell the new "Buy Now, Pay Later" proposition where the accept rate is much higher at 50% and they get cash upfront and recognise the revenue upfront. i.e. MMAG get cash upfront and recognise revenue upfront, custoers gets to pay in installmenst as the funding will be provided by PayPal or Klarna.

The CFO is more than aware and far better qualified that any troll on this board to manage the business to acheive bank covenants. The decisions they ate making is to focus on driving growth, maximising EBITA and avoiding an increase in net debt - infact they managed to reducing it in H2 despite having a recor Black Friday performance.

Recommerce as a category is booming and only going to get bigger

My local "Game" outlet occupies a prime spot in my local shopping centre. It's a high end shopping mall with sky high rents. It sits alongside the likes of Zara, Apple, Beaverbrooks, Pandora. When you approach the store, it;s not possible to see the games that reside in the store because the window is jam packed with second hand consumer tech - phones and tablets.

Robwire is clueless. Like you say, one of them on every board.

Playing with fire and only a matter of time til they get burnt

You can fabricate as much as you like.

I am invested here because I expect it to be sold for a minimum £50m

- It's a growing business

- In a growing market

- It's got a great team

- It's award winning

- It's gross margin is improving

- It has commercial agreements with the best (Apple, eBay, Amazon, TikTok, Paypal.. Klarna)

- The huge investments being pumped into ecoATM validate the Kiosk assets - MMAG have rolled out over 300 across the UK

- They have a £4m recurring revenue tail already in the bag

- They have managed their debt down and confient the leadership will continue to manage the debt levels. The new proposition in partnership with Klarna and Paypal will improve MMAG cash and debt position

Aha - it's our persistent, troll spreadig doom.

Your latest attempt to discredit and distract investors from the opportunity here.

But to humour you: H1 Finance costs were £800k, Net Debt has reduced in H2 so FY likely to be c£1.5m

EBITDA for FY will be £7.5m

So cover is 5x - comfortably delivering in line with covenant

In FY24 EBITDA forecast to increase, Net Debt will be managed to current or slightly lower level. (And interest rates likely to reduce in FY24)

Lots of late reported trades today. Would not surprise me if we see some biiger buys (or sells) afterhours and reported tomorrow. It looks like at least one 'short position' closed today.

MMs keeping this unde control right now - the re-rate looks like it is going to happen over a few sessions rather than a big spike today. That's a great result for shareholders here

Very unlikely that BT come back in. They would have had the opportunity to see more than us + these results really are not that much of a surprise.

But there will be other suitors

For me, the SP dropped disproportionatly - price moved down on minimal volume

I think reasons for the drop....

1) Concerns about debt - that is why the update today was so encouraging

2) BT choosing not to bid

3) Institutions have been selling a bit - but only a minority

4) FUD stoked as to why the company is 'up for sale'

5) Something else - don't ask me what but the volime on this share is SO low - there has been a lot of FUD shared on here. I can only assume that their has been an attempt to suppress SP during the takeover window which closes on Monday.

We'll know the true value of this company soon enough - could be tomorrow, it could be Jan, Feb, May? Who knows but this company will not be sold for anything close to curret mCap.

Nice to see some decent volume exchanging hands. Already the biggest day since March 2023

Volume is good - nice to see £48k trade go through at 13.5p

There may be a little resistance - there have been a few 'suspect' posters on here for the last month or so trying to discredit and crud FUD. I imagine they had a motive and an agenda - so perhaps so short positions who could be caught short.

There has also been a small amount of selling from 2 IIs. Less than 5% of their holding - but enough to match supply and demand.

However, now that the FY update is visible to all - debt under control, profitability improving the business case is fully validated. The company are seeking suitors and I have no doubt that conversations are happening in the background and hopefully we will get an update very soon

I'm going silent now...

See you all when this is 30p - hopefully before we get an update any potential acquisition

Takeover window due to close on Monday so I am expecting some sort of statement on the process early next week

GLA - try to ignore the few trolls on here that have been trying to tell you all that this is a broken business. Quite simply, It is not - its a growing business, with growing margins in a growing sector. It's peers globally are receiveing huge investments ecoATM has had $325m pumped into it since 2020.

Today's RNS should give you all the confidence you need. And if you need more, I suggest you follow them on LinkedIn and see what a wonderful team they have, all the awards they win and get a feel for their relationships and reputation in the UK market.

GLA

DYOR

Let's not forget that 12p values this business at just £12m.

The company with support from a third party are actively marketing to the business to acquisite parties

The CEO held 10% of the company post IPO: Howvere he chose to add significantly from his own pocket: He invested £250k at 52.5p in FY22 and a further £185k in FY23 at just under 14p.

I've researched into the sort of valuations that have come before MMAG:

MMAG floated at £200m just 3 years ago

ecoATM - bought for $300m

Regenersis disposed of it's recycle/repair business for 103m Euros

Gazelle sold at a lower amount, just $18m - but it was smaller than MMAG and not performing well

I think there are many companies that would consider buying MMAG: urrys, AO.com, EcoRenew Group, EcoATM, TES, Backmarket, Amazon, Timsons Group. And they are just based on my limited market and local knowledge

Good luck all - I'm holding as I see this company going for a minimum of £50m - hopefully higher. It has a great capability, trading record, growth levers etc

Wow - that was quick....FY Trading update as arrived

A very good update and has exceeded my expectations:

Record Black Friday contributes to 15.4% increase in EBITDA (And not all the BF benefits will be in the FY result - the sales of stock sourced during the period will be sold in December which falls into the next financial year)

Strong H2 Revenue performance; FY Revenue of £136.6m down 5% YOY. YOU decline down to 2 factors - we already knew that H1 Revenue was down 13% YOY due to a challenging Q1 beset by postal strikes. But given the H2 performance the reason revenue is not in line YOY is due to a higher % sales on Rental - MMAG have a guaranteed £4m revenue stream from rental sales that will hit 2024 results.

Gross Margin % UP year on year from 26.2% to 27.7% (A good sign of a healthy business when GM % is growing)

As per guidance at the half year - management are managing the mix of Rental Sales Vs Buy Now, Pay Later. Rental is used on better quality customers and targeted corporate clients . This has helped keep the rental base broadly flat (37k from 39k). This has been done to drive cash and EBITA and manage debt levels

Net Debt level well below expectations on this BB. Both myself and another poster was expecting net debt to have grown to 18/19m. However, the business is well managed and net debt has actually REDUCED since the interims:

"Net debt as at 30 November 2023 was £13.1m (31 May 2023: £13.6m) and benefitted from management's focus on cash versus rental growth. Leverage at 30 November 2023, being EBITDA to net debt, was 1.7x (31 May 2023: 2.0x). Net debt is mitigated by future contracted rental revenue of £3.6m and Rental assets on the balance sheet with a net book value of £7.7m. It also continues to be supported by the £30m committed RCF facility provided by HSBC and Natwest, due for renewal in July 2026."

A BIG congratulations to Steve and his excellent team at MusicMagpie - a great set of results for 2023 and a great platform to push on in 2024.

And they have won a lot of prestigious awards this year: (These are important proof point of the respect within the industry - the company was well connected and 'People' are such a key asset for a business)

Best Recycling Service at the Mobile Industry Awards 2023 for the 7th year running

Best Online Retailer and Best Secondary Market Provider at the Mobile News Awards 2023.

Best Refurbish Company at the Uswitch Telecoms Awards 2023.

Steve Oliver, founder and chief executive of Music Magpie was named as the Ambassador of the Year, not only in recognition of his remarkable role in leading MusicMagpie from a start-up to the stock market, but for being a solid champion of recycling and sustainability.

4.4* UK Trustpilot rating with over 260,000 reviews.

With a full year performance statement expected before Christmas I felt it was worth posting a few insights. It is worth noting that 'unusually' MMAG year end is 30th November.

What did we learn from the The Interim Report? (RNSd on 13th July)

Quotes directly from the interim report shares 4.5mth before year end:

"EBITDA up 7.7% with good momentum into the seasonally important H2; trading in line with Board expectations"

"Strong progress from the Group's device rental subscription service, increasing to c39,000 active subscriptions as at 31 May 2023 (31 May 2022: 24,000)"

"Near-term corporate customer pipeline building and 2,200 devices currently under rental to businesses

" Entered H2 2023 with c£4.0m contractually committed forward revenue, before renewals or growth in new subscriptions"

"SMARTDrop Kiosks now account for 45% of musicMagpie's Consumer Technology sourcing in the UK"

"Cost reduction measures reduced overheads by £0.8m in H1 2023 versus H1 2022"

"As usual, the majority of the Group's full year profits are expected in the seasonally important second half. Current trading conditions remain challenging due to the prevailing macro-economic factors in the market, but the strong momentum seen in Q2 has thus far been carried into the early part of Q3 of our 2023 financial year and this combined with the focus on gross margin by continuing to buy for less and sell for more, and cost savings introduced, mean the Board is confident of the Group meeting its full year expectations."

What have we learned since?

Publicly available quotes from the CEO:

Responding to an ebay post we get an indication that the key Black Friday period (which usually lasts up to a whole month these days:

"Proud to have had such an incredible Black Friday trading with you in the UK and the US on our Consumer Technology products .... consumers are choosing recommerce product from trusted sellers in greater numbers every year 💪🌍 📈 "

https://www.linkedin.com/posts/jamieiannone_as-we-look-at-the-top-shopping-trends-emerging-activity-7135680765429772289-aiDj?utm_source=share&utm_medium=member_desktop

Speaking about an article about MusicMagpie in the Sunday Times

"perhaps slighly disappointingly the article doesn’t reference last year’s £6.5m EBITDA profit but the £1.2m PBT loss, which is due mainly to the depreciation levels on our ‘recurring income’ rental assets. But we are all laser focused on growing both metrics in the years to come and have a clear strategic plan to do so..

https://www.linkedin.com/posts/steve-oliver-01369a8_martin-lewis-supercharged-my-electronics-activity-7119306870422401024-Tp-M?utm_source=share&utm_medium=member_desktop

This post suggests a very good partnership with Tik Tok which feels like a great channel for MMAG

https://www.linkedin.com/posts/musicmagpie_did-someone-say-cyber-monday-treats-activity-7134940973100355584-PWbK?utm_source=share&utm_medium=member_desktop

Particularly great to see the appreciation from his peers - they sounds like a cracking bunch at MusicMagpie, with a great culture and much has to go down to its founders. Steve appears to be hel ind really high esteem

https://www.linkedin.com/posts/steve-oliver-01369a8_martin-lewis-supercharged-my-electronics-activity-7119306870422401024-Tp-M?utm_source=share&utm_medium=member_desktop