Investor Meet Presentation25 Sep 2023 09:29
Https://www.investormeetcompany.com/investor/meeting/investor-presentation-434
Interesting Investor Meet presentation from the company last week.
Some takeaways if you missed it:
Management think that a £6-£7 share price is achievable in the medium to long term (2-3 years) resulting from a £30m valuation of Blink and a £30m valuation of Indian assets. They think that Blink’s revenues could get to £6m pa which, at a 50% EBITDA margin, assumes a revenue multiple valuation of 5x and an EBITDA multiple valuation of 10x. They obviously don’t see much value or growth potential in the Indian assets as they currently generate an annual EBITDA of c. £8m - £10m and this future valuation would seem to reflect an expectation of further margin erosion.
Continued management focus on the Turkish market seems like a waste of time. Economic and political uncertainty causing such an adverse FX environment and high double digit inflation continues to wipe out any favourable local business performance. The current EBITDA contribution could be lost in a rounding error.
Exiting from Globiva, which at present management deem to be a ‘distraction’, could be a good source of value for shareholders in the medium to long term. BPO business has tangible value based on solid industry benchmarks and the business is managed separately from the main Group which would make an exit a relatively straightforward commercial transaction. The Board should be keeping this under constant review as, relative to current market cap, this is material.
The legacy unwind and close down seems to be on track which is good news from a cost control perspective, as is progress on the IT platforms.
Management have been incentivised based on some fairly aggressive share price targets. If you park the excessive base remuneration for management, including the current options-based STIP which has no performance criteria attached, then the achievement of even the entry level to the incentive would see a decent return for shareholders. Again, you need to ignore the fact that the share price has more than halved in the last 18 months……but to get anywhere near the £6-£7 mark again would be very welcome. However, it's got a long way to go from where we are now.