Member Info for iWantThatOne

Back to the peer group comparisons…an updated research note this afty after the II call this morning noted that TIG was (at a 101 SP) at a 50% discount to online presence peers and a 40% discount to online marketing peers. That implies an SP of close to 200p (accepting that some peers may be on other exchanges and that there are multiple reasons underlying valuations). They also said that a sum-of-the-parts valuation is now more relevant, given the discussion about separating the segments, so I expect we will see that after the FY results.

The company is “not collapsing”, stop this rhetoric! It’s going to produce almost $90m of EBITDA this year with 22.9c EPS. Theres bound to be a glut of sellers who thought they were buying a high growth company but now see this is temporarily not the case. But it’s now extremely cheap, with plenty of options to grow value. The “conglomerate discount” that Michael spoke of is very real and there’s a good chance they will seek to unlock value by separating out Presence and Marketing next year IMO.

Btw Shinez appears to have seen significant reductions in business from key network partners due to “operational and compliance” reasons. They’ve done gross revenue of $21.7m since acquisition (late April) instead of expected $111m pa (so $47m or so since late April).

I don’t want to post it given confidentiality and the terms on which investors are given access to it. However if you pay the Research Tree £8.50 per month you can get access to three companies research including TIG.

To support the break-up thesis, Zeus lists four online presence peers (a small peer group, they admit) with varying metrics eg EV/Sales. Ionis is easily the lowest of those at 2.5x. TIG’s online presence sales in FY23 were $179.8m, x2.5 gives “EV” of about $450m.

Zeus has updated its forecasts based on no recovery in RPM and Shinez breaking even (vs expected $11m EBITDA), which it thinks are conservative. Its FY25 metrics are 6.3x PE, 4.5x EV/EBITDA and 15.6% FCF yield.

At 100p, the PE for the year will be about 5.5-6. Hardly challenging. And that should improve each year with share buybacks, together with increasing dividends. It’d be attractive if we knew things were now on solid ground. Plus there’s a strong argument now for break up into its constituent segments.

I presume Shinez has also been affected by rate compression, hence no EBITDA - it’s a bit of a distraction to highlight that if the main business is equally affected.

The RPM reduction of 18% YTD is hard to counter, and that seems to have stopped any top line growth. At the end of the day this is still a solid low P/E cash-generating company.

In fact the RNS dated 9th Sept (just three weeks before end-Q3) on the new share buyback programme repeated the “at least in line with expectations” message.

Might they be Bed &Sipps? Selling in one taxable account and re-buying in a SIPP? Too big to be Bed&ISAs. That would explain why no material effect on SP.

On Boku, whilst they’re twice as large as BGO, they’re also valued at 2-2.5x BGO after allowing for size. We can all speculate why but my thoughts are: institutional selling (Liontrust); relative scale; market not yet convinced BGO can meet annual target; not cash-generative this year (but will be from next year). FY results in line with expectations and a good forecast for FY25 will see a huge turnaround.

Worrying. The SP seems to have dropped fairly steadily throughout the day and volume is modest, which doesn’t sound like drastic selling from insiders. Only 7 trades during the day were 25k shares or more - the largest was 100k. Given the RNS which said “everything’s on track” was 12th August, 7 weeks before end-Q3, it’s hard to see Q3 results being a major issue. I’ve had a look at supposed peers (per Zeus) and they’re generally doing fine, so no obvious industry-wide issue.

Extremely positive, I thought. Wouldn’t be surprised if they exceed expectations slightly by end-H2.

They’re not poor results - they’re what was expected. And as far as I’m aware, the contracts allow TLY to increase prices due to wage inflation - this has been covered several times before by Wendy so I’m not sure what her comment meant - needs to be followed up at the prezzer tomorrow.

Boku’s current mcap of c$550m includes c$70m of their own cash for a start. Then at YE24 their Revenue and EBITDA will be roughly 2x Bango’s. They are focused on local payment methods that are growing rapidly (much more than Bango’s DCB, but then they have the DVM too). Overall I think this is down to Bango being particularly low rather than Boku being overly high. Remember, this time last year Bango was stuck at 180p in expectation of $49m revenue and $12m EBITDA. For FY24 they’re aiming for c$53m and $16m respectively. For completeness, Boku did $82.7m and $27.3m in FY23.

Content with the interims today. H2 is always larger than H1, they’re on track for market expectations, and even in this very difficult market H1 was break-even. Key, clearly, is more contracts being offered. Come on Wes, do the right thing.

G_G_G - in fact I see in an earlier post you suggested the Chairman’s new fund could buy the company and re-list in the US right away for an immediate 50% profit. Now that *would* be unethical. If that’s how the Chairman thinks shareholder value can be maximised he’s duty bound to pursue that for the company - not dissuade them with a view to buying them out and doing the same.

Isn’t it rather unethical for the Chair of a company to seek to acquire it? Seems a bit off.

Goldinvestor, no they’re not holding things back to prevent an SP collapse, I’m sure it relates to finalising the revised debt repayment schedule. After which - as I keep telling you - Q3 doesn’t matter. What matters is being able to meet debt commitments going forward, which it clearly will once all is agreed. I hope to see the SP rise a little once the way forward is on a stable footing.

BPat, you seem to be ignoring the $20m loan from Nioko by end-Q3, so whilst net *bank* debt (i.e. Coris) is $135m, Nioko is owed $20m and overall net debt remains c$155m. Also it is completely unclear whether the Nioko loans to date have been used to repay Coris. You clearly think not, and the $20m is sitting in the company bank account, with the Coris repayment coming from cash flow. I suspect not - it’s much more likely that the loans have simply been used to repay Nioko. Else why take out the loan? That’s also based on a debt repayment date of 31/10, which suggests the Q3 date may have been 31/7 when HUM certainly didn’t have the required cash flow.

However it is very much a positive that the debt repayment schedule is to be finalised next week, which will include the company’s commitment to near-term repayments that it must feel are possible. I expect we’ll see an RNS on this next week followed closely by one on Q3 performance (which I suggest will show roughly break-even performance given no real change in net debt).

They could be selling for any number of reasons - decided they were overweight in a regular investment review; decided to reduce, given performance down from 180p; see better opportunities elsewhere; creating liquidity for clients who are selling units to trigger CGT at lower rates; etc etc. They didn’t need to disclose until they hit the 5% threshold. It’s quite possible they’ve only been selling since the half year trading statement, in which case 3.5m shares divided by about 80 working days is 45k shares per day. Easily enough to push the price down to today’s figure. I was very encouraged by this news this morning, as it finally explains well enough what’s been going on. The question now is whether they’ve stopped. They’d need to disclose going under 4% which would be in five weeks at 45k per day.

At 160p TIG was reported as being 45% behind peers, which implies closer to 300p is fair long term value. Mcap is only 3.8x FY projected EBITDA, and EV is only about 4.5x. These are, indeed, silly numbers. 200p would be nowhere near enough to buy out TIG, but in any case I’m not sure the main shareholders have the combined power to do so.