Member Info for JG68

It's acting like a cineworld

What are we all missing here ?

There seems to be a roadmap to cash generation in 25, I'm struggling to understand why the market can't see through some of the short term challenges.

It's reacting like there is a risk of breaching debt covenants or really at risk of administration.

I repeated the mistake of averaging down too quickly like I did in the summer. Such a t1t.

I never learn with this share and end up with loads and it's still falling.

I do remember feeling massively overweight here with 300k at 40p, so I guess my 400k at 21 isn't as much , but it 5ucks

This is just falling despite the raised guidance, despite the oil price, despite any green days on the FTSE 250, similar to a lot of my UK mid/small caps.

And we can all be sure any sell off day we will get hammered. 5h1t show at the moment.

The market is dropping this regardless of buys, 400 and 100 k buys just go through followed by a 6000 sell, and they drop it sub 14.

We've got no chance other than to hold a wait it out, or just get out at a loss to remove the stress

Terry

I know it's frustrating and will take another 18 months or so but I am more encouraged by the new guys actions and at least his brutal honesty, compared to the absolute 5h1t that came out of JLs mouth, trying to gloss everything and create a false impression.

Just writing off this money as capital allocated for 18 months again and Hope for the best.

Trisor

I'm in for way too many here but I'm going to let it ride for at least 18 months and try and sit with the discomfort!!!

I'm not sure about 200 FCF, working it out simplistically, without the known one offs this year leading to an outflow of 70-90 million they would be broadly flat fcf, add on the 160 cost savings and who knows???

Without any hacks, court cases etc

Reduction in revenue to be expected given all the disposals.

As I said previously, without the expected one offs last year and this year, there is a map to cash generation next year, without any additional contracts or new innovations not currently accounted for.

Hardly life support when we know there is a perfectly reasonable explanation for cash outflows for 23/24 , is it?

We know all the one offs which contributed to cash outflows resulting in debt increase for 23 and 24 will drop off from 25 onwards.

So why is that life support?

I agree the sp is on life support, but I'm pretty sure it's because of the above guidance for this year, profits over a year away, market didn't expect that. Shock horror, whack cpi by 30%.

Didn't realise we are reliant on US rate cuts.

It's not good when we fall on days when both UK and US markets are up

Pokerchips

Do you know if MCG is more vulnerable to US interest rates than UK ?

This really has escalated from a consistently disappointing investment over the last 3 years to now one that feels like a complete gamble/ massive risk.

I appreciate that AH has inherited this current disaster, and just hope and pray he is ruthless enough to see it through.

It would seem that the guidance at HY 23 although very poor for H2 in terms of cash outflow, debt, overall losses, had been underestimated by the FY end.

The reaction by the market says so.

ANSWER

The FY 23 results came pretty much in line with the guidance given at H1 – in terms of cash outflow etc. The debt number was a bit higher because the Fera proceeds were received in January and not before the December year end. The issue per below is that the additional costs of the efficiency measures means that the cash outflow for 2024 will be higher than previously expected ie the analysts had to add a further c£30m of cash outflow to their estimates.

If I'm right in interpreting the guidance for this year, 50 million of the cash outflows ( 20 from 23/ 60 mill cost cuts and 30 from 24/100 mill cost cuts ), and 25 mill pension deficit, will result in 70-90 cash outflows this year?

And naturally as a result will lead to an increase in debt?

ANSWER

Yes that is correct and that with no further pension payments, efficiency costs, cyber etc we expect to be cash positive in 2025

Is this what the market is reacting to, cash generation and profitability being kicked forward by another 12-18 months?

ANSWER

Yes in terms of cash generation – the cost measures underpin the profitability estimates

No offence taken gocpi, I kind of thought whether it was a silly question, but wondered if a former insider recently made redundant would be able to be neither too bullish or too bearish.

Trisor

The losses or should I say cash outflows resulting in the overall loss were more or less known in December, even after August's hy update.

It was known that there were costs involved with cost reduction, part from 23 and the balance including the new 100 million from 24 cashflow.

I'm not understanding why the market has reacted so inconsistently, ie tanking in August, increase in December after cost reduction, and another tanking now from pretty much the same results ( ie increased cash outflow leading to increase in debt) with the exception of additional savings announced ( should be good) with additional costs to go with it ( temporary).

Ps

Sorry about your redundancy.

I would love to know in your unbiased opinion, do you think the the current reaction by the market is a fair reflection on how things really are as a going concern?

Pokerchips

Would you expect the review the auditors are completing would impact the the expected earnings 175-185 , or should I say could it ?

Alfredo

So why has the market reacted so poorly to the 100 million cost savings compared to the 60 million only announced a while earlier which was very positively received?

This is being priced like an Aim stock with zero revenue.

Fishb

Said a few weeks back maybe Garat was brought in by Cosmens to trash the SP!

And in turn Garat brought in Stamp to escalate the trashing!!

That is how suspicious I have become here, surely no management of a successful growing company pre covid are that bad.