Member Info for JMUK26

Why would there be a placing at xlmedia? They have just received 20m and due to receive another 10 shortly. They will have huge net cash in relation to market cap. Nice try. There is absolutely no reason for a placing here.

Not sure what did you tell us? We all know it is undervalued if that's what you mean.

Whilst 120p is possible in this market, 200p is more likely imo. Providing results are good next month, it's probably only going 1 way. It's historically cheap right now, and profit and revenue are just continuing their trend back up following the Covid blip so I don't think they will drop again, unless inflation spikes. Lots of variables but this looks a v good bet at the current price.

Originally bought in at around 15p and still holding the lot currently. Risky maybe but I'm confident. The company are extremely quiet on updates, so presumably they are not allowed to give any progress updates at all. Rockhopper were regularly updating the market on updates from the arbitrators on timelines and when decisions had been made to act as a guideline and even then the dates were always incorrect and delayed. Rockhopper took about 5 years from filing to award so you'd hope for a decision here by end of 2025 at the very latest, I was hoping for something Q2 2024 so anytime now.

Well, they have stated that like for like performance for Q1 is ahead of prior year, so they will be looking for a beat, but have been cautious in their outlook which is fair enough. Most marketing companies are struggling at the moment so they are still doing very well. If they manage to meet y24 expectations - which are conservative imo - and have increased net cash to "in excess" of 9m as suggested, that will be a third of the market cap in cash. That makes the business very cheap and could lead to a series of acquisitions, dividend, or buy-backs to bolster SP. Plenty of upside here.

So quiet here. Final results and an acquisition announced this morning and we have just 2 trades and not one post. The business had a good year, and it looks like a good acquisition so not sure why there is so little interest here particularly given the defensive nature of the business. Outlook is conservative, but based on organic growth this year and the new acquisition I suspect they will better this years performance. Under-promise and over-deliver is always preferable.

Yes, you can never second guess how the market will perceive news and then act on it. Great set of results here, no unwanted surprises, and strong outlook. What motivates a trader to sell on that news is strange as they certainly lost money rather than selling last Friday when they would have to have been holding already. And, for long terms holders that have sold out, all I can assume it that they were hoping for even more and that the recent trading update had lowball figures which was optimistic. Suspect we will see a speedy recover here either today or if not over the next few weeks.

Agree. Share buy-back and investment in the business much preferred to a special dividend. I didn't buy in here just to get repaid some of my own money back, I bought in because it is still very undervalued and investment in the business or buy-backs should materially affect the share price on the upside. There is also the good chance of a bumper bid for the remaining business in the meantime.

Painfully slow progress I agree. Management have over-promised and under-delivered in the last couple of years as they said it would be commercialized and being sold right now. However, they have at least been prudent with cost control and the speed of adoption may be a little out of their hands so I'm willing to give them time as they have made progress and seem to have a finalized product now without additional investment required. Lets hope things ramp up over the next year and get some positive real world feedback to raise demand.

Very strange. Given the huge change this business is going through right now, the lack of volume and SP movement is very surprising. I thought it would be a rollercoaster of highs and lows for a few months following the announcement. I sit patiently waiting.

Agree with Gallmat. These things always take much longer than anticipated, and I won't be at all surprised if we hear nothing material in April/May regarding negotiations and auction results. If there is a chance that the governing party may change at election then there is little impetus for the current party to negotiate a deal. Just leave to the new party to be the bad guys and sort everything out. Suspect meaningful negotiations are ongoing though otherwise we would have probably submitted the arbitration notice as per the previous statements. Fingers crossed for some news soon.

Much appreciated rivaldo. Very helpful.

Thanks rivaldo. Any new broker forecasts released today? SP is surprisingly down on good news. I thought the market would be pleased targets have been met given lack of recent news flow.

Unaware what the reason for the volatility here is. Lack of dividend (CEO prefers to invest in the business which I'm fine with) or possibly the high volatility has put investors off. Its is a solid growth business that has made no major errors since I started watching it over the last 4-5 years. Management seems trustworthy and is well invested himself. I top-sliced at £4 recently and will probably top-up again soon at this level. There are no red flags for me, it's just been caught up in the general AIM slump.

Hi Allessandro, no this forecast was not before a share split. It climbed to not far off that share price, and management cleverley raised capital at the high share price before it came back down.

Agree, not really interested in a special dividend as the share price would just drop by the corresponding amount anyway. Share buy-backs at this lowly price would make sense, or if they can put the cash to good use for growth then that would be the priority. What we don't want is the money frittered away on poor capital allocation decisions which has been a theme here.

It wasn't 200p + in a high interest / high inflation environment. The price started tumbling from that high once it become clear inflation was materializing and the business had a fair bit of debt and no cash for acquisitions. It's been on a downturn for a couple of years now. Throw in the lack of director buys and the major forecast misses / write-offs in the last year or so and it's guesswork as to what fair value is here and whether they can get back on track. The next trading update which should be due anytime soon will be telling.

Alessandro, on what basis do you think the shares are overvalued here? They are on a forecast PE ratio of 11.5 (which it seems they will definitely achieve) and a 2 year PE of 9.9. They currently have around £71m net cash and this will likely rise to around £91m this year, which effectively reduces the PE ratio by a third. In my opinion this is certainly not overvalued and bar any unexpected issues in the next year, it's hard to see this being under £2 which is still way under it's historical average. I can't see how you think this is possibly overvalued in relation to the rest of the market?

Agree with Shearclass that it appears there is at least some dialogue going on between the 2 parties which is positive. If there was zero response and GOI were not even willing to respond after 3 months then LCM would not be waiting a further 3 months to file the arbitration claim. 6 months is just a reasonable amount of time to come to an agreement when you are in dialogue with each other and if you cant agree within that timeframe you never will. If there is zero dialogue it doesn't matter if you wait 1 month or 10 years it isn't going to make a difference.

Surprised it didn’t edge up higher than this today. They have sold a part of the business for basically what the market cap has moved up to today. There is therefore no allowance in there at all for the remaining business which is arguably the better bit. Even then there could be an approach for that and another big premium. Even after today’s rise I don’t see much downside here in the short term though it may be a bit choppy! Suspect we’ll see 20p before long. If the various managements of this business hadn’t been so bad at capital allocation this would have shot a lot higher today.