The latest Investing Matters Podcast episode featuring financial educator and author Jared Dillian has been released. Listen here.
I think that's hope clouding your vision there Hedge. Rules around 8.3's and the like are clear. Down at this price there's enough retail/fund traders to absorb.
We need the FY23 results published. They should actually be decent reading (at least when aligned to this SP).
7.5m EBITDA
About 13M debt of which only 3m is not covered by forward contracted rental revenue and the asset value
Got to get past the idea of a buyer willing to pay the sort of money touted on here and move on with a business which should be £120-130m and nicely profitable. It'll be a business worth about £50-60m then.
Now here could be a kicker and has to be covered in terms of balance sheet risks. That £7.7m should reduce each month in line with the market value which could be realised for it. It's a simple system for them to have in place and prudent to avoid significant year end tangible write downs.
Maybe you could check with matey to see if they do indeed have that system in place Hedge.
The US is such a different market. I know of two online only sites that shut up shop citing DeCluttr as one of the reasons. They simply could not compete with the pricing structure decluttr were putting out and could not make profitable headway into the space. I'd fancy decluttr has little or no profit. Cost to collect and process structure are abhorent there if not processing in MX.
I don't know how much revenue there is there, but if it's $30-40m I'd say sell it. Whilst profit might be marginal a US business sale would consider that revenue because of what a PE house can do and put against it for the 'fund' purposes. Their upside is a 3 yr plan to deliver 15-20% onto the bottom line mixed with increased revenues... smart management would integrate it into retail network/partnerships e.g. Bestbuy, Staples etc.
ECOATM won't want it as they already had Gazelle within the group and they won't be interested in the media element.
Thing is you need a plan on how best to make any funds from a sale work...you don't want it simply dumped into working capital ... maybe share buyback.
Pleased your right on this GMHK. Couldn't care less about the packet I sold yesterday and will hold for gold now!
That £38m fine payment is a bit false flag. They would have it accounted for in their balance sheet since it was already a liability. So net debt should include that already.
VAT Margin rule (only for purchase from consumers) applies to most their stuff. So 16.66% on the material margin of the product (not processing expenses).
Rentals would have to charge the usual 20% VAT as it's not a sale. VAT margin rule would apply to the end of rental asset when sold.
My understanding was that rentals was not solely about adding profit but building a subscription type revenue base. Issue as we know is the consistent cash drain in doing that when it comes to hardware. Each growth cycle is a burden on cashflow. Another thing on rental is eeking out the most revenue per asset to maintain purchase price leadership on the inbound and draw consistent product through the door. This sector is all about securing supply and there's a lot of competition out there for it.
I've sold a few just in case this gets taken back down again. More than likely retail has driven today. Still hold plenty so please make me totally wrong!
Think I gave it the kiss of death today by adding to holding here! Oh well, not long till we get news.
@Tylo ... there was nothing indicating any immediate need to do that and so long as they focus on profit and cash generation then it's not something likely. They certainly looked topside of their facility though.
These businesses burn cash like it's going out of fashion when they are trying to push growth cycles. 2024 should just be a year where they settle down, put profit and cash back on the books. Just deliver a company where investors can see a future where return is possible. It just won't be the size that perhaps Cannacord and Shroders were hoping for.
As to the muted price response and guesses around it ... I imagine a fund got wind of the fact that SYNT were talking to banks about extending the timeline of the covenant breathing room they currently have. Without knowing the entirety of the situation and typically low volume trade to easily execute an effective short, the fund shorted from 180ish down to 120s and it's their algo we're been seeing in recent weeks. You could assume that no big buyer will appear off a trading statement and will await the finals in March. So we have a period where that fund will slowly manage their exit or hedge into the results presentation.
You're flat out wrong Wigwammer but I decided you were simply thrush a long time ago. You never got holding and trading. Maybe take your narcissism to another board that loves that stuff ... VAST used to be good for people like you ... go talk diamonds in the rough. Gutted I bit and will go back to ignoring you again.
This board is usually quiet with decent dialogue about the company and the usual stab in the dark as to ups and downs.
It might not happen today but you’d expect this to climb back to 160/180 pretty quickly.
There’s a few things the naysayers could grab hold of in there.
Better than expected really. Ebitda reasonable and more importantly cash generation. Just need the industry wide lull to swing.
3.5 times debt to ebitda is the anchor. Improving volumes would sort that out immediately.
I can only imagine something has kicked off with management and Cannacord/Shroders whereby they don't see value being realised anytime soon. Oliver has 33m shares of which 10m were at issue and the other 23m carry a 30/40p average. Probably standing firm on a value for the business which is simply not there. It's that owner run business problem ... same like you see in THG and a few others where emotional and business attachments get all muddled up.
If Shroders decide to sell all their holding, then we could see 10's and lower for a few months unless there's some positive business direction news.
You've made a very logical decision there LOTM. I failed to, so just hope any backwards movement is simply a blip. At some point the tide has to turn and this SP level seems crazy really.
Thinking of jumping back in simply because the cash position eclipses the MCAP. I genuinely thought they'd burn through some.
The negative is that the cogs that turn the wheel of this company is Covid and the subtext is that other tests are just struggling to gain traction to get to some kind of scale to support the company.
WT…new one for me today was FCH. Been there before and did ok. Other than general holdings I have too many projects on go at the moment like this one. Started selling down PFC today.
Good luck LOTM.
This is being run by algos at the moment so I'm sat on the sides and will likely hold through the update unless we see a considerable upward trend. Commercially it would need to be a disaster of an update to send people running for the doors . However, with someone's algos running it on too lower volume ... it could be a long period in the doldrums waiting for an uptick in positive news feed from SYNT.
This looks too cheap now. Been here before on a rise to over 50 from memory so back for a similar journey hopefully.
Hopefully March report will show some traction on the profitability side.
I think they paused before and it went to 12/13 and they started selling again. Irrelevant now for me as loaded as much as I care to on this.
Crazy cheap at that 10.50/11 spread. Was EBITDA forecast at £7.5m? There's a very big disconnect when a company MCAP is well under 2 x EBITDA. From memory they just have a revolving £30m credit facility with the rest of debt simply being leases/IFRS junk.
That's the way I see it Hedge. Should know shortly if Cannacord are continuing to sell off their 4% or so.
On the flipside, this process is a couple of months in now so there really should be some news regarding offers or inability to find a buyer at the right price. Just need to move on from limbo really.
Can't see how it's oversold when Cannacord are pretty much supplying the liquidity needed.
Just a case of sit tight and wait now ... maybe add a few more on additional drops in SP where (like today) the spread is not ridiculous.