Member Info for lemonade311

Could be a catalyst for future growth + increased land bank values on brownfield sites if planning permission is easier to get + faster sales/development cycles for WJG.

Will have to wait and see if the october budget has any actual teeth in it to stop this nimbyism bs but I'm hopeful this time around: https://www.theguardian.com/business/2024/sep/21/planning-passports-that-automatically-approve-high-quality-new-homes-will-be-a-game-changer-says-keir-starmer

No, they will not. And they should not declare a dividend.

They need the cash to invest in new land and as a hedge against the risk of any further provision increase in cladding. Declaring a dividend while rates are high and liquidity is an issue would be extremely stupid.

I'm not familiar with rolls royce but every company is different obviously. Dr martens has huge issues and it makes no sense to buy unless we see the new CEO start fixing inventory, brand and ROIC.

I was expecting much more sales tbh from plucky squire, quite sad really given it looks great, I don't own DEVO though.

https://gameworldobserver.com/2022/11/15/how-to-count-game-sales-steam-2022-review-multiplier

If we use a 40x review-sales ratio then it's only sold 20k copies. At a price of £25 that's just £525k in revenue.

I was expecting this game to go semi-viral.

See here if you want to save your money for why: https://www.reddit.com/r/ValueInvesting/comments/1flz0s8/dr_martens_still_a_huge_value_trap_even_after/

An absolute joke of a remuneration commitee, anyone looking into this stock, check out the remuneration part:

> For the 2021 award, the Remuneration Committee assessed performance against the underpin conditions up

to 31 January 2024. Despite a robust performance over the period, particularly the relative Total Shareholder

Return as shown in the adjacent column, the underpin performance criteria were not met in full. Whilst the

sustainability underpin was met with continued reduction in carbon emissions, retention of Planet Mark

certification and no environmental, social or governance issues occurring to potentially incur reputational

damage, the free cash flow and profit underpins fell short of their criteria. Despite there being free cash

generation of £6.9m over three years, the outcome fell short of the underpin target, and adjusted underlying

profit before tax at £12.2m in FY2024 fell short of the underpin of £21.2m. Both financial underpins were set

before the significant economic headwinds which impacted the last two years of the measurement period.

The Committee reflected on the outcomes, taking into account the stretching nature of the underpins and

the significant progress which the Company has achieved over the last three years, including the strong

performance in Total Shareholder Return, and determined that a scale-back of 34% of maximum would be

appropriate, resulting in final award size of 66% of maximum for the Executive Directors.

You read that properly? Directors missed their targets by a mile, still get a 66% award lol. Same for 2020 RSP awards.

This is a heads they win, tails you lose. The board is clearly not capable of doing their job and under control of the CEO.

Also looks like another inventory impairment charge will come soon.

Okay, my numbers below were very wrong, This company is hard to get correct numbers for...

Growth Capex per site $1,200,000 in FY23

And FCF per site was actually $132,000

In 2019, FCF per site was $210,000

Https://www.youtube.com/watch?v=9tGmUZhlTSc

@master_margarita

I apologise, I did a deep look into TheGym again and yes, you are correct I think. This company destroys value, if you do a bottom up valuation per gym you can see that. The killer is the massive `expansionary capex` which on average is £2m required per gym. Which means no shareholder will ever see any of that free cash flow.

2023 numbers:

Revenue per site $875,536.48

EBITDA per site $313,733.91

EBIT per site $66,952.79

Tax per site $16,738.20

Depreciation per site $246,781.12

Lease per site $158,798.28

Maintenance Capex per site $44,206.01

Growth Capex per site $2,733,333.33

FCF per site $93,991.42

The gym is extremely mis-leading with it's definition of ROIC as it does NOT take into account depreciation, so their headline number of 20% ROIC is just wrong, their ROIC is more like 3% if you include depreciation.

Their definition of free cash flow is correct, HOWEVER when valuing the company you have to take expansion capex into account.

It's simply not profitable or a good ROIC to spend £2m on a new gym and only get back £93k FCF, even in 2019 when they were more efficient, their numbers were awful.

And everything points to them having nailed planet coaster 2.

But yes, if it flops they are in serious trouble cause of their cash. However it's looking like it will exceed expectations given what I've seen of customer reactions on features and the game so far.

Thanks.

on point 2, F1M24 sales will have been half of F123, you can work this out yourself from the sales price of £30 and they had 1.6k reviews on steam.

F1M24 price was £60 on release so we can deduce that F123 sold 40% of F124, especially given it's bad reviews.

Anyway, none of this matters, the cash that both these titles generated was pathetically low and they should never have made F1M24 as it was just a distraction. The only thing that matters is the CMS games and how well they perform as that's where the FCF comes from.

Why this down today?

There's nothing in results that's bad afaik

BooHoo are doing awful, Looks like they are in terminal decline. They will probably need to sell their REVB stake at some point, depressing the share price. Will wait for that to happen.

Good idea from them to do a 95% sale on planet coaster 1, this will mean more users want to buy planet coaster 2 which is where the money is.

@BlackfoxTrading it is a big issue. I used to be a holder of Boo and sold out for a big loss.

It was a really stupid decision to continue the growth expansion in a time when interest rates are 5% and inflation is super high & competition is killing you.

This just dries up your cash pile and means expansion is super expensive. The CEO needs firing. A stock price drop of a few % here is not enough.

This company is now in terminal decline imo. They should have done this 2 years ago to shut down growth expansion stuff and preserve cash/margins etc

Well it very clearly says O'leary won't consider it until all growth options from his fleet are exhausted which is when all 350 planes are delivered from boeing and boeing is behind on deliveries right now so no, they are not going to 'take over'.

> Based on the information provided in the annual report, Ryanair has two major aircraft orders with Boeing:

Under the 2014 Boeing Contract, Ryanair ordered 210 Boeing 737-8200 "Gamechanger" aircraft. As of March 31, 2024, Ryanair had received 146 of these aircraft, with 64 remaining to be delivered by the end of fiscal year 2025.

Under the 2023 Boeing Contract, Ryanair ordered up to 300 Boeing 737-MAX-10 aircraft (150 firm orders and 150 options). These are scheduled for delivery between 2027 and 2033.

Combining these orders, Ryanair expects to receive all 350 aircraft (64 remaining from the 2014 contract plus at least 150 firm orders from the 2023 contract) by 2033, assuming Boeing is able to meet the delivery schedule and Ryanair exercises all options. However, the exact timeline for receiving all aircraft may be subject to change based on various factors, including potential delays in production or delivery.

Just had a re-read, the results are much better than they look on the surface. Significant cash flow generation from recovered margins + reduced inventory = £6m oper. cash flow and £5m free cash flow.

This is trading at an EV/FCF of 4x lol. With pippa's good leadership skills and a focus on ROIC this seems like a no brainer buy to me. a 4x multiple is quite ridiculous.

Does anyone know why franchise package revenue has dropped in 24/23?

They had same store openings this year as last, presumably this should have stayed the same or gone up due to inflation.

Also, why did they stop reporting franchise holding deposits?

The grenfell report recommended 2 actions that stuck out to me https://www.architectsjournal.co.uk/news/grenfell-tower-inquiry-second-report-key-recommendations:

- Modifying 11m requirement to instead be based on a case-by-case basis based on 'the nature of its [the building’s] use' -> I don't see how this is possible, tenants come and go and having to go through 10k+ apartments in the UK and specify low/med/high risk seems silly to me. Maybe they will do it based on cladding type/staircase, no idea but to me it seems not feasible.

- Speed up the pace at which cladding is removed and replaced as Monty below said -> I also don't see how this is possible. There's a finite amount of labour + capital. You can't just set a deadline of 2 years to replace all cladding in all buildings, there just isn't enough experts to be able to certify and do all this AFAIK.

Probably why Kier refused to give a deadline when pressed by that dumb reporter asking him.

As far as I can see, watkin jones is already moving reasonably fast. £22m in provision this year is a big chunk of the cladding issues with £33m after that in the next 3 years.

Yes, that's correct, WJG will have cash outflow for 4 years related to provisions. It's not conservative to remove provision from tanginble net worth, it's the correct thing to do. It's a liability that has to be removed, the bank uses this to test the RCF covenant as well.

The answer to the forward funding market issues is Joint Ventures where WJG takes on more of the upside but finances the builds more, they require cash to fund this I think, hence the talk about funding.

You should sell if you don't think you have margin of safety, but the question is, why didn't you model these provisions before, they have been on the books for a year now. I modelled them as cash outflows over the next 4 years + building safety levy of 4% that builders now have to pay.

Anyway I worked out from their 23 FY Annual Report that WJG would have to go down to £50m tangible net worth to break the RCF of £50m covenant that the bank has. Currently their tangible net worth is £120m so a lot of headroom even in a large bear thesis.

However if WJG was to double this RCF back to £100m, I presume the covenant would increase. The RCF is secured against the land bank they hold, so even in a worse case scenario, it would make more sense to sell some land and forgoer some future revenue to clear the RCF than it would to do an equity raise as the equity raise destroys more value at these prices.

You should probably read pages 104/105/106 of FY23 annual report in detail.