Member Info for lemonade311

Dead cat bounce. It will be sub 5p by next month again.

This company is worth exactly 0p.

Yes I mis-read the new clients thing.

However I don't see how they are keeping the same margins when they have increased headcount by 40%. Doesn't really make sense. Either they are excluding it in the asterik as one-off costs which is not correct or they have increased their spreads? Not sure.

Anyway the business model isn't good imo. Growing 40% headcount for 20% revenue growth and it takes years to mature sales people. I'll wait and see if they can pivot to tech or not.

Also they are now talking about transitioning to a tech first company in the update which means their current model isn't working.

But they don't even have a CTO?!

This is a deceptively bad trading update imo.

New clients have only grown 5% which is where future revenue growth comes from. Which means next year trading update will have low growth + lower margins as they have hired more people.

AlphaFX beat expectations with insane growth. This means they are taking AGFX market share and beating them.

No solid numbers on international growth either is a red flag. Just a weird sentence on 'half-on-half' growth in netherlands office whatever that means.

Another stupid rating by this broker. Their previous ratings were £5 and £11.

In what world is Plus500 worth £13. Yes there's regulatory risk but eve so Plus500 is a cash cow machine.

Any Discounted Cash Flow valuation puts the intrinsic value far higher. Relative comps are ridiculously low too.

This stock should be £20

Argentex doesn't seem to post RNS's often, they had the same timeframe in 2019 interim -> trading update.

I wouldn't read too much into it.

But yes I am also hoping for good results. Considering AFX has amazing results I expect big things from AGFX here and if not I will be questioning why.

But I do not own IDP anymore, sold them for 33p a share cause I don't want BAR shares.

This is the formula for NNWC:

Net-Net Working Capital Per Share (Q: Dec. 2021 )
= (Cash And Cash Equivalents + 0.75 * Accounts Receivable + 0.5 * Total Inventories - Total Liabilities
- Preferred Stock - Minority Interest) / Shares Outstanding (EOP)
= (17.284 + 0.75 * 5.08 + 0.5 * 2.655 - 15.44
- 0 - 0.181) / 17.320
= 0.39

NNWC is a much fairer view than Net assets imo.

And yes there's little upside priced into BAR. But I will wait till it drops to around this before buying as again, the recent RNS is not good. I fail to see why revenue should have dropped that much.

I did not buy IDP for it's NNWC, management looked like they could turn it around.

Although I'm not saying BAR has bad management yet but they are unproven and revenue going in the wrong direction doesn't really help that.

Bar has more to drop yet before it's attractive right now given how hard it is to forecast their future results imo.

It can definitely go lower.

Bad management destroys shareholder value. See Loopup for example on that.

Also you can't just look at cash - market cap... You need to subtract all liabilities from the company.

And it's more realistic to add a big discount to the liquidation price of the intangible assets as in a fire sale these will be worth very little.

Their Net-current asset value is £0.57 a share and their Net-net working capital is £0.39 a share.

You can see here at the bottom for the ratios: https://www.gurufocus.com/stock/LSE:BAR/financials

> Due to the BAR drop in price again today i think the deal is now worth 36p (29p shares plus 7p cash). BAR shares are at an all time low, but there is reason for that.

This only holds true if BAR is actually worth it's market price though. And who knows with bad management that destroy shareholder value.

If BAR becomes a net-net, i.e <= 45p a share I might think of buying a small amount simply cause it's less than it's liquidation price.

The fall is due to the poor results of BAR I think, not the merger of IDP.

Dropping margins due to shipping makes sense but Revenue of -20% with a poor excuse is a red flag imo.

I agree.

Also if you think about it why would they have not merged with Creightons last year as that would have cut costs down the same and Creightons is a FAR better business than BAR.

I think IDP has no choice due to running out of cash.

I dumped my entire stake in IDP for -25% loss, cost basis was 41p. Next time before investing in turnarounds I will wait on the sidelines to see proof it's turning around. Nice learning lesson.

I didn't want to hold BAR stock for any price. Management has not proved themselves, they have had 2 years to turn it around and yet in the latest RNS you see excuses on the huge -19% revenue drop. I'll keep track of it but on the sidelines this time until I have proof they are turning BAR around.

Also, as soon as the merger happens BAR stock will probably drop again as the people who were holding out for a higher price at the BAR stock sell their shares.

Yes I agree,

which is why I think shandy is right that IDP was forced to merge, especially because BAR has a ton of cash, why would they not just pay 100% in cash?

Because they either think their share price is overvalued or are opportunistic and know IDP is gonna run out of cash.

Either way BAR management does not look good imo.

What are your thoughts on BAR group shandy? Personally I don't like it. They seem to be going in the wrong direction after 2 years of a supposed turnaround.

My bad,

You are correct on the cash burn, seems like IDP were forced to merge.

To be honest BAR doesn't look very good either as a company. Bizarre excuses for the revenue drop in their most recent filing. Probably why the stock is dropping

> Revenues for the period of £7.4m, a decline of 19% on the prior year (£9.0m) as a result of delays to brand relaunches landing in store and planned product range rationalisation.

Why would delaying a launch of re-branding cause revenues to drop 19%?

Sounds like excuses. There were no lockdowns in this period. Terrible revenue drop.

> All the talk is synergies but I think BAR just wants to get their hands on ST. Weird scenario where the 35p capital raise gets 7p back + upside. So short term a win/derisk but reckon they’re losing a lot of upside from the deal.

We are not better off going for growth imo. That's what the previous management had all wrong.

If you do a Discounted Cash Flow analysis on IDP you will see that the value generation comes from improving margins i n the long term as this company isn't a high growing stock so it makes no sense to try and grow rapidly over improving margins. I think management has done the right thing.

Merging with BAR improves margins.

Maybe, I would want to see H2 results to see if they had no choice.

Checking past financials, IDP H1 results always had negative free cash flow due to it being a seasonable business where the money is made in H2.

They burned £1m cash this Half Year which is less than previous half years as well.

Per this statement:

> The Board remains optimistic that the transformation plan enacted this year, as well as underlying improved consumer consumption and retail momentum versus last year will enable the business to continue its improvement trajectory over the second half year with a return to profitability this year remaining the Board's intention.

So presumably this means they are expecting to have positive net income this financial year (i.e H2 would make up for H1 losses to make them a profitable company) but obviously who knows if they would actually achieve this.

Also, IDP results were good imo.