Member Info for m007j

Countingcards seems to be a bit confused.....

What do you mean by "I see the £325k as a seperate placing requirement and not connected to the previous raise". This is just fuzzy logic. Burt had to raise £325k at a massively dilutive price of 1.1p because otherwise he would have run out of money and the company would have gone bust. He now has money to last until April 2024. At which point he will have to raise more money otherwise the company will go bust. There is nothing separate about it. The company currently has a cash burn rate of over £2m per annum.

Just a reminder how much Burt the CEO has raised from investors since the company came to the stock market in 2021:

£3m placing of shares in July 2021

£3.4m placing of shares in Jan 2022

£2.2m convertible loan in July 2023

£0.3m placing of shares in Jan 2024

Total: £8.9m

This is for a company that has been going for over a decade and which in 2022 had revenues of just £3.2m. Revenues for the full year 2023 are unlikely to beat the 2022 number given then stood at just £1.2m for the first half. Since listing in 2021, East Imperial has raised more money from investors than it has generated in revenue. And we can expect another fund raising in April.

All very disappointing!

I do not understand why the company has not issued a statement saying the placing has completed and named the new investor. It would be very easy to do.

To be honest I am starting to view Tony Burt the CEO as a bit of smoke and mirrors merchant. The company stopped producing last year because of a lack of capital. Shareholders were told long after the event. He then does a fund raising last summer with cash which is supposed to last until this summer. Then he runs out of cash and announces a fund raising for 300k last week which will keep the company going until April this year at which point he will have to raise new money.

In November in the Directors Talk interview he said the company would be profitable by June this year. Last week's statement said this has been postponed. Until when? Not clear.

In January this year he put out an trading statement. But only reported on trading in New Zealand? What about trading in China, Singapore, Macau and the US? No comment on trading in these major markets. I guess because there is not much positive to report.

I do not thing Aviva is the investor who subscribed to last week's placing. They already had 26.1m shares according to this statement from back in 2022:

https://www.lse.co.uk/rns/EISB/placing-and-year-end-update-7h72l2menjyyagl.html

If they had subscribed to last week's placing (29.5m new shares) their total holding would be 55.6m shares or 15% of the company.

There should be a TR1 before the end of the week if the placing has been done.

"It is currently anticipated that Admission will become effective and that dealings in the Placing Shares will commence at 8.00 a.m. on or around 29 January 2024".

Has this occurred? Has the placing been completed?

Next week the investor who subscribed to the equity issue will have to be disclosed. Because they have bought 29.5m shares and following the new share issue there will be 367.7m shares in issue and 29.5m as a proportion of 367.7m is 8pct making them the second biggest shareholder in the company after the CEO Tony Burt who will have 17pct.

That charge over his shares means Tony Burt the CEO is all in on this. He either makes this company work in the next 6-12 months or he loses pretty much everything. Keep in mind he has invested a decade of this life to building up East Imperial. Today we have an new investor - either an individual or an institution - who has bought an 8pct stake in the company and clearly believes Burt can make it work.

The Company has the distribution channels and infrastructure in place in Asia and the US (the largest markets in the world). Sales have taken longer than expected to secure. It now has the cash to make those sales happen. And today we have a new investor who clearly believes the company can make those sales happen.

It will be interesting to see who has bought this 8pct stake in the company. The new shares were placed with one investor according to the statement. The idea that this investor will take a big stake and then go about selling it into the market in drips and drabs is stupid. Whoever bought this stake is a long term investor and believes in the potential of the company.

In the last Directors Talk interview, the CEO said the company is aiming to be cash flow profitable by the end of June 2024. After last year's fund raise the company easily has he cash to get it there.

This baby is sinking

Next stop 25p?

EV/EBITDA multiples for Costain peers:

Balfour Beatty.......3.4x

Keller Group..........3.4x

Morgan Sindall......3.9x

Average..................3.6x

In order for Costain shares to trade inline with the average they would have to rise to 125p.

Costain current cash: £164m

Debt: £0m

Current market cap (after today's rise): £187m

This values a business which will make operating profits of £50m this year at just £23m. That is crazy low.

Because the fastest way to get to the USA from New Zealand by sea is direct via the Pacific Ocean and not through the Red Sea.

It does not ship via the Red Sea. It ships from New Zealand via the Pacific Ocean to South East Asia and the US.

The Jupiter EBITDA multiple 1.4x (which I also agree with) is incredibly low. Here are rival valuations

Ashmore - 8.4x

Schroders - 9.9x

Liontrust - 3.7x

Polar Capital - 7.5x

Premier Miton - 4.8x

Also by Barclays estimation, Jupiter will generate free cash flow of £79m for 2023 and £77m in 2024. That is a total of £156m. This means by the end of 2024, Jupiter will have net cash of £430m vs a market cap today of £471m. That is an enterprise value of £41m for a company that generates around £75m of cash annually.

Feels like a re-rating of the stock is coming soon!

Looks like the business is trading strongly across all divisions:

https://igamingbusiness.com/strategy/rank-group-aims-to-reach-7m-weekly-revenue-for-grosvenor/