Member Info for Maddox

Great to see in today's trading update that despite the depressed stock market RBGP is trading well and in-line with market expectations. I'm particularly pleased to see that 'market expectations' is referenced and stated: This adds absolute clarity and I wish more firms would follow this best practice.

The integration of MC appears to be going well and the EBITDA margin improvements are very positive. The other Divisions are trading strongly which is reassuring with the general poor economic sentiment.

A key attraction for me is that the Legal Services market tends overall to be uncorrelated with the general economy. If one part of the market is suffering another tends to be busy. The degree to which this true and recognised by Mr Market we'll have to wait and see - Legal Services as an investible sector is still relatively recent.

Just to let you know MANO are presenting on MelloMonday today Monday 11th July at c. 6pm - full event starts at 5pm.
It'll be a good opportunity to get the latest trading position and ask any questions that you have on FY 23 results.

Https://melloevents.com/mellomonday-11th-july/

Lots of positives in todays' trading update from Unite but first we have the Quarterly Fund Valuation Report as at 30 June 22 for the two funds that Unite manages. These are in addition to Unite’s wholly owned student accommodation portfolio.

The two funds are:

USAF – Unite own 28.2% (up from 22% due to recent investment) - like-for-like asset value increased 3.5% during the quarter; and

LSAV – Unite own 50% - like-for-like asset value increased 4.0% during the quarter.

Just to emphasise those above jumps in valuation are quarterly not annual rises. This is reflecting the strong demand for this asset class by Institutional Investors - the RNS mentions the acquisition of Student Roost by GIC and Greystar announced in May. It also points out that we can expect to see a similar uplift to Unite's own portfolio of property. Student Accommodation is uncorrelated with the wider economy and is thus highly attractive in the face of a potential recession. It was the best performing property asset class during the 2008/9 Global Economic Crisis (GEC).

Outlook is highly positive based on the forward bookings for 2022/23 academic year an UTG are confident in achieving 97% occupancy. Much of the portfolio's rental rates are inflation linked and there is strong demand for the other direct-let beds; so the 3 - 3.5% rental rate growth guidance might be beaten.

UTG are highly exposed to utility costs and wage inflation - but have hedged their utility costs out to a 'substantial proportion' of 2024. Hopefully the current price pressures will wain before their protection winds-out. They have shown great foresight here and similarly they have locked-in their finance at the pre-fiscal tightening rates.

Clearly, Covid is still a risk, not least in China, but accepting that, UTG is emerging from the Covid-19 disruption in a strong position.

Results 1H22 - Strong underlying performance, as always, masked by the transformation, planned wind-down of services revenue and disposals (removing revenue). The tone is increasingly confident with a rebranding and relaunch of the Sage Brand.
So, looking through the statutory numbers to underlying performance the highlights are:
>> Organic Revenue up 5%
>> Organic Recurring Revenue up 8% (Annualised Recurring Revenue(ARR) up 10%)
>> Subscription penetration 74% (68%)
>> Business Cloud penetration 72% (65%)
>> Renewal by value 100% (97%)
>> Underlying cash conversion 120%
>> Underlying Op Margin 19.6 (20.4%)

The Op Margin reflects increased marketing spend and product development with the guidance that it will widen again in H2.
The key positives are the new customer acquisition (+£150m of ARR) driven by the Cloud Native products up 43% (ARR). Of this new customers comprised 75% and re-activations of 25% with Intacct again the star product delivering +31% recurring revenue in the competitive North American Market.

They have finally completed the disposal programme and the declining legacy services revenue is becoming less significant - so the optics should start to improve. Clearly, the global economic outlook isn't looking good but the trend to digitisation and Sage's resilience suggests they will continue to progress. The re-instatement of the progressive dividend policy should help support the share price.

The BetMGM business update yesterday - the highlights 'BetMGM will confirm that it has:
>> Established itself as a market leader, delivering strong performance inline with its ambitions
>> Achieved the number one position with 25% (See 1 below) share in U.S. sports betting and iGaming markets where it operates
>> Consistent leadership in the U.S. iGaming market with 29% (See 2 below) share;
>> A total addressable market (TAM) in the U.S. and Canada that is now expected to be approximately US$37billion, driven by expansion in online sports betting and strong customer dynamics;
>> Committed to leading the industry in sustainability and responsible gambling;

>> Reiterated long term ambitions in the U.S.:

o Expected market share of approximately 20% -25%;
o Expected EBITDA margin of 30-35%.

>> Reaffirmed its outlook guidance:
o FY 2022 net revenues over $1.3 billion;
o Reach positive EBITDA during 2023.

Presentations by BetMGM’s management team - Adam Greenblatt, Chief Executive Officer; GaryDeutsch, Chief Financial Officer; Matt Prevost, Chief Revenue Officer, and Jarrod Schwarz, Chief Product Officer.
A replay can be accessed through the following link:
https://event.webcasts.com/starthere.jsp?ei=1546306&tp_key=20ae892484.'

So, all looking very positive and pleasing to see that the sp has responded.

Note 1 - Active market share by GGR for retail, OSB and iGaming including only U.S. markets where BetMGMwas active; internal estimates used where operator-specific results are unavailable. Results for Feb-22.
Note 2 - Total market share by GGR for retail, OSB and iGaming across all U.S. markets, including markets where BetMGM is not currently active; internal estimates used where operator-specific results are unavailable. Results for Feb-22.

The BetMGM business update yesterday - the highlights 'BetMGM will confirm that it has:>> Established itself as a market leader, delivering strong performance inline with its ambitions>> Achieved the number one position with 25% (See 1 below) share in U.S. sports betting and iGaming markets where it operates>> Consistent leadership in the U.S. iGaming market with 29% (See 2 below) share;>> A total addressable market (TAM) in the U.S. and Canada that is now expected to be approximately US$37billion, driven by expansion in online sports betting and strong customer dynamics;>> Committed to leading the industry in sustainability and responsible gambling;>> Reiterated long term ambitions in the U.S.:o Expected market share of approximately 20% -25%;o Expected EBITDA margin of 30-35%.>> Reaffirmed its outlook guidance:o FY 2022 net revenues over $1.3 billion;o Reach positive EBITDA during 2023.Presentations by BetMGM’s management team - Adam Greenblatt, Chief Executive Officer; GaryDeutsch, Chief Financial Officer; Matt Prevost, Chief Revenue Officer, and Jarrod Schwarz, Chief Product Officer.A replay can be accessed through the following link:https://event.webcasts.com/starthere.jsp?ei=1546306&tp_key=20ae892484.'So, all looking very positive and pleasing to see that the sp has responded.Note1 - Active market share by GGR for retail, OSB and iGaming including only U.S. markets where BetMGMwas active; internal estimates used where operator-specific results are unavailable. Results for Feb-22.2 - Total market share by GGR for retail, OSB and iGaming across all U.S. markets, including markets where BetMGM is not currently active; internal estimates used where operator-specific results are unavailable. Results for Feb-22.

Yep IDEA takeover looks inevitable but I'll be sorry to see them go. I first bought in at 32p so a ten bagger for me. Their consistency of performance has been remarkable - particularly excellent takeover execution. The management team, Ben and Emma are very impressive and David Hornsby previously. Their shareholder engagement with individual shareholders has been exemplary. I wish I had ten more IDEA's in my portfolio.

I know you're not supposed to fall in love with your shares - but there are exceptions.

Regards, Maddox

These are a sparkling set of results (FY to 30Jan22) - particularly in the circumstances of Covid. Really demonstrates the strength in the KEYS platform approach driving high-quality earnings.
Whilst the growth in the number of Principle Lawyers recruited grew by a respectable 6.7% during the year the revenue grew 26.5% in a strong legal services market. However, this translated into PBT growth of 55% and basic eps up 42.7% showing superior Operational Gearing and Cash generation - 102% cash conversion. The final dividend of 11.2p gives a +48% for the full year and a 10p Special Dividend on-top.
KEYS' capital-light and operationally-light platform model is clearly strategically strong. Based on the outlook statement, it remains attractive:
>> The current financial year has started well with lawyers remaining busy.
>> We have made a fair start on recruitment, continuing to attract high quality candidates.
>> Well placed to deliver another strong performance.
Can anyone find something of concern in these results - because I can't?
Regards, Maddox

Looking at the share price recently you'd think Putin had invaded Unite not Ukraine.

Yes, a very strong recovery is in-progress and the outlook for academic year (AY) 2022/23 is highly positive. A key positive is that International Students appear to be returning in droves, particularly Chinese students. The development pipeline is at an all-time high of 6000 beds (c.£1bn in value) that will increase the weighting 44% towards London (35%).

The dividends are recovering nicely with more to come as the Covid effect wears-off.

With the LTV ratio at 29% UTG have huge headroom should any peachy PBSA portfolio become available for acquisition.

On Covid IMHO the virus is following a clear evolutionary pathway where each new dominant variant is more infectious but less severe – making the likelihood of the emergence of a more serious variant highly unlikely. The 20+ different viruses that we refer to as 'the common cold' was each probably a deadly human pandemic in its time. So, I think that this threat is being over-exaggerated.

Some interesting strategic opportunities/initiatives were revealed today:

>> HMOs: The private landlord with Homes of Multiple Occupation (HMOs) rented to students is a specific target for UTG. UTG is already competitively priced with HMOs and landlords are now under significant new pressures to comply with energy efficiency standards. The cost of retrofitting insulation to old property to meet the minimum standards could be prohibitive. UTG have their electricity costs fully hedged in 2022 and 85% hedged for 2023, and gas (which accounts for less than 0.5% of rent) is hedged through 2023. HMO renters are unlikely to be as well protected from escalating energy prices.

>> Premium segments: UTG are also trialling greater segmentation of their portfolio to target some more premium-priced segments. One of these is the recently graduated professional requiring City Centre accommodation a.k.a build-to-rent. This closely associated market vertical could become an important new market for Unite and definitely something to watch.

So, a very welcome set of results and plenty of interesting growth opportunities in-sight. I'd recommend you listen to the replay of the presentation as there is far too many points of interest for me to only scratch the surface of in this summary:

https://webcasting.brrmedia.co.uk/broadcast/preview/61a62ec07aad4f60e33f6620

Regards, Maddox

Very encouraging update on trading and valuations from Unite this morning. Good news on all fronts - trading, development pipeline and asset values.

Current trading appears to be returning to normal levels despite the continuing Covid situation - which is fantastic news. Looking forward Unite are seeing strong demand for 2022/23 from both domestic and international students. They are not taking any chances on international students and are intending to retain their domestic students. UTG are clearly keen to hit their occupancy targets.

Competition for prime city centre locations is more favourable for Unite in the wake of Covid. So, the pipeline will hopefully be expanded further with some juicy development opportunities.

There is also strong investor demand for student accommodation as an asset class. This is leading to higher valuations and thus acceptance of lower yields - the 'yield compression' mentioned in the rns.

Covid has highlighted the robust demand from young people for the university experience. On-line learning has its obvious advantages but Covid has also revealed its limitations. The 'right of passage' that a degree course at a university represents has been fully stress-tested and has come through strongly.

The future outlook for Unite is looking very positive.

The latest CVL figs for November are published. The Insolvency Service commentary states:

'For the first time since the start of the coronavirus (COVID-19) pandemic, the monthly number of registered company insolvencies was higher than pre-pandemic levels. This was driven by the higher number of creditors’ voluntary liquidations (CVLs). In November 2021 there were 1,521 CVLs, 43% higher than in November 2019.'

Note - that's Nov 2019 (1067) not Nov 2020 - they're up 99% on 2020 (765).

This is now six months in a row showing confirmation of a now resumed growth trend from the leading indicator for the insolvency sector. So, the outlook is highly positive whilst the share price presents even better value.

https://www.gov.uk/government/statistics/monthly-insolvency-statistics-november-2021/commentary-monthly-insolvency-statistics-november-2021

MANO's CEO Steven Cooklin is presenting this evening at 6pm on the virtual Proactive One2One Investor Forum: Sign-up here -

https://www.proactiveinvestors.co.uk/register/event_details/372

Mr Market seems to have liked the results, with the shares up to 790p as I post.

The top-line figs always look a bit mixed on a first look - as the business transitions into a cloud-based SaaS business. The decline in old-style licencing revenue and activities masks some highly positive growth particularly in H2. This momentum is anticipated to continue into the current year, so the outlook is positive.

A few highlights:

Annual Recurring Revenue +8%
Cloud Native Products +44%
Renewals by Value 99% (H2 c.101%) this is without any price increases.
Cash conversion 126% - driven by the move to subscriptions.

The star in Sage's product portfolio is Intacct aimed at medium-sided firms. In North America (USA and Canada) it's driving recurring revenue growth of 22% primarily through new customer acquisition. This is excellent performance in what is seen as Sage's competitively toughest market. Intacct is only just being rolled-out into other markets - if it can replicate the NA performance geographically it should have a big impact. Currently, 50% of Sage's revenue comes from the medium-sized business sector. So, something to keep an eye on.

With Sage Business Cloud penetration up to 67% from 60% last fin year the transition still has some way to go. However, the bright and shinny Cloud-based SaaS business is becoming more apparent and a very attractive business it's shaping up to be.

Regards Maddox

Yep Yuri, the Audit firms have had a lot of disasters occur under their watch - I am a critic of the regime - but I'm not as you accuse naive.
However, you can't hide from a legal outcome and the figures show that BUR have been conservative. I like that we have the transparency of seeing Mgt's judgement - and then the outcome, to see how accurate they are. I don't invest where I have any doubts about the honesty or capability of the management team - period.

I note your sub-text comment excludes BUR from your rant - in which case why post it?

There is a very detailed and structured approach as to what goes through the P&L as unrealised gains - which is closely overseen by the Auditors. They need substantive evidence of a case's value - the Auditors wouldn't be satisfied by an internal model and reliance on 'Management opinion'. This was a point of attack by Canaccord and MW - they accused management of 'manipulating the figures' and a long and drawn-out debate ensued, so its best to have a very high test for putting an unresolved case through the P&L. BUR issued a specific RNS https://www.investegate.co.uk/burford-capital-ltd--bur-/rns/briefing-on-fair-value-and-return-computations/201909230700092012N/

The figures both pre and post the short attack show a conservative valuation of unrealised gains - and it no longer gets raised as a concern.

Yes, IMHO. Litigation Finance as a relatively new and obscure investment sector was not widely understood but attracted a lot of momentum investors. Two events scared-off these investors, firstly, Canaccord Genuity issued a sell note and then secondly, Muddy Waters regurgitated it. MW added colour and a lot of 'apparent' detail which had in fact been culled from BUR's own Report and Accounts - so looked credible on the face of it. The MW Short Report was accompanied by heavy sell-side order input and cancellation that walked the price down. The reports looked credible and the momentum investors took flight and the sp still hasn't recovered.

OTOH MW has given fundamentalist investors like me to scale-up at very low prices - so IMHO they've done us a favour .

BUR's CMD gave some very thought provoking insights into their own 'Case Outcome Valuation Model' (distinct and very different to the unrealised gains valuation) . It is a point-in-time estimation of the value of their case investment portfolio built up on an individual case basis using past case data. The highly unpredictable element is how this value will be realised .

The $2.3bn value, on past performance, will materialise over 2.3 years on average - so across 5 reporting periods - but into which it may fall is a guessing game. As such, BUR are not providing guidance - just a current valuation. You have to have some sympathy for the Analysts needing to produce a forecast P&L - knowing they are inevitably going to be wrong. The cases are getting larger and lumpier, and the timing increasingly uncertain (in-part due to Covid).

Also, case investment and Case Outcome Modelling will continue and generate further potential value over that period. We have a firm with the potential to double in value every c. 2.5 years on a continual basis, with plenty of runway.

Regards Maddox

I very much enjoyed the two Analysts' questions as they struggled to rationalise BURs valuation. Along the lines of

'.....so let me get this right - you anticipate making, excluding YPF, $2bn of profit plus $360m of performance fees over the next 2-3 years, on your current invested capital - which is still growing ....and your mkt cap is $2.3bn?!?'

You could almost see them thinking '.... that's nuts!'

Wonderful ha ha.

I think the eSports initiative is wonderfully attention grabbing and in the audacious tradition of Kenny. The new team at the helm of ENT have been immensely impressive so far:

>> Re-branding - tick;

>> ESG Re-positioning (regulated markets, safer gambling and now carbon-neutral) - tick;

>> US roll-out (now No2 - No 1 in-sights) - tick;

>> Defeated MGM takeover attempt - tick;

>> Bouncing back from Covid retail closures - tick;

>> Acquisitions continuing - tick;

>> High-growth continuing and financing sound - tick;

>> Strategic re-set - tick.

And I've probably forgotten a few points.

An absolutely excellent series of presentations at the Investor Strategy Update today - catch it here https://webcasting.brrmedia.co.uk/broadcast/60f98959981eb346d9fe833e. I'm very impressed by the ambitious vision and goals - to be the category killing Global leader in Betting, Gaming, & Interactive Entertainment and to triple the size of the business.

With the proven capability (delivered though BetMGM) to have successfully launched in 13 different US markets in rapid succession; and with the intent to launch in a further c. 20 in the following year. The additional 50 target markets globally looks like a very realistic extrapolation. The 153% growth in Brazil was particularly eye catching this morning but can't find a revenue figure to put that into perspective.

They unveiled a compelling strategy to gain first mover advantage in eSports betting as well as a raft of other initiatives that should deliver on that vision and goal. ENT are moving extremely quickly into Sports Media Content, Sports Stats and Analytics and building-out their 'casual' mobile gaming proposition.

They don't seem like a firm prepared to lie-back and be taken-over - this was a very strong statement of independence. The one ambition they don't seem to have is to be running a bunch of Casinos.

Regards Maddox