Member Info for Margaret365

Hi PB

The results were ok but underwhelming for a rerate in the sp for now. But it’s the significant shift in direction that’s gaining traction that has me excited for the future. DR looks to be the game changing catalyst. They will have learnt a lot , it’s clearly been a positive move and with the new MD they look ready to move this along at pace with DSW Legal.

Take a look at similar plays, particularly Setfords. Fantastic 5 year growth since 2020, investment from PE Pheonix, and potential sale.

So I hope now we have a growth story that will attract new shareholders. For now we get a good yield from the healthy cash flows.

Where did you learn about the new investor? We could do with more of the same.

HNY PB

Not much to go on when looking online for James Tipping. The most likely fit that comes back was involved with financial services re Gibraltar.

Price is a little healthier to start 2026. We should start to see the impact of the ‘legal’ platform. EBITDA FY needs to come in above £2m. £2.5 would point to good progress.

Hi. Yes, I’ve read through the results and watched the presentation. The way ahead is clear, growth is going to be led by legal and increasing cross referral with further bolt on services like wealth management and HR. With legal it will be through expansion of the current and through looking to acquire other niche legal services. I was pleased to see that the financial services performed ok, I was concerned there may have been some disgruntled licensees, thinking they were going to play second fiddle and/or a drop off in service levels during the integration. All things being equal, FY EBITDA is going to be £2m, giving a PE of a mere 6. Yield is 6%, so this business is undervalued by any measure. It’s simply scale is not there yet to interest the bigger players. We need £5m, at which point you start looking at 10-15 times earnings. That should have the SP at £2-£3……but it’s probably a 3 year play. I like the company and prepared to wait as it’s paying a reasonable yield in the meantime. Value will follow. There’s been a share overhang, plus I was surprised to see AD sell some. However, I’m still a buyer. What are your thoughts?

You make a good point Pheasantboy, I’m sure there is plenty of chatter amongst the DSW fee earners about what this means for them. As long as service levels are maintained, which may have been a challenge during the integration, then they should get comfort that they remain important. This is key. It’s a clear direction change that will rattle the cage, the capable team will be aware of the importance of building any bridges that may have taken a hit. Ultimately, to achieve the sustained EBITDA growth they must dilute the reliance on M&A, the legal side can achieve this objective, plenty of opportunities for cross referrals too. As for JS agenda, I cannot comment, it may simply be a clean up of financial affairs or something more. Maybe he doesn’t agree with the change of direction. As for a takeover, this maybe some way off! But at current PE, DSW are undervalued. Increasingly as the legal team grows, keystone and market sentiment around such company’s will underpin value. I do feel positive over a 3-5 year time frame, the excellent team are capable of navigating the inevitable bumps.

JS had 6.5% back in Dec, just 1.5% now. The presentation was based around the last reported results, nothing new to speak of. However, news was out yesterday (not an RNS) from DR, regarding the strengthening of the healthcare offering via a credible appointment. Recruitment is happening at a much quicker pace than on the financial side. This is where the growth is going to come from, further dilutes the reliance on the lumpy earnings flow around M&A that has been a cause for concern on transparency around the stability of future profits.

The Co founder who has been selling doesn’t have much stock left, a reasonable chunk went through a few weeks back, with James Dow picking up some of these. Whilst the number of trades today was unusual, the volume was low, so the MM’s took the opportunity to play. Any meaningful buys at these levels would see the SP quickly bounce. The MC is far too low based on current PE. With DR Solicitors now contributing significantly to EBITDA, a re rating should be on the cards. Half year figures due November. A further dividend will be announced, yield is high. Take stock at these levels.

That’s what you call a very positive trading update. This is a 5 year power play, that’s a short term punt for Buffet!! What’s not to like……increased profits, cash flow, dividend, diversification, pipeline deals. This will wake up once overhang diminishes due to one founder cashing his tokens in, and improved dialogue with City. Long term, it will be acquired.

I like it. Correct, interest rate is high, but not much leverage used. Crucially, they are moving away from the reliance on M&A activity driving earnings. Earning levels are stabilised, giving greater transparency to investors, high levels of M&A become a bonus rather than a requirement. On the back of this diversification, I suspect the next trading update will highlight there has indeed been a bounce in activity due to the budget fears. This will be helping cash generation, which will be needed, as I think there will be more funds directed in attracting legal fee earners under the current model. Very positive news for me.

Appears to have found support when the bid hits 65p, bounced off a few times now, I think the bottoms in. There’s been a steady seller for some time and that appears to have dried. There is a market, I can now sell volume at above the bid which suggests a change. I can see at the least some stabilisation, any positive news will help to move this back towards £1.

Another buy from original founder/owner James Dow…..signs are there, bet he can’t believe his look buying back at these levels. This is a very nice buy imho.

Interesting one this. Fresh from the Seraphine win, looking for something new and this couldn’t be more different. Listed at 100p, went as high as 125p now at 70p. Warned recently of sluggishness and delays in M&A having an impact on income. The franchise model is neat though, although recruitment has slowed for now. They are looking for Top 4 teams to breakaway, DSW incentivise and support. More will come in time, DSW earn 15% of fees for little risk. M&A fees will come back. Previous owner still has 15%, buying more recently on the fall. Dare I say, if this languishes at these levels, they may take private again at a price north of here. Seraphine was twitchy, this is much much less so. There’s 50% at least in this IMHO for patient punters, I’ve tucked a tidy sum in. Lets see…

I’m of the opinion that Mayfair will need to withdraw, unlikely, or revise the offer price to get the 90% required. I can see a 37-40p new bid to tempt those that are holding on….including me. Even then, with the promised £5m investment, it’s cheap. 45-50p minimum is nearer the mark.

I kept buying all the way down, I own over 2%. In the end I will make around8-10% on the investment. In general terms a good punt but this should not be going for less than 50p. I’m not selling on the market, whilst 2% is small it is valuable to them. It’s possible they may need to pay more to get this across the line.

Sadly, this has played out beautifully for Bertie and his Mayfair crowd. Sold at a ridiculous premium to much fanfair at IPO, seems now after just 18 months that going back to private is the way forward!!! Getting it for a song at £15m, this will be back to making £4m EBITDA in no time, so it’s double bubble for them. I’m gutted, oh and what about this market disrupting baby carrier that’s got a patent pending. ‘Love it when a plan comes together’ eh Bertie.

Spot on kotichava

Hi Mizzini. Yes, I’ve been buying all the way down, buying some last week at the current low. Mid term, I can see this back to £0.65-£0.80, which values at around £30-£40m. I don’t think it needs much of a swing to make £3-£4m ebitda and therefore be valued at a PE of around 10. At £6m, it’s just to cheap.

Indeed some fall, even since my last post 2 months ago it’s halved again. I thought it was cheap with a MC of £12m…..it’s now £6m?! It’s going to turn over £45m and make a full year profit in what is the most difficult of conditions imaginable for retailers. I still stand by its agility to adjust as a result of scale. The significant headwinds of the last 18 months that have impacted procurement are becoming tailwinds. Shipping costs this month are back to pre covid levels, falling from $20k to $2.5k for a 40ft container. That is a significant saving for BUMP on there imported stock, which accounts for most of it. The FX issue of late is hedged by there US sales, so the cost of product will unlikely have been impacted like most domestic retailers. Furthermore, there product is niche and has some cushion from the cost of living issue and the recession that’s likely to be prolonged. The market always prices ahead of the game so a revaluation on these online retailers will come way ahead of the recovery….they indeed fell way ahead of the issues we now see. You are seeing what appears to have been a bottom for the larger players like ASOS and TGH, they look to have started what will be a haphazard upward trajectory as the very lucrative shorts unwind and investors start sniffing around for bargains. Seraphine is in bargain territory. It’s been around for a long time unlike some of the massive boom and bust players that we are seeing. It’s never going to explode, but good profits will come. If the shareholders are not rewarded by the SP, then the recent balance sheet activity will allow them to reward shareholders via dividends. As previously mentioned, I’ve plenty of skin in the game. My Share account P&L does not make for good reading, I’m not happy about it, but so many times I’ve seen this in the past. When I was young with less financial clout I would have been flushed out with my loss, only to look back in again after a few years to see what would have been a handsome profit. This will not go bust, it will not need cash, it just needs time.

I keep nibbling away at this one, now buying shares that value this at £12m. I’m sticking to my guns, this will come good in 2-3 year time frame. Majority of earnings now is USD so this is of benefit at the current low exchange rate.

Significant stock changing hands, including sizeable Director buys. I suspect that one of the large shareholders is a willing seller. I suspect like you Robsroom, that many of the trades that went through as sells were actually new buyers taking shares from this overhang. Hopefully once cleared we move North, I expect an RNS showing who this seller is in the next day or two.

The results paint the picture that was expected. Very difficult time, they have got through this and learnt some lessons…..just growing pains at a time when even the most experienced have felt pain. The supply chain issues are resolving nicely and good to see the increase in USD earnings which help with FX considerations when buying from the Far East. Growth forecasts are prudent due to the inflation and earnings squeeze, I expect the 0-15% will be exceeded with the multiple markets now open. This is a very nice Company, experienced team now onboard. This is never going to be huge, but no reason it cannot reach £250m turnover over time. It’s undervalued, the next year will rebalance this deficit or it could get taken out…..sadly that’s the most likely scenario.