Member Info for MattTheBrave

Yep - nice board with informed posters. Well done to all the patient LT holders!

I'm seeing a whole heap of greed, and very little fear on this Board right now. Be careful folks is all I'm saying.......

Still rising :-) I'm happy to leave a bit on the table for someone else at these levels. Still have 75% of the holding of course, so not unhappy if it continues to rise. However, market weakness yesterday has left some real bargains, so want to make some space for these! GLA

...be fearful when others are greedy. Be greedy when others are fearful. My return just went through 100% in 5 weeks. 25% of my holding sold today at 717.

Ah yes - apparently either spelling is ok according to wiki. See Next You Tuesday.....;-))

Most tech is on p/s of 10x or more. MCRO is 0.7x. MCRO share price will be driven by what's happening at MCRO - whether the rest of the industry is being de-rated or not will be largely irrelevant to MCRO sp IMO.

Wonder when Canute became a swear word......? :-)

Well, this along with a bid for DIGS has certainly brightened up my Friday! Lovely weather for the weekend as well - terrific stuff!

* decline stabilisation rather than 'growth' stabilisation.

Lee, to be fair:
- You can't invest unless you have a view on what might happen so chiding YHAL is a bit odd.
- In fact you are also building in what might happen in terms of growth stabilisation by 2023 - what happens if it doesn't?

Au contraire Mark - I think the behaviour of the share price tells you that the level and direction of leverage (and no growth till 2023 as well TBF) was not expected by the market, even if it was by you. Understanding what's discounted in the price overall is as critical as having a view on what will happen. Just saying Mr Market's an idiot isn't really going to cut it IMO. Having considered this more deeply over the past few days, I believe that the market got ahead of itself in terms of growth and FCF, and has reacted accordingly. That said, I this this IS now in the price, so starting to rebuild a position here is worth considering. I'd be looking to add if it falls much further.

Bid announced today, but signposted a couple of week ago - DIGS up about 30% prior to the market learning of the bid talk. Makes Empiric look pretty cheap at these levels. Maybe they'll be next!!

Lee - re your response at 11.23 - sorry, but I disagree. It is not the absolute level of debt, but a Company's ability to service that debt. As interest is paid out of EBITDA (I- interest BTW) then it is the ratio of net debt to EBITDA which is critical. This is why they specifically track it, and refer to it as a measure of leverage. Whilst actual debt is falling, Ebitda is falling quicker (due to revenue decline) and they have already signposted that leverage will increase again in H2. I think this was a significant shock to the market. Look, the stock doesn't fall 30% for no reason. The question now, is whether this is overdone.

Well there we have it - Bid recommended by management at 213p. The question is will others be prepared to come forward? Like you winski, I was here for the long term yield and growth so I'm slightly disappointed, and I don't know whether other bidders will come forward. Still, the price is now underpinned at 213p, so worth holding out for a bit to see what happens I think.

...except leverage was c 3x when they negotiated this. Looking like nearer 4x by the end of this year. They will need to make a dent in this prior to 2024 to get similar terms IMO.

Been giving the interims more thought and actually got around to listening to the webcast. I think I have a better idea now as to why the stock has lost 20% since the announcement:
- Fanciful hopes (some on this board) of a return to growth this year or next have been corrected. Revenue stabilisation still not targeted until FY 23 (ie end October 2023).
- AWS related revenues will only kick in second half 2022 (ie April to October 2022)
- CF is ok, but FCF hurt by (hopefully temporary) items which will continue in 2nd half of this year, so don't expect a big reduction in debt
- With EBITDA still falling quicker than net debt, leverage continues to rise, and will rise further in the 2nd half (3.8x? 4x?). This is possibly the big one, as I think some investors are genuinely worried about whether the recovery will be quick enough, and large enough to bail them out before debt is renegotiated in 2024.

Balanced against this is the fact that the stock remains very cheap: 0.7x sales, 2x adj EBITDA, 4.5x earnings. So, there's a lot of bad news in the price, and if MCRO can move into a virtual circle, of growth and FCF paying down debt, then the upside is huge. No-one should be fooled into thinking that there is not significant implementation and financial risk here, and I would advise against putting a serious chunk of your wealth in MCRO. I remain invested, but as part of a diversified share portfolio. GLA.

Squad - Just coming back on this. Essentially, they want to show growth rates excluding currency changes (so true underlying rates). It doesn't actually matter what rate they use for this as long as they use a consistent rate for both years being compared. Normal practice is to use the rate at the end of the last financial year (ie end June 2020 for DT) which is the 1.23 and 1.12 figs you see in the report. So it is only the % change I would look at rather than the actual figures. If you want to compare actual figures including currency changes then it's actual revenue (+40% for 2021 to $278m, +c30% predicted for 2022). Hope that helps.

These guys are the worst in my experience - low quality research. They are also a bunch of individuals, and so quite often they actually disagree with each other in print!

Clearly, the takeover is not welcomed by GCP. First they publicised it without agreeing this with the bidder, then they talked about a 'material increase in valuation' to up the price, presumably they hope, beyond the level which the bidder is prepared to pay. Interesting stuff.

I think 15x next years' revenues is easily justifiable, and this would be c£8. I'll re-evaluate nearer this level I think. I wouldn't be surprised if we get a pull back at some point along the way which might even allow some of to increase our holding further.