Member Info for MB10

Agreed, the fact that Walter chose to comment on only that today tells anyone reading these boards all they need to know about motivations.

It’s hardly a “sell off” and technically it’s the ask that dropped not the bid and narrowed the spread. This is probably more a result of a correction to the market muppets movements on Friday as opposed to anything else.

Good interview and backs up that the strategic investment by Jason Lee is for expanding KPOP.
I’m more reassured that SBS are on the hook for the European tour as that should guarantee the right mix of KPOP artists for each festival to be successful. It wouldn’t surprise me to find out that the O2 experience where they might have found themselves excluded from opening this up globally has resulted in a better deal for lvcg and probably better costs control. Nice bonus that he’s working on a Japan festival too, kpop is massively popular there. And StartArt with its monthly shows should bring in a nice year round revenue, but I’d still like an update on how London and Korea are doing, as well as an update on Formula E etc.

If StartArt does make £1.5m EBIT next year, that will more then cover central operating costs will it not? I also expect Bricklive can recover and wash its own face or even make a profit. We also know that LCSE is washing its own face from the cycling and other small contracts, so with the formula e and Volvo ocean race plus the efest, golf and the concert, we could see a very healthy profit going to the bottom line next year. And then if DC delivers on the 7/8 (profitable) KPOP festivals he is talking about, that will make another very significant contribution to the bottom line.

It’s not actually that difficult to piece this all together and see how DC’s statement that LVCG will be “making a profit bigger than the market cap” (£7m when he said it) can be achieved.

We know that our contribution to Frankfurt 23 costs us nothing, and if this European tour being talked about is done in a structure that means lvcg get a bigger share of that profit, plus better streaming revenue if they can move to live streaming the events. Then there is the potential to expand the efest to other host cities (Iain Banner says they are already in discussions with 4 host cities), and the potential news that DC keeps going on about that we are all hoping lands. All that will very significantly change the fortunes for shareholders IMO.

KNIGEL, the deferred share consideration for StartArt is already priced at 6p so it’s irrelevant to DC and Ranjit what the share price is when that kicks in.

And to state the obvious, if StartArt division makes the forecast of £488,000 EBIT this year that means it will have washed it own face and generated £488,000 of cash. So that’s where the remaining consideration will come from.

Sorry if the actual FACTS are a bit inconvenient. And given that 15,000 tickets for start art london were sold with a ticket revenue of more than £250,000 and the costs being covered by the sponsors (similar for start art Korea) and there’s the new show announced for next month I have shown exactly how those forecasts could be achieve. Again sorry if that’s all a bit awkward for you. And as to the merchandising revenue, have you never wondered why it was reported separately or bothered to look back at who the merchandising contract was actually with? That supports exactly what I’m saying.

In any share that does not have financial guidance, it’s easy to sit there and say “look at the past numbers” but it’s the future numbers and forecast that matter is it not. Being able to interpret those is how investors make money, not sitting back and waiting for them to be published. The key is to look for the triggers that signal in advance.

And to address Walter, its perfectly valid to look back at the pre-covid forecasts, to support the point i’m making, which is that bricklive alone was close to being profitable before covid hit. Now with business back in flow, the operating costs significantly reduced, and more model sets paid for and available to hire out, plus the central operating costs split out over a greater number of divisions than before there’s no reason why it cannot become a profitable division next year.

************

“For the period ended 31 December 2021 Start Art reported unaudited turnover of £0.554 million and had at that date net assets of £1.5 million. (£1.2 May 2022) Going forward, the core strategy of Start Art will consist of three main streams these being art and art related physical shows, on-line and off-line sales of art and K-Pop related merchandise and NFTs. There is also the opportunity for sponsorship revenue for each event being held. The synergy between art, popular culture including KPOP and live events further validates the acquisition.
 
An independent valuation was conducted which valued the entire business at between £5.0 and £5.5 million and the element of the deferred consideration which is performance related is tied into the projections inherent in that valuation.

The balance of £1,342,769 and £942,934, being the deferred consideration, is payable to Mr Ciclitira and Mr Murugason in cash or shares issued at 6p per share at the Company's option no later than 30 June 2023, 65% of which being subject to EBIT as reported in the audited accounts of Start Art for the year ending 31 December 2022 exceeding £488,000.
 
In the event the 2022 EBIT threshold is not met the deferred consideration remains payable no later than 30 June 2024, 65% being subject to EBIT as reported in the audited accounts of Start Art for the year ending 31 December 2023 exceeding £1,482,000. In the event the 2023 EBIT threshold is not met only the 35% of the deferred consideration not subject to the EBIT threshold will be

I have it on good authority that the profit made for the event excludes the merchandising. And my post is entirely accurate so saying that I’m quoting the wrong numbers is totally wrong.

And as to start art, those are numbers given in an RNS and are based on an independent valuation by a top 4 accountancy firm, so claiming that it’s just “ it's a target to release more goodies to DC and Ranjit.” is next level trolling IMO. Those numbers are indeed a forecast, but as to being an “outcome” any forecast is not an outcome until it’s been achieved, and I’ve never claimed otherwise, but I’ve shown with numbers exactly how that outcome might be achieved.

Well Walter, there are plenty of numbers given so claiming that there are “no numbers” simply isn’t true. Frankfurt made £160,000 profit, plus they recovered £127,000 in staff costs and they also made €350,000 from the merchandising minimum revenue guarantee. We also know what the cost of the streaming was and what the split was (and with no cost to LVCG as that’s covered by the partner). We also know that they are working to make those better. Frankfurt expanded to a 2nd day and had to cope with double the costs, yet they didn’t manage to fill the stadium on the 2nd day, and the streaming didn’t take place until well after the concert due to the restrictions with SBS. It’s easy to see how that would all scale up to a much bigger profit. There are also numbers given for formula E in an RNS in black and white. As to the cancelled O2 concert, there were no stadium costs to lvcg, the artists aren’t coming so there won’t be costs there, and the ticket refunds are being handled by the ticket partner so no costs to lvcg. And that was cancelled postponed due to the Itaewon tragedy so not exactly the fault of the company like many were claiming. We’ve also been told that they are working on a European tour and DC has previously said they are aiming for. 7/8 festivals next year. Then there’s the numbers given for StartArt EBIT of £488,000 this year and £1.5 m next year, and we have seen at least a small part of how they plan to grow that division, and with 15,000 visitors to London alone and ticket revenue of more than £250,000 and the costs converted by the partners its not that hard to believe that they will be on track to make those numbers. The long awaited brokers note that restores the financial guidance should be published soon, although I doubt it will ever stop the endless whinging by some ;-)

You were assuming I was referring to you bennster, but I wasn’t.

Maybe you are just paranoid.

Happy to see debate, but seems you are just trolling IMO.

“My beef is that RNS should include numbers and data to back up the "story" and DC never does this.”

Except the facts show that’s not actually true is it. I could post the facts about when numbers were given for the kpop festival, merchandising and streaming and the facts about what they said about start art ebit forecasts or go back to the financial guidance on bricklive before covid.

As I’ve said before, best advice I ever got from my late father was “don’t be a D1ck”. Happy to share that advice.

I have to take issue with Walter Mitty. Sure nobody like dilution, but the business over the same period has massively expanded, and I would argue it’s more than 4 times bigger with more than 4 times the potential.

The original bricklive business has been devastated by covid and is beginning to get back to normal. Lvcg acquired this business for circa £9m and have expanded what it does into live shows, zoo touring, BIDs as well as built an inventory of models and made content deals with big industry players. It was on an expansion path to make a healthy profit before covid, but with the cost cutting on operating costs hopefully it will get back to being able to not just wash its own face, but get back to generating a profit.

Since then they have added the LCSE division, with Formula E with its 5+5 year exclusive contract, the efest, golfing tournament and concert, plus the cycling and Volvo ocean race. That has already been described in an RNS as a “contract that was worth more than the market cap” (£6m at the time).

They have also added KPOP, and done a successful inaugural concert that was profitable. They are now expanding that significantly as well as (with Jason Lee) looking at getting better margins for LVCG. 2 in the bag for 23 already.

Then there’s been the addition of StartArt, which has been independently valued at over £5.5m which itself is expanding significantly. The EBIT targets of £488k this year and £1.4m next year easily support that independent valuation.

Then those complaining that DC is too powerful, there’s now a new CFO, they are recruiting a new CEO, and a new strategic investor as well as having premier Miton with a big stake in the company, which will provide better balance in the company.

I agree with those saying that the insiders are taking the Michael and getting more shares than they should for the size of the investment they are making. Go try and buy £250k off the ask and you would have no chance at that price. But I can whinge about it but can’t change it. What you do have to recognise are the triggers that will drive the share price for investors.

They need funding to expand KPOP. That could only come in so many ways. Either a placing through ETX, but that would be at a big discount and no doubt have warrants attached. You would get the normal flippers attached to the broker. They could borrow money, but that’s getting more expensive and would have to be paid back at some point, and would reduce the free cash available. Instead they have got a big strategic investor onboard and laid out the extent of the funding into Q2 next year, which will see them through until the formula E cash kick in. Personally I’m glad they didn’t go to the broker, because there’s no overhang to clear. Hopefully they will show us what the money is for as well as show us how formula E will add to the bottom line, show us why we paid DC and Ranjit £4.2m for StartArt as well as getting the long awaited bro

Great feedback from the recent mythical beasts rental at Croydon BID.

https://croydonbid.com/news/mythical-beasts-trail-entertains-thousands-during-october-half-term

Matthew Sims, Chief Executive at Croydon BID said: 
 
"We're overjoyed with the response to our Mythical Beasts trail, which has provided so much fun and entertainment to many families this half-term. It's been incredible to see the shopping centres filled with people of all ages exploring the trail, and to see the expressions on their faces when they've come to a halt in awe and excitement at the sight of each brick beast. Furthermore, we have successfully provided businesses with additional promotion and support during the half-term period, resulting in increased footfall and improved dwell time throughout the town centre."

You can check the FE ticket sales via the website, and they are selling well.

I would challenge the assertion that we have not raised for growth, that’s simply not true. There have been raises to bring KPOP and formula e into the company plus raises for StartArt and if those perform like we expect them too those will have been very savvy purchases.

While I dislike the further dilution, it does at least show how the KPOP expansion will be funded. And that’s £1.4m Jason Lee has invested into the company now, with a 2 year lock in, so there’s no overhang to burn through either.

I doubt if this is the news we were expecting, hopefully we will see very soon why Jason Lee has taken a such a big stake in the company and why the links with start art and KPOP will be so valuable for us. That and laying out formula E news and how we make money from that as well as the KPOP expansion and the long awaited brokers note.

And for those comparing MOS to LVCG I’ll just point out that in the same timeframe, MOS have gone from 140 million shares to over 3.5 billion (not including the latest dilution there) which is a 25 x dilution.

At least todays dilution will be balanced out by the 12 warrants that expire in the next couple of months.

The good = there’s another £1m in funding and it’s all been taken by Jason Lee the new CEO of LVCG Korea and there is a 2 year lock in. Any residual funding or cash flow concerns have been totally removed. Plus no shares hitting the market to be flushed. The bad = more dilution.

Missed opportunity IMO. They could have emphasised that the start art shows in London and Korea were a success, that their costs were covered by sponsors, or given an update in the 15,000 visitors to london that bought tickets giving a ticket income of more than £250,000 for London, or said whether they were in track for the £488,000 EBIT target for StartArt this year (I think yes), but they said none of that. Tickets to see this month long show are £10 and ohmin is really popular in Korea, so could make a nice addition to the bottom line.

New bricklive rental in Belgium. Shows that the product works and that there’s still a demand. Nice to see that they are expanding the reach of customers in Europe in the same way they have done in the UK.

https://www-nieuwsblad-be.translate.goog/cnt/dmf20221114_95678000?_x_tr_sl=auto&_x_tr_tl=en&_x_tr_hl=en&_x_tr_pto=wapp

As well as getting getting the annual management retainer from the FIA for staging the race, worth remembering that they get 10% of revenue from the sponsor partners. Easy to see how that will add up to more than a 7 figure number when you look at some of the travel packages being sold. This TV partner Supersport is showing this on pay per view and also on free to air which will increase the advertising exposure for the partners too.

https://www.capetowneprix-travel.co.za/package-items/ticket-inclusive-travel-package/

Thought this was interesting. Sir Robin Knox Johnstone wants £60 million for his private company ‘Clipper Ventures’ that runs a round the world yacht race. Cannot take the last couple of years financials into account as it was cancelled due to covid (bit like lvcg events) and of course it not listed, but if you read their accounts at company house there’s plenty of opportunity (and money) in sporting events.

LVCG manage the Cape Town cycling event(biggest participation sportive in the world), the Cape Town stopover for the Volvo ocean race and of course have the exclusive rights to host the Cape Town Formula E event for the next 10 years. The £8m market cap certainly dosen’t recognise the value or the opportunity in comparison IMO

https://www.thetimes.co.uk/article/sir-robin-knox-johnston-puts-clipper-ventures-up-for-sale-g2mkfgqr3?shareToken=3e106970356e6666a0c8042626fc757a