The latest Investing Matters Podcast with Jean Roche, Co-Manager of Schroder UK Mid Cap Investment Trust has just been released. Listen here.
https://www.***************************/interview-live-company-group-plc-bricklive-events-in-zoos-and-safari-parks/412760064 The interview talks of Bricklive Touring expansion into Zoos as mentioned in ‘the RNS this morning’ I can’t see any RNS since the Bright Bricks acquisition, so either the RNS wasn’t released as planned or the interview has been released a day early?! Either way, another positive and exciting development on the way!
My opinion as to why the share price hasn’t continued to kick on is the uncertainty over Q3 production figures. We know that the strike halted production from 5th - 22nd Sep, assuming the rest of the quarter achieved the new annual production target of 3750 BMN would produce around 760 (73 days @ 10.4T per day. However, from the 22nd August RNS, we know that production was still ramping up towards 3750 per annum, and there were a number of other issues that contributed towards BMN missing their Q2 production target. So the reality is likely to be significantly lower than 760, which is the absolute max, and possibly lower than Q2’s 629. The big question thereafter is whether BMN meet their revised annual target of 2850 or need to downgrade production again? If they do downgrade, you can guarantee that the market makers will hammer the share again as per August. What do others think of the likelihood of a second downgrade? Beyond this, as discussed at length below, if Vanadium prices remain at current highs, production can be consistent and on target, and the reporting timeframes are shortened (a la Largo, who reported Q3 on 3rd October), the share price will move significantly higher.
@Neo, S4 merged with MediaMonks in a deal worth €306m, it wasn’t a cash acquisition and the founders of MM haven’t sold out, instead have taken a 13% stake in the new company with their shares locked in for 24months. So you can’t value S4/Derr on the consideration involved in this transaction. Revenue/profit before tax growth in MM has been pretty spectacular; page 82 of the prospectus shows audited accounts with profit before tax of 2.7m for 2016 & 6.9 for 2017, growth of 255%, and for H1 2018 (prospectus page 139), profit before tax is reported as €10.4m, with revenues of €54m (2017 in total was €75m). Revenues and margins have both improved significantly YoY. So growth is pretty spectacular and in total contrast to WPP which has stagnated/declined over the same period. Based on the above, I think we can make some estimates of a potential P/E ratio from which to value S4. Assuming profit before tax of €25m for 2018, translated to £22m at current fx, divided by the 255m shares that will be in issue, we get EPS of 8.6p. As MM is clearly a high growth (and profitable) business and there is the expectation of further complementary acquisitions that could boost growth even more, a PE ratio of at least 30 should be easily achievable, which would given a share price of 30 x 8.6p = £2.58 and a market cap of £657m If 2019 PBT was to hit £40m (ambitious but possible given current growth and new contracts that will potentially flow via Sorrell), we could have EPS of 15.6p, and using the same PE as earlier, a share price of £4.70, and a market cap of £1.2b As far as I am concerned, none of the above seem outrageous given the growth of MM, they are a significant company in their own right, and that was before Sorrell came on board. Complementary acquisitions could of course add further profit to the above calculations, but also increase number of shares in issue. To close, just remember it’s taken 18 years to grow MM to this level, they have 750 employees and operate across 11 countries. If they were on AIM as an independent company, they could easily be valued at £500m + (Zoo Digital has a current market cap of £119m on revenues of £28m, and profits of £2.5m...) The market loves consistent high growth companies, so in reality the PE ratio of 30 could be significantly higher, and as stated earlier you can not compare this to WPP. The more you research, the more exciting this gets, and boy am I glad I took a decent chunk on Friday. All the above is my opinion, please read the prospectus and do your own research!
If you think you’ve been spiked then you may as well put yourself out of your misery and sell first thing Monday? Doesn’t really matter what everyone else thinks as you don’t seem to read/interact, just write negative one liners?
Reviewing the trading on Friday afternoon, 4 large sells between 2.47 and 2.55 (2 x 500k, 1 x 550k and 1 x 300k) stopped the rise at 19p. Fairly easy to do some analysis on true buys vs sells given the sizeable spread, will post an update later. In summary, without the 1.85m of sells detailed above, the price would surely have risen well over 20p... so when this supply line stops, the rise will begin in earnest.
Undoubtedly the quietest time of the week, so yes it provided the opportunity for those in the know/on the ball to get in ahead of the fireworks on Monday IMO. What is also interesting is that the bid/ask was initially set at 10/40p and the ask was reduced quite rapidly down to 15p before the major buying kicked in. Had it listed at 40p on a Monday morning, it’s quite likely that intense buying from the bell would have paid the full ask, and the price would surely have ended much higher?
Absolutely Madchatter, very glad to get in this afternoon, 13m shares traded in 3.5 hours! Given there are only 25m in issue it’s clear there is going to be some severe shortages over the next 2 weeks. The lock in arrangements are what caught my attention, as even post consolidation there will be very little available to buy. In my eyes Mediamonks growth of 50% YoY + Sorrell’s reputation & contacts + tiny free float = the perfect storm
Think page 20 below summarises the current situation nicely, free float will be severely limited given that almost all of the new share capital will be locked in... Mediamonks looks to be a very astute acquisition, with H1 2018 growth approaching 50% ‘In particular, in the period between the date of this Document and Admission, the share capital of the Company will not have been enlarged by the issue of the New Ordinary Shares and the Old Ordinary Shares may therefore be highly illiquid. As a consequence there is a risk that the price of the Old Ordinary Shares will be highly volatile in the period prior to Admission. The market for Ordinary Shares may be, or may become, relatively illiquid, particularly because the Proposed Directors, the MediaMonks Subscribers and the Affiliate Subscribers are subject to lock-in arrangements and therefore the Ordinary Shares may be or may become difficult to sell.’
Lefkosia, ‘savvy investor Invesco locking in some of their paper profit’, and at what price did they buy their 102m shares to make this fictional paper profit? You make yourself look incredibly ignorant with comments like that. Anyone who has done any research at all will know that Invesco supported previous placings (last one in 2016) at a much higher price, and so have actually made a significant loss on the shares sold, but retain a very large holding for a small cap share. Traders got spiked, investors should see a much higher price if they show patience and hold.
100% agree with this, last week nobody would have believed or expected that BB would sign a distribution agreement in China with Tencent. Ultimately, the share price will rise to the next level when it is proven that we can monitise new relationships like this, and in turn make the profits that can be used to grow the business organically or via M&A. All some way off at present, but as you say this is a substatial stepping stone & gives us a nice competitive advantage. Also worth highlighting the news confirmed last week regarding the official launch of Facebook Watch ; https://www.bbc.co.uk/news/technology-45333962 Given the number of Facebook views B.B. generate, revenue should benefit significantly from this going forwards.
You can look at this saga in a number of different ways, however the fact remains that this was a major step forward for BBSN. Tencent wouldn’t partner with a 10m mcap just so that invesco could sell 20% of their holding, the short, medium and long term just got a whole load more interesting! The market makers were obviously trying to avoid a repeat of May, when people were genuinely spiked at 5p, and day traders made a killing. I’m holding for he foreseeable, and will top up again if this goes much lower, but the fact is that this will have caught the attention of the big boys, and as yesterday has shown, WHEN the next big news breaks, you don’t want to be trying to buy at open. Final point for @Vitali, I don’t think we’ll be waiting until Jan for the next big news...but time will tell.
I’m afraid your comment this evening looks a bit silly in the context of your posts below over the last couple of weeks before you sold as a loss; “Will buy in if it drops more yes , one to hold on to . Thanks” “Thanks , that was a very interesting article , and it all makes sense. They will be marketing it freeze dried not in cream form . So no problem with stability and all on track . Good news, glad I wasn't one who panic sold .” The RNS clearly stated they would update the market on stability in the next few weeks, low and behold that’s exactly what they have done! A bit of patience and avoiding watching a shares every move will help a lot!
Hi Ogm4, of course they must be confident - where did I say otherwise? My point was there were four late trades reported yesterday of which the 1.4m was at the highest price. The point I was making is that it wasn’t obvious if the trade at 7.16 was a buy or sell given the spread at the time. Similarly, it’s not clear if today’s late 800k trade from yesterday at 7p was a buy or sell. I feel tomorrow we’ll see some huge delayed trades from today that sent the price rocketing, and that overall it is looking very promising.
The £100k @ 7.20 is a certain buy, the others less clear cut. The bid jumped very suddenly yesterday morning and it makes a lot more sense now. Now this huge order has been filled and publicised, the SP could really motor!
Hi Degsy, Strongly agree with this. The way the two significant trades this morning increased the price illustrated how small the free float is here and any sustained buy volume will hike the price up. Further to your point on the board recommending the financing, there is also the following fact in the last RNS; ‘In addition, the Directors of IIP confirm that they have received an irrevocable undertaking to vote in favour of the Resolution from GGIC IIP Holdings, Ltd. in respect of 175,324,980 Ordinary Shares, representing 25.77 per cent. of the Company's issued ordinary share capital.’ This, plus the 2 x £20k director buys on 31st July gave me a lot more confidence that the deal will be approved. In summary, the investment has the potential to be transformational for IIP ‘Significantly, the partnership with PSA, which is one of the leading global port groups with significant port operations across Asia, Europe and the Americas, which would result from the Proposed Financing will provide DLI with the additional expertise and know-how of an established global platform and enhanced marketing opportunities.’ Fingers crossed things play out smoothly!
Hi cminhinnett, apologies I didn’t see the reply to my original post. I’ve tried to explain my point below; The original H1 2017 figures included significant low margin revenue, from the RNS datesd 31/07/17, gross revenue was £10.5m, from which ‘commissions’ of £4.5m were then deducted, leaving net revenue of £6m. In the restated accounts there is no comissions figure for H1 2018, so it is my assumption that this cost was directly associated with the low margin product that was cancelled. So, yes they are presented on a comparable basis, but the H1 2017 numbers include at least £4.5m of now discontinued low margin revenue. Had this low margin revenue been retained, we would have reported total revenue including commission share of at least £13.9m for H1 2018, and revenue of £9.4m; an increase of £3.4m/57% on H1 2017. The problem is that none of this is explicitly stated in the H1 2018update, if the following sentence had included the amount of revenue involved, investors would have had much more clarity; ‘The decline is due to the Company terminating a low margin advertising revenue product in the first quarter of 2017.’ In summary, I believe BBSN is performing significantly better than the comparative numbers show. The H2 figures should truly show this, as the low margin product will not interfere. The cynic in me thinks that the IFRS 15 rule change provided the perfect opportunity to disguise net revenue performance and buy more time to cement the turnaround - time will tell! All in my opinion, DYOR
Decent sized sell showing on Nex at 1.36 which somewhat explains why the ask didn’t rise at the time. Must be a larger sell being filled in the background as well though. 06/08/2018 15:07 141,345 1.49 06/08/2018 13:36 268,608 1.426 06/08/2018 13:14 57,193 1.46 Following the 400% rise on partnership news in Dec 17, the business has released a very positive trading update, multiple distribution agreements & raised enough cash to last at least 2 years, yet finds itself trading below cash value... a buy and hold until at least the end of H2 2018 has the potential to provide significant upside IMO.