Late 4m buy showing up from yesterday. Another big buyer around now. So we have the company buying, directors buying and a large shareholder buying. This is going up again today for sure.
Couldn't agree more. This share is extremely cheap right now. I am surprised it fell this low but I really can't see it falling any further. That's my million share buy today.
I’ve done some calculations and it looks to me like this share is over-priced. The £20m black hole is not really the main issue. If it was the share price should be back up at 1.40p+ already. The problem is that the company just isn’t as profitable and is more indebted than it was previously thought to be. June 2016 Share price 158p Market cap £231.5m Net debt £25.3m EV £256.8m adjusted EBITDA £25.8m adjusted EBITDA margin 23.6% Debt to EBITDA ratio 0.98x EV / EBITDA multiple 9.95 December 2016 Share price 78p Market cap £115.16m Net debt £42m EV £157.16 adjusted EBITDA £18.2 adjusted EBITDA margin 17.2% Debt to EBITDA ratio 2.31x EV multiple of EBITDA 8.64 Looks overpriced to me. When everything was believed to be rosy it was trading on a EV / EBITDA multiple of 9.95. At that time it was believed to be earning a 23.6% EBITDA margin on revenue. If revenue remains unchanged, with a 17.2% EBITDA margin on revenue it will now take 38% longer to earn the same amount as a proportion of revenue. All things being equal this implies an EV / EBITDA multiple of 7.21 is where we should be now. So then are all other things equal? - Net debt is now at 2.31x EBITDA when it was previously thought to be 0.98x and expected to fall. - The company was previously paying a dividend and now it is not. - The company was previously reporting period after period of strong organic growth which is now known to have been overstated. - And although Deloitte and Nabarro’s involvement now seems to be providing more transparency, there will be fees to be paid which are yet to be known. Overall, until we can see the full year accounts and have some confidence in the company’s ability to continue with genuine organic growth valuing this on anything more than 7 times is folly. So with 7 times where does that put the share price? 58p DYOR / GLA
Below the value of the assets now. And you get the revenue generating advisory business thrown in for free. Underlying trading EBITDA of £3.1m in year ended 31/08. This share is currently trading on a multiple of zero. Re-read the final results published on 1st December if you need a reminder of why this is a great buy.
The huge amount of insitution buying that we are seeing would suggest there won't be an equity issue any time soon. Follow the money.
Looking good. I make that EBITDA marginally higher than the combined EBITDA of Selection and C4L pre-acquisition. More importantly though, recurring revenue is now up to a staggering 84% and gross margins appear to have increased quite a bit since this increased EBITDA has been earnt on a lower revenue than before. Very good start for Coretx. Looking forward to great things with this one.
Simon Thompson agrees with you. He's tipped it again today on Investor's Chronicle website. His opening line is: "I think investors are missing a trick at MXC Capital..."
Look again at the Kestrel Holdings RNS. They increased the number of shares but decreased the percentage of their holding. The number of shares which it states they are now holding is the same as the number which it states they hold post placing in the placing RNS. They haven't sold any. They just didn't get enough shares from the over twice over-subscribed placing to maintain the same percentage holding in the company.
In terms of a valuation of CSI when unsuspended I think we should be looking at the value the market places on Castleton. Castleton was also a buy and build put together and run by MXC. Below figures for Castleton are extrapolated from half year figures ending 30/09/15. Revenue Selection £35 million, 65% of which is recurring Castleton £17.5 million, 55% of which is recurring EBITDA Selection £3.3m Castleton £3.4m Gross margin Selection 39% Castleton 62% EBITDA % Selection 9.6% Castleton 20% Net cash / debt Selection £16.5m net cash (post acquisition) Castleton £6.1m net debt Customers Selection - over 500 Castleton - over 450 Castleton valuation Market Cap £60.1m Enterprise value £66.2m Ratio of Enterprise value / EBITDA - 19.5 If Castle Street Investments is valued with the same ratio of Enterprise value to EBITDA as Castleton the valuation for Castle Street would be as follows: Enterprise value £64.25m Market Cap £80.75m A market cap of £80.75m would give a share price of 47.2p. However, I think there are a number of reasons why CSI should be valued on a higher multiple of earnings than Castleton at this point in the journey. Castleton has already gone through the buy part of the buy and build. The synergies and cost cutting have been found and are now being exploited. The cross-selling opportunities with the acquired businesses have started already. Castleton is still growing but the low-hanging fruit have already been picked. Selection, on the other hand, still has all those low-hanging fruit waiting for MXC to exploit. Eg - the EBITDA % and Gross margin for Selection are very low and leave plenty of room for efficiencies and cost savings; - Selection already has 500+ customers before starting on the acquisition phase so the cross-selling opportunities will be higher Imagine, for example, if the new management team can improve the EBITDA % and Gross margin to match Castleton's. EBITDA would be £6.9m and with the Castleton earnings ratio of 19.5 this would give a market cap of £150m and a share price of 87.6p. And that is before considering the cross-selling, synergies and additional EBITDA from businesses that are acquired. So in my view the very minimum value of CSI should be 47p upon opening. However, considering the huge potential to quickly improve efficiencies and funds available to embark on the acquisition path, a multiple of earnings of around 30 straight away would not be unreasonable. This would give a market cap of £115.5m and a share price of 67.5p. Anyway, those are my thoughts on this. Looking forward to the 21st to see how it plays out. Good luck everyone. DYOR