Member Info for Pharmhall

I've been to Mello in the past, but not recently. It is a great way to listen to and speak directly with the management teams from many companies thereby identifying really good investment opportunities, generally in the small cap space. Not all will be successful and it might take time to reach fruition, but getting a good feel about the companies in such a setting can be very helpful. Good examples have been Burford Capital, Tristel and SRT Marine (has taken years, but the technology was never in doubt). It also helped me avoid some disasters. There are usually some good guest plenary speakers that operate in the small-mid-cap space. Hope this helps.

JL79...Given your long-term investment and interest in MSI, I was surprised by the pessimism in your post. Even if the non-defence divisions contributed next to nothing in 2H'25, the increased defence contribution (delayed revenue recognition from 1H) should see, at least, the same level of EPS in 2H'25, giving ca.80p for the full year, which gives a P/E of 14.0x. This is still not expensive for a growth/defence stock. Anything from the other divisions is all upside on these numbers.

Taking into account the BoD shareholdings and a number of very long-term shareholders, the effective free float is really small. Add in the big spread and I do not think that this is a stock that would interest day traders, as there is too little profit on offer. So, IMHO, it comes down to the outcome of the strategic review that will be the key driver of the share price.

Hmmm....that's quite optimistic for dividend, I'm looking for 19p final (up from 16.5p), giving 24p for year (Halo is only on 22p; unlikely given the big increase at interim stage). As the BoD has got older and their shareholdings moved into pensions and ISAs, so the dividend has risen more generously. Cash pile should have increased substantially in 2H'25.

I do not think MSI will be taken private, other than if the Executive Directors cannot find suitable successors. I think that a sell-off of the non-defence businesses may be a conclusion of strategic review, which will leave the defence division as an attractive add-on to other defence companies. Maybe wishful thinking, but those directors are not getting any younger.

Last week saw good results, a positive Capital Markets Day and now it will join the Russell 3000 from end June. Valuation so far below its peers/competitors, share price must eventually catch up with all the news.

IMHO, the main point about valuation is that there is very little to go on right now. We simply don't know how much of these contracts with come into fiscal years 2025, 2026 or 2027. Even house broker Cavendish is not putting out any forecasts out presently for fiscal 2025 and there is only just over a month to go. Having said that, I believe that everything is moving very much in the right direction operationally and financially. 2025 has been transformative for the company and the shares will look very cheap when we are given all the financial information needed to be able to make an informed judgement.

A reminder that FY25 results to end-April are expected at the end of June. Consensus on Halo is still looking for a 2H'25 sales figure lower than 1H'25 (£54.7m) despite the interim statement saying that some revenues had been deferred to the second-half. The consensus sales trend on Halo also follows through to the pre-tax level. For what its worth, I'm looking for sales of £115m (driven by Defence & Security £80m) and PBT of £18m, giving EPS of 85p (Consensus 75p).

Apart from the numbers, we should finally get to see the outcome of its strategic review. Waiting with bated breath!

1Q'25 results on Thursday looked a little pedestrian with sales and EBITDA up 4% and 8% respectively. However, I suspect that they were heavily influenced by turmoil in the US following the January inauguration of Trump. Now that things are settling down, it was notable that revenues in April rebounded to +20%. This company has an important role in water management in 46 US states. I particularly like its relationship with five of the biggest US insurance company and with Stream Labs, a Chubb subsidiary. Warren Buffett declared a new, major holding in Chubb earlier this year, so good links. On 15 May, WATR opened a new Dallas HQ for water leak detection. Halo has sales of $98m in 2025 and EPS of $0.42 (neither updated since 1Q). But even on these forecasts, WATR only trades on 11x prospective P/E and 5x EV/EBITDA, for 18-20% growth. (Disclosure: I am a shareholder)

SRT Marine Systems – Near A New Break-Out (From Master Investor)

"After hitting all-time 67p high, the group’s shares have eased back on slight profit-taking. However, with shares at 61p we could be ready to advance higher. Expected to hit 100p during 2025". I admit I am a shareholder, but based on my own research and the consensus data on Halo, I totally agree with him. Can't wait for next update.

Terry, I loved your last sentence. It reminded me of a former colleague from many years' ago being quoted in the FT: "...Well its a buy, sell or hold, but I would not be doing anything at the moment..." LOL

100% agree with you. No lender would not put in covenants. 7% coupon is far cheaper than the cost of equity (ca. 11% at moment) and much less dilutive. What would happen to share price if it tried an equity issue of the same size. This loan for working capital is really good news and standard business practise.

I appreciate that everyone is excited about a potential Senmet listing on NASDAQ, but I can't find much evidence of progress. In its release on 19 November 2024, GST stated that "...TGC shall identify a suitable US-based corporate finance adviser and broker for the purpose of the Potential Listing and send a copy of its proposed engagement letter for GST's review before it is signed...". Does anybody know if this has happened yet? I would have thought six months was more than enough time to identify a suitable, and willing, financial adviser. Then the whole listing process must begin which will also take many months.

I, too, have been watching KOO closely after excellent results for 2024 and a reasonably positive outlook statement. However, I believe the reason for the poor share price performance is due to the forecasts, which I am struggling to comprehend and they will need more work. Consensus (from Halo) has flat (!!) revenue at £67m (can't be due to currency), 26% fall in EBITDA, and 50% declines in PBT and EPS. If these numbers are correct (unlikely IMHO), this leaves stock trading on prospective P/E of 16.4x . AGM in June, but no trading update until end-July last year. So may continue to drift unless there are broker upgrades/corrections to those forecasts.

JL79, I agree with you, MSI will benefit from international orders rather than UK. FYI, the MoD has invested in a Portugal-based drone company, so unlikely to also invest in MSI drones; CEO had a head-to-head with Starmer last week.

2reincarated: why on earth would the CEO buy 10.18m shares at 0.376p per share if there was a Placing just around the corner at a deep discount to the market price? He would obviously wait. But he hasn't, he's just stumped up ca.£38k to massively increase his exposure. This is very positive IMHO

No, its in play:

https://www.investegate.co.uk/announcement/rns/globaldata--data/statement-re-media-speculation/8855052

Private equity groups are after it after the share price fall. Will need to be much higher than this to get a recommended offer.

20x prospective P/E would give 960p

20x would not be over-the-top for a company growing at 20+% per annum

Actually, I sold my GGP at 15.7p last week. Looking to get back in around 12.0p

It's a Consultancy business that competes with the likes of Accenture, PWC and EY...but, being smaller, is more bespoke. Very impressive track record. But, at end of day, we all make different decisions. Best of luck.

JL & RM...I have posted on ELIX page, but really good 2024 results today and excellent outlook statement. No guidance, but on realistic broker forecasts, its trading on 14x 2025 P/E, falling to 12x 2026 P/E. 3% yield and no debt. Cheap.

Following my pre-results post yesterday, today's announcement and outlook statement could not have been much better! Interesting that its move to the Main Market from AiM is preventing company from issuing guidance for the time being. 1Q'25 was its "best ever quarter" and "April looks set to be its record month" (surpassing last known to be January). IMHO, 2025 sales are looking like £140m (+25% incl. acquisitions); adj EPS of 48p. Yield of 3% and no debt. Trading on P/E of 14x, falling to 12x in 2026, which is cheap compared with international peers.