Member Info for ragnarlothbrok

I went through the TR1s for the last year. Date for each as below. There was also for Standard Life/Aberdeen on 5th Feb saying they dipped below 5% so they may still hold some as well. Add ins some employee shares and a few other bits and pieces means there is almost no free float.. surely the two recent additions must have come from either exponent or Tosca? 10% couldn't have been bought on-market in a couple of days

Exponent 33.8%___________15/12/2020
Ravensworth 27.5%________27/10/2021
Toscafund 22.4%___________1/4/2021
CIP Merchant Capital 3.6%___29/3/2021
Hestia 5.6% _______________28/10/2021

What the deuce is happening here? We have had two funds accumulating 5.7% and 5.6% this week. Where on earth did these come from? And now 92.7% of shares are held by the top 5 holders. Is this correct?

Exponent 33.8%
Ravensworth 27.5%
Toscafund 22.4%
CIP Merchant Capital 3.6%
Hestia 5.6%

What the deuce is happening here? We have had two funds accumulating 5.7% and 5.6% this week. Where on earht did

Agreed. Priced to implode is still an appropriate header. The only hope for this is that costs come in below expectations or that the squeeze on net sales margin is temporary. Liquidity is almost non existent, they have been abandoned by the institutions and the market seems to be waiting for more bad news. They have been extremely poor at managing market expectations of almost start-up like growth. However any reaction is likely to be short term. The market will realise that a single digit P/E is pretty harsh for a company that is showing strong growth in customer numbers and revenue in a market that is ripe to steal business from the incumbents

Looks like it will be choppy like this for a while to come...with the recent acquisition I expect we will be quiet news-wise for the next year, with the exception of results and the odd trading and integration update. The lack of liquidity, horrible spread and absence of any meaningful institutional interest to anchor the SP means it goes down just as quickly as it goes up and is enough to put most potential investors off

Reading this talk about dividend taxes over and over again from those who have failed to do their due diligence properly is almost enough to make me sell up and move on.

But then I see that December 2022 Henry hub price at 4.40

Really positioning themselves for a dramatic turnaround here. If they can show an improvement over the next 12 months and be a on a solid path to EBITDA breakeven then a valuation of 1x sales is not unrealistic, being a price of 4p or £25mcap.

Its just mind boggling how bad the IDE business must have been to warrant a price of only £250k, and deferred consideration at that. From the IDE half year results:

"The Connect division has continued to struggle in H1. A lack of scale has continued to hold the business back and the choice for IDE was to invest by way of acquisition to enable scale or sell the business to someone else. An informal process was undertaken with Oakley Capital and the combination of continuing churn and longer-term onerous contracts made an elongated sale process an unrealistic option. The reported expected sale price reflects this. "

Those longer term onerous contracts are concerning. Execution risk high!

Handy... hard to argue with those numbers...

...As the Spearad acquisition largely relates to its technology, we expect a modest impact on Tremor’s FY21 financials, and we will include the acquisition in our forecasts at Tremor’s Q3 21 results in November. For Q3 we expect Tremor will deliver organic net revenue growth of at least +50% with adjusted EBITDA of c$37m, after achieving organic net revenue growth of +159% and adjusted EBITDA of $37m in Q2. As Tremor continues to deliver on its strategy, strengthen its platform, and outperform its US peers, we do not expect that it will continue to trade at a discount due to market or external interest. Its current valuation of 9x 12-month forward EV/EBITDA with NTM EBITDA growth of +16% compares with its US peers on 16-69x EV/EBITDA with +20-32% growth, and finnCap Tech 40 peers on 15x EV/EBITDA with +19% growth, as we highlight in more depth on the finnCap Tech Hub website. We look forward to Tremor’s Q3 results in November, and reiterate our 1,400p price target based on 20x FY22 EV/EBITDA...

Market really likes this M Ward chap. Over 30 trades today, haven't seen that for a while

My reference to the business being a mess was the acquired IDE business not CLCO. But thanks for another deeply analytical and profound contribution from Gazza. Your one line posts are really making the world a better place

By my guess we now have a business of 27m in sales with declining growth and around break even at the EBITDA level. The consideration form is intriguing, fully financed by the vendor at a very low interest rate. Smacks of desperation from IDE. Successful managed services businesses are valued at multiples of revenue, not fractions. This business is a mess, falling revenue, rising overheads, loss making contracts and a high level of customer churn. Reminiscent of Adept4!

Also an update on how much has been hedged for 2022 and 2023 and at what price. In the recent investor call after the acquisition there was a question about that and Rusty said that they were hedging as much as the market would take for 2023 and that they had already started Tapstone.

In Q1 of 23 you can hedge over $4 and there are prices over £3 right out to 2025. Compared to $2.75-odd for this year and on a much higher production base thats a huge uplift in revenue (and cash flow)

I think you're right Mando. Bloomberg have had their day and the writers will move on to the next sensational story. Meanwhile DEC has some new publicity, can respond at its leisure and then investors will see that its paying a 15%+ dividend yield next year which is safer than many bonds paying a third of that yield.

On value, Cenkos had an interesting comment from their note yesterday.

"In recent months there has been a disconnect between DEC’s share price and both that of the Company’s US focussed natural gas peers and the rising Henry Hub natural gas price. Whereas Antero Resources, Range Resources etc have seen their share price increase in line with the recent uptick in natural gas prices, DEC’s has fallen. Whilst we acknowledge that DEC’s near-term hedging strategy does insulate DEC from some natural gas price upside, the improved forward curve does allow DEC to layer on additional hedge volumes at increased prices as periods roll off and as acquisition volumes come online. This disconnect is further emphasised when you consider that DEC’s peers have hedged a greater proportion of their production at a lower weighted average floor price – therefore providing lower exposure to rising natural gas prices."

Andy I don't think they have their own exploration drilling crews. They have accumulated a few prospects with the acquisitions but have said in their presentations that they would be looking to sell or JV these. Its one of their core values that they don't explore

I think its a very positive update overall. The fact that they gave us an update only 3 weeks after the year end is pleasing in itself

If you add these results to the recent acquisition (which has one month of performance included) you are looking at a business of around £14m in revenue and EBITDA of close to £1m. We actually have an EBITDA margin, an EV/EBITDA and cash flow on these numbers.

Now what we are missing now is some revenue growth..sales were flat compared to the badly covid affected 2020

And that Bloomberg piece has proved incredibly timely for those wanting to get in. Bloomberg has moved on, probably never to return, but the company can continue to accumulate more facts for the market about how they contribute to asset maintenance

Johnny Gee it was emailed to me, I think you need to create a Cenkos account to read it (free from memory)

The note is dated today and definitely incorporates the Bloomberg article as RedTom mentions below with a lengthy section about asset maintenance. Its very likely that they have had decent correspondence with the company to write this given the details.

It doesn't appear to update the dividend in 2022 but hedged EBITDA rises from $300m in 2020 to $337m this year and $544m in 2022, with a corresponding boost to FCF. Excess cash is assumed to be funneled into debt repayments which falls to 1.6x by the end of next year but if the company continues to hit its payout ratio of 40% you are looking at a gross dividend of 25c in 2022

https://www.cenkos.com/research-portal#/portal/cenkos-securities

Very detailed note released today, would recommend reading

We update our valuation following the announcement of the Tapstone acquisition, increasing our target price to 176p (from 130p), a 64% premium to the current share price. We reiterate our BUY recommendation.

If you think the 2021 yield is now looking chunky 2022 is even more so.

Pro forma 2020 EBITDA rises from $300m to $500m.
FCF $250m to say $425m
Shares issued increased by 20%
Dividend at 40% of free cash flow.

Put all those inputs into your calculator and it will tell you the expected dividend for 2022 is around 14.8p/share or 12.6% after 15% WHT. This ignores the impact of decline rates but also excludes the impact of 2022 forward strip price increases which I think roughly net off at the EBITDA level for 2022.

The 40% in the previous year was against the hard lockdown comparative when most businesses were completely shut down. That distorted the H1/H2 split. How are they going to achieve that this year? Is it general market growth or market share gains?

Volume is going to be immense today. 1m shares changed hands by breakfast should see a few per cent churn just today. It seems a lot have had enough. If I wasn't holding a decent amount here i'd be captivated but as it is I can hardly watch

Shares are at a lifetime low, even below the lows of the pandemic last year and well below the IPO price. How many companies can say that?!