Member Info for ragnarlothbrok

GDP contracted at 2.2% in Q1, lower than the 0.5% expected. Annualised growth 0.8% v 1.9% forecast. Looks like this will send the rand back to 13 sooner than I had expected

The recent proposed acquisition of MZ could drive some tremendous gains in the SP. Previously Loop�s EV/EBITDA multiple was around 28x/21x 1 year forward, with 40% EBITDA growth. Combining the two businesses produces a business with a proforma EV/EBITDA multiple of 15x/12x 1 year forward (including synergies) and 27% EBITDA growth. If LOOP can deliver on the integration this seems like a shrewd way of using Loop�s high multiple to revalue MZs own earnings and buying MZs cash flow on the cheap to reinvest into further Loop pods. It beats a dilutive capital raise! It also ignores any revenue benefits from the tie up, which I will keep as potential upside. There are definite integration risks but if they can deliver on this acquisition my June 2019 price target is �8, assuming a proforma 2020 EBITDA of 21m (Loop 12.3, MZ 4.9, cost synergy 3.8) and a multiple of 20 times. Based on my own research, company announcements and consensus

You'd think so Baz. Still trading at a big discount to the Ipsos sale as well. Looks like bored PIs selling shares. Can't blame them, the team haven't exactly put forward a compelling investment case recently. I was expecting more frequent contract wins indicating genuine disruption and driving top line growth and scale, we are effectively twiddling our thumbs hoping management are doing something.

Last year's full year results are old news indeed. I think some 2019 guidance would help a lot to reassure investors and, given we are already 4 months into the new year, and the World Cup starts in a couple of weeks, they should have solid order visibility.

I was surprised to recently read some very bullish hotstockrockets articles on FLX from the last few months. I normally ignore everything from TW/HSR but he does tend to engage with management and so often it�s a point of view which many PIs (without the same access) tend to follow. Here is an excerpt from May 17th : "Now you will remember that before First Base was bought we were expecting a PTP of �500,000 this year for Falanx. Last year First Base made profits of c�600,000 and it is clearly growing. And with some synergies (i.e. duplicated overheads to be cut) we cannot see how our forecast of a PTP of at least �1.3 million in the year to March 31 2019 cannot be met or beaten. Next year we continue to look for �3 million+ and a stock growing like this in a sector like cyber security should be on a mid teens PE. That is why this is a STRONG BUY at up to 6p with an initial target of 8p but that looks increasingly to be far too low." That implies a very punchy short-term valuation, but more bullish than my own expectations (based only on information in the public domain). No doubt many will disagree with his views but at the very least he sticks his neck out and gives some numbers and analysis.

Hey Lindon, shambles is a good word for it. What is normally a relatively straight forward exercise has been turned into a drawn out saga. I can appreciate the complexity of the audit as they do have a very bulky balance sheet with the receivables and deferred income in particular being disproportionately large relative to earnings. However a company needs to under promise and over deliver and not meeting a deadline impacts credibility. I took the opportunity to take a few on the drop last month. There's a lot happening in the industry, presenting plenty of opportunities to grow that dividend. Hopefully we get over this blip and get on with it!

Hey MickyBee, its a placing. PAF has just issued more shares at a 5% discount to market price. We get diluted but only marginally. Unfortunately they are issuing shares right at rock bottom but they need the cash for the Evander closure and net debt is already under strain. Likely we will see the SP fall to match the placing price today or maybe more if the market assesses this as indicative of cash flow difficulties

Agreed there are some worrying signs Eish. I think the government needs to consider some kind of stimulus to increase investment to lower unemployment or the country will be left behind. They need to give something in return instead of taking. The current account deficit is not so bad and government debt neither, they could lower the tax rate and invest in infrastructure, particularly power, supported by further govt borrowing, but the whopping 8.5% bond yield on SA 10 year and BB credit rating (junk) is a bit offputting. I guess the good news for SA miners is that there couldn't possibly be much upside to the rand. I'm expecting 13 to be tested over the next 3-4 months.

Thanks for the updates Mulder and Eish. The govt seems to be all over the place right, I hope some decision making and clarity will help the situation. I wonder who is going to run all these nationalised unprofitable mines?

Plenty of shares about, they're practically giving them away. Down almost every day since the news on serious volume. An indicator of a capital raising or just higher beta to general market malaise. Without a profitable acquisition a capital raise would put a serious dent in confidence Turnover has been around 10% every two weeks with 100% changing hands over the last 6 months. Could see a lot more selling leading into results. Results aren't likely to be pretty, I hope they have some good news

I think some more news about that 700k Midgard pipeline currently being negotiated will soak up on those sells. I note from the announcement the MoJ Midgard contract was executed in partnership with Roc Tech, seems like a very tidy business, strong growth and good margins. Hopefully more work will come from that relationship https://beta.companieshouse.gov.uk/company/07579363/filing-history https://www.roctechnologies.com/news-coverage/104-roc-technologies-partners-with-bgf-to-support-growth-strategy

Looks like the 'deep value' Israeli hedge fund has sold down after holding for 3 months. A couple of 1m sells around 18th May possibly related to this. Perhaps explains the abnormally high recent volume (12m shares changed hands over the last 8 days). They originally acquired 8.6m, so possible they have sold down completely. I'm guessing they bought in around the 15p mark so they have taken their 15% and run. Next news some time away I think with Q4 due at end of July, hopefully with news of 7koz of PGMs being produced per month. Maybe closure of Aus buyback before then but not exactly price sensitive stuff

The 5k sells are coming in thick and fast

ZAR basket at 5 month high, hopefully rand weakness has further to go

The breakdown of revenue (I'm guessing pro forma) and margins by division at 5:20 is very useful: Intelligence �2m, Assessment (inc First Base) �2m, Consultancy �0.5m, Response �0.2m, Monitoring �1m, Total �5.7m, spread across 300 customers. Hopefully the recent UK govt Midgard contract of �230k, plus the pipeline of contracts currently being negotiated of �700k, is in addition to this total. Midgard will drive future profitability with recurring revenue at 70% margin and "growing rapidly". This is obviously where the money is at, every additional contract falls to the bottom line at 70%. When asked about whether they have enough cash, Mike won't answer directly but says "if you look at the numbers, it looks good".

The article closes with Nick declaring he is stepping back from the day to day running of CAML to focus on the future strategy, which could include more acquisitions or even building a greenfield mine from scratch. That would be an interesting scenario indeed

Big resistance at 20p, hopefully consolidate at 19-20 for a while and let the heat off the technicals. PGMs a little weak but ZAR basket has been pretty steady this late month. Rhodium is flying, at this rate SLP will be a primary rhodium producer in a year

Tipped by who?

I second that Jambon. Here's the list for you. https://shorttracker.co.uk/company/GB00B3MBS747/ I'm not a holder here but just came on to say congrats to all of those who are, I've been watching this for some time but was never game enough to dip a toe in

Although disappointed like most holders, I'm not surprised that the SP didn't take off today. The UK government contract was only �0.2m for one year - this is a good start but longer/larger contracts will have more of an impact on the SP. Is a �400k order book acquired with First Base a good or bad sign on 2017 revenue of �1.8m?? Today was news that FLX is on track but over the next 3-6 months we will hopefully get more confidence around firstly delivering beak even and then proof that the business model can generate sustainable profits via recurring revenue with limited customer churn. I think we�ll get a pretty good idea in July. Though I wouldn't complain if, in the meantime, we get a regular stream of contract wins like today.