Member Info for ragnarlothbrok

wordog that is always a valid concern on AIM. They raised an additional �1.4m in March for working capital and other costs under the First Base book-build in March. If that is running out (especially considering FB was cash flow positive in 2017 and they promised break even by mid year) then they are burning through cash and we are in trouble. Today would have been the perfect time to announce a placing on the back of new contracts news and a new product release so hopefully this means they are fully funded.

https://beta.companieshouse.gov.uk/company/07706694/filing-history

Well today's announcement was a little unexpected but after spending some time looking through the announcement I'm a little surprised at how good this deal actually looks. Prior to the announcement Loop was valued at �155m but for �61m Loop is more than doubling its profit. They have raised debt at Libor +2.5% (no longer a start up!). I don't know much about Meeting Zone but I bet Loop do. They already have their strategy road map in place and earmarked the required investment for the next 3 years to deliver this strategy. Loop's previous stratospheric valuation, while still high, will come down significantly, although the level of growth will moderate with MeetingZone historic revenue growth around 10% https://beta.companieshouse.gov.uk/company/04300344/filing-history There are significant integration risks as Loop transition a large proportion of MZ business over to their own platform but my gut feeling is that the cost synergy benefits are conservative and the deal comes with some fantastic marketing channel opportunities. Market reaction today verifies the above, with the SP at a 20% premium to the placing price these shares are likely to be in demand, although as usual there is the short term risk that some of the placees will be flipping these for a short term profit

New contracts wins with some high profile customers, including MoJ. Next generation, off the shelf cyber tech to be released this summer which will provide clients a lower cost option to managed services. Assynt making its contribution as well with some high profile wins. Seems like everything is on track

I'm surprised by the strength of the PGM basket, mostly due to the rhodium contribution. According to my calculations, rhodium is contributing 25% of revenue and has overtaken Pd for the first time this quarter (based on today's closing prices). I wonder how much further it can go after almost straight-lining it up from $600 to $2100/oz over the last 2 years.

Hard to argue with the cash generation, low P/E and EBITDA margins of 40%. Sitting at 6 year high now as well. Well done to the board and management for having the vision, purpose and patience to build a sustainable business that will survive every stage of the commodity cycle, without having to tap investors for funds. I believe that this company and its management have many qualities that deserve a valuation premium which is not yet factored into the price. Still some way to go...

Hey Panda, the Sophos valuation is an indication of what a rapidly growing cyber security company can be worth: Based on consistent EPS growth in excess of 50% p.a the 2018 P/E is 150+ and the 2020 P/E 62. GRC reported PBT of �0.6m in 2017 and is worth over �100m for consulting, training and technical services (no software). It will double earnings this year but still puts it on a pretty punchy P/E. If we get a sign that FLX is continuing to rapidly grow revenue and is on the way to sustainable profitability I think its valuation will be re-rated to something more in line with the industry.

Thanks Bazzaman, I don't read the IC and was wondering what all the excitement was about today

Plenty of press recently covering cyber crime: for example World Rugby was recently hacked and there was an article in today's FT about the struggle of financial institutions to combat cyber crime. Unfortunate for those organisations but highlights the scale of the opportunity to the industry. Sophos finals are this Thursday which should give a good picture of industry growth

Uncrossing trade determined the final price. This will sort itself out on open on Monday, nothing to worry about, back to 7.60p

6% forecast dividend, lowest cost exposure to copper price, extremely low capex, close to debt free by end of next year, 5x EBITDA, the list goes on... Still early days but the acquisition seems to be paying off and was worth taking the time to run the ruler over several hundred opportunities before settling on SASA. Competition for new assets is likely to be fierce but I hope they continue with their ambitions to build a global, low cost base metals business. Next stop southern Africa? https://af.reuters.com/article/africaTech/idAFKCN1FX1NF-OZABS Given 10+ year mine lives, strength of management, outstanding cash generation and current forward P/E pf 7.5 this is fantastic value. I've been accumulating on this dip, can't see any reason for it other than profit taking and am expecting a swift retrace back to �3 and beyond.

Great post riskassesor. It always sounds aggressive when someone says that a company is worth 3 times its current value but it does not seem that unrealistic if you look at a similar company, GRC. Current market cap of �110m and announced in its April trading update revenue of �15m. This implies a revenue multiple of 7x. Applying this to FLX would give a value of �35m+. GRC is obviously larger, profitable, grew revenue at 100% and doesn't have an intelligence business so there would be adjustments to that multiple but it still indicates the opportunity if FLX get it right. It makes the acquisition of First Base, which was acquired on a multiple of <2x revenue and 5x cash flow, seem like very good value. I'm not invested in GRC as I decided FLX offers a better growth opportunity from a smaller base (and GRC has more than doubled in 2 months). I am looking forward to seeing some numbers demonstrating how the recently won contracts and the performance of First Base drives operating leverage (and hopefully profitability!)

It is indeed a high receivables balance and has always been high relative to sales. Based on half year results debtor days are 140. I think this reflects the nature of the sales process; while SLP recognises the majority of revenue on delivery of the concentrate, I believe payment is only made towards the end of the refining process. TWC/Sales is a touch high at 33% but does not ring alarm bells in my opinion. The fact that there is only one customer, one of the SA PGM refiners (Amplats, Impala, etc some of which have well known cash flow problems) is a risk. However I can't recall there being a bad debts expense and I have no reason to believe that the relationship with this customer is not strong. They used to have two customers several years ago but I think the strategy to have one was deliberate so will trust management's judgement on this point that they have chosen to partner with a financially stable and reliable customer.

Looks like seller has cleared, can't buy a bean

Yes that's a pretty fair statement. So far they have proven that the concept can generate revenue. The next step is to do this on a commercial scale and prove they can at least cover their overheads and over the longer term develop a recurring revenue stream. While they like to boast about the strength of their client base, its not a significant amount of revenue, and I get the impression it includes a high proportion of non recurring, project work.

Morning Eish. A bit yo-yo-like this last couple of weeks, have we started the uptrend yet? We need a few days of closes above the 7.50p mark. Current rand weakness is good news, much needed! Evander closure is not good news, especially for the employees, but it was necessary and good to get this uncertainty out of the way. Continuing to run Evander would have driven the rest of the business into the ground. Hopefully no union disruption to other parts of the business as a result. Closure costs are high which will stretch the net debt even further but offset by immediate recurring savings. A little nervous about this additional standby facility, hopefully the bankers continue to offer support.

His reference to 2018 revenue is a little ambiguous (14.30). He references last year revenue at �1.3m and 70% growth YoY and gives guidance for this year to be 'exactly the same'. Is he talking about growth or revenue? Assume its growth as flat revenue would be very disappointing. Says results to be released end of May. Why does this company release its results so late after the December year end. I thought the cut off was 3 months after year end?

Thanks for the post. Its a good watch, really interesting stuff about Ipsos strategy, that revenue channel could prove to be very valuable if Ipsos can convince its clients to pay for it.

Hey Dibbs. I�ve been a collecting a few shares over the last couple of weeks and my A3 sheet of due diligence scribbles tells me that in the year to 31 March 2017 First Base had �1.8m revenue, �600k of EBITDA and NAV of �700k. The acquisition price is roughly 1.8x revenue and 5.3x EBITDA on these numbers. There is nothing from the most recent year , I checked but companies house doesn�t reveal anything (https://beta.companieshouse.gov.uk/company/OC352070/filing-history) The acquisition announcement notes that �Over recent periods, First Base has achieved annual revenue growth in excess of the wider industry growth rate and it is trading well in its current financial year�. The more recent update also confirms that growth is on an upward trajectory. and the orderbook add sales pipeline are healthy. I think it�s a pretty sound multiple for a profitable, cash generative company in a hot sector.

Hi Visitor, they haven't mentioned it for 2 quarters now but it looks like they told the broker that they will announce a dividend at this year's results at a yield of around 2%. Hopefully we see a sustainable, progressive dividend policy which reflects the increases in capacity over time rather than the cycle nature of metal prices.