Member Info for SeaTank8300

Fingers crossed this is the real thing!

Good volume through the local share today, adjusted to the black market GBPNGN rate the large blocks went through at between GBp229 and GBp240. Total value traded today was GBP1m. Pleasing to see local institutions or HNW paying up for it.

The oil price has a challenging outlook over the coming 12 months, this is the best summary as to why that I've seen, although Javier Blas from Bloomberg is also worth reading:

https://x.com/BurggrabenH/status/1831360459733094610?t=o93hawutcBJOHzGnNfs2xg&s=08

For long time followers of SEPL, you'll know that the share's correlation with POO is low; in short, various other factors are more impactful on the stock price than oil.

The MPNU deal sign-off and publishing of Prospectus with deal terms is key here, at this moment in time.

Don't forget though, commercialisation of ANOH, which should be by year end.

I'm still holding.

Apparently not allowed in FTSE 250, I think because the company is incorporated in Nigeria

Indeed Trek, I halved my position in SEPL around 200p but it remains a big position, my second largest, so I am very much invested. MPNU is When not If, so I am pretty relaxed about the timing. I expect it will be given approval by October, so not far off. In the meantime the dividend flow continues and, come 2025, with ANOH fully operational and the bond refinanced (thus the covenant cap on dividends lifted), the dividend will be raised significantly again and we should be back to near a double-digit yield at the current share price (that's without MPNU). There is a lot to be patient for. Indeed once MPNU is approved and acquired, yes there will be another share price rise and additional dividend stream, but then we will have another 2-3 years investment phase during which MPNU production is recovered and gas investments are appraised before the next transformation, which will be gas export. I suspect we will be holding this name for quite a while yet.

Making up numbers? I don't know whether you read much, but repeating myself, this is from management comments via Jefferies. I laid it out below. You don't have to read it, it's there for others.

What people seem to be missing and I've been pointing out that the market cap of PLUS has flatlined for several years, so it is not as if this business is being valued more highly by the market these days, it is not. What has changed is that the US business is becoming a big contributor and has longevity, but is currently being ascribed NO INCREMENTAL VALUE AT ALL.

My investment case is not too rosy at all. It is straightforward.

So first the USA. The B2C platform only went live in September but it has "thousands of users" as per management comments at the beginning of the year and these clients are more sophisticated and deposit more money than clients elsewhere. As a result, despite being a lower-margin business than CFD, ARPU should be the same or higher. Assuming 5,000 clients and $2,500 ARPU, that gives ~$12.5m/year. According to management comments passed on from Jefferies their broker in January, the B2B business in US was making "tens of millions a year" in revenues, annualised, which I take as meaning at least $30m. Put the two together, at the start of this year the US business was doing around say $40m in revenue, annualised. PLUS management have a stated target of $250m of revenue in 2026 from the US. If they double estimated contribution this year, takes us to $80m, +80% in 2025 takes us to $1.44m, +60% in 2026 takes us to $230m. Still short of their published $250m target, so in my view conservative. OK, so this current year the US will be 10-15% of revenues, which means in 2025 it will be closer to 30%, which is why the NASDAQ listing will be in 2026.

Turning to the LTV/CAC ratio, why do you say it is terrible? This is very much opinion. Where one draws the line on incremental revenue vs CAC is subjective and rather depends on what one's return target is. The EBITDA margin is still 42%. They could spend less on marketing in exchange for lower CAC but would have fewer clients and lower revenues. Margins might benefit but EBITDA would fall. There is a trade off here. You make it sound like this is an obvious problem, but it is not. Put another way, they could drive client acquisition and revenues much harder than they are currently if they wanted to, but prefer not to. They obviously consider that buying shares with excess cash is better value than chasing incremental profit, and it is a tremendously positive signal for the share price.

You say this is "the real reason institutions are not buying" - well frankly it falls into the same box of reasons that institutions consider PLUS opaque, but that is their issue. More to the point, management are not interested in convincing UK institutions that this business is sustainable. Their focus is hoovering up shares into treasury and the NASDAQ listing in 2026 and I don't blame them.

Given the competitiveness of the platform, why would churn skyrocket or ARPU collapse? I am interested in this risk, but it appears to be a low likelihood. The stability of the business in recent years including new customer registrations, alongside diversification achievements, provides comfort on this front. You could argue a similar case for gambling to slowly die out in society, but it does not.

PE and market cap history of PLUS here:

https://x.com/HindsightFnd/status/1825887124219949072

Still dead cheap.

To summarise the investment case:

1. Core CFD business diversified across more than a dozen markets showing very sustainable metrics with high return on customer acquisition cost and good persistency/low attrition

2. Market leading technology stack, entirely internally built, allowing rapid evolution of new functionality and regulatory requirements, and market-leading trade and service levels, such as tightest spreads

3. Growth into new growth markets such as UAE and Japan

4. The transformational entry into Commodity Futures in the USA and Europe, primarily targeted at commercial enterprises, offering a disruptive high quality service to users of commodity futures that otherwise have relied on non-digital platforms from banks and brokers. PLUS is growing rapidly in this area, already doubled in size, but still sits at just 0.1% market share yet contributes 10-15% of group revenues. This business has a high chance of multiplying in size.

5. Listing on NASDAQ slated for end 2025 or 2026, to open up shareholder register to US institutions.

In the meantime, dividend yield (including specials) is around 5% and share buybacks are considerable.

Good luck!

For those that follow SEPL closely, you might be interested to peruse my latest commentary on PLUS: "Why the share price is Slow; why it will Double". I still own 50% of my original holding in SEPL, but PLUS is now my primary position at around 1.5x size of SEPL. It is for similar reasons as I bought SEPL before: asymmetric risk-reward, >100% share price upside, alongside dividend yield and a simple story for getting there. I have mentioned it before on this board, but there is still runway. Good luck!

I read that posters here are regularly disappointed with the share price performance of PLUS despite solid news flow and results, and good operational progress in diversifying the business and introducing new revenue streams, not to mention amazing shareholder distributions. I can explain why the share price is so very incremental: a scarcity of marginal institutional Buyers.

What do I mean by scarcity of marginal institutional Buyers? I mean there are very few new institutional Buyers entering the name, so there has generally been an ongoing weight of Sell demand outnumbering Buy demand as the share price rises.

Why is this? Frankly, it is the fault of the management team, but may be, in part, planned that way (i.e. management are not convincing new institutional Buyers into the share on purpose).

The history of the business has been one of ups and downs, some regulatory scares, a lack of financial transparency, and inadequate management relations with the City. In short, the vast majority of Institutional funds have passed-over PLUS and won't consider it whatever happens. The pool of investors in UK assets is relatively small, as too is the pool of Israeli investors. In short, those that have been open minded towards PLUS already own it, those that aren't don't and won't.

The practical result is that, as the share price rises, there is continued selling by holders, but very few buyers entering the share other than the FTSE250 index trackers, which are few, hence a dependency on the share buyback programme to pick up the remaining liquidity. It results in relentless technical pressure on the stock.

I believe management actually find this a satisfactory situation, since they continue to amass shares through their share incentive programme at low prices over many years, with a plan in the wings to list on NASDAQ at a much high valuation and make a fortune in 2025 or 2026.

I believe the US business was 10-15% of revenues in 2023, so should reach 30%+ in 2025, which will validate PLUS for US institutional ownership. The gates will be opened to an unlimited source of new Institutional investors when that happens. The move to NASDAQ is slated for end 2025 or more likely 2026.

That is why only incremental share price gains are possible over the coming 6-12 months, or at least until they announce the roadmap for NASDAQ listing, at which point I expect Hedge funds to enter and drive a re-rating into the NASDAQ listing.

As I have pointed out numerous times, the market cap of PLUS is barely above historical highs today, so the share price has a long way to rise from here. I estimate it will double, on conservative assumptions (low 20s P/E ascribed to the US portion of earnings, low teens P/E ascribed to non-US portion of earnings).

While we would all like a rapid rise in the share price, it is unlikely to happen until NASDAQ listing, but should make steady upward progress despite this.

Https://x.com/HindsightFnd/status/1825809480602230811

Remember folks, the share price is not representative, given the pace of share buybacks. Market cap + dividends better represents value creation. We are finally on the move. I truly believe the US business will eclipse all others in time and PLUS will become a US-listed fintech and valued as such. This remains my top asymmetric risk-reward opportunity.

Spain banned advertising of CFDs, not CFD use.

Anyway, gambling is pretty widespread across Europe and the world and the losses per average punter are not particularly large here, so there is no reason why CFDs will be banned across any of Plus500's more than a dozen markets. People have a right to do what they want with their money, so long as they are informed properly of the risks.

Plus500 is a diversified business these days and the perennial noise concerning regulation in a particular market here or there is no longer a major sentiment killer - it's old news, we all know it.

In around 7-8 years the company will have bought all its stock back with it's prodigious cash flow.

Meanwhile, the US business has a good chance of eclipsing the CFD business. Plus500 have 0.1% market share of the US commodity futures market today. That could easily go to 1%, which would mean the US business eclipses everything else.

Https://financialservices.plus500.com/firm-financial-information.html

28% growth in Customer Segregated Funds year to date!

I find it darkly satisfying that the share price has halved again since I tried to point out to the Telegram chat group that there were/are serious fundamental problems with the Lithium price. I was ejected because I told the chat group the truth about deteriorating supply-demand dynamics and that there was severe group-think among posters on the chat and that most of the posters were moronic parrots simply echoing a fantasy bull case propagated by certain know-it-all's.

It is some compensation for the £s I still have invested in this disaster of a share.

Solid as a rock. Exactly how it should be, and as you point out, VIX up is great for cash earnings.

I'd just point out that the withdrawal of the court injection at end May allowed SEPL to interact with MPNU once again, thus (as per the presentation) progress can and is being made regarding Operational readiness and Publication of prospectus. These are time consuming and important items to deliver a successful acquisition/integration, so it is great that SEPL and MPNU have been working together on progressing these items for almost two months already since the injunction was withdrawn. When regulatory approval is finally given, the Prospectus should be published quickly (note a lot of work had been done even before the injunction) and that is the door to shareholder vote and completion.

The share is finding momentum again, thanks to improving operating fundamentals. I'm looking for a return to 100p.

The new hotel in Shoreditch is receiving great reviews on Booking.com

PPHE has thrown customer services staff at the soft launch, which is paying off handsomely.

RevPar here probably has some upside, as rate looks low for the quality of experience and facilities.