Member Info for Senator1

Here's the thing. Anyone who knows anything about accounts knows that when you move Europe to an associate you lose the consolidation so this puts the core business in the spotlight as the assoc becomes an investment on the balance and then share of associates net in the P&L. They now can't obfuscate the core numbers. i only know if I was putting it in the spotlight I would want to be pretty certain about the Rev growth as there is no way to hide it now. As a % 4-8 is a big increase but its only £4M in absolute terms. When you start at a small number the % increases are large so £8M of sales is no big deal if its generated by a £25M overhead base. I would be demanding much more if I was running sales. If the CEO was to put the core in the spotlight in the way he has and deliver 30-40% growth, he is an id--t. He must know that, so for now I am assuming he is not.

Did u request the share register or what is the source of this information?

If they lose £12m next year thats 11.5P. With a tailwind the core might do £8M next year and £16M the year after, £25M overhead base and thats -£9m pre tax minus whatever 49% of a business they sold for 100% value of euro 72M. I think 14p a reasonable floor until we get more information on sales of the core.

Having a different opinion is one thing, an intelligent opinion is another. At 5p the Equity Value is £20.6M thats less than the cash of £30M plus the 49% of Europe they still own at a recent sale valuation of £29.2M. So if we were to believe your "fair value" you would be buying cash and 49% of another business at 35p in the £ and zero for the core business. That makes a lot of sense to me! The cash and 49% of Europe alone are worth 14.34p alone and thats giving zero value to the core business.

Comparing to last years 53 week £629M EBITDA, todays guidance for a 52 week year is down 2% at lower end and up 1.27% at higher end of range. Feeding through the guidance to net profit, this thing trades at 7.9-7.56x earnings. Thats cheap. Way overdone. Once they get Lux domicile sorted their best trade will be to buy back stock which has over 12% earnings yield which is better than their operating margin.

I dont know why people moan so much about shorting. They are guaranteed future buyers and they are a vital part of any market. Just as those who believe something is undervalued can buy, the opposite is just as valid. kill shorting and market is dead. No interference from anyone, stamp duty is the issue in the UK. Irrespective of all that there are no material institutional shorts in BME.L. The mostly heavily shorted retailer is Kingfisher, with 6.89% net short position as of yesterday. Next Burberry & then Sainsbury.

Also using above ie holding GP at 50%, overhead base at £25M and near 100% p.a. sales growth you can see why Edison are saying 2028 until breakeven now from 2026 ex, the assoc contribution. I assume Edison checked with management before publishing the call that 2028 is breakeven which is faitly typical before they publish.

Sorry should have taken the remaining Equity Value in Europe, call it £25M off the EV of 37M. So essentially sales pro-forma multiple of the core is 1.5x. Thats cheap if this thing delivers.

CREO Eur now an associate so CREO lose 26.4M out of £30Modd and get rid of £5M costs. So proforma 2025 Rev is £4M plus say 100% growth, £8M. GP margin (50%) so GP =4M. Overhead base now £25M (30M previously), so call it a PBT =-20M as cash should produce some interest and then the 49% of whatever profit the associate produces (not a whole pile). Yes its a cost reduction but it comes from not consolidating Europe. So we are still at 20M losses and I have been generous with the 2025 growth. CREO market cap £67M, take off £30M cash is £37M, pro-forma sales £8M (generous), so almost 5x sales!

Sry, 5 yr closing low 21.34. the lowest low 20.506. So 2 battles before 20!

5 year closing low is 2050. Until it gets below that, it is far from obvious that it goes to 2000. One step at a time!

Because its in the news today, take TTD which fell 30% odd because it missed double digit sales targets in Q4 but still grew 20% odd for full year. Yes its a digital advertising business but its EV/Sales ratio is 16x . So if CREO can starting growing 20% plus.......the current 2x sales could easily push out to 5/6 times, so 40p is easy. I think 8x and thats 80p so long as it hold the 50% GP.

With the £20m cash (euro 25m) this thing trades at 2x sales. For a 50% GP business with a £40M overhead base, the job is simple. They need to double sales. No evidence of this, first half 23 to 24. They need to ashow this momentum in 2H or talk a good game for 25. its not a demanding rating at 2x sales if they can show sales momentum. Plus it doesnt take a lot to cover the current £40M overhead base. The job for this co. is so clean. If its such a great product and its at the right price, its just about sales execution but they need to show it. its understandable that it takes time to train users and before that get it accepted but when this train starts moving, it has an annuity profile to it which could be very interesting. Hold.

If you take the current year adj PBT guidance, make your own tax assumption and derive eps I get 1.14 to 1.47. At £32 thats a P/e of 28 to 22 for a company that grew 3% in the half year. If I just take the average its 25x or a 4% earnings yield. This needs to fall further, why would anyone buy a 4% earnings yield with downside risk to say nothing of the very concentrated share register and the risk that comes from there. Sell, imo

Why does expressing a view that something is over-valued not have investment merit. Why does it only have investment merit to be long and pretend you can see 5-10 years forward. Time and time again the markets show us that if you are in the crystal ball gazing mindset, the best strategy is to buy an index. Few active professionals consistently win. The data supporting this is 25 years plus from S&P global. Shorts are as important to the market as Longs and given the daily cash cost they endure rather than the opportunity cost of Longs they are insightful participants. If the market didnt have them, the quality of the market would be questionable.

I agree, that is a huge problem and in reality means as an investor in this stock you are taking a blind punt on the management and Board and maybe following some of the other big investors that are disclosed. Unfortunately none of those factors instil confidence in this particular case.

Molten will hide behind NDAs for the lack of valuation information. Thats fine but there is nothing stopping them from disclosing their shareholding percent. The fact that the valuation is widely leaked means if they did supply their ownership we could all decide for ourselves and bridge this gap in most cases. If they are not prepared to do this then it should not be allowed to be marketed to retail investors. The big boys know these data points so the excuses are just nonsense.

Dec 20th the 50 SMA went under the SMA 200 much quicker than I thought, as I thought it would be jan/feb. This is now exhibiting very bearish price behaviour and if it breaches 281/285, its back to the 200-220 area. Watch for the management renumeration in 2024 and in particulat the 1p options. If the Board issue a load more of these, this will never recover as the payment for failure has been going on far too long here.

This is now at a 3.5% discount to October Nav. Of the top 10 holdings year to date perf is NVDA 179%, Meituan 106%, Meta 62%,Spacex c.40% valuation incr, Tsla 39%, AMZN 37%, Ferrari 28%, Meli 26%, ASML -9% and PDD -34%. These 10 names are 44% of the portfolio. What happens if large cap tech in the US rolls over? Over the last year SMT is up 33%. Everyone who bought after the spring of 2022 is up. Will it make £10 and then what?

You day high valuations for big boys but not for the companies from where they came. Look at it this way. MSFT one of the most successful of big boys currently trades at a PE of circa 32x. If you take a fast growing private company valued at 6x sales and lets assume a net profit margin of 20% (which is very good) at some point in the future that is a PE of 30x. So the fast growing private, unproven relative to MSFT, has a 30x multiple and the big guy with the resources to buy anything it wants and stop anyone it wants to stop is 32x. Relatively speaking, which do you think is closer to the right valuation from a fundam perspective and this maybe explains the 50% discount. Apple is 32x so same point. Only NVDA at high 38-39x is the M7 outlier.

Large Cap Tech valuations are near an all time High, unprofitable tech is definitely not and if you look at a relative chart you can see some recycling from large cap to unprofitable. its only a couple of months but it is there. The Funnymental guys say private valuations are at an all time low as it is only 6x sales. I was taught value to equity is free cashflow to equity not sales to equity or as proverb says, turnover vanity, profitability sanity. I would change this to free cashflow sanity. Commentators point to strong sales growth as the justification for high values. Can be, but growth consumes cash as well and defers that free cashflow to equity. Maybe that explains a 50% discount to nav by market. Market knows that probably less than 50% of all growth generates free cashflow (most consumes cash). Im not a funnymental guy as technicals (price behaviour) is far superior tool. On this basis Molten doesnt look good at moment. It is in bearish territory at moment with the one month average approaching the 200 from above. This is first battle that is imminent (the scouting party) and then if this breaches we have the battle of the heavy weights, probably in January/Feb. This positioning is much more relevant in the short to medium term than Nav calcs or economic theory, imo, as academically interesting they are.