Member Info for Senator1

For whatever reason, its clear his plan is to keep buying more add on businesses and buy back more and more of the shares. The market cap now at todays price is just over £700M. He will announce another £50M buyback with the results in March and in two years if he doesnt sell any shares he will automatically be at a 74% ownership, the EBT 5%, so him and employees will own almost 80%. His target in 2 years is adj. ebitda of £250M (which should be very clean with only small adjustments) and then he can do what he wants and he doesnt even have to worry about other bidders, he is in an unasailable position. What he is doing is very smart, hes like the quiet assassin. keeps buying shares off the dumb asses selling which quietly increases his % holding and when it suits him and he needs no-one he will strike. He wont pay any material DVD as he will use the excess capital for buybacks to keep his tactic working. It's billiant in its simplicity & the dumb asses in the room are the sellers but they dont know it!

I did seperate valuation of Healthcare and Non Healthcare and used Head Office costs of £10M. I used a WACC of 8.9%, g of 8%(half organic, half acq), RoIC=12% (I include goodwill as I view their acq strategy as an integral part of their operations (which is what it was in FY 24) and I get a value per share of £2.79 after taking off the 40% value accruing to Inflexion from Healthcare. So I can see why Danson turned down 190 a share. In his shoes, I would as well. I havent factored in the Adj.ebitda margin going to 45-50% either which is the goal from FY 2027 onwards. Think thats why he didnt sell as he sees this business at £500M Rev, £225-250M adj. ebitda, growing high single digits with an after tax return on invested capital of 12% plus, and a WACC at less than 9%. If he was to achieve those targets by FY 27, I get to a value per share of £5.5. A business doing those sort of targets deserves this rating. He wont get it on AIM but maybe a full premium listing as a member of the FTSE 250, I could easily see it get to £4 by end FY 26, a minimum 4 bagger in 2 years. Once the market starts scrambling for these shares this will get very interesting. Mind you, if I was Danson, I would have taken it off the market now at £1.5 -£1.75 instead of bothering with the main market and that is the bit I dont really understand. Danson did a great job for Data shareholders with the Inflexion deal so its hard to understand why he doesnt get the benefit of the doubt on his next move.

In June last year GD sold 40% of Healthcare for £451M implying their remaining 60% has a value of £677M. The current market cap is £713M implying the non Healthcare business has a value of £36M. At the half year the non-healthcare did Adj. PAT of £14.2M and adj. ebitda of £24.2M. The AI comp argument is hitting all these information providers but what is being lost in the melle is that 90% of GD's data sets are proprietary and that figure is audited by KPMG. So if AI dont have access surely it cant rely the information to others cheaply. There is a lot of nonsense circulating on this issue. If you own the data you have a defensible moat and in fact makes you more valuable as the proliferation of "wrong data" accelerates. Institutions will pay for trustworthy data if they get a return on the insights from well researched data. You can have the best AI agent in the world but if its locked out from access and even if it buys access, prohibited from circulating that data to others, its game over. Going forward it will be much easier for those that have the data to build AI agents to help their clients than for AI agents without quality data sets to effectively compete. The proliferation of rubbish in rubbish out will make entities like GD a premium provider in their areas of expertise. This is an incredibly cheap share, hit by misinformed rubbish and partly total lack of interest because of large inside ownership plus Liontrust, near 75%

I understand 100% what the Europe stake does. I just dont think you will get a lender to lend a material amount against it, particularly as Creo dont decide the cashflow (the DVD). i wouldnt want them to borrow on that basis either as if they fell out with Med Tech they are in trouble as they could cut the DVD off quite easily. As a loan, the only way I would take any value from it is if Med_Tech itself lent the money and did so on a limited recourse basis, limited to the cashflow from the DVD, so no general recourse. The market would not value a straight third party loan in the way you think, it would be a negative. The only other sensible way to monetise it is via a further partial sale if that becomes necessary. My cashflow projections suggest it will be very tight as I am pretty sure dealing with NHS type entities will be working capital intensive. If they came to some sort of licencing agreement with Intuitive which had an upfront cash payment, that would also work. Management have said they have the resources to get to cashflow breakeven, given their history, I think they have not made that statement lightly and so hopefully a further sale of the 49% is not needed. However, I would encourage management to explain in detail their calculations on this critical aspect. In fact, I would want Crofton to lead the discussion on this, not the CFO.

The cashflow from Europe is only the DVD and as the payout ratio is set by the 51% partner it will be hard to get external funding. The obvious party to provide this funding is Micro-Tech. Remember, the unused portion will require a commitment fee of circa .4% plus the real negative is it just doesnt matter. The 49% will have a share of profits of call it £2.2, with a 50% payout thats just over £1m cash p.a. Yes it might grow but its hardly "fortress". The max you might get would be £6/7M of a funding arrangement. Better to sell another 24% imo towards the end of this year and get £15m that way. 25% stake should maintain the relationship.

If there was an award for worst IR (non-existant), given they have a great story to tell, they would be a serious contender. This is why I dont understand the step up to main market as it is clear he has no regard for other shareholders and my sense is he sees them as a nuisance and certainly makes no effort to get other institutions on board. This is the only rational explanation for the share price at curtrent levels, no interest.

And all the time DATA just keep buying shares, down to 760.3M voting now, or market cap of c.£780M. Concensus FY 26 adj. ebitda £134.8M, a margin of 40% but yet this share price is just over £1 and 74% of the shares are closely held. Taking net debt at half year of £16.8M the ev is £796M or ev/fy26 adj.ebitda of 5.91x. Will the valuation of this business improve by moving to Main Market? I think Danson owning 60% odd is the problem as with that shareholding he doesnt have to listen to anyone and can do what he wants. Factor in the EBT and he and employees own 67% and as he keeps reducing the share count this keeps increasing. I would have said take it private and save yourself the hassle but I suspect the main market listing is his last shot at the public markets. He might as well see if it makes any difference and I guess it gives him optionality on a very large acq. if he wanted to go down that route. This is a bizarre share.

What are Liontrust playing at. Oct last year they increase by c.2m shares, then jan 28th reduce by c.2m shares. Really odd behaviour before step with to main market. Yes it is a meaningless amount of money in itself, but the mindset that lies behind this d..king about.

Constant selling of one share at the same price every couple of seconds. What is that about?

Somebody agrees with you as JPM bought stock to provide an Equity swap to someone. this will be an institution as its a >£80M spend. Now that is brave or stupid. Wonder who that is? Surely, if you buy in on Equity swap at greater than 5% you still have to reveal the ultimate beneficiary. Surely the FCA know what an equity swap is and this isnt a reporting loophole. If anyone factually knows the answer on this, it would save me some time. Anyway, this probably explains the recent bounce but what happens when this dries up which it muist be close to doing.

Concensus net for FY 25 is £124M thats EPS of 1.22 so thats a PE for FY 25 of 13.5x and as management guiding the same for 2026 (so no growth) thats too high. A sp of 14 would be 11.5x or an earnings yield of 8.7% in a high 4% environment. I just cant see it making any gains in 2026. You get a measureof how much these guys have been spending recently when you look at nrt cash going from £124M to £47M at FY 25. To be spending that kind of money in the UK discretionary spend market is a brave thing to do, i edge towards foolish but then i only try to look out 6/9 months or so. Im afraid, unlike BG, my 10 year crystal ball doesnt work or maybe I threw it out, cant remember.

Lets see what happens but i think there is a very high probability it goes back to test the low 1400s, thats only 14% away and then it gets interesting. its still well below some technical levels i use to say it has turned a corner but time will reveal all. one of us will be right, lets see

Nobody can predict anything with certainty. the funny mental followers, chartists, outright punters, insiders........this is a game of probabilities. lots of people follow the technical charts and so they way they think matters. does it guarantee the outcome? no it does not, but if your time frame is that of a swing trader its the best tool i know. i like it best when the charts and a funny mental analysis converge. they do with grg. from the funny perspective the problem grg have is their RONIC < WACC and so their expansion is not adding value. it might later but its not now, nor will it over 2026. i appreciate that to plan the sort of expansion that grg are doing takes time to plan and execute and they have got caught by a generally soft market for discretionary spending and a labour government that have hit them with increased employment charges in the midst of all this. while growth is taking away from value the share price declines, its that simple. in this environment does it deserve a PE of 12 and a bit. my view is it doesnt. im not trying to scare anyone thats just cold harsh realities. if your running a long short equity book in the uk its a pretty obvious short, as is anything depending on discretionary spending in the middle of an expansion.

I agree its not easy but CREO give their estimate of TAM and then you have to "guess" how much sales they can handle with an £18M overhead base before there is step change in expenses and what their steady state targeted operating margin might be (I used circa 30%). It wont be perfect but even trying to do it makes you think about the critical issues and how they are doing against those value drivers. I cross checked my own valuation with that used by Prof. Damodaran and using that model (10 years discrete forecast) it gives me 43p, so i think 40-50p is a reasonable current estimate. Based on my £26M Rev in FY 28, that would be 8x Rev. Obviously, if they can step up the Rev growth from the 50-60% area to 75-100% for next few years, that changes things quite dramtically, adds c.20p.

Or join the shorts, they are much smarter than star gazing Baillie Gifford with their 10 year time frames!

A chart of GRG looks terrible. It looks to me like it is going back to test 14 for the second time. Thats the smart money bet, no point accusing the short side of manipulation. You never hear them the longs of manipulation when the share price goes. as a general rule, the short side are the smartest people in the market as they have to pay cash out every day to hold their position. Take them on at your peril. Your ire should be directed at the CEO who has gone on a massive expansion drive in a very weak UK market. thats where the blame lies, not the shorts. They just want to express a view that the share is overvalued. They are right and Baillie Gifford is wrong, as they normally are. When you see them take the long position its time to run far away.

An option does impact the share price, the seller of a put has to sell short the options delta, to hedge himself, likewise the seller of a call buys the options delta to hedge as professional options traders are just trading vega and the pros are mostly on the sell side, with retail the dumb money on the buy side vis a vis individual stocks. so in short options matter a lot but in the case of greggs im sure it hardly trades in the options market, if at all.

Using no more than a 60% growth rate until FY 28 and then tapering off until 5% at the end of a 15 year discrete forcast period and in the continuing value period a growth rate of 3%, RoIC of 15% and WACC at 15%, gross margin at 60% and a growing overhead base I get a per share value of 74p using a DCF and using a multiple of eps in yr 15 PVed back to today at a 12x multiple I get 63p. Taking 25% off because its the UK, 47-55p is a reasonable estimate of value. Im way more conservative than cavendish with the projections who are at 70p and Edison are just smoking dope at £1 or something similarly outlandish given what we know.

Cavendish are 9.5 for FY 26 so just under 60% and Edison 10.3, so +72%. Cavendish is the newer research, out in last few days. As it really is impossible to opine on these forecasts, its over to management to guide in a month or so. Hopefully fact they let Cavendish go at 58%, they will guide at least 50-70%.

Another "independent" view which I monitor closely. Creo has £160M of accumulated losses on its journey so far and not a single penny recognised as a DTA. This tells me the accountants are not prepared to declare visibility on pre-tax profitability. I of course recognise they get an opportunity every 6 months to opine on this so why rush but if it was such a slam dunk then why wait. They can incrementally keep increasing the value, but to date nothing. At full utilisation thats worth £40M.