Member Info for Senator1

So the UK market valuing CREO at its cash and value of european associate. It must have taken market participants a week of running DCF models to come up with that. Any high growth co choosing the UK to list is off their head.

The thing to watch now is whether mgmt reward themselves with a whole lot of new shares as thast would be really disappointing or my pet peeve, nil cost options. Until they are back to 22p minimum they most certainly dont deserve that. This will be a real test of the new Chairman, whether he is really with shareholders or whether its all just the usual say one thing do another. A £2M increase in Rev does not deserve anything, there are enough shares outstanding at 400M odd.

If you take the europe value of say £30M plus £12.4M cash thats £42M. Market cap £50M so thats roughly £8M of value for core business doing £6M actual, £9M pro-forma for 2026. So as usual the London market is mean with its valuation. If this was in the US, it would have a multiple of sales of 4/5 pro-forma, that would be £45M plus the aforementioned £42M so a total of £87M or 74% higher or back to 21p. Its no wonder the US has such an advantage in developing the cos of the future. Why CREO is listed in London is beyond me.

Difference is GRG trades at forward p/e of 13, Tesco 14x and BME just over 7x. This shows one main thing, the distrust legacy the previous guys left and rightly so. If they had kept going the way they were under an accountant, they would have got in serious trouble. As the new CEO has implied on his tweo calls so far he was appalled that the basic retailing tools were not being applied or wrongly applied. The market is quick to punish but slow to accept the change that the new guy brings. For him to replace the CFO and bring in a new head of buying and make the guy in charge of logistics to be in charge of both the warehouses and the stores tells you everything you need to know about the previous bench and this confirms what the share price says. the new guy has given the market his plan and that is the right plan. he has to show it is working and then the market will react. i remember listening to one of the results calls with the previous guy when he had almost everyone chip in because he had absolutely no idea about the details of retailing and the guys he brought in were at the same clueless level. the new guy talks about everything himself apart from some details on the make up of some of the numbers. it wont take much to push this share price up a lot but i suspect the market will be slow to forgive and it will bellow "show me the money" before material changes and given the history that is fair.

What are u talking about? The UT is the closing auction THE MOST important trade of the day. Ignore it at your peril. You want to ignore trades, ignore the rest of the day!

They should set the debt policy at 2-2.5x instead of playing games with a pretend 1.5-2x. In FY 25 Adj EBITDA was £82.7M and lease costs (P&I) £30.1M so there is just no issue there. That leaves them with £52.5M to cover £14.4M of bank interest costs. If the CEO can make 20% return on debt funded acquisitions at 6% he should just keep going. If he borrowed another £100M at 6% this would bring debt cost to £21M with coverage greater than 2x before accounting for the cash from the acquisitions. P. Scott worrying about increasing the debt is just stupid, he has limited financial skill it just isnt an issue given the predictable nature of the cflo. The big issue is consolidating the properties. I understand the financial benefit but on the other hand it exposes the Group to the concentrated risk from accidential fire or some other external event damaging the boxes. I wouldnt be kept up at night worrying about the cflo, this however would worry me as this could kill the business overnight unless there is some interesting tech in the buildings that takes oxygen out in an event like fire and so eliminating this risk. until I knew more on this area it is too risky even at pro-forma 11x FY 26 concensus.

You dont get much detail on the TU on the profitability but if they re-iterate a min adj ebitda of £470M, £2 and it will go higher to £2.2/3 area over the following days.

In EPS terms this has been going nowhere for 3 years now. Last year it paid DVDs and bought shares in by increasing debt. They are opening 2 new superstores in the 2H and their current guidance again suggests no real growth in PBT but of course they will issue more shares to management so EPS will be down. It trades at 11.94x pro-forma FY earnings with no real growth in eps for the fourth year now. Yes it has grown Rev but its just not coming through in earnings and wont in FY 26. If you want retail exposure in this area there are far better opportunities elsewhere. If they maintain the DVD in FY 26 they will do so again by increasing debt which in itself is never a good sign. If this fell to £8 it wouldnt surprise me. Definitely not a buy, not even close on that.

As it enters Main on March 5th I presume it wont qualify for FTSE 250 inclusion at end of month and so June is likey FTSE 250 entry. I would assume exit from AIM 100 and FTSE 250 entry would be a net buy in number of shares. Given the near 75% insider plus Liontrust holding this will put pressure on the shares unless Danson supplies the demand. If I were him, I wouldn't and just let the market fight it out. Also, if I was a holder because of AIM 100 inclusion I wouldnt sell given this dynamic. Today's reaction just clueless retail.

TU suggests rev for FY 2026 up 6% to £341M, Adj EBITDA margin 40% is £136.5M, net debt £110M so EV is £966M at 1.16 share price. Thats an ev/ebitda multiple of 7.3x forward. For a company with 40% EBITDA margins and 6% growth (3% organic), thats very cheap. If it was to move to a 10x multiple thatwould suggest a share price of £1.64, thats 41% upside. I think 10x ev/ebitda multiple is pretty conservative. Insiders hold about 74% of the shares so inclusion on Main Market will make shares hard to access, so a double from here wouldnt surprise me.

Given they are at £191M at the half year it will take a hell of an effort to get to £475M for the FY. I dont think they will do it but I also dont think it is a major issue. IF, they do £450M which is more manageable I estimate this translates to £266M of NOPLAT. On £1.7Bn of invested capital this gives a ROIC after tax of 15.3%. Using a Ke of 11% and weighted average debt cost of 5.8% I get a WACC of 7.15% which I round up to 8%. Bottom line, this entity, in a bad legacy year is adding value to its capital structure, a lot of value, the excess is 7.32%. The reason it is able to do this is because they do a great job on leasing the properties so the adj EBITDA number is so good. So the property guys are excellent or maybe it is the fact the property owners just want these guys as tenants. Whatever the reason this is excellent.. The rest of the team under the old CFO took their eye off the ball and did a "sh-t" job but even in a bad year it throws off a lot of free cashflow. This is grossly undervalued because if the new guy sorts out the UK margin, the share price on this things starts with a 4, very easily. If they get the margin up to 11% and grow profitably at 4% p.a. it starts with an 8.

Wrong, their incentive plan is primarily options and RSU driven. The rest of what you wrote is rubbish. They have a credible product (early stage for sure and needs significant add ons) but they are making stupid financial decesions because no-one I listened to on their presentations has any skill in this area. The sweet heart deals exposes this to everyone. It will now be close to impossible for them to raise money as I for one do not trust them. The laughable thing is it was incredibly stupid of the person putting in the £500K as well in this way. Everyone associated with this trade is stupid, i million percent. I expect better from Allenby and Im amazed Premier Miton havent takem management aside and kicked some sense into their thick heads.

IF BME can deliver the minimum £470m Adj EBITDA for FY 26 which is the low side of their guided range this will imply an adj Ebitda margin (free of exceptional items) of 8.25%. This will be down on FY 25 of 11.1% but above the 6.9% of the interims. If you then use a WACC of 10% (after tax) and that the new guy can grow the margin by 0.1% in each of the next 5 years to 8.65% (which is under his double digit target) & using a terminal growth rate of 2% I get a value for the share of £2.82. Im not giving the CEO the benefit that he will get to double digit Adj EBitda over next 5 years so I think this is conservative. If he get back to double digit margins then fair value starts at high £4. If I were the CEO I would sell Heron (as its a piece of crap, sell it off piece meal) & make sure all new stores have tougher profitability hurdles. The previous guys just went for Rev growth alone and recent years showed the dangers of that, it doesnt necessarily increase profit. On the trading update, the most important single statement will be whether the CEO and CFO re-affirm £470M for FY 26 as a minimum. The back up to whether this is credible will be UK LfL ex Heron.

They dont do it, however they use as custodian does it and they get paid for allowing it. In the custodian agreement you agree to lending out by default and you have to be active to disallow it. HL wont disallow it as its a source of revenue. If you dont like it, HL will tell you to arrange your own custodianship and I suspect you couldnt use their platform to buy as they couldnt deal with executing in an efficient way if they had to listen to different requirements from the beneficiaries.

Concensus before today was £1.25 so it trades 13.75x. 11x would suggest price of 13.75 which is why I think it goes back to lows of 14.07 as a base case. This doesnt even account for concensus likely coming down over next few days. The earnings yield of 7.27% at current price just isnt attractive for equity risk in a 4.5% rate world which you can get for no risk. £20 would suggest a multiple of 16x or an earnings yield of 6.25%, thats not going to happen unless the UK business environment has a major upgrade for which I see no trigger.

LfL sales increases and static profits tell you there are huge cost pressures. LfL sales are the most efficient sale to fall to bottom line as they only have the variable costs to cover. This entity is running faster to go nowhere in profit terms. Like a hamster on a wheel. If management are calling static profits at this stage this is more likely than not to be revised downwards. Expanding in a subdued market was never going to end well because expansion has upfront fixed costs. The shorts were and continue to be right. Its just too expensive at 13x PE, it will go back and test the 14.07 low at 75% probability imo.

Your a total idiot. There isnt a hope in hell you could buy 5% of the co. in the market at that price. What are you talking about! I couldnt care less who it is. You dont raise money at 3p and then do sweet heart deal like this, period. £500K creating results.... this is all a load of rubbish! This entity is at the early stage of its funding journey. The key to being successful in this journey is to build momentum, not destroy it by being an idiot.

The average trading value of the last 252 days is £22K. That is beer money and couldnt be further from a trading stock. In fact at that level it just doesnt trade and to use ANY sort of technical analysis of a stock of this trading value is "rubbish in, rubbish out". You have no idea what you are talking about, clueless!

Don't make stupid comments. Of course it is incompetent. The world and his granny knows they need to raise more money and you don't stuff the investors who invested in the last round with an incredibly stupid sweet heart deal. It is grossly incompetent to think the market wont remember this behaviour. The share price is near a record low so how that benefits Directors in the way you allege is beyond me. They are just as thick as 2 planks, its that simple. If you watch one of their results presentations, it screams amateurs. Being new to something is fine, to be a stupid amateur is too much. As to your point that the only way to make money is trading the stock. What are you talking about? This trades almost nothing on a daily basis. It has no liquidity and the bid offer is a joke. This is about as far removed from a trading stock as it is possible to be.

The fall from almost 3p to 2p is 100% down to management's unbelievably stupid placement to one investor for £500K. They have made this share univestable

Special DVDs are dumb. On the ex DVD date the share price, all other the same, falls by amount of special. Buybacks are much better. The Lux entity for technical accounting reasons couldnt do buybacks and hence the Jersey move. They moved to Jersey to replace specials with buybacks. The only one to benefit from specials was the Aurora family as they could collect the dvd on payment date but on ex dvd date buy the shares, given their financial resources. As their family office is a Lux co. Im sure it was tax efficient too. BME's issue isnt footfall, the CEO has said that. The numbers tell you its the UK margin. The min wage, NI and other taxes added £75M to UK costs and they were not able to recover this from the gross margin. The previous CEO only increased sales by £75M but he did this by lowering prices and introducing cheaper ranges and so he was running fast to go nowhere in profit terms. The CEO has said he has four levers to fix this 1.) rationalise the range (get rid of the cheap tat), 2.) Buy better (see his first hire), 3.) get the promo mix right, 4.) Make sure the through put gets rid of most of what they buy. They dont need more customers, they have 5M a week. More customers come from more stores and that hits the P&L. They need to get the detail of retailing right. The previous guy was an accountant, not a retailer. The solution for BME is in the detail of retailing and the previous guy didnt even have the tools to do this right. He just flloded the store with more crap and hoped for the best. The numbers dont lie, its obvious where the problem is. I think the new guy knows where the issue is and he made a great start getting a new head of buying to creack the whip there, a new CFO and putting one person in charge of the stores and logistics to the stores. That was a fabulous start, the rest is coming assuming the previous guy left no more omissions from the accounts. If he had remained as CEO, BME would have been in trouble. The fact he is gone is a turnaround in itself!