Member Info for shandypants2

Current SP action is bizarre.

We have a 30p bid that is a low ball offer.

Even with some uncertainty a 20% discount , so 25p seems excessive.

If the vote is no this doesn't mean the deal is off - Sidara could increase their offer and/or another bidder may enter the negotiations. Both outcomes will increase the SP.

The risk/rewards seem very favourable if the SP remains under 25p IMHO.

Looking at APN results v THG the issue is the admin costs (which will include marketing and distribution, in additional to central costs).

APN has a gross profit margin of c 45% and costs are less than 50% of this so overall a £107m rev, produced £49m GP, EBITDA of £30m and £28m of operating profit.

THG Nutrition for Q1 2025 had £303m rev, £132m GP (so 43% margin). However, only £12m EBITDA. So central/admin costs appear to be c£50m too high.

A simple rule of thumb should be for every £100m, GP should be 50% of this and EBITDA about 50% of this - so a £100m rev should have GP of c £50m and EBITDA of £25m.

For Q1 2025 on £300m revenues EBITDA should be c£75m.

Why are THG costs so high as surely distribution costs via Ingenuity should be quite costs effective?

Maybe marketing is too high, build costs are excessive, we have too many staff etc or as a suspect a combination of all.

Whey powder prices are clearly a smoke screen , it is obvious where the problem lies with THG. They need to be leaner and more cost focused

Due to the frustrating SP i have questioned whether i am have a natural bias with this stock, or being a micro cap it is just under the radar.

Looking back at the interims and also the last few years accounts it is clear this is a growth stock and continues to achieve c20% YoY growth.

This year PBT tax is already RNSed at £5.7m.

Current valuation is c £46m with £12m in cash at 31/5/25. so the EV is c£35m.

The balance sheet is strong with almost no debt. Net assets of £43.7m and net current assets (a better guide IMHO than cash) of over £18m.

In the last 6 months cashflow from operating activities was £4.7m and even after changes in working capital and a few purchases overall cash was up £2.88m.

The gross margin is consistent at 48% and operating margin is 16.7%. Both fine.

We are in a high profile and growing sector. I have looked at the products and the CCTV includes facial recognition software, which seems the way to go.

The only slight negatives i can see are the lack of BOD purchases, although they do have a generous share incentive scheme so they gain from that. The other is maybe Whitehall Associates, a Panama based company, that owns 25% of the shares.

However, overall there are no red flags and this is seriously undervalued by any method.

For me on a PE of 10 (very conservative) plus cash this is a £70m company all day long.

Another decent contract announced today and yet again the SP barely moves.

A growing cash pile, decent YoY revenue growth, and a now single digit PE (for 2025 ) this seems massively undervalued.

With the recent break in at the Louvre, where outside cameras were limited), the horrible knife attack on the train this weekend and Tesco announcing delivery drivers will start wearing body cameras it just shows the importance of surveillance across so many areas, even low risk ones.

This is a growing industry that will only get bigger

EAAS rarely provide midyear TUs and there wasn't a TU last year on 24/10 although they did provide an outlook update when 1/2 year results were published on 30/9/24. This year 1/2 year results were published earlier in late July. YE numbers were reaffirmed so unless something has changed it could be argued there is nothing to say.

I would prefer a Q3 update , but based on previous years this is rarely provided.

Maybe no news is good news

It won't start trading at 18p just because that was the last closing price. MMs can set whatever price they want - i suspect it will go directly to 27p/28p range

I would ignore the many markets as the only significant revenues are in the US. Feraccru has been sold in the UK for over 5 years , yet revenues remain very low. As the NHS in England is not one single organisation, but is made up of hundreds of different organisations of differing sizes, at central, national, regional, and local levels with different roles and responsibilities it means approval for the product varies across the country.

My doctor can't prescribe it (in Kent) as an example.

Having said that with breakeven a massive milestone for STX and this was only reconfirmed last week the SP action seems bizarre.

I think there may be a few reasons for this. Firstly, STX has missed so many deadlines/milestones before that investors will wait and see.

Secondly the breakeven will almost certainly be a followed by a dip as Q1 is always the worst quarter. So it will not be a straight line - get to breakeven and then profits will suddenly materialise.

However, based on 54k quarterly prescriptions the product is now selling over 200k units a year, which is an amazing achievement and will get people noticing - it is now the highest selling iron supplement, i believe.

In the recent Investor Meets presentation the CFO seemed very relaxed with the money so that's a good sign.

I asked about the IV infusion market as this is a natural complementary area for accrufer (have IV infusion to boost short term irn levels and then accrufer to maintain those levels and prevent repeat costly hospital appointments . It appears they have struggled to access this so have focused on easier areas (women's health etc) however this is a massive market and one they will revisit.

Yes, not the largest contract but it shows we are growing in the EV space as we expand from LED and solar into a wider net zero offering.

Was hoping for a comment on Q3 performance or at least an inline with YE market expectations, however, maybe that will come separately

I agree AK, these seem ok, and reiterating YE breakeven only c 2 months before YE is a massive vote of confidence.

I would focus less on revenue as this seems fluctuate a little - QoQ prescriptions are up c15% (47k to 54K) and NSP has slightly increased too. So the direction of travel is positive. The free/cheap prescriptions are still stubbornly high at 22% but less than Q2 (thought this would be less than 10% by now as they have been selling accrufer for c 3 years).

The other big takeaway is cash burn - they have $8.6m left so cash burn in period was c$4m as they also had the £1.5m placing added.

With prescriptions growing revenues should continue to increase so cash burn per month continues to fall.

I've always had a 25k per month prescription figure in my head for breakeven based on some basic calculations, however, with the cost savings they supposedly implemented this could be maybe 10% lower now. So IMHO they need c$6m rev to generate $3m gross profit to cover costs.

They mentioned 40% of revenues came in Sept 2025 so that's $5.2m if this continues into October and November then the $6m is very achievable.

In fact i suspect they may achieve it in October and then it may settle back a little as Nov is thankgiving and Dec is Christmas.

Was this some kind of out of market transactions? Volumes were reported as 15k shares yesterday (daily volumes rarely go above 10k shares) and the SP traded slightly down.

Holdings in company increase is always a positive sign. Hopefully 1 or 2 of those contracts that the CEO mentioned a few months ago will be finalised in the next few days/weeks

I think any purchase below 300p (c£50m market cap) will do well in the medium term. This stock can be a little frustrating and the CEO is quite conservative is how RNSs are written.

I think the YE target was £5.3m PBT and they've just reported a minimum of £5.7m so a near 8% uplift - maybe not quite 10% to say exceeded expectations, however, i'd have definitely called out it's in excess of the broker forecasts.

Similarly it's over 20% up YoY - not called out.

I think the one big positive is the new broker - i suspect the TU was push forward to ensure Singer can now go around and raise the company's profile.

Hopefully we will see a Holdings RNS in the next few months.

There is very little not to like about this company - value will always rise to the top eventually. It was 340p this time last month and we've since had last week's positive RNSs.

Yes a really solid update, and nothing to justify the recent SP weakness. With PBT increasing by over 20% and forecast to be at least £5.7m it seems crazy that this is still values at less than £50m.

This valuation includes well over £10m in cash (maybe nearer £15m by YE?) .

A £60m valuation is an SP of over 350p and £70m is over 400p.

On a PE of 10 and with cash added on £70m seems quite a conservative valuation.

Is this just an overlooked sector? I look at companies like BOOM making a small but growing EBITDA on low margins but the SP has risen considerably this year and is valued at c£100m.

New contract in a new sector looks encouraging too. All those new AI data centres that are in the pipeline will need security/surveillance, so the timing is encouraging

Disappointing recent drop but notice a BOD purchase of c£20k worth of shares so i'm guessing he knows more than we do.

Still hoping for a decent contract win to perk things up and hopefully a good YE update in late Nov/early Dec.

350p min at YE is still my target

Agree, this is now a long term buy, but to say a single contract will get us to YE profit is completely misguided. If a decent contract was to land now it would need to be scheduled, volunteers recruited and then undertaken over a number of months.

Clearly a new contract would be great news, but the main impact would be on 2026 numbers.

Https://www.bbc.co.uk/news/articles/cqlzwqv7xz1o

Average of c£700 per person according to this. £8bn in total

Sidera have already seen the accounts as part of their due diligence, hence why they lowered the bid from 35p to 30p.

The accounts haven't formally been approved as the auditors need to confirm it is a going concern etc, the actual numbers will not change and will have been finalised many months ago.

well 5p is c£35m. today it is valued at c£45m. assuming cash keeps going down i would ignore this in any valuation. i also suspect 2026 revs to decrease, maybe 20%. that will take annual rev to below £40m and again i suspect a loss as per 2025.

back of a *** packet calculations anything under £40m for company's valuation looks cheap, but i'd want a little leeway so 5p would be overdone imho.

not saying today it is overvalued but not sure there will be a short term bounce to justify the purchase.

Whilst positive overall it does mention that wind speeds and the cost of installing wind farms are still an issue for the UK.

https://www.bbc.co.uk/news/articles/cx2rz08en2po

Ignore this article the guy is very anti climate change.

He talks about the decommissioning costs and 20 year lifespan of a turbine without mentioning that with servicing (like a car) the lifespan can usually be extended to 30 years and also doesn't mention more cost effective alternatives such as repowering. Why decommission an expensively assembled off shore turbine when the motor and blades can be replaced with upgraded and more efficient alternatives. The newer blades produce a lot more energy so the cost is recouped within a few years.

There is no time bomb.

In contrast in the news today green energy has overtaken coal

https://www.bbc.co.uk/news/articles/cx2rz08en2po