Member Info for shandypants2

Just to add to comments, with the current value now at less than £24m and with £25m to be deposited in c2 weeks the current SP is very undervalued.

With AIM shares i have noticed that people pile into a share and leave the moment news drops, however, on the whole this was never over hyped.

Although this did open a 9.75 when the RNS was released it fell almost immediately and has continued falling since.

Let's be honest if you conservatively valued the services division at say £10m and with the £25m cash (so ignoring the debt being repaid and the extra money linked to performance) the £35m valuation is over 9p a share - 45% higher than the current SP.

So where do we go from here?

I think clearly the sale needs to be ratified. Accompanying this the BOD need to show they have a sensible plan . Previously whilst they have shown they can grow revenues, profits and cash management have not been as well managed.

I still think a small special divi would be well received. 1p is less than £4m and is well over 15% return

One other thing to consider. With issues with post office deliveries this will have less impact on Card than online alternatives as many of our cards are not posted.

If i was Moonpig i would be far more concerned

I particularly liked this comment in the YE trading update. SP reaction is unfortunately somewhat muted despite fantastic numbers and expected operating profit growth.

"Our successes in 2023 and positioning in buoyant markets give us increased confidence in our prospects for 2024. These strong foundations enable us to continue delivering 15% growth in underlying operating profit per annum, on average over the medium term."

Really good numbers. I particularly liked the final comment

"· Continued positive trading momentum throughout December 2023 gives significant confidence that full year trading will be at least in line with Board expectations".

Hopefully a RNS will drop tomorrow. Maybe the SP has risen a little in anticipation.

With c£30m in the bank all year this alone should have earned a decent amount of interest (keep £10m available and get the extra £20m earning a higher rate) - over £1m? - to add to the bottom line

Agree. The Feb divi will be a bumper one to get us to 10p this year , so 3.43p by my calculations, and then 2.5p a quarter thereafter.

With the share buyback, inflation (mainly) falling vs the dividend increasing, and the NPV much higher than the SP i thought this would be steadily rising .

Happy to hold and top up as and when possible

The SP seems to be getting a bit silly now. At c6.5p the whole company including the part that we're selling for £30m is valued at £26m,

Anyway, i've re-checked old RNSs and the bonds/loans taken out in late 2022 that are to be repaid in May/June 2024 can be repaid early without penalty so that is good and should save us a bit as this interest rate is high.

Attached to the bonds are warrants at an exercise price of 6p (42m of them so potentially an extra c11% of shares).

Some of the selling could be in anticipation of exercising their warrants at a lower price .

Clearly paying off the £8m debt is sensible as it will save over £1m in interest p.a and will improve the bottom line immediately ( £1m at 10 x PE could be worth the equivalent of £10m to our valuation). However, it appears people are now waiting to see how this money will be used to expand the business. Energy Services is definitely a hot and fast growing area.

I am not expecting it but a special divi of say 1p would cost less than £4m.

Revolution do quite well in uni cities as they can usually be 'rented' free for birthdays etc mid week and in main cities if the location is good they are still prospering - the one in Manchester Deansgate is always popular, the one a mile or so away near St Anne's Sq less so ( i would shut the latter).

Clearly the BOD must have the figures for each so they will know the worst performers. Maybe a 50% reduction is required as long as they are not tied to long leases.

I would hate to sell Peach, but it is a bolt on that could be easily disposed and would get the best price. I note when this was purchased average weekly revs per pub were 'approaching' £30k. Now we are told that on their best weeks the 22 have exceeded £1m a week so c£45k a week each. Hopefully the average weekly rev has increased accordingly.

Online is currently less than 2% of revenues so not sure if it would make much difference, even if it doubled or tripled.

Click and collect seems to be a better option as there over over 1k stores to collect from.

Maybe partnerships is the way to go as there will be many opportunities and the Matalan tie up seems to be going well.

Clearly we would all like a Moonpig valuation - however, they seem as overvalued as we are undervalued.

Very disappointing and blaming this on train strikes is poor.

Going forward the immediate action i would take is to review all Revolution bars and get rid of at least the bottom 20% that are underperforming.

It seemed a strange decision to refurb and expand this brand just after covid when it has struggled for years.

de Cuba seems to be performing a bit better and is aimed at a higher age group so it appears less drastic action is required here.

I don't think it will come to it, but the other option is consider maybe later in the year is to sell Peach Pubs. While this was only purchased just over a year ago it has traded well and will be an attractive option. This was bought for £16m and the whole company is currently valued at half this amount, so even if they just got their purchase price back it will clearly boost the SP and improve the balance sheet. As most of the pubs are in the South, maybe a London pub operate such as Youngs will be interested - they recently bought City Pub Group for a lot more

Dibs - i know what you mean about the fad nature of the business, and i think this particularly applies to Escape Hunt. However, this part of the business continues to grow steadily on a like for like basis, which is reassuring .

The big growth area is of course Boom, where the number of sites has increased rapidly.

From the interims i noticed this - "Boom owner operated site level EBITDA margins 19% in sites trading over 12 months and 11% overall (H1 2022: loss 33%)".

So as each site beds in the revenues rise and the EBITDA margin increases rapidly. Many sites were opened late 2022 (including Oxford St) so they should now be adding value.

This is backed up in last week's trading update for Boom

"As sales continue to grow, operating leverage continues to improve, and accordingly site level EBITDA margins are expected to be significantly ahead of H1 2023 and in line with the board's expectations for the twelve months to December 2023."

Sit - in terms of sellers, it is possible LUCE are selling a chunk as they bought in recently at 5p - so even at today's SP they are making c40%.

Also, remember the period end date has been changed so this YE is 18 months, not 12. The interims announced late last year were for a 12 month period, so the £2.3m EBITDA is not an estimate, it was achieved, albeit accounts haven't been independently reviewed. Maybe the growth over the last 6 months (July to Dec) has been lower than they would have liked (maybe some managers were focused elsewhere!!) , but the first 12 months is definitely impressive

The Mgmt division deal includes £25m cash upfront. Pay off overdraft and loan of £8m leaves £17m sitting in the bank. That's c4.5p a share. So whatever the SP take off 4.5p to get the current value of the business.

Newboy - XPF made an operating profit last year of c£1.6m. H1 2023 did show a loss but that included the cost of a few new sites, which then take a while to be fully functional.

H2 was better for both revenues and margins so hopefully there will be a small profit overall.

However, as a growth company money is being spent to the growth so that always comes off the bottom line.

EBITDA is pretty much an industry standard and is a good guide for a growing company. Many deals are also done on an EBITDA multiple - for example only yesterday EAAS sold one of it's divisions for c7 x its EBITDA - so £30m upfront although last year the whole company made a profit of just over £1m . If for example XPF was to sell Escape Hunt to invest in BOOM it would be done on EBITDA. Based on a multiple of 7 that's c £35m BTW.

As a rule of thumb i often use a 5xEBITDA to get a company value. Based on £10m for 2023 gives us c£50m, double the current SP.

Also look at cashflow - XPF is very cash generative from operations. Always a good sign

JP Morgan agrees. Raised price target from 125p to 135p.

"Just Group's management actions in recent years have led to a Solvency II ratio, debt leverage and quality of capital that now compares favourably with peers.

"We see very strong new business growth prospects, which should support double digit dividends per share growth, coupled with an attractive valuation."

It did open at a reasonable level c9.75, but dropped within seconds. I had 3 sell limits at 9.5, 10.5 and 11.5 and the lower got sold at 9.51 bang on 8am. Within minutes the price was in the 8s.

The current price of c7.6 is slightly less than £30m which seems strange considering the news today.

Yes good to see this finalised. Seems a fair, if not spectacular, deal. £30m upfront was always my minimum expectation and hopefully at least 50% of the extra £8m will be realised.

Accounts at 30/6 had borrowing of over £7.7m with the £5m overdraft taken in full. This resulted in financing costs of just over £1m for the 12 month period.

Clearing this in full will put the business on a firm financial footing and eliminate any financing costs going forward.

Only small negatives for me are the YE figures are at the lower of mgmt expectations and with debt being repaid i suspect there is not enough left in the kitty for a special divi.

However, having said that the current price is madness. So we have just sold a proportion of the business for £30m and the overall valuation is currently £32m. Under 10p (£38.7m) is ridiculously cheap. Even £45m (11.7p) seems on the low side.

Maybe once the profit takers have gone and the AGM is passed we will see this creep up.

A strange trading day. A big drop in the morning on what appears to be light volumes, followed by a steady rise this PM to finish up on the day.

I think the big positions were taken a number of weeks ago and other than a few nervous sellers, maybe happy to take a profit now if they bought in the 5s, most are sitting on their hands.

A big week next week for sure

Agreed re YE operating profit. Was £173m for H1 and H2 was at a higher margin so £350m seems the minimum.

For a business valued at less than £900m this is ridiculous. Even at a low 5 times op.profit that's a valuation double the current SP.

If the market regarded this as a growth stock the PE would be c20. However, we sit at 7 and possibly nearer 5 once the YE results are published. Surely a PE of 10 would be both conservative and a little more realistic. Madness