Member Info for shandypants2

I agree the Energy Management division will be sold off. Firstly there is more than one interested party and the RNS states discussions are at an advanced stage. I think the loan repayment due in May 2024 is predominantly covered by the money just received from Luce so this is not a fire sale.

At H1 Energy management was growing slower than the services division but EBITDA was higher at over £4m. Always difficult to value a growing company, but i'd like to see minimum 5 x full year EBITDA.

As EAAS as a whole is currently valued at c£20m this looks a good spin off.

However, the devil is in the detail - will it be full cash or cash plus shares? Will all/most of the money be paid upfront or will some of the money be linked to future performance etc.

Even if 'only' £10m was returned as a special div that would be c3p a share.

If we do receive £30m upfront difficult to see how the whole company is not valued at c£50m - c 15p a share.

ILoq tie up definitely looks interesting

https://www.iloq.com/en-uk/

The City Pub takeover is very interesting as it shows there is value in the gastro pub/beer garden market which is exactly the same space as Peach pubs.

City Pubs has performed well over the last couple of years and yet Youngs has still paid a decent premium.

Peach was bought for £16m just over a year ago and seems to be the best performing part of the business.

RBG is currently valued at c£8m. So you could buy the whole company for £12 to £15m .

Anything under 5p seems good value IMHO

Just watched it. Some good things - H2 trading going well and more acquisitions due etc.

Not sure i warmed to CEO. Didn't really accept that the sell off has been poorly received by the market, when it clearly is the case.

Ultimately it is a profitable company paying a decent divi. It is valued £8m and has net assets of £15m, although £5m of this is intangible.

We are also due c£5m over the next 3 years.

Hardman research note today - nothing new but quite encouraging.

Notes that salesforce is not at full capacity yet - has YE numbers of 110k , which is ok if hit.

Growth in the effectiveness of each rep translates into an increase in the number of

Rx-filled, which, in turn, generates the sales forecast. Key for 2023 will be the

effectiveness of the complete 100-person sales team in the final quarter. Although

both the 2Q’23 and indicated 3Q’23 outcomes are extremely good, the growth rates

were a little below our forecasts. Consequently, our growth rate for 4Q’23 has been

reduced from 120% to 95%. This would generate a new Rx total for 2023 of just

over 110,000. This is towards the bottom of the new range stated by Shield

management of 100,000 to 130,000 Rx for 2023.

The reduction (20%) in 2023 Accrufer Rx has had a knock-on effect on subsequent

years. However, because we expect the field force to become more effective over

the next 24 months it is less detrimental. For 2024, we are now expecting ca.330k

(previously ca.371k) Rx; and for 2025, we are on ca.453k (ca.506k).

Why are you not convinced? Are you just a glass half empty person? The RNS excerpt below says they have entered into a period of exclusivity with one party - so that shows things have progressed considerably. Also later on it states that discussions are at an advanced stage. That's a massive tick in the box IMHO.

During the first half of 2023, the Board received a number of unsolicited approaches expressing interest in acquiring the Energy Management division (the "Division"). The Board engaged professional advisers to conduct a strategic review of the Division, following which the Board received a number of indicative cash offers which valued the Division in excess of £30 million. The Board has now entered into a period of exclusivity with one of the interested parties.

The £2.5m loan needs to be re-paid mid 2024 - May or June i think. Interest is c15% so i think c£3.2m will need to be re-paid.

In June we were told we would get cash on completion of a min of £1,073k. In the accounts today it states we received only £670k plus £380k shares were essentially cancelled and placed in Treasury (to give to the BOD in bonuses in the future?) .

So that comes to £1,050k - £23k short.

Not massive but as the terms of the sell were so attractive to Morley and Co you would think they could at least pay the full amount.

By letting them essentially pay only 10% upfront this has eliminated the potential of a special dividend, which would have helped the SP.

Agree, good results and a really positive forward looking statement (and they are already 4 months into the new year, so will have a good feel on H1 numbers).

Only slightly disappointment for me (and also clearly the market, based on SP action since the Vigilant sell) is the low amount paid upfront and the need to wait 3 years before full payment is received.

If it can get to a profit you may be right, however, unfortunately it has made a loss for a number of years now and the recent results don't show this changing anytime soon.

The revenue increase is almost exclusively due to the Innovaderma acquisition - another loss making company.

Limited cash burn? In H1 2022 cash was over £17m, a year later it was £8m - the cash element of the innovaderma was only about £2m, so that's over £7m burned in a year.

Not quite - the RNS excerpt is below...

"Early indications suggest Accrufer's® growth trajectory will continue to rise in Q3 2023, exceeding 28,400 prescriptions, representing an ~80% sequential increase vs Q2."

So there are a few caveats there - early indications and exceeding 28,400 prescriptions etc.

Therefore, whilst we do have a estimated figure i suspect they will be keen to update the market if that figure does exceed the 28,400 they have quoted. I suspect the 10% rule will apply - if the actual numbers exceed 30k then maybe we will get the official Q3 figures.

In the presentation, not the RNS, CEO seemed to indicate that this figure was on the conservative side.

Unfortunately the Chinese study has been delayed by covid, so is not expected to completes until late 2024. I think the milestone is expected soon after, so maybe early 2025.

Yet more disappointment and the long list of excuses continues - WFH on a Friday seems to be the new one.

A big loss despite being EBITDA positive and the core Revolution bars seem to be struggling.

Peach pubs the one bright spark, however, as we paid £16m for this and the whole company is now worth £8m not sure if that was value for money.

H1 hasn't started brilliantly too, poor weather being one of the excuses.

Hopefully xmas corporate bookings and the students will be our saviour.

I'm sure the CEO will still be getting his bonuses and excessive pay though so he'll be ok.

YE trading update hidden at the bottom of the Dirty Martini RNS in July - appears with EBITDA lower than expected it's essentially a profit warning.

Trading update

Whilst the cost-of-living crisis has affected the entire hospitality industry, as indicated in Nightcap's previous updates, the influence of train strikes has been the main source of disruption to the Group's trading in the 52-week period ending 2 July 2023 ("FY 2023"). Recovering the lost revenues and EBITDA from the significant level of train strikes held across the UK, particularly during the key 2022 Christmas trading weeks, has proved a particular challenge. Management currently estimates that the 28 train strike days over FY 2023 have cost the Group a total of approximately £2.9 million in revenue and £1.9 million in EBITDA. In relation to FY 2023, the Board currently expects to report revenues that are broadly in line with current market expectations, with adjusted EBITDA* expected to be below current market expectations.

Barnacle - are you a paid ramper, you have you keep repeating the same lines?

On 3/7/23 they said "Given BrandShield's highly scalable SaaS platform, the Company is focused on the top line whilst customer conversion continues to be of paramount importance for 2023. That said, the Company believes it will get cash flow positive during 2024 without the need for further funding."

So to have a massive fundraise 3 months later seems to be a pretty big miss IMHO.

The reason they may not get to profitability in 2024 is because the revenue increase has only been possible due to massive marketing spend, which shows no sign of tailing off. Until they can show they can manage costs then the revenue increase is meaningless.

What loss are you sitting on?

The recent placing and round of presentations hasn't gone down well judging by the SP action.

I free the CEO must shoulder much of the blame for this.

He was brought in on big wages with a track record of building an iron supplement in the US.

Since then we have only heard positives from him and every presentation is an opportunity for him to tell us how great things are progressing despite the SP repeatedly tanking.

The company seem so scared of losing him they reward him with loads of almost free options just for staying in the job.

Twice he has spent the placing money and not met his own timelines. It was only 2 months ago we were told there was sufficient money to get to breakeven.

Only a week or so ago the 2023 prescription targets have been reduced by over 20%.

Now it appears he has completely mis-judged the gross to net revenues and is only now belatedly reacting to it.

So unfortunately after a horrible couple of years the company is on a much sounder footing and has a path to profitability it appears many have just lost faith.

He needs to start rebuilding trust and can afford no more missed targets going forward.

Nicwe - you have summed this company up very well.

Yes, it does look undervalued and may get to profitability in a year or so (a big may IMHO as they've missed every previous target). Furthermore there is the potential of a decent profit on WeShop at some point in the future.

If you believe this and are happy to tie your money up for a few years then go for it. I suspect many doing so have no choice as they are sitting on big paper losses.

I think they will have to re-list at some point, or be bought out, as the founders have so many shares and options that's realistically that's the only way they will ever see some value.

On the downside do you trust the BOD? The founders (CEO and CTO) are both extremely well paid (£420k each in 2022) and yet have repeatedly failed to manage the business - hence the repeated fundraises and missed targets.

Furthermore, both have over 10m shares and a similar amount of options so they have no interest in participating in their own placings. Similarly, governance is so poor that they have managed to get these millions of options re-priced to reflect the terrible SP performance.

On balance i think the current SP now makes an attractive entry price. For those who bought in the double digits it is not much consolation.

Well results are out on 17th Oct - hopefully there will be a H1 trading update too.

Be interesting to see how much the CEO is getting. Last year he got c£750k - £400k basic and almost the same in bonuses.

I think his bonus was 'limited' to 100% of basic so the targets must be ridiculously easy for him to get c90% of it whilst he seems unable to get Revolution moving forward.

Buying Peach pub on credit at a time when the balance sheet had just been stabilised and interest rates were increasing seem bizarre IMHO.

Sorry was trying to highlight your comment, but it created a post! 100% agree.

CEO keeps mentioning that awareness of Accrufer was almost zero when he started. So to increase this we need salespeople to contact doctors/clinicians and support this with marketing etc.

Say this process takes 3 months for the penny to drop.

Then a relevant patient will appear but will almost certainly be prescribed the low cost salt based tablets first - reviewed after 3 months (please note some of the insurance companies stipulate that the iron tablet must be tried first).

If iron levels are still low then a pilot using Accrufer will be tried - reviewed after 3 months.

So hopefully after 9 months the doctor has a level of confidence that the accrufer does indeed improve iron levels and has minimal side effects.

He/she will be more confident prescribing it going forward and of course repeat prescriptions will start kicking in at this point.

Now the full sales team only became active in May 2023 so add 9 or so months to that and you can see when the real value of their work will become apparent.

Growth in sales is not just about the sales team going out and winning new work. It is also about the passage of time and physicians gaining confidence in the product so that they make it their go-to product.