Member Info for shandypants2

sorry i meant 1 x rev for this year (2022) - which was c£7.5m (at 30/6/22) plus £3m cash.

Roy - i do agree re the BOD, the last fundraise was poorly managed and executed - why not raise more last August at 4p??

Having said that the last placing was at 1.25p and the BOD all bought a fair few so they are c1/3rd down.

We may take years to get back to a £50m valuation, where this was only 9 months ago, however, if we reach profitability this year as has been earmarked numerous times and if revenues keep growing, especially GDM which appears a low risk, high margin business then even 2 x revenues looks quite cheap. 2p a share (c£25m valuation) looks very achievable IMHO

A disappointing update really - more jam tomorrow. 20% down on a low SP that has fallen c80% from its peak.
I think the issue is that it has built an expensive new factory for IHT yet has barely any orders. These orders need to start coming in ASAP yet no mention of x amount of pipeline orders etc.

They have tried to put a positive spin on it - see below - but the market is unforgiving at the moment.

During the period our Ashvale facility was heavily engaged in finalising the design standard and pre-volume production supply of roll-to-roll EV product for our UK OEM customer. Our people additionally focussed on development of potential future IHT products for our target industries. Whilst progress in the development of sophisticated new technology is frustratingly challenging, the results we are achieving are establishing a solid foundation to support solutions for future customer demands.

Let's hope so. At £11m valuation this is c 1x 2020 revenue plus cash.
2022 results (YE was 30/6) haven't been published so we could get a trading updating, although GFIN don't always issues these - no news means that YE numbers were met, else they would have to tell us.
2023 (started on 1/7/22) is forecast to be the 1st year of profitability. This is a massive milestone. It is imperative this is met (and not just positive EBITDA - PBT must be positive too).

the 2 big takeaways from this are that breakeven is now not until 2025 (was 2024) and that an extra £25m is required.
They have assumed this will be debt, however, i am less sure if this is possible.
A best case scenario is a placing at 5p - so an extra 500m shares would be created. We have 217m now so the dilution would be about 70%. So the 172p is actually about 50p once the new shares are taken into account.

Cash does seem to be a massive issue. The net spend is over £100k a month and on 31/3 they had less than £500k, so much of this will be used up now. Yes the Landstead deal should bring in some money but this is based on 2p a share. At the current price the proceeds will be considerably less. Something needs to happen in the next month or so - either a placing or a licencing deal.

The Subscription proceeds from the Lanstead Sharing Agreements pursuant to which the Company is entitled to receive back those proceeds on a pro rata monthly basis over a period of 20 months, subject to adjustment upwards or downwards each month depending on the Company's share price at the time. The Sharing Agreement provides the opportunity for the Company to benefit from positive future share price performance. Notwithstanding the Subscription Price of 1.5 pence, shareholders should note that the share price of the Company needs to be on average over the 20 months of the Sharing Agreement at or above the Benchmark Price of 2 pence per share for the Company to receive at least, or more than, the gross Subscription of £1.65million.

getting back to OTB and avoiding personal insults - yes it has next to no debt, but it has done 2 recent placings, at much higher prices than now, so whilst the balance sheet has been improved, investors have been diluted.
Whilst recent booking appear to be encouraging the high marketing spend is a concern IMHO.
Increasing revenues via excessive marketing spend is not a great strategy IMHO.
In 2019 marketing spend was about 1/3 of the gross profit - as per the 2022 interims it is now c50%. This seems to be the biggest contributor to the H1 loss

Is this coverage freely available?

Any idea what the guidance is for the YE just completed?

Last year we had a trading update on 28/6, however, i think this was required as profit was above expectations.
I'm assuming profits are as previously guided this year, however, not 100% sure what this guidance is.
Thanks in advance

The market cap is still c£200m and yet this is no longer a growth stock and is currently loss making.
When a company moves from growth to become more mature the SP can be hit quite hard - look at Fevertree, and it is still quite profitable.
In 2019 OTB revenues were £148m with PBT of £27m and was dividend paying. A PE of 20 was not unrealistic - so a market cap of over £500m was justified.
IMHO i'm currently finding it very difficult to value OTB. You could argue that the growth will return after covid, however, maybe this is the new normal. Clearly Brexit hasn't helped the travel industry.
I wouldn't focus on a % of revenue for a valuation, i'd focus on profit. If OTB gets back to say £10m PBT next year a PE of 15 is a £150m company. If you are using revenue i wouldn't want to go higher than 1.5 x revenue. Happy to be proved wrong.

really disappointing - unfortunately i did fear this, as per my post last week.

Sales at H1 were £7.4m with a loss of 1.1m, so H2 has seen revenues decline even more and so i can see a YE loss being well over £2m, possibly £3m with the acquisition costs included.
The IDP element only generated £800k in June which is also a concern too as this is a peak period for Skinny Tan so i would have expected that alone to be over £1m and maybe £100k from the other brands.
Cash is just draining away too. Cash was £17.3m on 31/12 so it has declined £6m in the last 6 months. The IDP payment was less than £2m and probably £200k in acquisition costs, so the business has burned through over £3m in the last 6 months.
The only slight positive is that the SP has not declined further - although it has slipped so much over the last few months maybe some of this was already factored in.

No , the covid impact was in March/April 2020, things were slowly getting back to normal this time last year.

This is mentioned in the trading RNS this time last year (12/7/21) - see below
"I am pleased to report a 10% increase in sales revenue and 15% increase in volumes year-on-year for the first quarter of our financial year. Growth in volumes ahead of revenues reflect the partial recovery in Licensed sales for Blavod Black Vodka, mainly through Europe and Duty Free.

The figures are particularly encouraging as we are lapping the unprecedented first quarter in 2020, (that had shown a 21% increase in revenue over the previous year), in which we experienced panic buying fuelled by the emergence of the Covid-19 pandemic, resulting in unusually inflated revenues.

Stt1 - you have been banging on about TLY and it's cash position vs ORPH for some time. I am not knocking TLY it looks a decent low margin operation, and pays a small divi, but on good revenues it made PBT of just over £1m so at a valuation of £80m looks a little high IMHO.
It does at YE have a healthy cash position of £15.3m (up from £14.8m) during a period when it spent over £7m on acquisitions.
All good, however a little more analysis would show you things are not quite what they seem.
Cash is at a point in time, so is not a great indicator, especially if you pay for things on extended terms. I tend to use the whole current asset figure v current liabilities as this incudes accounts receivable and payables (money we are owed and money we have to pay out e.g. wages, VAT and tax). TLY has a very high trade payables of £36m which has increased a lot from the previous year. In fact it's current liabilities - current assets is over £14m i.e. it owes a net £14m, almost all its cash position.
For comparison ORPH cash net assets of £25m v £20m net liabilities, a surplus of £5m.

So as you can see cash position isn't everything you need to look at the wider picture. I notice YLY recent took out a £5m credit facility - strange for a company with loads of cash and debt free. The clues are there

They look quite bad to me. Revenue impact will be c£580k as per today's RNS - so c 20% reduction on c£3m annual revenue.

This at a time when they have just spent an extra £500k on a TV advertising campaign.

The timing of this spend looks a little odd IMHO. Would it not have made more sense to change your distributor first before upping your ad spend.

based on the CRL rns yesterday and the increased cost pressures i'm a bit worried about YE for BAR.
H1 was pretty poor for BAR and if CRL had issues in H2 i can't see how BAR could not also.
Hopefully Skinny tan would have had a good peak season (Apr to Jun) as the weather was good, no lockdowns and holidays resumed, however, with the takeover only completed at the end of May assume only a limited amount of revenue will be included in H2 numbers.

Director sells have been small, so don't think you can read much into that IMHO. Forster sold 23k shares a few months ago - he still holds over 1m shares so he must be hurting today.

Results aren't terrible if you compare to 2020 , rather than 2021 which were positively covid impacted. Revenue growth is ok, however, extra costs is a concern - admin costs have grown c£5m in the last 2 years. So as a result PBT is flat between the 2 years.

The move to more branded goods makes sense as these are higher margin products, however, neither of the 2 recent acquisitions seem to be performing well. Hopefully this is just a bedding in issue and 2023 will be better.
Take the acquisitions away and the company is still cash generative. Overseas sales are improving too, which is encouraging.

yep, just looked at the accounts in more detail. For 2021 revenues increased by $1.6m yet sales and marketing costs increased by $1.7m.
How is that possible?
As you say 10 new customers in 5 months is not great, unless they are all big ones, i would have expected maybe 5 to 10 a month based on the high cost and the supposedly high quality and much in demand product.
I would like to see the BOD provide a clear path to profitability

growth is slowing and costs going up. Always a big concern for an already loss making company.

Would have like a bit more detail on today's update e.g. current cash position etc and potentially any cost saving measures BOD are undertaking

a bit harsh. They raise c£11.5m after expenses and used almost all of it on the acquisition, so essentially the monies raised went directly to the purchase.
I did notice H1 was a loss and cashburn of c£1m however recent May update was more reassuring - £3m EBITDA.
Let's see what cash position is when 30/6 results are finalised. I would hope cash at end of H2 is better than H1 based on a strong H2.

I too am getting a bit fed up with Greg coming on and telling us how wonderful things are etc without discussing the big funding issue or the 90% SP decline since he joined.
However, in his defence when he arrived/was being interviewed he would have told them they were 24 months behind and so it will take at least 2 years before decent revenues are generated i.e. judge me after 2 years. We are just over 1 year in so he has another 12 months to show progress.
Unfortunately, the company didn't have funding for 24 months and the monthly burn rate has barely changed (July to Dec 2021 £1.7m p.m, Jan to June £1.58m per month). Is the CFO just hoping for the best? How about a few of the BOD taking short term salary reductions or shares inside of wages. Probably wouldn't save much but would be well received.

Agree Poker, however, even with 1bn shares this was still over 5p less than a year ago, so c£50m valuation.

To get back to that valuation it would still represent a SP of over 4p.

The current £10m valuation looks cheap, especially if they hit profitability this year (1/7/22 to 30/6/23).

Wetherspoons are a standard pub chain with a old clientele, many of whom are on low income - they are suffering from the covid impact and the cost of living squeeze. In fact a recent update stated that ****tails was their one growth area.

CPC are a decent more up market pub chain who has recently announced good trading. They are valued at c£80m despite revenues being c£35m, less than half of RBG.

RBG has bars not pubs and is aimed at a younger clientele who are less impacted by covid and cost of living issues.
It's revenues for 2022 will be over £100m and yet it is valued at c£35m.

It is clearly not immune to the issues the country face but a lot of these appears to be priced in already. It recently reported good trading and was profitable in H1 despite covid restricting xmas trading.