Member Info for ShearClass

Has the NASDAQ listing been mentioned anywhere? If not, they will be running out of time to arrange anything before their cash runs out. Cash burn was £25m in YE2021 and that was with revenues of £9m. Considering they only expect to report ~£2m in the current HY ending 31st October, cash burn could very well have increased to around £15m, leaving cash of just £10m, which is falling at > £2m a month. That doesn't leave much room for manoeuvre.

Technically the chart looks vile & I doubt there will be an influx of buyers until the funding position is clarified. If / when SENS reaches breakeven they will be a very interesting proposition, until then the rollercoaster continues.

Suspect we won't be staying at these levels for much longer - fundamentals just got even better (if that's possible) with confirmation that investors who get free shares in Ricca and take the rights issue at 10c will at a minimum double their money / quadruple their overall position on a 2022 ASX listing. The A$7m of funding being provided also makes complete sense, why spend money on something that isn't being attributed any value by the market? Very astute management here that are executing on a well planned strategy, impressive stuff.

Agree, I've taken a position this morning - hadn't quite realised the value disconnect here. Was £2.70 in early 2019 and there has been zero dilution since. If this was a new IPO they would be priced at a minimum of £40m market cap IMO.

Unsurprised to see that the price has been butchered since the 1st Oct results. SENS needs to raise more cash, that's why the price is falling.

Fundamentally, what changed between a £2.50 IPO and the current valuation? To me it looks like a mix of illiquidity & over exuberance of PI's...

Puts CODE on a forward PE of 5.2… have never seen a profitable company growing at >100% per annum valued at such a low forward multiple before. The fact Amati took 14% in the IPO is a further positive, given their excellent track record

Bought in this morning after watching since the IPO, nice to see the price starting to rise on some buying interest.

Wey Education could be a good proxy for the future valuation here - they were bought out in April for £70m after reporting £8.4m revenue in the prior financial year. Northcoders reported £1.08m in their recent interims and WH Irelands recent note (available on Research Tree) is forecasting 2023 revenues of £10.5m... if they achieve such growth then then the current share price will look like a bargain!

I actually find it interesting, the market would be boring as hell if everything happened when you wanted it to / shares went up in a straight line. HZM taken off? It's the same price as it was this time last year & 20% below it's 2021 high, it's also going absolutely nowhere until they raise over $100m in dilutive equity funding... something IRR doesn't have to worry about. All good here, volume of 7m shares suggests that things are getting a move on behind the scenes.

What I really don't like is the way they dropped the price yesterday when Cenkos were very likely writing up the research note that they released pre market this morning. IMO they dropped the price below 7p to scare PI's into selling / trigger stops, knowing news was being released today. They've then collected the shares and sold them to PI's this at 9p. Anyway, I guess that's what happens if you try and trade this type of share...

Just got to keep accumulating, I bought a large chunk at 18.57 on Tuesday so was reluctant to add more today, if they take it into the low 17’s I will though.

Worth rewatching the Proactive videos from earlier this year - Vince states that the initial resource estimate at Zaranou will cover the market cap (about £60m at the time) when they decide to release it. It’s been that long since they released a gold related RNS I think the market has forgotten what they have in the locker! I’m here for the Ghana Lithium, but Zaranou is a brilliant hedge to have.

Re. valuation, I agree it's difficult to value due to the diverse combination of parts. In my opinion, any valuation will be irrelevant in the near term as both hedge funds & institutions will control the share price until such a point that the CEO decides to behave in an appropriate manner. Listing an IPO then announcing a spin off of your largest division is bizarre, however to then flag that you are also considering spin offs for other smaller divisions is unchartered territory. If the market encouraged this by bidding up the price then all and sundry would be doing the same thing, which would bring the market into disrepute. It needs to be stopped in its tracks.

Using $1750 gold & $4.08 copped as base case is aggressive, using $1500 and $3.30 instead gives an IRR of just 16% as per Newcrest's assumptions. I'm assuming this is due to a lot of one time capital costs related to the initial mine development so future conversions from inferred to indicated will improve the economics...

Yes, they show as sells because the advertised spread is incorrect. LSE / the market shows the ask price as 19.95 when in reality it's 18.7, the real question is why the ask is displayed at 19.95 when it isn't actually anywhere near that level... My answer is that is puts off buyers. Welcome aboard anyway, anything specific that attracted you to IRR?

So onto the EV comparison with their European peers; how does Made stack up at present?

1. Made

Market cap : £519m
Cash £185.3m
EV : £333.7m
2021 Rev Forecast : £409m
EV - Sales ratio : 0.81
Gross Margin : 48.7%

2. Westwing

Market Cap : €599m / £508m
Cash : €122m / £103m
EV : £405m
2021 Rev Forecast : €510-550m / £449m based on €530m midpoint
EV - Sales ratio = 0.9
Gross Margin : 50%

3. Home24

Market Cap : €350m / £297m
Cash : €169.7m / £144m
EV £153m
2021 Rev Forecast : €638m / £541m
EV - Sales ratio = 0.28
Gross Margin : 46%

All show similar cash flow profiles at somewhere between breakeven and a small loss and are all well capitalised with >£100m of net cash and minimal debt.

Now here is where it gets really interesting;

Home24 IPO'd in mid 2018 at €23 a share, the price then cratered down to less than €3 in April 2020 before surging to €25 last year, currently they are at €12. It was valued at €600m at IPO : https://www.home24.com/websites/homevierundzwanzig/English/450010/news-detail.html?newsID=1702675

Westwing followed a similar path, IPO'ing at €26 a share / €535m before falling as far as €1.95 within a year of listing then bouncing to over €50 this May!

The share prices of all three have fallen significantly since the Made IPO (Westwing ~42%, Home24 ~26%, Made ~33%), Westwing has fallen 28% in the last month alone. So all three currently appear to be falling knives, however Home24 is valued at a much cheaper level than Made & Westwing.

Are the shorts looking at the post IPO performance of Home24 & Westwing and betting that Made follows a similar path? I presume such extreme post IPO falls must have been caused by missing revenue forecasts and / or bigger losses than expected...

IF the Home24 valuation is closest to reality then both Made & Westwing have a long way to fall, the fact Westwing was trading at €4 in April 2020 would certainly concern me if I held Made shares.

Will watch how this plays out with interest!

Some truly b*llocks research posted by Liberum today, answering '5 key questions', including how Made compares to it's European peers Westwing & Home24. The peer comp doesn't even have the market caps / EV's of the three companies! It is one of the biggest cherry picking exercises I've seen for some time. Second post to follow this one that does include an EV comp of the three companies...

For what it's worth, I'm a big fan of Made products & will likely buy shares in the future, however with 3 hedge funds disclosing short positions post the interim results; https://shorttracker.co.uk/company/GB00BNXM7M46/ I don't think it's an appropriate time to open a long position.

Why have they opened shorts? The obvious reason is the escalating shipping crisis;
https://www.icis.com/explore/resources/news/2021/09/16/10685630/shipping-container-rates-continue-to-soar-despite-increased-attention

"Robert Khachatryan, founder and COO of shipping forwarder Freight Right Global Logistics, said this week that he still thinks the market will not start to settle until the middle of 2022.

Things are actually getting worse,” he said, noting that container rates from China and east Asia to the US continue to top $20,000 per 40-foot container."

Contrast the this with the 'base case' sales forecast statement from the Made interims;

"The Group's base case forecast assumes an increase in stock purchases, and therefore reduction in lead times as high levels of product is delivered to the Group's warehouses, and a stabilisation and then a gradual improvement in elevated international freight cost levels."

- IMO the case for a reduction in lead times due to higher purchase volume has no basis in reality; if it was simply a case of economies of scale then there wouldn't be a crisis... it's down to total demand being > than supply of container ships.

- The case for stabilisation & gradual improvement in international freight costs appears at odds with reality.

So in summary, if their base case forecast use the above assumptions then they are highly likely to miss full year forecasts. In my opinion they don't appear to be forecasting in a prudent manner if they are assuming the above...

The funny thing is 2025 is only 13 quarters away, it's already been 1 quarter since Piedmont bought in, so 7% of the journey to production already done. One of these days the price will take off and the naysayers will be gone, it's all part of the game that you can watch being played every day on the Level 2 order book. If it continues to fall I'll continue to accumulate shares, it's only those that have gone in too heavy that will feel under pressure to sell (or if they bought without doing any research).

Put simply, an IRR of 125% on $650 spod prices is unreal. Add in resource upgrades + increasing demand and this has all the makings of a multibagger. All you have to do is sit and wait.

This is yet another example of an IPO which was overpriced due to Covid, a huge winner for selling shareholders and kick in the teeth for investors. The IPO was priced at 262p yet it opened trading at 308p...it absolutely stinks.

Re. the trading update;

"Whilst revenue growth moderated over the summer, gross margins remained strong throughout and adjusted EBITDA for FY21 is anticipated to be ahead of market expectations."

Why do they only mention adjusted EBITDA being ahead of expectations? What about pre tax profit & EPS? I thought it was a poor trading update that lacked clarity considering they had a >£700m market cap at the time. Forecasts appear to be for 8.34p EPS in 2021, so at 203p they are still trading at 24x current year earnings. That is aggressive for a company that was grew at 29% over the year but has suffered from recent moderation in that growth.

The market is de-rating the shares, to me a 15x PE would make sense for an online bathroom products company; clearly Covid will have given them a boost by directing discretionary spending into home improvement, so growth will be tough to maintain.

15x 2023 EPS of 10.2p would put them at 150p ish, I'd potentially be a buyer below that level, but would need to do more research.

Added more under 18p, I've never been as relaxed about a falling share price. Now 39% upside vs Piedmonts second investment / the price we were at just 5 weeks ago!

We're getting less than zero traction on LSE!

It made me wonder whether a US based investor has been involved in holding the share price since the Piedmont deal...reason being that they couldn't invest without an OTC listing...

"Piedmont commits a further £720,000 (c. US$1m) and increases stake to 9.91% via placing of a further 2.88m shares at 25p"

At right now you can buy at 18.6p, a full 25% less than Piedmont paid. Madness.

It just proves that 99% of potential retail investors don't revisit an RNS release unless price action attracts them.

Whoever put £2.6m in at 2.5p must be spitting feathers, unbelievable.