Member Info for StreetsJ

May I respectfully suggest that you're better off following people whose views don't chime perfectly with your own.

Did they cut their forecast for FY26 at the same time? According to refinitiv they were forecasting £2.8m pre-tax; presumably that's now come down to £0.9m? Or are they going to strip out the write down and call it one off? How will they treat any other future unrealised gains/losses?

Seems amazing to me that the brokers can say they were valuing the claims at 50% of written up book value; while the company was resolutely sticking to its valuation. This is what Manolete said less than a month ago

"The valuation includes the investment in the cartel cases as at 31 March 2025 of £15.4m, which remains relevantly unchanged from FY24 valuation of £15.1m, the increase relates to an increase in prepaid costs. Investment in cases is shown at fair value, based on the Company's estimate of the future realised profit.

Management amend valuations of cases each month end, following discussion on a case-by-case basis with the in-house legal team, to accurately reflect management's view of fair value." Having just written up their value by £0.3m, they're now cutting it by £1.9m.

The money multiple is impressive but have we any idea what the costs involved were to get to that total? If it's so attractive why don't they want to more of them?

I don't understand how the costs on the cartel cases work - do they just add their costs to the value of the claim, assuming they get them back as their part of the settlement? If that's right then you could buy a claim for £1, receive £1 plus £9 costs back and claim you've got a 10x multiple, whereas in fact you've got your money back and spent a lot of time and effort.

There's a further £1.1m write down on the other cases.

Obviously the cash is good but interestingly too much profit has already been booked. That is not encouraging.

Where are the bulls today?

I’m interested that you still think the project is viable. Why do you think none of the competitors has bought it?

What was it about?

was it this one?

https://archive.ph/t0LiT

I have spent far too much time looking at this company but it fascinates me. When I first started looking at it - immediately prior to COVID - it looked brilliant. Difficult to say what effect COVID really had (though it clearly wasn't helpful) but we are some years on from there and the company seems to have lost its ability to make money.

Profits are what matter and c£1m of net income using a normalised 20% tax charge give you 2.4p of earnings. Another way of looking at it is the return on equity. Again using a normalised tax charge the return on £41m of equity is a miserable 2.6%. the only one making money here is the grossly overpaid CEO whose pay went up to £688,000.

What's changed? The main thing is the size of the cases. Back in 2018 , 2019 the realised revenue per case was £204k and the GP £87k and £99k in 2019. In 2025 those figures are £101k and £32k. And that's before admin expenses (impressively held down this year)

At the year in 2019 they had 84 cases, today that number is 419.

In 2019 EBIT margin was 50% today it's 10%.

the company hasn't paid a dividend for a few years and yet the balance sheet hasn't grown. In 2022 it was £42.2m today it's £41.4m.

I will carry on watching, even though I know I'm wasting my time.

Does anyone know if 4% arrangement fee for a £17.5m loan facility is high or not?

2p of eps (slightly down on the year) on 45x seems like a bargain

Forensic505, that's where we differ. I got interested in the company in 2020 and then Covid disrupted everything. Since then it is not clear that things can get back to 2020 times. Revenue is up markedly but the case size is much smaller with a huge implication for profitability.

Two bull points that people make on here which I think are misguided: one that costs are fixed. They're not and have been rising steadily. And they like the "cash flow" - the problem with the cash flow in this business is a large proportion of it is just the investment money being returned; unless the profit margin is decent the "cash flow" will be mostly gobbled up being reinvested just to keep the show on the road and pay the CEOs absurd salary.

"That positive cash inflow enabled the Company to organically finance all ongoing cases and all new case investments, which amounted to £5.5m for FY25 (FY24: £6.3m), leaving a cash surplus of £2.0m (FY24: negative £1.4m)." - they've reduced the level of investment (from £6.3m to £5.5m) and there's still a surplus of only £2m. That, to me, is not a bull point. Or at least it says the business is viable but not growing and not worth £40m.

I don't know if you include me in your "sad old trolls" but I just look at the numbers. In 2018 MANO made £3.3m of net income on £10.6m of revenue. In 2020 they made £7.6m on £18.7m. In 2025 it looks like they've made £1.3m on £30.8m.

Which company would you value higher one making £7m or one making £1m?

I agree that the statement reads very bullishly (it usually does). After all that positivity, the bottom line is say £1.3m of net income. Putting it on 30x. I don’t see why anyone would pay that for it.

They really are singularly useless about IR

Sometimes it's as interesting what a company doesn't say: 28th March would have been a perfect time for a trading update for the year about to end on Monday. I was also intrigued by the asset cover covenant being relaxed for the next six months. Why would that be?

But it's clearly good news that HSBC has renewed the revolver on marginally better terms.

Let's compare the last published forecasts by the company's brokers with the new forecasts by the new brokers. Makes sense to me which is why I did it. I agree that I should have been clearer that the old forecasts were Peel Hunt but anyone following this chat would have known that.

The previous figures were the Peel Hunt estimates and were old but they were the last published estimates. I thought it was interesting what the new broker was forecasting and I hadn't seen anyone mention it.

Which bit of what I wrote is fallacious?

I missed Canaccord's new forecasts. As of 19th Nov. Old ones in ()

Fy25

Revenue £26m (£17m)

PBT -£0.5m (£8.7m)

EPS -0.8p (15.1p)

FY26

Revenue £30m (£20m)

PBT £1.2m (£10.2m)

EPS 2p (17.7p)

FY27

Revenue £35m

PBT £2.6m

EPS 4.2p

4p of earnings to be reported in June 2027!! This should be 40p max and probably half of that.

Https://radcliffechambers.com/wp-content/uploads/2024/11/Manolete-v-White-2024-EWCA-Civ-1418.pdf

judgement here.

White definitely a rogue, but rather like sausages it's probably best not to see how they're made. this is quite grubby business.

Yes. the spiel rarely tallies with the numbers.

One of the things with these "investment" companies is that the cash coming in is partly just cashing in their investment - it's partly their own money coming back - that's why the profit element is so important. If there is nothing extra after the costs have been deducted then the whole effort has been for nothing. I get there are issues with calculating profits, especially with unrealised gains, but it's still the most important factor.

The key seems to me to be the size of the cases and, while they are going in the right direction, they are still way below their peak and costs have risen substantially.

I only follow it because I think it's interesting but these results don't seem to have shown the corner is turned despite all the fine noises.

Does anyone know when the Canaccord research report is coming out?