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Finally got around to listening to the results pres. There's a lot of good stuff in there re their product innovations and traction with clients. And thought the Obviously chap came across really well and seems there's a lot of cross / upsell and new client opportunities the deal is driving. CFO said he hoped his guidance on this would be fairly conservative. Guidance overall for FY seems solid also.

The big bug bear (which it took a question from buy side Jupiter FM to get to, sell side / mgmt had glossed over it) was the exceptionals. I think £11m this half and guiding to £25m this year. It's a big number. Mainly for M&A, cost of headcount reductions / reorg (£7.5m), and IT cloud migration programme (£3.3m). Also said that next year it would be a little lower but still around £20m I think. Last year exceptionals were £22m ish also for restructuring / reorg costs. So we've got £20m+ exceptionals for 3 years in a row. You have to go back to 2024 to find a more reasonable number of around £3.5m.

I think this is the main reason for the share weakness. Something for the bears to get their teeth into. If you're a cynic you'd say they are flattering earnings. The number is too big relative to the size of the company, and the fact it's both this year and next suggests some of these costs are ongoing and not 'exceptional'. And also is a real cash drag on the company. And my other criticism is they are not clear on what benefits these exceptional costs are driving, like how much more cost out to come this year and next? How much will they save by replatforming the IT to the cloud? Mgmt need to do better on these points.

I think if you're optimistic, you want these to trend down back to <£10m levels over time. And perhaps discount valuation by c.£50m due to the cash burn.

If you're pessimistic, you re-adjust profits down by £15-20m and say they are flattering profits.

What gives me some hope, is that even if you do the latter, and 'real' adj operating profit this year is closer to £55m than £70m, you have a company at £270m mcap, c.£300m EV, which is trading on this real op profit figure of 5.5x EV/EBIT. Which to my mind is still outrageously cheap given the tech / IP, the growth outlook and the margins / cash gen. On top of this you're getting a 7p+ dividend (this was 100% confirmed on the call, could be higher) which is pretty much a 10% yield.

I think if the exceptional costs issue didn't exist then the shares would be at least 100p and probably would have strengthened on the back of the results.

Maybe I'm a bit native on this? Any one else got views?

RCH not directly involved in the case as far as I can tell, but hopefully helps to draw a line under this going forward, and hopefully removes a tail risk from investing in the sector in general. From what I gather the gist of it is - just cause private information is published doesn't mean it was gathered illegally, unless you can prove it was (gathered illegally).

If the major shareholders don't take this up they may have to end up doing a special dividend to return the cash to shareholders instead. They need to return the cash somehow as it's massively capital inefficient atm with all of it sitting on their balance sheet. Just something to be aware of in case you dont hold this in an ISA or SIPP - taxes on a big divi like that will not be pretty.

Will be interesting to see what the shorts do over the coming months.

Also struggle to understand the shorts here. One of the most shorted stocks in the UK! Seemingly only increasing as the share price has gone down this year.

I can only think:

1. Cash flows are long end dated and dependent on the roll out (ie looks expensive on todays valuation metrics).

2. AI SaaS-mageddon.

I'm pretty comfortable on both of these. Not sure what the catalyst is to get the shorts to change their mind, but 7%+ short interest in a relatively small and very illiquid company like this could get very squeezy if there is some good news.

Risky short IMHO. For a starter there's always a chance the bid (or another one) comes back. Secondly the long term growth is relatively low risk given the contracts in place and the Board / ownership of PINE. And I think their software is too integrated to be easily replaced by AI. The clearest indication of this is the time it is taking for them to roll out their product to their customers dealership estates.

Happy holder.

Very solid results. Ahead on rev and EBITDA, inline PBT and cash. Great organic growth in H2. Throwing some meat to the masses with the divi increase.

Next catalyst the Moore Barlow deal hopefully. It's been 3 months since they mentioned it, so would expect it relatively soon.

Hopefully these results put paid to the bears that claim there is no underlying organic growth and that the M&A model doesn't deliver value and that cash generation is poor. There is a good slide in the presentation that shows the progress since IPO. Revenue 6x, adj PBT 6.9x, FCF of £161m since IPO. Share count has only increased by 20% from 71m to 86m over this period. Net debt only increased by £40m over this period (£26m to £66m).

Yet despite this the share price has only increased from 145p at IPO way back in 2018 to 195p today.

Agree with Equity Dev - this should be on at least 10x PE which is 300p+, and actually if they can maintain decent organic growth, and continue to add acquisitions (MB hopefully imminent and quite a large one), this should really be on 12x (roughly in line with the market rating) with upgrades to come from org growth and M&A.

This trades on a significantly lower multiple than similar white collar B2B services peers (with exception of Gateley which I also think is chronically undervalued) despite higher than peer group forecast EPS growth.

What's not to like?

Topped up. Valuation is hard to ignore. I expect they may cut the divi (although I don't think they HAVE to do so given cash gen and balance sheet). But whether they do or not, it's still trading on about 4.4x PE, vs 'the market' on about 10-12x.

So trading at a 60% discount to the market, despite generating double digit EBIT margins, and having an 10 year (TEN YEAR) unbroken track record of delivering ORGANIC growth. It's grown organically every year since IPO in 2015 (at 95p) at an average of 9% pa. Successfully diversified the business since IPO through M&A, which I think is both smart and financially attractive. Balance sheet is fine, only very modest debt. And paid to wait with a v healthy divi which should be double digit % even if it is cut a bit.

Just seems fundamentally the wrong price to me. GLA.

I agree the Celea deal was underwhelming vs expectations. But think some are missing the bigger picture here.

Net cash after the celea 100m financing taken off is 150m+.

Celea stake 33% stake at 85m based on the deal. Will increase a lot if phase 3 is positive.

Seaport 16.5m shares currently at $21 is $350m.

The three of these alone is $585m or £430m. Vs current mcap of £300m. Seems 50% upside at least to me.

I've not included any of the other pipeline assets, or the celea royalties / milestones, or the karuna royalties / milestones which are all jam on top.

To my mind this is still monstrously undervalued.

Happy to be corrected if I've missed something to the downside?

From their interim report.. company still has some supportive institutions. Well regarded fund.

"Specialist media business Future also performed poorly. The business, which owns a range of hobbyist websites and niche magazine titles, via around 175 brands, as well as the GoCompare price comparison platform, profit warned at the end of the period, as fears around AI materialised somewhat. We see this as a clearing event - the company still owns a diversified portfolio of leading content brands, proprietary technology and multiple monetisation streams, and is adapting to structural changes driven by AI and search through partnerships, product innovation and regulatory tailwinds. At around three times earnings, with an EBITDA margin of 25%, the shares are attractively valued in our view, and we retain our holding."

Don't forget the £50m net cash on the balance sheet. Some reg cap yes, but it's way overcalitalised imho and generating cash. Could do more bolt ons once things stabilise.

Profits should be helped by the river global deal also

People starting to get interested now deal announcement likely within a month or two I guess? A lot of upside at this valuation even standalone I think.

Yes seems a few decent sized buys at c33p. Guess there's not much selling volume around so have to pay up. Still doesn't seem large enough for institutions? 50k shares is only £15k. Unless they are accumulating in chunks I guess.

Even a modestly small fund eg ONWD would want £500k or so for a decent position, most funds £1m+...

Up 10% today on no news. Not that far off the price before the recent trading update now, ie around 36p.

96p EPS forecast next year and £10m net cash after another £20m of buy back this year to go, and £40m next year, and 22p pa (£20m pa) in dividends.

So currently trading on 8.5x adj PE. To my mind this should be AT LEAST 50% higher, ie in the 12-13x range. And if they can get growth going a bit better, fair value is probably more like 15x, which would be 1440p+ IMHO.

Think this is main reason for recent weakness. Their main points were a) limited top line growth, b) likely need to invest more in the products over coming years, and c) valuation is currently in line w peers given growth rate.

Fair points, but they do also state that they think the peer group in general is undervalued. And also say there is quite a lot of upside if the company can actually deliver growth in line with their ambitions.

They are forecasting decent EBIT growth (c.10% from FY27 on) and rapid degearing which is good.

On their FY28 numbers, at 10x EV/EBIT, this would trade at $875m mcap or 535p. At 9x EV/EBIT (their fair value rating) this would be 480p. I think they've undercooked their valuation a bit by using calendar 2027 forecasts (not FY28) and also by not fully taking the cash generation between now and then into account. And I think the sector rerates, and we should be trading on closer to 12x rather than 9x.

But I do broadly agree with their thrust - the performance of the business needs to improve. And the thesis from here is that the new CEO and mgmt team will improve the business, which has in my view been under managed / poorly managed over the last few years.

Strange to enter a consortium then leave it in such short notice.

TBH I'm happy to hold this company absent a bid regardless - it's way too cheap standalone. A bid would be nice, but think these will do well on the market in due course regardless.

One way of working out 'the bottom' is estimating value of GoCo on sensible assumptions, and Mony valuation. It did £77m adj. EBIT last year.

Mony did roughly £120m EBIT, and basically no debt. Valued at £940m today. 7.8x.

On the same mulitple GoCo is worth £600m vs current EV of FUTR of £540m (£260m mcap + £280m debt). If you give GoCo a 20% haircut (£480m), and assume the rest of the business is literally worth nothing (which imho is stupid), then the 'floor' is £200m mcap, or c.220p.

Obviously I think this is incredibly pessimistic given the rest of the business is making roughly £80m EBIT per year even after multiple downgrades.

If you fast forward a year, assume 30% further downgrades to EBIT for the remaining business and put it on a very conservative 2x EBIT, and are even more pessimistic about GoCo you get something like:

- Goco: £400m

- Rest of biz: £110m (2x £55m EBIT)

- EV £510m

- Net debt: £230m (assume £50m FCF post everything vs £100m expected this year)

- MCap: £280m

This is still £20m ahead of where we are today. This doesn't take into account the current buy back so is probably more like £35m ahead.

Whichever way you look at it, it feels like we're at or close to the floor already. The market is essentially valuing the publishing and B2B part of the business at a zero or negative valuation, and is ascribing no value to the cash those businesses will generate even if they are on a glide path to zero over a few years. AND is giving GoCo a very conservative valuation despite a very close peer trading at almost 8x EBIT.

Still watching from the sidelines. Not seeing any turnaround in fortunes yes. FY27 expected revenues will be down, profit marginally down, capex up and net debt up. Forecasts for <£5m EBIT vs EV of over £100m, of which £90m is debt. High risk still, and one profit warning away from requiring a big funding round. Net debt way too high at almost 4x Net debt/EBITDA, and EBITDA flattered due to high capex. Net Debt / EBIT is over 20x.

Shares been very strong in the lead up, and this update doesn't provide any quantification of how good trading has been in H1 vs expectations, nor much guidance / forward visibility into H2. We'll need to wait until Interim results for this, and I guess the market is impatient...

For me this is entirely a degearing story from here. Cash generation and paying down debt, combined with incremental improvements in profitability could drive really material share price upside. But more patience still required from here. I think the balance sheet is still a fair way away from being investment grade!

Paying up for it, but it's growing rapidly and looks strategically sensible. Good note from Zeus out on the deal, available on Research Tree. Recommend reading.

I guess we know why they've not been keen to do a buy back now! No longer net cash but will be again by next year. Still have c.£20m left on their debt facility so in theory there could be another smaller deal, £25m net debt would be manageable in the context of £20m+ EBITDA expected for FY27.

Results for FY25 were mediocre IMHO but FY26 YTD seems to be pretty good. And yes good to get a vague timeframe on the DIS deal ie before mid-August, ie we've got up to two more months to wait... I wonder if bidders want to see a) audited FY25 accounts, and b) better view of FY26 YTD trading before confirming any bid? And given it's been decent YTD I guess mgmt would want to wait a bit to get a better price that takes this fully into account.

That is of course the glass half full bit. Half empty view is that we still have nothing specific on the bid process. And new non specific info about this court case, no names no range of values no timeframe. I think the market has just stopped believing anything they say tbh. I hope they are proven wrong as the price of these is crazy if you believe what they are saying about a bid, current trading and also potential further material upside from this court case which ideal world could be settled early rather than dragging on.