Member Info for TheTrotsky

The final dividend for FY24 is 13.5p. The FY25 interim dividend, payable in October, has yet to be determined but is likely to be in the region of 6.7p+ (assuming at least a 2% uplift YoY).

AV, like most general insurers, will have some risk exposure to major hazard events but the vast majority of the risk will have been re-insured with the likes of Munich Re, Swiss Re etc. Likewise with Probitas.

It would seem that you and I are apparently cut from the same cloth. Not believing in cause and effect but choosing to err on the side of caution and not count your chickens before they're hatched ;-)

I've been waiting all day to point out that despite GSF going XD today the sp was still rising. Didn't want to "spook it" whilst it lasted ;-)

Done it now. Kiss of death. The market will catch on tomorrow and the sp will react accordingly. Just my luck ;-)

We thank you for your insightful comment. Is that really the best that you can do?

Pray tell, where were you yesterday and the day before when there was over a millions buys each day?

You really do need to get out more.

Aw, missing me 😂

Chelsea, I'm not, and never have been, a critic of smart manufacturing (SM). My criticism has been that the two businesses we've acquired are small fish in a big sea offering few economies of scale with the existing Vicon division (and debatable cross-selling opportunities). They're small niche players in the SM sector (with sales of c10m in a global market of c$350bn in 2024) and their historic revenue growth has been far from what might be described as meteoric. There is undoubtedly an opportunity but it remains to be seen how large and how long it will take to realise.

It also remains to be seen what impact these new orders will have on the SM division's annual sales. There is no guidance in the RNS on how the orders will impact current year expectations and/or whether the two contracts with existing customers are merely renewals of existing contracts. The renewal of existing contracts is never to be sniffed at but won't necessarily have a major impact on YoY sales. If the market's reaction to this morning's RNS is anything to go by, they are as sceptical/non-plussed as I am at present; particularly as these are the first contracts of any size announced by the SM division in the current financial year.

In the meantime, it's good to see, at last, the launch of Vicon Markerless this week. We now await the interim results to see whether there has been any material progress fixing the problems at the Vicon division (falling revenues and margins) or whether Imogen is just continuing her habit, thus far, of flimflamming us.

It's a pity that any discussion (of the pros and cons) is drowned out on thsi bb by TenBagTroublemaker and BamBam.

I don't like filtering other posters but these two are doing my head in with their constant bickering and banal posts.

FFS give it a rest!

03 April

For those who (just) might have confused GCP with GCP and bought in this morning, welcome to the world of infrastructure investment ;-)

I think, and this may sound a bit bizarre, that the fuss might be over the acronym GCP (Google Cloud Protection).

Betaville has covered Google (and presumably its proposed acquistion of Wiz) in its periodic deals note this morning and the acronym does appear to be cropping up in various other news stories over the last 24 hours.

Just an idea for the sudden spike in the sp shortly after 9am this morning.

Any thoughts on what exactly a "prgressive dividend policy" means? MNG has been increasing its dividend year on year in a fairly haphazard way over the last four years - a c2% increase in 2024, a c0.5% increase in 2023, a c7.1% increase in 2022 and a c0.4% increase in 2021.

It would be nice to have a bit more guidance (like AV and LGEN) than just "progressive". MNG seems to have taken a page out PHNX's book (progressive, sustainable etc.). However PHNX, unlike MNG, has been increasing its dividend a tad more steadily over the last four years (albeit at a reducing rate).

That said. As a dividend investor, can't quibble about MNG's dividend.

Nomlungu, I think that Perplexity might have got totally the wrong end of the stick - SUPR is looking at transferring to the equity share sector of the market, once it has internalised the management of the fund. You don't have to be a closed-ended investment fund to be a REIT. For example, Safestore Holdings is a REIT and most definitely isn't a closed-ended investment fund. I think the administrative burden to which SUPR is referring are the various disclosures and calculations that closed-ended investment funds have to make with regard to costs etc.

I can't see any scenario where a loss of REIT status would be beneficial.

From the notes to the interim results:

Furthermore, if the proposed Internalisation becomes effective, the Company will explore a transfer of its listing from the "closed-ended investment funds" category to the "equity shares (commercial companies)" category. The Board expects that such a transfer of listing may remove administrative burden, provide greater operational flexibility, and potentially attract a wider range of research analysts and potential investors.

Criminal management? When will investors ever take credit for their own bad decisions? The valuation of this business went ballistic during Covid but, if you'd ever bothered to run a rule over the business, the valuation was always a nonsense. They just happened to have product that could be used during Covid, and generate a lot of cash, but which had virtually no use beyond Covid. People seemed to assume that the cash would just continue to roll in post Covid when in reality it was back to the day job of trying to create new products, burn cash and hope that they might create a product that could generate sustainable long-term income. People's expectations got out of kilter with reality. With no product to sell and only a faint hope that it might be able to create a blockbuster product one day, the valuation was ridiculous and now that raising capital on the markets has become more difficult and highly dilutive, a lot of biotechnology companies are now going back private again.

This is nothing against SNG, just par for the course for most biotechnology companies. I'd hazard, off the top of my head, that probably less than 1 in 10 drugs actually make it to market and generate significant income. It's always been high risk, high reward. You just hope that 1 in 10 of the biotechnolgy companies you back comes good and that the gains on the one outweigh the losses on the other 9.

Lemonade, I fully understand how valuations work and don't try to use 50 year old valuation data to try and "prove" my point. You The simple fact is that businesses are being valued today in ways that they were never being valued 50 years ago; right or wrong. Buffet has realised this and moved on; perhaps you should try it too. CBOX would have loved to buy Ambala at 6x EBITDA but it was never going to happen in today's market and Ambala is years off going bankrupt, if ever.

Ambala represents a rare opportunity to buy an already established business with a reputation for quality products in a large niche market (an opportunity that would unlikely have arisen but for the death of the founder and sole shareholder in June 2023) plus CBOX believe that they can make synergy savings of at least £1m without even having to increase Ambala's existing sales.

As regards whether acquisitions work, you need first to separate the wheat from the chaff. Firstly, a lot of acquisition activity is driven by investment banks bringing potential acquisitions to their clients' attention who care more about their fees than whether the aqcuisition actually "fits" (these are a definite no-no in my books). Secondly, a lot of companies get it into their heads that because they've been successful in one field of business they can be just as successful in a wholly different field of business with few, if any, opportunities to cross-sell (these are generally best avoided). Finally you have complementary acquisitions with lots of opportunities for synergy savings, cross-selling etc. Think of, say, Nestle's purchase of Rowntrees or Mondelez's acquisition of Cadbury's. These two examples have undoubtedly been great success stories, at least from a business perspective.

I would respectively suggest that the acquisition of Ambala falls into this third category. That doesn't mean that success is guaranteed (only death and taxes are certain in this life) or that the acquisition won't need work to succeed but it stands a far better chance of success than the majority of acquisitions that tend to fall into the first two categroies.

This is now becoming a bit of a farce. I appreciate that exchange rates aren't working in RWS's favour at the moment but this is becoming ridiculous.

Lemonade, That just about takes the biscuit! You are using a 1972 acquisition (1972, over 50 yeasr ago, that's not a typo) to justify your current argument. Back then, a company with a PE in excess of 7% and an EPS of less than 7% would have been considered expensive. Since then Buffet has bought and sold a large slug of Apple which, if he'd used the same metrics, he'd never have touched with a bargepole! Move with the times for crissakes!

You've totally ignored the fact that CBOX itself currently trades on an EBIT multiple of c10 and, in the event of an offer, would probably be expected to realise an EBIT multiple of in excess of 12.5.

It's important to emphasise that the Mithai will complement rather than compete with CBOX's current offering and that's something that the management, and a large number of their franchisees, being from Asian backgrounds (there's a large preponderance of Asian franchisees) fully appreicate. Asian visitors always make a point of bringing a gift of Mithai and if you happen to call on an Asian family they will bring out Mithai (rather than biscuits) to give to their guests. It's a large niche market in the UK that cakes just don't compete in. Buying an "off the shelf" Mithai manufacturer which already has a large established customer base and a reputation for quality is far more cost effective than trying to create one from scratch (it would probably have been impossible for CBOX to create in-house; the whole point is that the Mithai are manufactured in one location rather than in individual shops).

Also, it shouldn't be fogotten that CBOX has previously spoken about its long-term aim to expand overseas (partiuclarly into the US market) and Mithai could prove to be an important differentiator if, and when, CBOX does so (it would help them to target Aisan communities abroad and enable them to establish a foothold to build and expand on).

You miss the point. CBOX isn't diversifying into a new industry or cannibalising its existing business. Ambala represents an opportunity for CBOX to complement its existing cake business and generate additional income from its existing franchisee network. An opportunity that might not have arisen, or cost a lot more, if Ambala's founding shareholder hadn't died.

Because Mithai are often intended to be given as gifts or used to entertain the occasional visitors, and tend to be bought in bulk, they tend not to be made fresh for daily sale. Instead, they tend to be manufactured off-site and sold pre-boxed. This is distinctly different to CBOX's current offering. As I say, it won't require existing franchisees to re-train to make Mithai and will instead enable them to extract additional sales from their existing shops via higher footfall (new customers coming in to specifically buy Mithai and potentially purchase cakes too) and also existing customers, particularly Asians, buying Mithai in addition to their normal purchases. QED, increasing the utilisation of their existing shop network and generating additional sales per square foot/metre. All good metrics.

Ambala wasn't/isn't heading for bankruptcy anytime soon but delaying the acquisition could have risked losing part of its existing, loyal customer base or turning an essentially good, but leaderless, business into a bad business. Paying less for a bad business is definitely a sure fire way of destroying shareholder value.

It might have escaped your notice that CBOX currently trades on c10x EBITDA and that if a purchaser turned up to acquire CBOX you'd probably expect them to pay c250p, perhaps more, which would put them on a multiple of c12.5 EBITDA, or more. So, in that context, CBOX is not necessarily overpaying for Ambala.

Clearly Ambala's business has been affected by the loss of its founding shareholder, particularly in the last 12 months ended 31 December, and the business has now been rudderless for the last c15 months +/-. Allowing Ambala to remain rudderless for much longer, in order to try and drive down the purchase price, may not be in the bext, long-term interests of CBOX and also give a rival the opportunity to snatch Ambala from under CBOX's nose.

CBOX has already identified c£1m of synergies that it thinks it can deliver. Also, Mithai represent a complementary market to CBOX's existing cake business (Mithai sales are unlikely to undermine its cake sales or vice versa) and there is a massive opportunity for CBOX to now address the Asian diaspora in the UK through both its shop network and online. If anything, the Mithai business is better suited to online sales than CBOX's traditional cakes (which could help underpin the costs of running the online business) and can be supplied direct from the factory, rather than via the franchise network (it won't necessitate CBOX's franchisees having to learn how to make Mithai).

Went ex-dividend this morning