Member Info for Wednesday

Am hoping that the sell off from the trading update is a little bit overdone. H1 turnover was 2% up despite the April fall off - and we know May recovered plus the war seemingly drawing to a close (if that was an issue).

Top end of the revised estimate is still the same profit as last year. This company has cash on the balance sheet and generates cash each year. I like they are aggressively buying shares at these prices too (buy backs should be used in instance like this imo)

Obvious problem child is photo, down 6% in half 1. But we knew this is shrinking and being replaced by Wash increases. I think there is a natural size for photo, less than where we are but it should level at some point.

I would like to see a me group app and multiple vending offerings that all can link into that. Offers and geo features - find nearest available machine (even product available).

Have said this before but this doesn't get taken out by AI, there already is the network spread over a large geographical area with first mover advantage.

I suppose the £1m share buy- back is the benefit of having a company that is highly cash generative (apart from April 😉 ).

I would like to see the BOD continue significant return of cash to the shareholders through both dividends and buy-backs when prudent.

At some point the market will take note and the SP will re-rate.

I have been very positive on this, especially following the investor presentation but like others have said, am concerned about the drop off in Photo over the 6 months (not just in April) and also this clunky update. This adds onto the faux-pas from the accounts too.

Also agree the war in Iran doesn't seem like a valid reason for a drop off in income (I won't renew my passport or wash my clothes 'cos Trump is bombing).

We want a stable board delivering on what they say they will, keep it boring until the wider market realise the true story of this company and it starts to re-rate.

Appreciate it is xdd but this sell off (again) seems well overdone.

The company is still in a growth stage, whilst photo may be shrinking (CEO disputes this tho), Wash is going great guns and there are other products in the pipeline.

First mover advantage and a product not going to be adversely impacted by AI, churning decent cash.

Also thought the chairman seemed bullish in a confident way

Continuing to increase stake and have historically bought other competitors in other countries, could Mony be next?

Assuming turnover from each machine remains stable, the Asda deal should add around 10m to turnover - which equates to around 3% of turnover. So a decent deal and it opens to the relationship too (think dog-wash etc)

However, they also state the target worldwide for machines is 20k - they currently have 7,600 worldwide, if they were to do this (current roll out is 1,300 per year - but maybe increased?) that would lead, based upon current figures to an increase in turnover of 183m - over a 50% increase in turnover! Also greater than the current turnover of Photo.me £168m.

These are my calcs based upon today's RNS and the figures in the Annual report - any mistakes are by accident and more than happy to be corrected! :)

Thanks for that HHH, a good, balanced read.

I do wish they would stop with the continual exceptional items, it feels like we have had them for 10 years (does anyone want to check?). Ultimately now is the time to deliver FCF over the year (even with £20m, exceptional) and a clear runway for good returns in 2027.

Turnover 1.8bn

Margin 7.2%

Profit (circa) 130m

Multiple (of a steady - not growing business) = 10

MCAP = 1.3bn

Therefore around £10 per share. Btw. not saying all of this will be realised, but it seems credible in line with the statements and successful execution.

Obviously imho - do your own research too!

Agree not every location is suitable for dog wash stations, but the company can easily (in theory) add a dog station next to wash machines in terms of having water, electric and the existing relationship. Also they take metrics from these machines so should be able to work out the best locations and keep under review going forwards.

Really positive on this

Just listened to presentation through 'Investor meets company', feel really positive afterwards. Vlad seems very switched on, long term growth expected in Wash, Photo not in decline (according to him) and new products - dog wash, which are ideal to be situated next to the Wash Machines (already have power and water).

Also mentioned the competitive advantage the group has and the difficulty another company replicating what Me Group do. The biggest is first mover advantage - plus also the analytics the company is already deriving from its estate of machines.

I think it said in the results, they would apply for the lifting of the suspension today. Not sure when it would be available on the market.

The increase in full year divi is less than the half year increase. But they have started the buy back and it is still a good overall increase at 9.5% and around 6% on current share price.

All looks good, perhaps slightly higher capex than ideal but no nasty shocks as I can see.

Increased divi and buy back too

Just had a quick poke at the background of the auditors and the statement itself.

As someone has posted the RNS seemed very bullish from the company - of course there is the escape route of the term 'the Company has not been told of any material audit issues' - but at least at face value that is reassuring along with the reconfirmation of the guidance.

Also, the auditor was criticised by the FRC (its regulator) for audit quality and this may lead to cautions behaviour. My reading of this is that the delay could be due to enhanced diligence. To add balance, I could not find extensive delays for other company form the auditor.

All imho (with assistance from AI).

Look good to me too.

I actually think Mony could be impacted by AI, but we have a long runway and the company has certain elements that can't be replicated (MSE and the gold standard advice it offers) as well as ingrained knowledge of all its markets (not just insurance)

Hi AmInv, thanks for your comments, think you are onto something too.

So you know how the other takeovers happened, did they build a stake in each prior to being taken over or were these private companies etc?

Listening to the Interim Results interview with Richard Staveley. He has Capita as his 2nd biggest holding and has Capita listed under the 'Big 2026' header as due a re-rate.

He mentioned, albeit briefly, 'rationisation of the portfolio' - not sure what this means (another sale possibly?) - he hesitated as he said it too (although he may have just got a frog in his throat). Spoke highly of Adolfo and mentions the 'problem child' contract which he expects to be resolved soon.

How do you know there has not been loads of interest is buying the group? Not challenging, you could well be correct due to the passage of time, it does seem likely, but wondered if there was other reasoning?

It does appear that photo-me, which is still the biggest part of the business revenue wise, is a shrinking market and that has impacted full year estimates made in July.

On the up-side, still making record turn-over and profit and has a cash pile too.....

Mmmm, wonder why? Leak, background buyer, something else?

No predictions from me ;)

Oi KGInvest - I can take offence! ;)

'just when you think the quality of cr&p being posted here has reached a bottom, comes wednesday and bang'