Member Info for wolfhound

picked this up on another board courteous of a user called ralphmalph who noted it from TMI feb issue "Barclays has upgraded eps to 37 cents and 47 cents for FY16 and 17 dropping forward PE to 15 and 11.8." "Barclays new target is 560p and "upside case" 760p." ------------------------------------------------------------------------------------------------------------------------------end - so by my reckoning Barclays are projecting a PAYS earnings of £124m (2016) and £ 157m ( 2017) or 27% growth. Worth noting here that 2015 EBITDA was £150mn with only 4.5 months of Skrill included so forward projections here don't look too demanding especially as on a run rate EBITDA for 2016 should be at least £200mn. Worth bearing in mind that historically the PAT and EBITDA for OPAY was largely one in the same - even allowing for the new debt raised for skrill I would still only see this at about a 10% differential max.. Average FTSE250 PE is about 22, we know peers have been acquired on higher multiples nearer to 30 but If I take 22 as a conservative level then SP for 2016 and 2017 should be around : 2016 : £124m * 22 = £2728m/480mn shares = £5.68 2017 : £157m * 22 = £3454m/480mn shares = £ 7.19 So interpreting Barclays if PAYS delivers its expected profits ( which as mentioned is hardly a stretch given 2015 result) and is rated in line with its FTSE 250 peers - then £5.60 in near term is v achievable and in fact the higher of upside of £760 should not be a big challenge. I would go so far as to say once results are published and we get 1st qtr update we should be due another leg up in sp even before the buying by tracker funds starting on the 23rd. GLA

Preliminary results for the 12 months ending 31/12/2015 - out on 16th March https://www.paysafe.com/investors-and-shareholder-services/financial-calendar/?Preliminary FTSE250 Entry on the 23rd March

Citi has upped price target to 490p gla

Agreed, sooner or later market will need to re-rate this stock to a higher PE to be more reflective of its long term growth !

This is some back of a fag packet calcs but highlights what 2106 might hold for PAYS : EBITDA 2H2015 ( 6 mnths OPAY + 4.5 Mnths Skrill + 10m synergies) = $100m Pro-forma run rate in H1 2016 ( $45m OPAY + $60mn Skrill+ $20m synergies) = $125m Est EBITDA H12016 ( 25% growth) - $125*1.25 = $156mn EST EBITDA H22016 ( 25% growth) - $156 *1.25= $195mn EBITDA 2016 FY = $156+$195= $ 351mn Assume 75% Net Profit = $263mn (£ 175m) So current sp indicates a forward PE of 10 UK peers on a PE of 15 - so 50% tick up ( which is in line with Barclays £5.60 target) Larger Competitors on a PE of 30 - 3 fold increase !! The analysts have continuously underestimated the growth and delivery prospects of PAYS - on the flip side this does make PAYS open to a predator as it is naturally earnings accretive relative to all its competitors. Interesting year ahead methinks - GLA

@JEM - if they did ( and that was pure speculation on my part) then fair play to them - clearly they would have done the analysis/due diligence on PAYS and today's trading update would have been no surprise to them - would also be a very clever way of letting ii know what price they might expect to pay once PAYS goes into FTSE250 and trackers are forced to buy. If they were to execute same they would make a v hansome £80mn profit by my estimates. Now that is research that PAYS - if you will pardon the pun :) GLA

Post current update - and $100mn of EBITDA came from last 6 months which included 4.5mn of skrill , I estimate EBITDA is running something like $20mn a month. Factor in 25% annual growth ( conservative based on past performance) and we may be looking at a 2106 FY EBITDA of $ 300mn+ so current sp is on a PE of around 10 - makes Barclays £5.60 look conservative ( equates to a PE of 15 on above calcs). A dual nasdaq listing to coincide with FTSE250 entry would probably see a much higher sp on a much higher PE ration ( nearer to 30) - would also make it much easier to do a chunky acquistion - something that will not be lost on JL Interesting qtr ahead GLA

i'd rather get to £5.60 and then have a bid approach - now that would be nice : ) Clearly Barclays have started to re-rate PAYS now that it is in FTSE - just need the others to folow suit - perhaps trading update due next week will be the catalyst - GLA

One bit of good news amongst the market gloom - posted by user EH9 from another board - Barclays have upped their target sp to £5.60 ( 60% upside from current sp) http://sharedealing.nandp.co.uk/broker-views/PAYS/PAYSAFE-GROUP-PLC-ORD-001P-news

great end to 2015 with new highs achieved - argues well for 2016, onwards and upwards - hopefully we have now seen an end to the AIM games of the past with the sp - 1st qtr should see a v ggod rise with trading update due in Jan and FTSE250 entry in March How do the charts look Techni ? GLA and HNY

Agreed - I think DBS at similar MV to STAN is too small a player to takeover STAN - however the market reaction to sp indicates that perhaps a larger bank might be sniffing around, my money would be on a large Chinese bank looking to expand globally especially if they want the Renminbi distribution capability - strategic value.

Indeed , also I think the appointment of Deutsche as broker will add a lot of much needed impetus in terms of helping to erode the sp discount that exists to peers - I guess it is now confirmed why CG as broker have been relatively quiet since the acquisition - I guess they knew it was inevitable that PAYS would switch broker - and no reflection on CG but the credibility Deutsche research will add to addressing the undervaluation of PAYS to peers cannot be underestimated. Onwards and upwards

there may be headwinds but there are also green shoots of recovery in EM which could make this the ideal recovery stock - 5% yesterday and 6%+ today indicates a change in market sentiment IMHO

agreed - the dip seems characteristic of the other two dips we have seen since at end of Aug and Oct - dip down before recovering over a week or so - this one might be short lived however as we should see prospectus being issued towards end of this week ahead of move to FTSE next Wednesday. When Domio Pizza moved to main market from AIM in May 2008 - they issues prospectus on Thursday 15th May 2008 ahead of move to main market on the following Monday 19th - if PAYS follow suit that might mean we see a prospectus COB Friday - and with it SP will rise quite strongly.

Indeed - has been way oversold IMHO - JP has a 79% upside on their target price - now that would be nice for the new year

For what it is worth I think the timing of the CVC sale has a lot to do with the way PE firms operate : a) They are investing others money not their own so they only earn a percentage of profits - usually 20%, so getting it away at a 5% discount in one lot ( and probably for little or no commission) ensures they earn 20% - and I assume they got into Skrill for about half of what sold it for so they still made a killing for their investors and themselves. So even if stock had gone up another 50% their gain was only 20% of 50% in terms of management fees - and they also have to take MTM into account - whereas when it was SKrill private they held it at cost and then a big uprating. They would have wanted this crystallised and settled prior to y/end so they can earn their performance fees and pay bonus to their teams for Xmas - assuming payroll is the 20th that is why they did it last week so they could do all the calcs. b) They are $71bn in size and they only have so much bandwidth to manage all their investments - so once they made the strategic decision to sell skrill and crystallise their gains they are not interested in rump position - in reality I think will have had Barclays on notice that once the lock in period was over to be lining up a buyer and in the absence of an RNS of a new buyers I would not be surprised if Barclays warehoused the deal on its own book knowing there would be buyers from the 23rd Dec - nice sweetener for the their equity teams y/end bonus pool. I think the MM just used the opportunity to spook a few pi's to pick up some extra stock cheap - it is bouncing up pretty well this morning.

CVC exit is simple to understand in my mind - they earn something like 20% performance fee on the profits they earn clients - they only get paid out once they crystallise the asset via a sale. The fund probably has a December y/end so wants to wrap this up in time to take their y/end bonus in cash ! Cast your mind back to Jan 2014 when sp was around 247p - Dermot Desmond sold his 25% stake for 8x his original investment - SP fell briefly and within 1 yr we were at 575p. This now removes the stock overhang from RI and aqn - I expect we will see sp at new highs within the next 7 days as we move towards FTSE entry on 23rd

Hard to predict / speculate - CVC are a $71bn Private Equity fund - they are not an Asset Mngr so holding a stake in a FTSE co is just not their style - they were always likely to exit - as soon as they had a liquidity window - queue FTSE entry. They also recently bought RAC for 4+bn. announcing just shy of FTSE entry and on a Friday suggests they may already have a buyer - "accelerated book build", I think the real key question is who is the buyer - someone on this board suggested some time back that they wouldn't be surprised if someone pounced just before FTSE entry.... now wouldn't that be interesting. GLA

Thanks Techni - guess the catalyst for breakthrough trend line is likely to be prospectus hopefully with buying right up to the 23rd to propel into breakout - not long to go now - never know perhaps a few big ii will want to do their Christmas shopping early !! GLA

I get the impression that SP has been hammered down due to RI so cheap stock can be picked up - I can see this recover some ground in the near term albeit it may be some time before it fully recovers to previous level pre-rights that said I see £7/8 as a realistic short term target - time will tell.