Member Info for x54v

“In the latest in our Smart Small Caps series, Jemma Slingo talks to Octopus Investments about why M&C Saatchi has turned a corner…

The shares have yet to recover from the 2019 scandal, which involved overstated revenues and understated costs. However, things are on the up – at least according to Richard Power, head of the quoted smaller companies team at Octopus Investments.

“It has got its mojo back,” he said. “But people are still looking in the rearview mirror.”

Power is enthusiastic. “For the rating it’s on today, and the growth it’s likely to achieve over the next five years, have we got an investment that’s likely to achieve quite significant returns? Absolutely. And I say that acknowledging that we could well see some headwinds in the next 12 or 18 months. At the entry point today, the opportunity is substantial.

Five years feels like a long time for a company with a history of volatility. However, the group is responding well to the new management team, and feels significantly more dynamic than it did a few years ago. The market doesn't seem to have clocked this, and despite its expertise in brand-building, M&C Saatchi is often still portrayed as outdated and slow-moving. Things could be about to change.”

https://www.investorschronicle.co.uk/news/2023/05/30/the-poster-child-of-advertising-is-back-on-investor-s-radars/

Continued overall market weakness dragging valuations down a good thing for ADVT. As Crux recently put it:

"Paradoxically, the more difficult the economy, the better the odds of finding the bargain needed to kick off “the investment story”."

https://moneyweek.com/buy-uk-small-and-mid-caps

The strong position ADVT is in was also highlighed in the Interims in March:

"With a strong cash position which exceeds GBP100m, we have a clear advantage in against a backdrop of market uncertainty. Whilst the cost of servicing debt and its availability have become major challenges for other investment vehicles, our cash reserves offer a unique, attractive alternative and positions us well to execute on our strategy. This financial strength provides flexibility and the resources to capitalise on opportunities, navigate the challenges that may arise, as well as being an attractive proposition to potential target businesses."

Vin Murria continues to wait patiently with a hefty cash balance ready to pounce when the right opportunity presents itself.

No probs Fishcakes47.

Yes, if VM can replicate her previous success then there is a lot of potential upside here. All her prior listed vehicles were multibaggers.

Some interesting backgound here:

https://archivesit.org.uk/vin-murria-2/

This is covered here from 1:17:00

https://youtu.be/FexUObmgv8Q

So usually 2 years, but the company can approach major shareholders requesting extra time if it thinks there is still a good opportunity of a target company being found. 2 years has recently passed so presumably VM has spoken to the main instis and they are happy for her to continue her search.

With regards cash outflow, there is an estimate of a max of £500k per annum. The interest on the £103.4 million cash currently held will easily cover this and more, so the cash balance should increase over time.

“Ongoing costs and expenses incurred in connection with seeking to identify acquisition opportunities (excluding any project specific costs incurred in pursuit of an acquisition opportunity) are estimated to be no more than GBP500,000 per annum.” - from Final Results Oct 22

The current SP of ADVT is 77p. Against that it has 77.6p cash in the bank and SAA shares worth a further 15.3p. There is the upside potential from an acquisition and also the possibility of bids for SAA.

So:

- Solid upside (to NAV) should a target not be found and

- Very significant potential upside should VM repeat what she has successfully done with Kewill, Computer Software Group and Advanced Computer Software.

“A proven software strategy

AdvancedADVT (LSE: ADVT) raised money at 100p to allow seasoned software investor Vin Murria to acquire software businesses and improve them. Murria has had three successful iterations of this strategy at Kewill Systems, Computer Software Group and Advanced Computer Software Group. She raised money and invested £16m herself at 100p per share.

Today the shares languish at 71p and the firm has around 95p per share in cash and shares. Paradoxically, the more difficult the economy, the better the odds of finding the bargain needed to kick off “the investment story”. The shares could bounce by 50% or more on a deal, and would return 95p-plus in the unlikely event that no deal is found. It’s a small company, but one widows and orphans could readily invest in.”

https://moneyweek.com/buy-uk-small-and-mid-caps

Https://www.investormeetcompany.com/investor/meeting/ina-completion-angola-update

Https://twitter.com/bobbyoflondon/status/1654472890656468996

Https://twitter.com/bobbyoflondon/status/1654472890656468996

Baron keen on the upside:

“AET and ARCM have huge potential legs, the former needs to close and then non dilute on next deal (what I expect)…”

https://twitter.com/baroninvestment/status/1654030625286889472?s=61&t=zan1D2KbkX6Ux4S64eMTJw

https://youtu.be/z6yMYwzpV9M

from 47:10

Results confirming 103.4m in cash vs 100.6m mcap.

NAV of 95.6p vs 77p share price.

So more cash in the bank than the market cap and 12 million shares in SAA thrown in for free.

A strong position to be in, waiting with a tonne of cash for the right opportunity to present itself as markets continue to decline.

https://investegate.co.uk/advancedadvt-limited--advt-/rns/interim-results/202303140700058169S/

from 28:14

https://vimeo.com/803474750/a11f0abecd

https://www.ina.hr/app/uploads/2023/02/FR_INA_Group_Q4_2022_ENG.pdf

“INA reporting on Angola disinvestment from FY2022, released 16/02/23”

“Divestment of Angolan assets: SPA with Afentra Angola, Ltd. was signed; in December 2022 transfer of INA`s
Participating Interest (PI) on blocks 3/05 and 3/05a has been approved by the Minister of Mineral resources”

https://twitter.com/redmirres/status/1628995235446509570?s=61&t=JxqJ859vEjy8rIGE2qsOMA

Last chunky buy like this at 200p was Vin Murria / ADVT buying

https://investegate.co.uk/advancedadvt-limited--advt-/rns/acquisition-of-shareholding-in-m-c-saatchi-plc/202201050947285080X/

https://ukinvestormagazine.co.uk/mc-saatchi-broker-says-40-upside-in-advertising-groups-share-price/

Very strong recent momentum at SAA. Another bid on the way?

ADVT yet to move to reflect the strength in SAA. NAV now around 96p vs the 81.5p current share price.

If there is a premium bid at SAA there could be a decent move ahead. And of course there is the chance of an acquisition as well. Surely Vin Murria has something lined up by now.

Very strong momentum. Another bid on the way?

https://youtu.be/6aAKsS5CUew