Avanti Capital Share Discussion Threads

[liarspoker] 05/11/2013 10:49

John - I accidently deleted your email address last night. Could you please send it to me again.

If anyone wants the Eclectic accounts just drop me a line at [e-mail]

[eezymunny] 05/11/2013 10:37

Well we can only speculate til we have some details Paxman. A 20m valuation would be about 7xEBITDA which ought to attract decent interest as you say and even a £20m float would make AVA look absurdly cheap here (if my sums are right which I'm not sure about!). Risk that the float doesn't proceed of course!

[paxman] 05/11/2013 10:29

If Eclectic floats at £20 m post money - and I don't think it will - I'm definitely buying lots of shares as I think it would offer extremely good value/would be mispriced.

[paxman] 05/11/2013 10:27

Eezy

I'm guessing £20 m pre money - you'll have seen £20 m as an IPO figure mentioned in the press - because I don't think there is any way Eclectic could be valued at £10 m pre money.

A leisure business growing at 15+% a year, with likely EBITDA of £3.5 m or maybe more this current year would be given an enterprise value of say £30 m. 8 to 9 times EBITDA. With £7.3 m of debt ( owed to Avanti), that would suggest a pre money value of £20 m or more.

Avanti own 60% of those pre money shares. So say £12 m of shares.

We have to guess at the moment, as final IPO figures have not been released, but I'm going on what quoted restaurant and pub companies are currently trading at on EBITDA multiples. Eclectic seems to be growing at 15% or more per year so could command a higher multiple that's why I think if it floats at £20 m pre money or £30 m post money it might go to a nice premium.

[eezymunny] 05/11/2013 10:14

Not sure about your numbers Paxman.

The floated is mooted to give a market cap of £20m not £30m but these are just rumours on the grapevine (unless anybody knows better?).

AVA currently have 60% of the equity, so if they are raising £10m in new shares AVA would be diluted down to 30% post float, non? As I say they will sell between none and all of that equity stake in the float (depending presumably on demand and how much, if any, equity they wish to retain).

So they get the £7m+ cash from debt repayment, plus £6m in cash/retained equity. In addition they have some current assets, proceeds from sale of Espresso 340k and holding in mblox valued at £5m.

So I reckon value all-in post float is possibly 100%+ greater than current valuation – tho I continue to be befuddled by the consolidation of Ecectic into last published accts so my numbers may well be miles out!

[paxman] 05/11/2013 09:04

My mistake - make it £3.5 m EBITDA not £3.5 pre tax earnings. I'm estimating that on 16% growth from the £3 m EBITDA it made last financial year according to yesterday's FT.
As Eclectic will have net cash and only accounting amortisation, only the depreciation figure will vary from EBITDA to pre tax earnings.



Interesting IPO - might go to a decent premium on listing.

[paxman] 05/11/2013 08:47

Think you may have understated Avanti's proceeds from the Eclectic IPO.

Avanti should get 60% of £20m plus £7.3m in cash ( being their loan repayment).

Eclectic should IPO at £20 m pre money + £10 m raise ie £30 m market cap. That should give good upside to IPO investors who will get a company making say £3.5 m pre tax earnings in the current year and is growing at say 15+% a year.

Eclectic seem to have a good and scaleable business model so might make a good investment once they are listed.

So Avanti would receive £19.3 m in cash and shares, the mix depending on how many shares it sells in the IPO. That's about £2.40 a share. It will have to pay the manager something like 30p in performance fees. So cash and shares of £2.10?

The above figures are approximate and could be wrong so DYOR.

[eezymunny] 04/11/2013 13:37

I think AVA have 7% of mblox so £4m is about 1 x their revenue share which may or may not be about right. Can't find any mblox accounts anywhere....

[euclid5] 04/11/2013 13:30

Thank you I shall take a read - Thanks for the interview link - would think that this MBlox is worth substantially more than £4m with $100m in revenues

[eezymunny] 04/11/2013 12:32

The link to my thread is in post 527 Euclid.

[adam] 04/11/2013 11:39

I am hoping that mBlox also IPOs in the next 12 months

From AVA results

With renewed focus on the messaging market, mBlox is poised to have the best year of profitability in its 13-year history

Also


The difference with mBlox is that it has scale, we delivered 5.5 billion messages last year and our revenues are substantially above 100 million dollars......



AVA hold over 7% of mBlox, which they have valued at cost of £4m. I would think (hope) that is very conservative.

Espresso sold, so with Eclectic going mBlox is the only thing in the way of a full liquidation of Avanti....

[euclid5] 04/11/2013 11:18

Ok thanks - I thought they are only hldg the £7m debt loan & they will get that back on the IPO - didn't realise they are also another 30% - agree, assuming they don't use the £7m as working capital they could pay bk some of this as a special Div

Please can you post your web link to your thread

Thanks

[eezymunny] 04/11/2013 11:03

As I said in write-up on my thread euclid. I reckon AVA go from current 60% of Eclectic to c. 30%. So £7m+ debt repaid plus Eclectic holding worth £6m (which they will sell between none and all in the float) plus other holdings etc. Potential I believe for a special divi of 100%+ of current market cap and lots of extras in for free. If I've done the sums right!

[euclid5] 04/11/2013 10:43

Very good write up in the FT - thanks for the post - I wonder if AVA will be holding a minority stake in this co that's floating?

[eezymunny] 04/11/2013 10:36

FT article FYI

[eezymunny] 30/10/2013 16:03

I had a very small slug of these today. Thoughts on my thread...



The Eclectic numbers (not cash flow) are outlined in the just released AR Liarspoker - would be grateful if you could post any cash flow numbers that you've got (assume you downloaded from companies hse?).

Also I feel like I've overlooked something big, so your thoughts welcome!

[whealan] 29/10/2013 09:47

It might be interesting to go to the AGM on 12th December for a chat

[liarspoker] 29/10/2013 09:34

Guys if you want the Eclectic Bars accounts then email me at:

Marcel @ Market-Swings dot com (no spaces obviously)

[adam] 29/10/2013 09:29

The carry is generous, but there is also a hurdle rate from 2008 @ 6% which started at 82p or £6.6m. 5 years @ 6% should add 34% or approx 110p before any carry kicks in.

Avanti market cap still under value of Eclectic debt of £7.3m, never mind equity, cash on hand and value in mBlox and Espresso (both seem to be going quite well)

Let's see what the 60% equity is worth in Eclectic. It could add very significantly to the NAV.

My understanding in the past has been that managements' intention is to return the bulk of realisations to shareholders.

[hugepants] 28/10/2013 23:06

Eclectic Bars, the Avanti Capital-backed bar and club operator led by Reuben Harley, is preparing a £20m float on the Alternative Investment Market (AIM), which if successful would make it the first pub or bar business to float since Capital Pub Company in 2007...

[5310carraroe] 28/10/2013 22:55

Great news RNS and great investor reaction.

[smithie6] 28/10/2013 12:06

"OPL will be entitled to 25% of such excess up to GBP9.1m of realisations or 113 pence per share."...and higher % above that level

OPL is the directors vehicle

I dont agree with dirs. at any company getting 25% of gain above a certain level....as well as getting paid and expenses and company cars....

while if the shareholders lose money the dirs. pay nothing of that loss.

excessive imo.

[ukmassy] 28/10/2013 10:45

Predictions for end today? It's been all buys for a while!

[liarspoker] 28/10/2013 10:19

This is beautiful!!

It's the share my mentorship clients have been working on. :O)

[jeffian] 28/10/2013 10:11

"We also hope the IPO crystallises a return for our loyal shareholders."

"Loyal"? I think "long-suffering" is the word they're looking for.