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|panamul: Apart from(a) the potential of Selection, (b) the over twice over-subscription by institutions at 30p, and (c) the excellent track record of MXC with companies like CTP, Accumuli, Redcentric to name a few, for those that are still in doubt regarding the potential share price of CSI upon relisting, I would turn your attention to two other companies that have been recently graced by MXC:- Pinnacle share price has increased by over 100% since it was announced that MXC now have their man running the company. Nothing else done yet. Just MXC now running the show and the market has doubled its valuation of the business.- Cash-shell Eco-City Vehicles is currently being valued at about 2.5 times its cash value simply due to MXC's "takeover". Sure, this sounds like poor value, but that is the value the market is placing on a cash shell simply due to it being under MXC's control.So with all that in mind, justified or not, the suggestion that we could open anywhere near 30p is just ignorant of the way markets have responded to MXC's involvement in the past.|
|panamul: In terms of a valuation of CSI when unsuspended I think we should be looking at the value the market places on Castleton, considering Castleton was also a buy and build put together and run by MXC.Below figures for Castleton are extrapolated from half year figures ending 30/09/15.RevenueSelection £35 million, 65% of which is recurringCastleton £17.5 million, 55% of which is recurringEBITDASelection £3.3mCastleton £3.4mGross marginSelection 39%Castleton 62%EBITDA %Selection 9.6%Castleton 20%Net cash / debtSelection £16.5m net cash (post acquisition)Castleton £6.1m net debtCustomersSelection - over 500Castleton - over 450Castleton valuation Market Cap £60.1mEnterprise value £66.2mRatio of Enterprise value / EBITDA - 19.5If Castle Street Investments is valued with the same ratio of Enterprise value to EBITDA as Castleton the valuation for Castle Street would be as follows:Enterprise value £64.25mMarket Cap £80.75mA market cap of £80.75m would give a share price of 47.2p.However, I think there are a number of reasons why CSI should be valued on a higher multiple of earnings than Castleton at this point in the journey. Castleton has already gone through the buy part of the buy and build. The synergies and cost cutting have been found and are now being exploited. The cross-selling opportunities with the acquired businesses have started already. Castleton is still growing but the low-hanging fruit have already been picked.Selection, on the other hand, still has all those low-hanging fruit waiting for MXC to exploit. Eg- the EBITDA % and Gross margin for Selection are very low and leave plenty of room for efficiencies and cost savings;- Selection already has 500+ customers before starting on the acquisition phase so the cross-selling opportunities will be higherImagine, for example, if the new management team can improve the EBITDA % and Gross margin to match Castleton's. EBITDA would be £6.9m and with the Castleton earnings ratio of 19.5 this would give a market cap of £150m and a share price of 87.6p. And that is before considering the cross-selling, synergies and additional EBITDA from businesses that are acquired.So in my view the very minimum value of CSI should be 47p upon opening. However, considering the huge potential to quickly improve efficiencies and funds available to embark upon the acquisition path, a multiple of earnings of around 30 straight away would not be unreasonable. This would give a market cap of £115.5m and a share price of 67.5p.Anyway, those are my thoughts on this. Looking forward to the 21st to see how it plays out.Good luck everyone.DYOR|
|phenomenonnick: Hi all,
I've got 300,000 shares here so I'm keen for this to do well, but isn't this an extremely full price to be paying? 1x revenues for a firm with no profit and whose revenues are falling despite an acquisition (8el)? The purchase price is over 10x EBITDA. Isn't that pretty steep? Or at least, not an amazing deal. It's surely only momentum and excitement which will push the share price higher in the short term? Maybe MXC's partner who is our new CEO can find some great acquisitions, and I hate to rain on the party, but for me the jury's out.|
|zac_mo: Well done agaon chimers. Where do you see the share price post acquisition? It seems that the management are after a whooper and not small acquisitions. By the sounds of it could be a company that is already listed on a major stoxk exchange. Hopefully they will allow PIs to take part in the placing. The stake building these last few weeks now makes sense.|
|johnsmith321: Kestrel, Dobbie, SPARK and griffiths have sunk millions into this turnaround/rev acq. They are not going to walk away and except cash. As after costs they would all be down. This will be a rev. acquisition announced by December. It will shoot the share price up (in a similar way as CTP) and after that there will be more general interest which will mean the price will continue to climb. Perhaps with extra bolt-on acquisitions to help the process along.|
|11_percent: johnsmith321 9 Sep'15 - 10:27 - 231 of 268 2 2
As IBANS described earlier, there are a lot of serious tech investors invested in CSI. I think this will go the way of CTP or redcentric. If new investors have patience (till December) then I expect the share price will reward them even if they entered at 40p.
Do not sell out, otherwise you will miss the news and miss the largest increase that will come with the rev. acquisition.
Say it again....
"that will come with the rev.aquision"
Anyone know what this idiot is on about.
What is "that"
What is "rev"
What is "about", about.|
|johnsmith321: As IBANS described earlier, there are a lot of serious tech investors invested in CSI. I think this will go the way of CTP or redcentric. If new investors have patience (till December) then I expect the share price will reward them even if they entered at 40p.
Do not sell out, otherwise you will miss the news and miss the largest increase that will come with the rev. acquisition.|
|ibans: Yes, agile will have a Mcap of £12 mill.
CSI have over £20 mill
A bit disappointing they used a shell like Lafyds with over 10 billion shares in issue. So they now will be doing a 10,000 to 1 consolidation and a 75p share price on floatation.
Spark news will be released this week and take CSI closer to the gravy train and I note that MXCP has still not spent any of their cash yet and are working with CSI so now that agile has been sorted...they can now concentrate on what we will be acquiring.|
|johnsmith321: Hi TheChancellor,
Unfortunately I am not Mr Griffiths, Chimers is mistaken.
My reason for investing in CSI are similar to most here.
I originally watched cupid collapse and then read the directors change in business direction and investment policy and could see a large increase in the share price after the crash. If successful.
I invested below the cash value of CSI.
They are using MXCP (which have a good track record in converting cash shells to successful businesses).
The directors have large positions with average prices alot higher than mine. Griffiths came on board.
Not many shares are available.|
|johnsmith321: Looking at the 3 month chart. Every time the share price jumps outside of the Bollinger bars share price goes back inside and moves sideways for a month before another price jump. So now would be a good time for anyone who is interested in CSI to invest. Before the announcement comes.|
Castle Street share price data is direct from the London Stock Exchange