|The Foresight funds that invested in zoo will be closing, at this point VC's have no interest in the holding, no matter what is happening to the company!
Very frustrating for PI's but that's the nature of the beast, not far to go and they will be out.|
|Why would Foresight be selling now after all these years, any ideas? Makes no sense their holding would be worth more if they just hung on a few months.|
|Rns re holding|
|Topped up today .Price drifted down on small sells|
|Guess you also sold out mudbath, you went from all over this like a rash to total
silence but posting elsewhere|
|If ebitda is over 1m and sales over 10m then fair valuation pe if 10 would be 10m or 3times sales would be 30m. To get to 30m would require cash generation of say 1m per annum. Anyway its in my potential 10 bagger portfolio.|
|Now promise of 'another industry-first on the way' on website.....|
|From Twitter a few days ago
Parliament passes #SubtitleIt! amendment promising @Ofcom power to enforce #subtitles on video-on-demand services
..... it all helps!|
|Found this interesting.
This led to an exchange gain on borrowings of $0.4m (H1 2015: loss of $0.1m).
The weak pound helped for about 5 months so for a full year should be looking at about 1 million which should help ease things.|
|Hopefully there will be more news before April. Never fails me how quiet it gets....
Come on ZOO!!|
|Thanks martina pescatore for your reasoning.
I must admit looking to 2017/8 showing further strong progress in order to underpin my enthusiastic hopes for the share price|
Such a hypothetical scenario might result in:
a) A Rights Issue to raise £2.5M before costs (£2.0M after costs) at 17p per share = 14.71 million new shares in issue.
b) £3.0M of CLN converted to equity at the conversion price of 48p per share = 6.25 million new shares in issue.
Current shares in issue = 32.661 million, with debt at circa £6M, I think, including CLN.
After a) and b) above, the company would have only £3.0M in debt and £2.0M in the bank for working capital to build and grow the business.
However, after a) and b) above there would now be circa 53.621 million shares in issue (i.e. 40% more shares). Therefore, eps would be significantly diminished, although I accept that the attractiveness of the company to the market would appear to be more appealing.
At the half year basic eps was 2.07 cents (say 1.6p). The second half looks as if it might be similar to the first half, after the recent TU, therefore, let’s assume basic eps for the year at 3.2p, but based on 32.661 million shares in issue.
If there were to be 53.621 million shares is issue, this eps becomes circa 1.95p, I think.
Put the recapitalised company on a p/e of 10, this could give a share price of 19.5p (mkt cap of £10.46M). Too low? Maybe. So…
On a p/e of 15, this would give a share price of 29.25p (mkt cap of £15.68M). Still too low, perhaps, for a company now with a minimal debt to cash ratio and profitable(?) and growing (EBITDA forecast to be up minimum of 800% for year end 31 March 2017, compared to previous year, as per recent TU)? Also remember that if £3.0M of CLN at 7.5% interest and £600,000 loan from wife of CEO at 10% interest, equates to nearly £300K in interest payments that will be massively reduced and the company becomes more profitable, all other things being equal.
On a p/e of 20, this could give a share price of 39p (mkt cap of £20.92M).
On a p/e of 25, this could give a share price of 48.75p (mkt cap of £26.14M). If CLNs were to be converted, at the conversion price of 48p per share, this might after all suggest a fairer share price at close to 48p.
The above are obviously crude calculations and are only suppositions of course. However, the p/e suggestions are not forward p/e’s, from where many growth companies appear to be assessed.
NIA and DYOR of course.|
|Agreed martina pescatore on your point that the interests of the CLN holders are very much aligned with those of the major shareholders.
Having spent much time lately examining the whole ZOO spectrum ,I would also agree with Verulamium,although I am of the opinion that it would not require two years of growth for an investment reappraisal to occur,for we seem to be already on the cusp of such an event .imo.
If I were the private equity CLN holder, possessed of the full details regarding current and projected future profit generation and if these were to mirror the surprisingly vigorous upward trends touched upon in the recent trading update,then my inclination would be to :-
Propose a rights issue,timed and based on the release of that further promised T/U to raise say £2.5 million .
The issue could be at a significant premium to the current SP(say 17 pence)meaning that those CLN holders could strengthen their pro rata equity holdings.
Convert the Loan Notes according to the full coupon and repay outstanding debt to Mrs Green etc.
Stand back and watch the share price soar above the conversion price,which imo would then look exceedingly modest.
Finally,convert their warrants into equity,thus further strengthening ZOO and of course the ultimate profitability of ZOO's Private Equity supporters.
WE private investors would also naturally benefit in spades.
Win win ?|
|in response to the Question on CLNs, here are some notes that I made on Zoo Digital the other day, as follows:
The recent TU also points to cash flow improving month on month and continues to do so, which is very encouraging, as the company does have some debts, with $3.8M CLN due for maturity at end Oct 2017. However, it is worth pointing out that these CLNs are mostly held by significant shareholders, with Herald Investment Trust plc holding 60.7% of the CLN and 19.4% of the shares, whilst CEO Stuart Green holds 20% of the CLNs and 14.9% of the shares. The interests of the majority of the CLN holders are therefore very much aligned with those of the major shareholders (and little old me), who no doubt very much want the company to continue to grow, and make profits.
Some time ago I calculated that Zoo most be paying circa £0.5M ($0.65M) in interest on various loans. Therefore, reducing these as soon as possible would be favourable, thus making the company more profitable.
However, I would not wish to see the CLN being paid off via a rights issue and dilution of shareholders, as at current price levels, this would be about 50% dilution. Personally, I don’t think such radical dilution is likely though, as the CLNs have been due to expire before and were renegotiated and extended on exactly the same terms, being 7.5% interest and redeemable at 48p per share, or settled on expiry of the new date. Furthermore, the company now appears to be demonstrating an ability to execute a successful and growing business with profitability now very much in view. What I would really like is for the CLNs to be converted to equity at their conversion price of 48p per share, but perhaps wishful thinking at the moment, at 9.75p per share.
NIA and DYOR|
|Looking to get into this. Is there any risk from the loan note holders?|
|Good piece on Look North - thanks for the link.
They only appear to be punching above their weight because of their ridiculous valuation. If they were a new start up with the same technology, deals and turnover, they'd be on many times the current market cap. Because of their past years of rubbish DVD games etc, they're labelled as jam tomorrow no-hopers. If they put a couple of good years of growth in, the dodgy past will be completely forgotten...|
|Let's hope this exposure to a mass audience translates into some buying tomorrow.
I first heard about ZOO on the radio, a story of promise about a decade too early!!!|
From about 20mins|
|BBC Look North Leeds has just aired the ZOO feature with Stuart Green outlining ZOO's role in subtitling Silent Witness for viewers.My wife thought SG came across very well,if a little softly spoken.|
|Unfortunately, I think will be the case until Foresight have cleared their holding.
However on a positive note the PI base will grow and allow more trades going forward and fingers crossed a significant increase in the SP!
Looking forward to seeing the Look North coverage on Zoo's You Tube channel.|
|Twice as many buys as sells and down we go - it is hard work!!|
I have had a 9.90 pence ceiling for ZOO share purchases so yesterday's was not mine.
This was tweeted by ZOO yesterday with more details available on their website :-
"Thanks to @BBCWPress 4 letting @BBCLookNorth cover our story & showcase our work on Silent Witness."
Did anyone watch Look North or pick up on this ?|
|Nice work mudbath some interesting reading. One buy today does confuse me that it is only you me and another that believes. Please don't tell me it was your buy haha
Have a good weekend lets hope for the break out next week would be nice to get a juicy contract win to get ball rolling. It will have some momentum when it does imho|
|Herald are very sector focused.
"The long term health of the market for primary capital to invest in emerging companies, successful companies need to make good returns, and it is disappointing to see some of the companies that we had nurtured through the loss making phase to become strong profitable businesses, taken out with inadequate returns to their founders, ...While it is exciting to be able to invest at what appears to be “bargain”; valuations, there is a disturbing change in the market. There has been a net cash outflow from smaller companies every year since 2000, hence the proliferation of take-overs at low valuations.... This is an opportunity for patient investors, but there can be no certainty when value will be realised."
I wonder if it will be Herald who takes advantage of ZOO's apparent need for some form of financial restructuring, for I too would prefer this to an opportunistic bid.|