32red Share Discussion Threads

[welshwizarduk] 06/1/2016 16:59

Hit another new high. Mainly a red day but a good day for me with 32red and audioboom in my portfolio.

[saucepan] 06/1/2016 16:50

With such a strong late afternoon finish it is not unusual for momentum to continue the following day: i.e. the theory being that buyers have not finished and it is only the market close that has caused a temporary halt.

Let's hope such a scenario plays out here. There is quite a re-rating going on.

[cezary2] 06/1/2016 16:41

have noticed that when markets down this gets a positive boost!!

[jakleeds] 06/1/2016 12:17

Ticking up on another horrendous day for the market.

[ulinbac] 04/1/2016 23:28

Was tipped in loads of places. Seen 120 to 160 and even 200 plus. Think it was on iii website. The gaming industry is becoming a somewhat popular sector with PPP, Rank GVC popping up on breakout charts at.

[discodave4] 04/1/2016 20:10

Pps....Sorry, mcap £105m!Ppps not having a good day :)DD

[discodave4] 04/1/2016 19:38

Ps apologies meant :- EBITDA (including costs that should be expensed IMV).DD

[discodave4] 04/1/2016 19:21

Who knows!TTR comes up on a lot of value/growth/Zulu screeners so maybe also on a lot of naps for this year?. But IMV it only pops up because the earnings are now EBITDA (minus other costs incurred) whereas previously they were normalised, so earnings, eps growth rate and value metrics etc., paint a false picture IMV.Perhaps it is good value, IMV it's not but WTFDIK. A PE of 19 for a company that only made £75k profit after tax for H1 on £18.6 million rev, and now has a mcap of £82m........mmmmm!.Will watch and see but still don't fancy it, perhaps another mistake on my part!. Good luck though.DD

[treeshake] 04/1/2016 15:28

Disco, interesting reading, can you fathom why the share price is still rising though ?

[jakleeds] 04/1/2016 14:25

That's a breakout, on a dire market day. Wow.

What happens here on a good day?

[jakleeds] 04/1/2016 10:18

Still rising in a terrible market, amid plenty of buying, including auto trades.

The market seems to think these are still undervalued, so I'll hold mine at least until the update later this month.

[saucepan] 01/1/2016 11:41

There are several useful snippets of info in here that relate to the above discussion:

[discodave4] 31/12/2015 13:45

Glaws,If I was in I would hold and see how it goes, but I'm not so as you say it's too hard to make a case for jumping in.If year end normalised eps is 3p to 4p (at best), then the PE is very high indeed.All the best and as I said hope I'm wrong, but sooner lose a bit of face than potentially lot of money!.Have a Happy New Year.DD

[glaws2] 31/12/2015 11:11

DD4

Your points are all well made and I would find it hard to invest now - but I have been on board for a while now.

[discodave4] 31/12/2015 11:05

Thanks Glaws,The forecast revenue for year end seems ok, I estimated about £6m for Roxy. However, previous earnings are normalised but this year they are underlying EBITDA which excludes a considerable amount of costs/expenses which is distorting comparisons with previous years. Also, H1 (to 30th June) uses 74m shares in issue to calculate eps, whereas H2 and beyond the additional 10m consideration shares for Roxy acquisition will kick in and thus further dilute eps.The Interims state: ......"the Board remains confident of meeting ITS expectations for the year".Pedantic I know but their expectations may not be what the market expects - TBH with the Interims it was clear in my mind that pre tax profit has taken a big hit, that's IMV the true measure of earnings not underlying EBITDA with about £1m of business costs/expenses added back. This £1m is about 25% of H1 gross profit. The P&L account gives a better picture IMV, NGR might have increased 22% but cost of sales increased 40%.Just not convinced enough to invest, sorry.DD

[glaws2] 31/12/2015 09:56

DD4

There is an obvious concern. Taking the published normalised (but not adjusted) EPS figures -

2014
H1 - 1.6p - H2 - 2.8p - total for year 4.4p

2015
H1 - 0.1 - forecast for year 6.5 - therefore will have to do 6.4 in H2 which seems unrealistic.

Set against this "unrealistic expectation" is the Board's statement in the Interims and repeated 6 weeks ago that they would meet market expectations.

So - how to square the circle ? I see three factors

1. Inclusion of Roxy Palace revenue and profits
2. Efficiencies in combining existing platforms with Roxy Palace (both use the same technical platform)
3. Efficiency improvements in the existing business having come to terms with the POC tax (although I have no evidence of this)

However, I am still concerned that they might not achieve expectations.

[discodave4] 30/12/2015 19:32

Saucepan,2014 H1 eps 1.63p, FY14 eps 4.4p, pre tax profit was £3.4m, underlying EBITDA was £6m (eps c 8p).2015 H1 eps 0.1p eps (-93%), FY15 eps ?, pre tax ?,underlying EBITDA forecast £5.6m (eps 6.5p = -19%). Think I'm right in saying there's another 10million shares in issue now, as per the Roxy acquisition (hence although EBITDA only drops 7%, eps drops a lot more).Not an accountant but the like-for-like comparatives show profit and earnings will be less this year IMV no matter which way you look at it. Particularly if depreciation, amortisation, share option costs and exceptional items are on a par with last year.The forecasts are from their own brokers only, no other analysts have provided any forecasts, thus it's not a consensus/market view (again all IMV and WTFDIK).Hope I'm wrong.DD

[saucepan] 30/12/2015 18:08

Cheers. I hope someone else with a better understanding of balance sheets can come in to help.

The essential point I was trying to make was that across most of the key metrics there does appear to be strong achieved and forecast growth. If TTR was not going to hit its targets, it would/should have notified the market.

A Slater PEG (*) of 0.18 looks very attractive.

* Alt-Rolling PEG, not shown in the above table.

[discodave4] 30/12/2015 16:51

Saucepan,The issue I have is earnings (profit before and after tax) this year have reduced quite a bit when compared to last year. As your data shows, norm eps last year was 4.4p. This year will be ?? 1p, 2p, 3p?, havnt a clue. But based on H1 its going to be a lot less than last year, on a like for like basis.Basing eps on underlying EBITDA, excluding losses/expenses for Italy, excluding exceptional items, amortisation and share option costs, and whatever else they choose to make the numbers look better is just covering up the fact this year has been tough and the current share price is way too high IMV.Turnover and profits have not increased year on year. Yep there have been the odd two consecutive years of growth and 2012-2014 will be no different as the "real" numbers for 2015 will only show that NGR has increased but the bottom line hasn't.DD

[saucepan] 30/12/2015 14:47

DD4

You raise some good points and it can be a nightmare trying to fully understand balance sheets.

I do, however, think there has to be real growth here. Perhaps the following helps.



What initially appealed to me was the strong turnover growth, year on year.

Margins are reported as increasing and cash is growing. ROCE is strong.

Number of employees is also on the up - also a sign of a growing business.

[discodave4] 30/12/2015 14:24

Underlying/adjusted eps last year would have been about 8p, forecast for this year is 6.5p (as it does look like their house broker is now forecasting "adjusted" eps rather than norm eps).As per 2014/2015 LFL H1 comparison the underlying earnings have reduced by about 22%, over the year it will have reduced (IMV) by about 19% (2014 8p, 2015 6.5p). This years H1 earnings after tax had reduced by about 93% when compared to last year.Last year depreciation and amortisation alone (exc. exceptional items and share option costs) was £1.5m, in my mind they are painting a rosy picture in terms of earnings growth - as its not actually growing (this year) due mainly to marketing costs/Italy and POCT. That said they have coped with POCT better than expected and Roxy will ensure a profit IMV.On the basis eps is now like comparing apples with bananas and the value/growth metrics are misleading, think I will pass on this one.All the very best though, I'm probably wrong, but at the end of the day it's my hard earned.DD

[discodave4] 29/12/2015 16:37

Thanks firtashia, will have to revisit the numbers. Every forecast I've looked at though does refer to profit before tax, not underlying EBITDA.DD