32red Share Discussion Threads

[discodave4] 11/3/2016 12:29

Hello Hutch,Yes, assumed net cash next year as per this year (£3.3m). They have generated about this much for the past couple of years so apart from Roxy why would it change that much?. However, have noted that their working capital is getting squeezed and reducing a lot (£2m less than last year). Trade and other payables has more than doubled and is well exceeding their rate of increase in cash and cash equivalents.Have no position or motives for posting somewhat negatively, just trying to understand their accounts and whether or not there is value here - am really struggling though! (the bottom line earnings say no no no, EBITDA plus cash = yes, maybe!).ThanksDD

[hutch_pod] 11/3/2016 11:30

DD

On your rough cash calcs, are you presuming cashgen of circa £3.3m in 2016? Seems on the low side if 2015 generated £4.5m operating cashflow (pre working cap) and the business is growing at 35% ish.

IC previously quoted Numis at predicting 19p/share cash at 2016 y/e but i think that was before the special dividend of 3p, and also before the final results (which had higher closing cash than expected).

Cheers.

[discodave4] 11/3/2016 09:06

dave2608Didn't say they didn't pay £2m cash but it was to be paid £1m in FY15 and £1m FY16."The cash consideration is payable in instalments as follows: GBP1m on Completion; GBP0.5m six months thereafter and the remaining GBP0.5m on 31 December 2016, provided there has been no warranty or other claim in that period."DD

[dave2608] 10/3/2016 22:35

Today's interview with the CEO for those interested.

webcasting.brrmedia.co.uk/broadcast/56e0119eec37441045e3cbc4



DiscoDave4, they definitely paid £2 million in cash for Roxy Palace

www.hl.co.uk/shares/stock-market-news/company--news/32red-acquires-roxy-palace

[discodave4] 10/3/2016 20:15

dave2608,The basic eps (1.2p) and profit after tax (£964k) is what it is from the P&L account.Roxy was only £1m cash in the reported FY, which combined with the div 2.8p (not 4.7p, think the special div of 3p will be accounted for in FY16) is £3.3m which is covered by their annual cash income (just about).They have without doubt built up a decent cash pile, but based on the above (the remaining £1m for Roxy), a total year div of say 5.5p is £4.6m, so quickly cash FY16 circa £8million (cash/share say 10p).Agree when you include cash/share + basic eps of say 1.5p for FY16 then forecast PER is about 13 (very quick calcs), so doesn't look too bad - perhaps that's what I've been missing, focussing too much on the bottom line (still don't like EBITDA though).ThanksDD

[sharestobuy] 10/3/2016 20:03

Or do what I do hold what you have and if it goes down buy a load more. Either way you can't lose then

[muffster] 10/3/2016 18:43

Don't buy back. Follow the chart, it points down. Only buy when chart shows uptrend. We could see this settle around 140, then take a view

[sharestobuy] 10/3/2016 17:58

That's what MM's are suppost to do. Cause treeshates and encourage you to sell. The results were good. I'd buy back asap if I were you while it's still reasonably low

[ksharlandjiev] 10/3/2016 15:43

I've got shaken out... damn!
It was my first Tree-shake, and I couldn't hold on.
Well at least I know the name of the game now...

[shakeypremis] 10/3/2016 15:36

What an insidious bit of manipulation. Glad I decided not to sell.

[dave2608] 10/3/2016 14:44

£1.59 to buy now on the spread bet account. If only I'd of made that click :(

[dave2608] 10/3/2016 14:02

Correction to post 1221, cash balance going from 10p a share to 19p a share (In my head i was using 19p a share for the PER when I should have been using 9p) so not quite a single figure PER, more around the 15/16 mark at the current share price. However this figure could easily be upgraded. If you notice things are accelerating.

In the January trading statement:

Current Trading and Outlook - Early trading in 2016 has been strong across the Company's products with revenues for the first nineteen days in January up 27% on the corresponding period in 2015 and up 54% including contribution from Roxy Palace.


In today's final results:
Current Trading and Outlook

Trading during 2016 to date has been very strong across the Group's portfolio with like-for-like net gaming revenues for the first nine weeks of the year up 35% on the same period in 2015 and up 66% including the contribution from Roxy Palace.

So in a matter of a few weeks revenues have gone from a 27% increase to a 35% increase and gone from 54% to 66% if you include Roxy Palace.

[hutch_pod] 10/3/2016 13:53

Yes, while adjusted EPS has to be taken with caution, in this case you can take the net operating cash generated at £9.3m, take off £3.8m investing to give £5.5m / diluted shares of 84m to give 6.55p per share (pre dividends).

[sharestobuy] 10/3/2016 13:47

Agreed. I'd personally hold long term now or at leat to the end of the year

[dave2608] 10/3/2016 13:41

DD if the eps is a paltry 1.2p, equating to a profit of £964k, then how does the cash balance go from £7 million at the end of 2014 to £10.3 million at the end of 2015? That's despite paying out £2 million in cash for the acquisition of Roxy Palace.

Also tell me how they are going to pay out 4.7p a share in dividends (3.0p special and 1.7p final) if the the eps is only 1.2p. There has to be real cash to do this, so the adjusted figure makes sense.

Numis say the cash balance will rise to 19p a share by the year end. The true PER looks to be in single figures if you look at it from that standpoint.

[sharestobuy] 10/3/2016 13:09

That 34.79k buy would have been bought by the MM's. They dragged it down to purchase loads at the cheapest price possible. Always the way when positive news is released. They obviously know where this is heading

[dave2608] 10/3/2016 12:50

Unbelievable. Was about to place a spread bet on at £1.42. Hesitated, looked back about a minute later, it had gone up to £1.46. Hesitated again and in what seemed like a minute later, it went to £1.51 to buy.

Some lucky person picked up 34.79k's worth at £1.39.

[ksharlandjiev] 10/3/2016 12:42

what a mess!

[sharestobuy] 10/3/2016 12:25

This must be being manipulated by MM's as this just doesn't make sense. The company is showing a good growth rate yet the share price is down 13%. Confused. I'm holding on

[propercharlie] 10/3/2016 12:07

FWIW I sold this morning as I was not happy with the basic eps of 1.23p and diluted 1.14p versus 4.49 and 4.2p respectively last year. I know the adjusted was 6.97p. But I have learned to be wary of using adjusted EPS as the measure.

[paleje] 10/3/2016 11:34

Numis reiterated their 200p target this morning, no upgrade, they've been pretty good so probably steady as she goes for a while.

[hutch_pod] 10/3/2016 11:04

Thought the latest EPS forecast was 6.9p, so a modest beat at 6.97p?

Also IC mentioned Numis's net funds target of £9m, so £10.3m seems a decent pile.

The Ebitda growth with POCT stripped out is v impressive, and i guess is why 2016 EPS is forecast at 11.4p...

[eiresorpio] 10/3/2016 10:40

I'm the same, struggling to see improvements on the bottom line. Hence selling this morning for a 25% gain. Seems there's an emphasis on increasing marketing spend, won't that offset any increase on the revenue. Either way I needed the funds for a house purchase! Will be keeping an eye on this stock though.

[webclick99] 10/3/2016 10:18

I'm struggling with these results. Are they good, or not so good? Revenue looks good. Dividend is good. But...profit, ebitda and eps numbers - shouldn't they have been better?