Facilities By Adf Share Discussion Threads

[rivaldo] 11/1/2022 12:04

Excellent write-up hastings, cheers. Given the high visibility for 2022 and 203, it would seem likely that the terrific H1'21 performance will continue for some time to come. In which case the current share price should prove very good value indeed.

Cheers 74tom, and agreed. It's crazy that blue sky IPOs with no or few revenues attract huge followings at sky-high valuations, whereas solidly profitable companies in fast-growing sectors floated at conservative valuations often go undiscovered for some time.

[cheshire man] 11/1/2022 12:03

In good company here I see :-)

[74tom] 11/1/2022 11:26

@Rivaldo, done! And yes, interesting that we had a similar thought process for ADF vs CLX, FNX. Given this, I'd imagine we will be popular with PI's once it gets discovered. I do find it quite amazing how many AIM IPO's remain under the radar for some time post listing...

[rivaldo] 11/1/2022 10:31

Bit the bullet and topped up again.

74Tom, please could you tick the boxes in the thread header post for fundamentals and news so we can easily see the m/cap etc?

[74tom] 10/1/2022 22:42

Re. Route to £100m, P21-22 of the admission doc provide more detail. Agree that a 115p initial target would seem to make sense at this stage.

Growth strategy

The Group has ambitions to grow revenues to over £100 million. Initially, the Company intends to grow organically through further investment into revenue generating fleet equipment, however, the Group is also looking at a number of other opportunities to grow the business through inorganic means.

Organic growth
ADF plans to increase its fleet size from its current level of 514 to 600 by the end of 2022 and over 700 by the end of 2023. The Group has committed to new fleet capital expenditure orders of approximately £7.2 million and £6.6 million for 2022 and 2023, respectively. These capital expenditure commitments are for incremental additions to the fleet and not replacement units. Once the fleet size reaches 700 as planned, the Directors believe the requirement for incremental capital expenditure will significantly decrease from 2022 and 2023 levels.

The Group’s 2022 and 2023 capital expenditure orders have been placed well in advance due to the current high demand for production facilities and strained worldwide supply chains. This has led to increased lead times on production of the new fleet from ADF’s key suppliers in Canada, the UK and the Netherlands. Long lead times on supply does however, the Directors believe, mean that only those facilities companies with existing supplier relationships, such as ADF, will be able to secure supply and thus ADF is expected to maintain and even increase its market share in the UK.

Due to the growth in UK film and HETV production and the high levels of demand seen for ADF’s services, the Directors believe that there will be sufficient demand over the coming years to fully utilise a fleet size of 700 vehicles and trailers.

Inorganic growth
ADF’s inorganic growth strategy will focus on the following areas:
*
*
Competitor suppliers – the Directors estimate that ADF currently has approximately 20 to 25 per cent. of the UK TV and film facilities market, with three other main competitors comprising a further approximate 45 to 50 per cent. of the market, and the remainder of the market largely consisting of smaller sole operators. All of these competitors are private companies and the Directors believe that ADF’s access to public capital markets and share incentives following Admission will put the Company in a strong position for acquisitions, with any acquisitions increasing ADF’s market share.

Complementary services for film and TV – ADF can expand its range of services through the acquisition of other businesses servicing the UK film and TV industry. Such businesses may include those which provide storage, props, catering, training and other equipment to ADF’s own customers. The rationale of expanding ADF’s range of services will be to move ADF closer to a “one stop shop” for film and TV producers and to capitalise on cross referral of sales.
21

*
Expansion into Europe – acquisition of European film and TV production suppliers, initially focused, in Spain, France and Eastern Europe. The Directors believe that the acquisition of international businesses with existing teams and equipment will be a more productive route to gaining international market share than attempting to grow ADF’s business purely organically in overseas jurisdictions

[74tom] 10/1/2022 21:54

Ffs. Just ignore it! Why take a new company thread straight off the rails with that diatribe?

[eezymunny] 10/1/2022 17:41

Awful to see people here who ban you for saying anything even slightly negative, no matter how sensible and realistic.

Wonkers!

[masurenguy] 10/1/2022 15:13

Took an initial position in ADF today. A positive to see both Riv and Hastings here too.

[rivaldo] 10/1/2022 10:22

74tom, it's interesting that you should mention CLX and FNX in your thread header post. I bought both of those immediately they floated (I started the CLX thread), and ADF is the first new IPO I've bought since those two! We must have very similar investment tastes.

I got a decent chunk here, but was hoping that the share price would stay around 55p or so for a while to buy more. Sadly not so....c'est la vie :o))

[eezymunny] 10/1/2022 10:20

Some forecasts would help. 2,8m pbt in H1 21. Maybe they do 6m pbt for the year, 4.8m pat. Stick that on a PE of 15 and add 15m for the net cash and you get a possible market cap of £87m or 115p/share. Seems a reasonable target in the absence of other information.

Not sure how big this market may be. They say they have 30+% market share, suggests c. 70m market. Not sure how they expect to grow to 100m turnover unless they diversify. Will be a fun one to watch...

[74tom] 10/1/2022 10:00

Nice work @hastings!

[74tom] 10/1/2022 09:57

Yep, I suspect this is heading to at least £1 a share in the near term. The buying II's have negotiated very well here - very likely aided by the fact there were some insiders wanting to sell a small portion of their holdings. £13m cash, zero debt and on track for ~£5.5m profit before tax this year, surely a bargain at the current price.

[hastings] 10/1/2022 09:54

For interest I've a call lined up with management this afternoon, so will add a write up following that.

[elpirata] 10/1/2022 09:48

hence the strong start this morning on modest PI buying

[eezymunny] 07/1/2022 14:39

Yes, looks quite interesting. Especially with all the current facilities booked out for 2022 - so shouldn't be any nasty profit warnings, in the medium term at least. Insiders have held on to the majority of their holdings.

Sort of thing that might get tipped in the IC/Daily Mail/SCSW etc I reckon..

[the chairman elect] 05/1/2022 15:25

Facilities by ADF (ADF.L), has joined AIM, a provider of premium serviced production facilities to the UK film and High-end Television industry. The Group hires out its facilities to productions throughout the UK and Europe, providing its services to some of the world's largest traditional and on-demand content production companies. The Group's business has grown to a business servicing productions with its fleet of over 500 trailers and vehicles and providing its services to the largest global production companies including Netflix, Sky, BBC, ITV, Disney, HBO and Apple amongst others and has an estimated 35% market share of providing facilities to the UK HETV market. Anticipated Mkt Cap £37.75m. Capital to be raised £15m.

[74tom] 05/1/2022 11:32

Why has it listed at such a reasonable valuation?

- Difficult overall market conditions

- Selling shareholders being out negotiated by incoming II's - although it has to be highlighted that £15m was raised for the company vs £3.3m for selling shareholders.

- This setup of selling shareholders vs new II's was also present in Calnex & Fonix Mobile which has doubled since their respective IPO's

Overall I think it looks like an excellent opportunity, if they reach their goal of £100m revenue whilst maintaining operating profit of ~25% (the H121 figure) then this could be a multibagger from here.

The other positive factor is it's operating in an industry that is easy for everyone to understand :)

[74tom] 05/1/2022 11:17

This looks like a really good IPO, in value terms it appears comparable to Calnex Solutions & Fonix Mobile listed in late 2020.

Admission doc is here;



Key points;

- Market cap at 50p = £37.5m
- Net cash proceeds of £13m
- Turnover for half year to June 2021 was £11.5m
- Gross Margins 45% (pre covid they were 31-33%)
- Profit before tax of £2.8m in the 6 months to June 2021 and generated free cash flow of £1.9m. They were also profitable in 2018 (£1.2m) and 2019 (£1.6m) before Covid hit.

- Longer term they aim to grow the business to £100m in revenues
- has an estimated 35 per cent. market share of providing facilities to the UK HETV market.

In terms of listed comps, I think Zoo Digital is the closest analogue. In their recent interims they said;

"During the first half of the Company's FY22, production companies across the global entertainment industry resumed work on creating new TV series and feature films that will drive growth in H2 and beyond."

They reported revenues of $26.8m in their most recent half with gross profit of $8.5m, gross margins of 32% and a loss before tax of $1.5m. Zoo have never been as profitable as ADF...yet, they have a current market cap of £114m.

Major shareholders;

Andrew Dixon 10,593,600.00 14%
Sian Dixon 7,062,400.00 9%
Stephen Haines 10,593,600.00 14%
Julie Fletcher 7,062,400.00 9%
Marsden Proctor 1,400,000.00 2%
John Richards 2,400,000.00 3%
Business Growth Fund 12,000,000.00 16%
Ennismore Fund Management Limited 5,000,000.00 7%
Canaccord Genuity Group 5,000,000.00 7%
Killik & Co 2,341,000 3.1%

Total held by above; 63.4m / 84.1%

[rolandp] 25/6/2001 00:59

Kayak
"Fundamentals are always out of date" - they are if you accept what you are told. I dont. Almost all the companies I invest in will talk to me and answer my technical questions up to date, today. They do that. You probably didn't notice because it isn't your bag, but when I posted on Celtic, some of the data was not the same as that published. This is because as you implied things change. I don't accept what I read as today's truth, unless I have checked it out as much as possible myself.
As for the chartist view. I'm not against, its a valid model but doesn't suit me because I would go mad staring at a screen all day.
Good luck with the graphs.
Cheers
Roland

[mr ashley james] 24/6/2001 23:44

Dil,

Yes but it is so messy, you have to take their dummies out of their mouth first, then make sure that they do not throw their rattle out of the pram as they lose their tempers, then get a sawn off shottie and blast em, it makes such a mess!

Who cleans it all up?

It is better to just ignore them, or wind them up when they ask about the Relative Strength Index, Moving Average Convergence/Divergence or otherwise ram a Bollinger Band or two up where it hurts if they really step out of line!

That way there is no mess!

LOL

Ash

[dil] 24/6/2001 23:39

I agree with you Ash , bloody chartists and day traders should be shot at birth :-)

Dil

[kayak] 24/6/2001 19:00

Ashley, a chartist can see that everyone else is selling and decide that the three year business plan, revenues, profits, and press releases count for nothing if the stock is going down. Say Redstone for instance :-)