Facilities By Adf Share Discussion Threads

[rivaldo] 11/8/2022 15:32

All the £1.3m IPO costs are reflected in the historic 2021 P&L. Cenkos have nothing in this year's P&L for any further IPO costs.

[disc0dave45] 11/8/2022 14:02

Don’t know partridge, money must have been allocated to their FY21 accounts as they’ve allowed for the IPO costs and their rights of use assets and liabilities have increased. But the placing only took place on 5th Jan (FY22) so surely they can’t do that from an accounting perspective?. Perhaps splitting some of the costs over two years?.
It makes a difference though to their adjusted EBITDA numbers. I’m thick so clearly got it all wrong :)

[partridge1948] 11/8/2022 13:40

Surely the new money was raised in 2022 and these results are for 2021 (when most of the IPO costs would be incurred?) CAD Services looks like the main trading subsidiary - curiously cannot yet see their 2021 accounts at Companies House, although group numbers were filed on 23rd June.

[rivaldo] 11/8/2022 13:33

Just featured on the BBC lunchtime news - Disney's latest quarterly streaming numbers to June beat expectations by some distance, up to 221m subscribers (from 207m), just ahead of Netflix's current total, and their shares rose sharply. Disney are of course another ADF client.

More detail here:

[disc0dave45] 11/8/2022 12:00

Just a quick one, I know premiums don’t like it, but can someone confirm if this is correct - from their balance sheet and notes for FY21 results their right of use assets (which on DAF HP terms can go on the balance sheet) has increased about £4m and lease liabilities by about £2.3m to £3m (what does it mean that CAD services hold their lease liabilities?).
So I make it that out of the £13m net raise about £6.3m to £7m has been used on vehicles / plant. Hope they’ve got some decent acquisitions lined up.
Oh last thing, why are they adjusting again for IPO costs this FY?, I’d expect circa £1.5m - £2m share based payments but surely IPO costs are done and dusted?.

[disc0dave45] 11/8/2022 10:37

Let's see how they define their order book status in their H1 next month.Just for melody, although I'm filtered, the link below describes all of the lease / HP terms with DAF and outlines "ownership". Imagine General Coach have similar contractual terms.HTTPS://www.daf.co.uk/en-gb/daf-services/financial-services/hire-purchase

[masurenguy] 11/8/2022 09:55

Yes, a couple of interesting and positive indicators from Videndums interim report.

1. The content creation market is now larger and growing faster than pre-pandemic

2. Increasing spend on original content creation for subscription TV channels, while traditional broadcasters are all maintaining existing levels of spending on original content, is driving higher demand for our equipment.

[partridge1948] 11/8/2022 09:02

Interesting debate. We will (hopefully) learn more when half year numbers come out mid September. I have recently acquired modest holding in ADF, but a long term holder of Videndum (formerly Vitec) and their results today worth a look. Not directly comparing apples with apples, but clues to what seem underlying buoyant market conditions. Always dyor.

[disc0dave45] 10/8/2022 17:52

Just for the premiums!The average cost of their fleet is £66k per vehicle, going on the average figure 200 new vehicles bought outright would be all of the money raised at IPO. However, some trailers only cost £16.5k whilst the most expensive is £180k so quite a wide range. But we know they've bought on finance terms anyhow and they've already said only a portion of the £13m (net from IPO) was used on the vehicles the rest will be used for acquisitions. But how much did they actually spend on the vehicles? What type of vehicles (gulley suckers, vans, costume trailers etc etc), what were the finance terms?. Unfortunately the DAF PACCAR finance details for various options don't give the deposit amount and some options like HP it's a mutually agreed figure.

[disc0dave45] 10/8/2022 17:13

Sorry but completely disagree, they've said that they pre book the new vehicles, so that means they should be taking orders for every vehicle, new and old irrespective of whether or they have had delivery. They've ordered 100, 76 have already been delivered and with 7 months lead time all 100 vehicles should be booked up for this year, as well as their other 500 vehicles - their order book should be 100% full as they define it not that it's almost full. If they said plant utilisation is well above target then fine, but they don't. For a business that basically hires plant they are not very open in terms of capacity / orders / utilisation, despite what they keep saying about order visibility.As I said previously I may be jumping to the wrong conclusions but for a business to clearly state one minute they have full orders for 2022 and then 6 months in to say something different doesn't give me much confidence.

[yasx] 10/8/2022 15:27

DD,

On the latter point, it would be impossible to determine to what extent additional capacity has been taken up until/unless advised of the exact numbers. As additional trailers are added, what was almost fully booked becomes less so until that new capacity is utilised. Thus, on that point Rivaldo's interpretation is fair since it would suggest some of the additional trailers are being used hence why they remain almost fully booked, otherwise they would not be at that level given the addition of further trailers.

[disc0dave45] 10/8/2022 12:05

First ramp, sorry, point (confirmed by whom I wonder!):"Whilst the distribution of productions in H1-FY22 has seen a larger number of shorter productions than in H1-FY21, resulting in additional budgeted fleet movement costs for moving equipment between productions, the Group has strong order visibility for the remainder of FY22"So additional costs are being incurred moving equipment, not additional income so not allowed for in the contract and now at their cost - that's how it reads to me anyway.Second point on their 100 new vehicles and their "visible" order book:"At IPO, we were also able to demonstrate a substantially sold-out 2022 order book and a significant order book for 2023. This continues to progress and means our new trailers, which increase our capacity, can be booked out in advance."Note - "can be booked out in advance". But for some reason their orders are not matching their capacity, why?.

[disc0dave45] 10/8/2022 10:28

Thanks yasx for your comments. I had a legitimate interest here as a long term investment but I now have some concerns as I've already posted, so will just decline for the time being. I'd hoped my concerns would have been adequately countered by holders who know more about the company, but unfortunately not in this case - that said I hope for holders sake that they do hit earnings forecasts.Newbies beware of serial rampers......DYOR then do some more.

[rivaldo] 10/8/2022 09:10

I've confirmed a couple of points which may be of interest.

Firstly, ADF provide their facilities within the film/TV studio complexes as well as on location, since these studios aren’t built or operated with all of the services which are provided by ADF. Plus the studios themselves are immense, covering a large area, so mobility is key.

Secondly, it is indeed the extra capacity and ongoing investment in such which means that ADF have been "almost" fully booked up for the year.

And to clarify Cenkos's current forecasts:

this year : £7.8m EBITDA, £3.5m adj. PAT, 4.6p EPS
next year : £10.2m EBITDA, £4.5m adj. PAT, 5.9p EPS

[yasx] 10/8/2022 01:12

I welcome the alternative view from Disco - seeking to stamp out any differing opinion is just absurd and is usually noted on stocks that end up with unjustifiably optimistic views of a Co.

As it happens, I m long ADF and have previously explained why, but, unlike EM, Disco offers a different perspective based on his analysis, not a flippant abject comment from those such as EM.

[rivaldo] 08/8/2022 12:34

More extracts for non-subscribers from that Sunday Times article FYI:

"In these bullish days the stickiest problem is a skills shortage. There is pressing demand for more trained gaffers, electricians, line producers, accountants, make-up artists and directors of photography....̶0;It’s now a sellers’ market.”

"By 2025 film and high-end TV production in the UK could be worth £7.66 billion and require nearly 21,000 more crew to meet demand, according to ScreenSkills, an industry body. As studio space shoots up, it’s a race to get more trained boots on the ground. “We know we need to match investment in talent to the investment in infrastructure,̶1; Cooper says. “It’s a fantastic opportunity to get the next generation working in the film industry because they can take their pick from a huge variety of roles."

"NBC Universal, the American entertainment company behind movies such as Minions and Despicable Me (which, like Sky, is owned by Comcast), will be a stablemate making big-bucks blockbusters. Plans are afoot for another site, spread over 30 acres with a further ten soundstages, in green belt land to the north of the current studios. The expansion is in the public consultation stage but spoken about like a done deal."

[disc0dave45] 08/8/2022 11:17

Omg, can't stop laughing.If you check out the AHT thread (post 61100) from 24 days ago you will see why I was interested in ADF, and then 4 days ago what happened.....mmmm they (ADF) issued a trading update which I have since made comments about.What's up chap?, can't you handle anything negative about your investments?.If you want to target serial rampers then you won't have to look too far on this thread eh.

[masurenguy] 08/8/2022 10:24

Hmmm.....disc0dave45 has suddenly appeared and made 16 posts in 4 days. Informed Bull and Bear contrasts are always welcome but intensive serial ramping/deramping is unlikely to establish credibility.

Riv - intersting sector background post highlighting once again the continued expansion of film and TV production capacity in the UK. ADF just have to continue to exploit that expansion in capacity into an acceleration in sales.

[rivaldo] 07/8/2022 23:31

Big article in today's Sunday Times about Britain's booming film/TV studio space and productions - headlined "Welcome to Brollywood"....



Here's just one extract (I suspect non-subscribers can't access it?):

"Welcome to Brollywood: inside Britain’s booming film and TV industry

Britain is on course to have more studio space than Los Angeles within two years. Go behind the scenes to find out why the world’s biggest movies are now made here"

"Today, alongside the Harry Potter film set tourist tours, Warner Bros Studio is where anticipated global movies — such as Greta Gerwig’s Barbie and the third Wonder Woman instalment — are in the works, or will be shortly.

“We’ve never seen anything like this boom,” says Matt Gallagher, founder of the crew website thecallsheet.co.uk. Many of the productions now filmed here are for overseas markets. “There are so many shows that are made here that cost millions to produce but barely find an audience in the UK.” There are also examples of producers “writing in a move to the UK for part of the story to take the benefit of the tax credits, the talent and also maybe freshening up the stories.” He cites the Fast & Furious and Magic Mike franchises as examples.

Last year Amazon announced in an unexpected coup that it was shifting The Lord of the Rings television series and its Middle-earth world from New Zealand to Britain. The first series, which comes out in September, cost a reported $450 million (£375 million); if they make the rest of the planned four series at Bray Studios in Berkshire, that’s potentially $1.8 billion (£1.5 billion) being spent, countless on and off-screen jobs being created, and a likely tourism boost.

While a tentpole film might take over a studio for six months, a high-end TV series will bed in for years. “It locks up the space, it locks up the talent and so you have to find another space for another television series because it’s not going to become vacant again,” Wootton says. “We realised that we needed to encourage private investment to come in . That’s why we’ve got something like 3.5 million sq ft of new studio space either under construction or in planning.” Planning consents for film studios rose by 45 per cent between 2018 and 2021, according to Knight Frank, and the UK is on track to have more studio space and filming facilities than Los Angeles within two years.

The biggest studio development in London in half a century — the £350 million Eastbrook Studios — is due to open in Dagenham next year. In recent years streaming giants have also stumped up for multimillion-pound leases at our best-known studios. Netflix has taken over Shepperton Studios and Longcross Studios in Surrey, Disney has locked up Pinewood Studios in Buckinghamshire, and Amazon signed a deal earlier this year to lease space at Shepperton for more than a decade.

This is not just a success story for the southeast. Studios are being built or expanded in Bristol, Belfast and Manchester; a £17 million studio complex, the Depot, opened in Liverpool last year; and Marv Studios, which was behind films including Kick-Ass and Kingsman, is in talks to create a £13 million studio and stunt school in Derby. Steven Knight, creator of the BBC’s Brummie gangster hit Peaky Blinders, is the force behind a new studio opening in Birmingham; he plans to make a spin-off film there next year. In Wales, at studios including Wolf and Dragon, popular shows such as Doctor Who and Industry are made.

Similarly, filming locations are spread across the UK: the next Star Wars TV series, Andor, was filmed on a beach in Cleveleys, Lancashire, and in a Dorset quarry; Harrison Ford worked on the new Indiana Jones film in Scotland; Norwich’s Sainsbury Centre art gallery became the Avengers headquarters in the Marvel films; Jurassic World Dominion was partly filmed in Black Park in Buckinghamshire. The list goes on."

[eezymunny] 07/8/2022 22:41

The ROCE collapses if vehicles are achieving good utilisation rates. We'll have to see how things pan out. I see a big danger of over-expanding the fleet, chasing growth, in a market that may not expand as they hope. Or more capacity arrives from competitors. Etc etc.

The moat seems pretty flimsy to me.

[disc0dave45] 07/8/2022 21:52

AdamNot twisting what you post at all. You've clearly stated that their ROCE is 94% which means for every £1 invested in their new fleet will return 94p in profit.....which is completely misleading folks as their return (historically) has been no where near this, last year it was 17.7% and their average is 20%.Can we move on now please, thanks.

[adamb1978] 07/8/2022 20:41

You're twisting my posts. Not sure whether deliberate or not.

As I said at least once, I also look at incremental ROCE which is naturally lower, rather than ROCE based straight off the BS given that any moment reflects the history of the company.

[disc0dave45] 07/8/2022 19:39

Thanks.Their four year average ROCE is 20% and that includes the highest in 2018 of 44%, your saying it's nearly five times that.Guess you can work it out anyway you like but IMO it's not a true representation of the businesses real profitability and capital efficiency.So for their £13.2m new investment in fleet / vehicles you expect a profit of £12.4m, wow that's some return on assets that are funded partially via debt.