Arena Events Share Discussion Threads

[researchmonkey] 07/2/2019 10:09

The news today that all horse racing has been cancelled because of Horse Flu is a a major concern. One of the foundation contracts of Arena is with the jockey club to supply tents, seating and bars for horse racing events. Cancellation of the Cheltenham Festival in the coming week would, I think, have a dramatic effect on the profitability.

[turbocharge] 06/2/2019 23:55

Is this comment, at the bottom of the IC article, making any valid points we should be worried about?

"You state that Cenkos has reduced its previous 'cash profit' estimate of £14m to £12.3m. I think you are referring to the mythical adjusted EBITDA and not real cash. The 'real' free cash flow for this business looks truly horrid given the necessity to continually invest fast sums of capital expenditure on potentially short life structures. To illustrate:
2017
Op cash flow £3.3m, capex £6.5m
2018
Op cash flow forecast £8.2m, capex £10.5m. Free cash flow doesn't cover the proposed dividend.
The business model looks flawed and no surprise the original AIM listing struggled to get away."

[dround87] 06/2/2019 18:34

I would read the IC article linked below. Summary is that Arena overtraded. They committed to more work than they could actually complete and so got themselves in a bit of trouble. That's the cause of the recent drop. They have all kinds of contracts in the pipeline and they're growing the business in the middle east and US. On face value of what's in the pipeline they're set to grow significantly. Invest based on your own opinion of whether they can hack it. It's a classic high risk/high return scenario. Personally I'm in with a very modest stake of 1% of my portfolio at 37p. If they show progress and manage their workload properly it should be a lucrative. The IC give it a high risk value buy rating which I think is correct based on the above. They say the drop has been overdone. I don't agree. Overtrading is a big deal which can permenantly harm a company's reputation. In this game you're working with a relatively small number of customers. Failure to deliver on a contract can easily impact the next. If they make a balls up of any of their high profile contracts like the 2019 Rugby World Cup or the 2020 Olympics that's a coffin the way I see it. The price is justified until further notice. I will buy more on the way up or stop myself out with minimal losses.

[turbocharge] 06/2/2019 14:01

Just started looking at this company, any more thoughts from knowledgeable people?

[dround87] 25/1/2019 18:25

The article hit the main IC publication today. I've been here watching for some movement before buying but definitely looking cheap.

[paleje] 21/1/2019 11:53

Blackrock behind that cluster of large sells last week then. No way of knowing if they're done but I do know some buys reporting as sells, it was happening last
week too.

Edit - out of interest this was the tail end of the the ST article:-

In my opinion, a forward PE ratio of 8 for 2019 doesn’t reflect the realistic chance of Arena delivering EPS growth well north of 25 per cent again in 2019, nor the fact that it has just secured contracts for the 2019 Rugby World Cup and the 2020 Olympics. I would also flag up that Arena has never lost a major contract either, thus de-risking its sales forecasts. This is more a case of the directors addressing the overtrading issues in the UK, which they believe they have done.

Importantly, there are no financial issues for shareholders to be concerned about. Cenkos is pencilling a closing net debt of £20.5m for 2018, and a small reduction in borrowing to £19.9m by the end of 2020 after factoring in the board declaring dividends per share of 2p in 2018, rising to 2.5p in 2019. So, with cash profits now expected to rise from £12.3m in 2018 to £15.6m in 2019, the closing net debt to cash profit multiple should fall from 1.66 times in 2018 to 1.27 times in 2019, hardly exacting given that Arena’s operating cash flow in 2018 is expected to cover the interest bill almost 10 times over. Furthermore, chief executive Greg Lawless owns 6.7m shares, or 4.43 per cent of the issued share capital, so there is an added incentive for the board to maintain a progressive dividend policy.

So, having taken the reasons for the earnings downgrade into full consideration, and considered the stability of the contracts underpinning Arena’s 2019 revenue stream and beyond, I feel the share price mark down this morning is overdone and once the dusts settles investors will realise that too. Recovery buy

[paleje] 17/1/2019 22:26

I read that ST report, hew, he makes some valid points. 30% drop seems overdone.

[hew] 17/1/2019 14:54

Made a decent turn on these after the drop last Spring and I'm expecting it again after today's fall. Agree with Simon Thompson in his view: "recovery potential on a forward PE ratio of 8 and offering a prospective dividend yield of 6.2 per cent".

[kemche] 17/1/2019 10:02

SCSW strikes again.

[oshy92] 10/10/2018 10:07

Morning. Short TV clip on Arena:

www.fmp-tv.co.uk/company/arena-events-group-investors-news-and-videos/

[davr0s] 01/10/2018 19:12

Because for every buy there is a sell - so you can't draw that conclusion. What matters is are buyers willing to buy at higher levels or sellers willing to sell lower - that's what moves price

[dround87] 01/10/2018 13:59

Nothing but buys. What's up?

[dround87] 19/9/2018 21:52

So long as they can convert their expansion into profit it looks great and it looks very much like that's the way the winds are blowing. This is a good time to get in.

[melody9999] 29/8/2018 12:33

Wow - this looks like a chunky contract. No RNS.

I was watching anyway so took an initial position.

hxxps://www.marketscreener.com/news/Arena-Events-Americas-Secures-7-Year-Seating-and-Bleacher-Contract-with-the-PGA-of-America--27173091/

[dplewis1] 15/8/2018 07:36

Good - they've reissued it for London hours.

[typo56] 14/8/2018 21:12

It's an odd time to RNS. Slips under the radar.

[pireric] 14/8/2018 20:19

Indeed. That's the key question

[typo56] 14/8/2018 19:57

I get bogged down in all the EBITDA, EBIT and adjustments. Where's the profit?

It may be earnings enhancing but it will increase the shares in issue by over 28%.
Is it EPS enhancing?

[pireric] 14/8/2018 19:31

I don't get it. Earnings enhancing fine, but that makes it sound like only a single digit enhancement which isn't that attractive (if true) given the management focus this will take up. Appreciate if anyone could flag the enhancement numbers if you see any from brokers over the next few days

[davr0s] 14/8/2018 19:21

Placing RNSs are quite usual after the close - looks ok and might kick some momentum into the share especially as it's perked up recently

[dplewis1] 14/8/2018 19:19

Very odd time for an RNS. They are certainly active with their acquisitions at the moment, good to see in different territories.

[jockthescot] 13/8/2018 11:00

Anyone got a view as to why their ROCE is so low?(From 2017 annual report)