Argentex Share Discussion Threads

[eagle eye] 14/4/2023 10:50

EB110,

'The way the share price reacted yesterday, you'd think they'd issued a profits warning,'

Well, in my book they did.
Singer's new note forecasts EPS of 9.1p for FY 24, when the existing forecast was 12p.
According to the new note, eps of 11.8p won't be achieved until FY 2025, which has pushed everything a year out.

I've contacted Singer's regarding a possible error, but have had no reply.
I've now contacted Argentex, so should hear from them shortly.

[melton john] 13/4/2023 15:40

I've never bought the nonsense that is the trade info either. There are many examples in the trades where with the spread, + or - 3.5p, the market makers are able to make buys look like sells and vice versa. 10000 shares = a hundred pounds a point in the spread for the dealers. With volume like yesterday they can make a turn on a fraction of a penny spread and still have a good day.

[dr biotech] 13/4/2023 15:06

I've never bought the strong/weak holder argument. Using yesterdays trade info there were 300k more sells than buys, and these need to find a home as they are in "weak hands" etc.

I have mixed views after the results and the presentations. It seems that the revenues are taking off which is great and much needed after several years of anaemic growth - but the expansion has cost more than I'd like. It probably means that there are quite a few new hires that are currently not "washing their own face" and a few other back room staff that are underemployed at the moment. 20 or so in Amsterdam on minimal revenues must be loss making. However when (if) they get a licence to operate this could prove to be significant.

Bad debt levels are very good and risk is well managed. If they can continue to increase revenues at the same pace over the next 12 months we should be in a much better position. I think I've said a similar thing over the last few years though.

Its not expensive though - PE closer to 12 if you factor in the cash

[melton john] 13/4/2023 13:34

For the first minute and a half the price went up yeterday until a few algo trades and a "what an ugly baby kind of post" spooked a possibly small number of weak holders into selling. The sharks tasted blood and a lot changed hands to possibly buy back later. The shares are now in stronger hands imho and should consolidate around this price. I might be wrong though, I thought I was wrong once but I was mistaken. :-)

[johndoe23] 13/4/2023 13:15

Same feeling as me, though I don't hold. Bit disappointed I missed the drop to 110p the other week, but now not so sure.

[eb110] 13/4/2023 12:54

The way the share price reacted yesterday, you'd think they'd issued a profits warning, the company is growing they announced excellent revenue numbers (Q1 revenue up 34%). Lack of liquidity playing a factor IMO. Investors chronicle seem to think its a buy too from yesterday : "The shares currently trade at 14 times forward earnings for the current calendar year, which we think constitutes reasonable value for a company providing an increasingly essential financial service. Buy.
"

[doobz] 13/4/2023 12:07

What's everyone thinking currently? This board was all very bullish at breaking 140 this week, have the results put a stop to that? I couldn't really equate whether I was happy with them or not

[gopher] 13/4/2023 00:28

I think harsh on costs as they have been aggressively hiring in the recent past and this is an industry where there is a relationship between headcount and turnover. I also gain the impression they may have underinvested in technology and are playing catch up.If you look at KPIs such as turnover/profit per employee then you are going to much prefer Alpha, it looks a larger better run company. However as I said there is a price to be paid for Alpha so Argentex is the value option and there seems room for both to grow: The dividend increase may be best guide to underlying growth here at 12.5% as year end change confuses figures and agree with Taurus view on this issue.

[taursus] 12/4/2023 19:18

These guys are poor communicators. The change of year end for no valid reason has not only confused the numbers but has now come to bite them.

The performance in Q1 of the current year is not good when viewed sequentially; it is down nearly 7% on the last quarter of calendar 2022. When March was the year end, they said that Q1 of the calendar year (or Q4 or their old financial year) was the busiest. So why the sequential drop despite all the guff about new clients, new products,and overseas expansion?

The messaging is not consistent. The CEO told Paul Hill late last year that the operating margin would return to mid to late 30s% from 2024; today the CFO said in the medium term the margin should return to late 20s%/early 30s%. Where is the consistency there?

Each presentation brings news of more costs being added and the prospect of limited operating leverage. The Netherlands office now has 22 employees and turned over £2m in 2022; in the year to March 2016 Argentex turned over £7m with 19 employees and £10.6m a year later with 28 employees. Quite a difference.

[teamrilex] 12/4/2023 18:15

Presentation was very positive, as was Paul’s interview. Harshly treated by the market today imo.

[dr biotech] 12/4/2023 17:31

I've just listened to the Investor meet webcast - these are always a bit dry but some good info - they will continue to invest (ie costs aren't going to drop) but my interpretation was that the guidance could be beaten if things go well. The timing of the licenses is a little bit of an unknown.

[toffeeman] 12/4/2023 17:20

>> Paul

The market disagrees!!

[brummy_git] 12/4/2023 17:19

In this fascinating interview, CEO Harry Adams, CFO Jo Stent and COO David Christie take me through Argentex’s impressive 2022 results, strong start to 2023 & longer term growth plans.

[gopher] 12/4/2023 15:14

I don't think quarterly reporting does a company of this size any favours which is what we have in practice because of the year end change.It has been disappointing stock but this in reflected in PE ratio compared with Alpha international which I think may be heading off AIM to the main market, I remain optimistic there is some upside here if they keep their act on the road.

[disc0dave45] 12/4/2023 14:02

trident See what you meant now, thanks.

[se81] 12/4/2023 13:41

"It's no good increasing revenue if every £ of increased revenue costs more than a £."

Hmmmmmmmm.....maybe a caveat like "but we can't predict the future so we have no idea if this will be the case for AGFX until few years down the line" ;)

[qs99] 12/4/2023 13:13

forgot to invest ahead of results yesterday, glad I didn't, will wait and see where market takes it, looks like having to heavily invest to maintain growth.

Heavily weighted still in Equals, more of a platform play IMO/DYOR, and so more scaleable tech across wider TAM, next stop May AGM to see how it is faring......DYOR as ever on both

Cheers
QS99

[dr biotech] 12/4/2023 11:21

25% increase in staff will inevitably add to the cost base. As long as they can come up to speed and be profitable I think thats fine. The new hubs in the EU/Oz are going to act as a short term drag until the revenue grows.

The post period increase of 34% vs Q1 2022 looks more than useful as is the amount of cash on the balance sheet (about 20p per share).

Admittedly this hasn't been one of my better investments - average after dividends is about 115, but hopefully now they seem to have their act together.

[trident5] 12/4/2023 10:29

Revenues for the 9 mths to December 2022 were £41m and revenues for the 12 months to March 2022 were £34.5m

Pre-tax costs for those periods were £31.4m and £23.9m respectively.

It's no good increasing revenue if every £ of increased revenue costs more than a £.

[disc0dave45] 12/4/2023 10:10

Note 2 - Revenues generated in the 9 month period ended 31 December 2021 were GBP25mRev for 9 month period ended 31 December 2022 was £41m.

[trident5] 12/4/2023 10:08

My comparison was 9 months against the prior fully year, and my point stands - every £ of increased revenue cost £1.15.

Which I think explains Singer and this morning's market reaction.

[manics] 12/4/2023 10:07

This has been a right dog.Compare it to sector peers which have bagged since the pandemic. AGFX still trades 10% below the IPO price (after opening premium) years on and that's in nominal terms, never mind real, share price today is biased to the ATL and a country mile from distantly aged ATH's, with their peers posting relatively recent ATH's.Excuses include Carl Jani, change of strategy yada yada. Years on, still no jam imo.Now we're poking fun at Carl -when he's the only one that's pulled decent cash out of it!

[disc0dave45] 12/4/2023 09:54

tridentFor the equivalent 9 month period FY21, Rev was up £16m not £6.5m.

[yump] 12/4/2023 09:50

I hate it when businesses invest for the future.