Be Heard Share Discussion Threads

[adelwire2] 09/6/2020 09:22

Top riser....

[dangersimpson2] 09/6/2020 08:49

A lot of small caps are bouncing at the moment as the market adapts to the idea that the worst is over for Covid19 restrictions, and businesses are going to be supported via grants & loans.

In this environment you want to own the most leveraged stocks as the downside is removed by government loan support and all of the upside accrues to equity, as long as the business itself is sound.

BHRD is very high up my list for seeing a big bounce. It has fallen a long way and significant leverage, but even before the current crisis there were reasons to be less concerned than normal: Bank debt was less than cash balances, convertible note holders are also significant equity holders and have little interest in crystalising a loss on their equity, those who are owed earnout liabilities have waived any rights to enforce those.

Although the business is going to be affected by Covid19 their increasing focus on cash generation and cost control puts them in a good position.

So I can easily see this bouncing to 0.5p in the short term, with more to come if we get a positive AGM statement in the next month or so.

[adelwire2] 09/6/2020 08:40

Top 10 risers..

[adelwire2] 09/6/2020 08:15

Activity...

[tradertrev] 05/6/2020 16:53

The share price targets to crystallise LTIP benefits were 2-4p

[tradertrev] 05/6/2020 16:52

It was almost exactly a year ago to the day that BHRD issued shares at 2.52p to deal with a good chunk of the earnout liabilities. They were worth that then and they've traded profitably and generated cash since.

[escapetohome] 05/6/2020 16:51

Huge value here at this price.

[escapetohome] 05/6/2020 16:48

Yup, not surprising to me, so undervalued!!

[adelwire2] 05/6/2020 16:41

Nice surprise. 10% rise

[tradertrev] 26/5/2020 15:17

Must be working our way through a seller, I just topped up at 0.2225p!
Maybe some fund manager can't be doing with a £3m mkt cap company.

[tradertrev] 20/4/2020 15:01

Would be nice to see some director buying - I own more than the CEO!

[escapetohome] 20/4/2020 09:11

Just goes to show : my strategy of looking for bombed out stocks in the good times , really paid off when the bad times came along.

Im down here, but very much not out.

Googly safely batted.

[dangersimpson2] 20/4/2020 09:07

This was the key line for me:

As part of the subordination of the Group's earnout obligations, earnout holders waived their right to sue or make claims against the Group in relation their earnout arrangements.

Confirms that earnout holders can't put them into admin, convertible bond holders also hold the equity so have little incentive to do so, and they now have net cash, so bank debt shouldn't be an issue.

Obviously not immune to Covid19 impact, but actually one of the more sanguine outlooks compared to other small cap companies.

[tradertrev] 20/4/2020 08:39

In a mid-cycle environment (I am not a short-term investor) one might expect marketing services companies to trade on 8-10x EV/EBITDA. The mid-point of that range on 2019 results would imply a share price around 2.5p including the convertible loan note as debt and excluding any improvement in net cash from ongoing results. Just my opinion, but this looks more like a ten-bagger than bust (ref post 2948).

[escapetohome] 20/4/2020 08:17

A very encouraging update in these exceptionally troubling times.

[tradertrev] 20/4/2020 06:58

That's a pretty good results statement and Covid-19 update this morning. "Consequently, we do expect to remain both profitable (adjusted EBITDA) and cash generative."
You can't go bust if you remain profitable and cash generative.
By my calculations this is trading on 2.9x 2019 EV/EBITDA (adj) and if it went to 5x the shares would be at least 1p, before taking into account any improvement in net debt/cash.

[dangersimpson2] 09/4/2020 10:49

I wouldn't normally touch a company with this debt profile but I think there are reasons that this is an exception.

In the trading update they say:

The Group had net cash as at 31 March 2020 of approximately £2.4 million and has access to a £2.0 million Revolving Credit Facility from Barclays.

You've got to assume this has the same caveat as the HY results:

Net cash (debt) excludes £3,604k of convertible loan notes issued on 28 November 2017. The notes are convertible by the holder into ordinary shares of the Company at any time between the date of issue of the notes and their redemption date. The notes are convertible at 3.5 pence per share.

And as already pointed out earnout liability is subordinated to bank debt:

Additionally, the remaining cash earnouts of £9.4 million (June 2019) have now been formally subordinated to the Group's banking facilities. By entering into the subordination arrangements, the earnout holders can only receive payments if the Group satisfies its banking covenants and has prior Bank approval.

They clearly overpaid for these acquisitions and not enough was contingent on future performance which has been poor for some of these.

The key point is that none of these stakeholders have an incentive to put them into admin. Gresham House are an equity holder as well as loan notes, and the sellers of the businesses get nothing since they are subordinated to the rest.

The bank would put them into admin if they thought they couldn't repay and they would get a better outcome in admin, but seems unlikely to me unless they run out of cash/agreed facilities.

Against this we have a business that generated OCF close to the market cap in the 6 months to 30th June 19.

With brexit + covid19 that is clearly not going to be repeated in the short term, but does show the potential if/when they trade out the other side of this.

[tradertrev] 09/4/2020 08:02

Bust or ten-bagger - place your bets!!! (or preferably do your own research)

[escapetohome] 08/4/2020 18:51

Yup nice to see it go up, even though i think everyone is under water here.

[tradertrev] 08/4/2020 18:00

Interesting trading today (not down for a change!)
I just checked back on old announcements and noted that the £9.4m earn-out liability is subordinate to the bank debt. The company can only pay off some of this liability with the bank's permission. For me, this reduces the probability of the company going bust substantially as this liability cannot be enforced.
Shares look priced for going bust to me...

[escapetohome] 12/2/2020 13:54

What that means , news must surely be on the way?

[tradertrev] 12/2/2020 09:19

Single share trade here yesterday at 16.24. Is that supposed to mean something?

[escapetohome] 25/12/2019 12:53

Oh Happy Christmas all, and I certainly hope that will BE HEARD. Im tellin’ ya.

HEE HEE,!!!!!