Best Of The Best Share Discussion Threads

[investographer] 22/10/2020 09:30

Whilst BOTB is in the FSP process, I doubt any update will have a material impact on the share price. The last cracking AGM had no effect. Volumes are pathetic. I am very surprised that they are five months into this process & still no conclusion, especially as there are several interested parties.

[peart] 22/10/2020 09:25

Yup, in a couple of weeks we'll get an update....

[investographer] 21/10/2020 16:50

Last years six month trading update released on November 5th

[hdavies1] 21/10/2020 12:20

Where have you seen that announced?

[jeff h] 20/10/2020 13:13

Trading update at the beginning of November so not long to wait for more news.

[peart] 20/10/2020 12:31

At the announcement circa 5 weeks ago, I would guess that the company has about 30 - 33p eps in the bag already. The initial forecast for the year was 70p, so to announce after 4 months that you are ahead of forecasts would have to mean that you are up quite a bit as a third of 70 is 23.33, so why would you announce that things are up if you were at say 26 or 27, as that to me after 4 months would be "comfortably in line" to give yourself a cushion. Hence my view of probably early 30's in the bag, or at the worst very late 20's.

[peart] 20/10/2020 12:20

As ever, we're batting from the same hymn sheet ryanc106. I reckon minimum 80p - £1 eps for this year. Next year assuming the company doesn't just stop growing, after such explosive growth, we have to assume that £1.50 eps is not unreasonable. If these assumptions prove correct, which the first appears from what we know to be as good as in the bag, then in a few months this is on a fwd p/e of circa 10 which is ridiculously cheap for such growth in a web based business.

[ryanc106] 20/10/2020 09:38

FSP doesn’t matter too much imo.

I’m looking at the eps growth and it’s explosive as we know.

We know they are going to do more than the 69.8p eps forecast so if they do say 75,80p or even more which wouldn’t surprise me the current price is v cheap.

[pastybap] 20/10/2020 08:49

With hindsight, volumes are tiny (as I talk to myself here!).

[pastybap] 20/10/2020 08:35

Has something leaked here regarding the FSP?

[ryanc106] 19/10/2020 12:32

Slightly perplexed as to why anyone would want to be selling BOTB right now. I've been adding over the last week or so on the slight price weakness.
Now have 6k of these belters representing just over 16% of my portfolio... probably should stop buying now :/
They just seem such tremendous value at these levels for anyone with a half decent time horizon.
All the best

[jlstocks] 19/10/2020 10:35

Now into month five of FSP... what chance some tough negotiating going on behind the scenes?

[peart] 13/10/2020 19:25

I'm with you Ryanc106, as we often are. I think a knock out offer should be in the early 40's from what we know. In a few months time we could be on a forward EPS of circa £1.50 per share, which makes early 40's not terribly expensive for such proven growth. I also agree with Steptoes Yard with the comment that the price only increases for this company as time progresses, as such growth, once proven and baked in, comes with a price.
If management are confident of say £1.50 for next year and perhaps £2 for the year after (not unreasonable assumptions considering current growth), then why settle for a mediocre price? It has to be knock out, as even though the company may anticipate such growth or maybe higher growth they still would need to achieve it. Hence an early 40's offer might tease them out, as it were. Much less and I suspect they will stay the course, and if they can achieve such growth the share price will follow to that sort of level regardless.
We would all like that price now, and for that only time is going to tell!

[jlstocks] 13/10/2020 12:54

I’m taking it, on balance, as positive news. Ultimately, BOTB is a simple business to understand (data and brand is everything), so due diligence in terms of validating cash flows is simple. 100% of income collected upfront, zero credit risk. They have done the proof of potential (reflected in the flexing of marketing spend), and FSP is still open - so, must be at least one interested party involved. If it was/is only one, and offer is derisory, would have closed months ago. Just my thoughts, but delays can’t be due to complexity of business operations.

[steptoes yard] 13/10/2020 12:53

Hi there, I wonder who agrees with me in that I see BOTB as a network effects company and by that I mean each additional new user adds value to the existing user base. So the users themselves are creating value. Apart from the cost of prizes which the owners set the dial on (so thats gross margin in their control)their marketing costs (aside from occasional temporary spikes) over time reduces and thus their net margin rises.

By the very nature of what discreet gambling is , each new user is likely to return each time and they are likely to tell those in their own network so to speak (hence the telephone number growth rates). Eventually there comes a tipping point where this becomes the irreversible leader in its sector. Apart from the National Lottery, im not seeing much else that can compete.

On the bid, I suspect (but dont know) that they had an offer that was low or mid ball and stood their ground, ramped up the dial as serratia asserts, the counterparty returned with an improved offer which by then was outdated by the dial ramp and the founders are sitting patiently. Each day without an offer is a more expensive day for a counterparty.

[ryanc106] 13/10/2020 12:39

Thanks for the insight Serratio!

Investographer - agreed, there has to be a conclusion soon

[investographer] 13/10/2020 12:31

Interested parties have now been doing their due diligence for four months now (unless some joined the race late on).We know that several parties from different sectors are now interested.Surely there has to be a conclusion soon?

[serratia] 13/10/2020 11:54

Ryan,

I work off operating cash flow for shares I review for the simple reason cash is harder to manipulate than earnings. These guys are genuine so not implying anything here it's just the way my spread sheets are set up.
In the past I have a multiple that the market seems to ascribe to BOTB. Up until this year it's been easy to predict outcomes. It's a bit harder this time as the bid set them running on marketing so costs will be up more than in the past. Against that there is an increased revenue stream from mid week competitions so I don't know how it will pan out except well up on last year.
Excluding those changes if everything on costs was as before I'm looking at a target of £25 - £26 when the results come out as long as the market gives it the same multiple.

[ryanc106] 13/10/2020 11:30

I agree Serratia. I've done a few calcs based on implied eps outcomes at different multiples.
We already know that they are going to beat the 69.8p eps this year comfortably so my best guess is that eps will be somewhere in the region of 80-90p
If we take 80p eps for this year, and apply multiples of 30,40 & 50 we get implied Share prices of £24,£32 & £40 respectively.
If we take 90p eps for this year, and apply multiples of 30,40 & 50 we get implied Share prices of £27,£36 & £45 respectively.
I don't see any reason why a multiple of 40-50 on those eps scenarios is out of the question.
One thing that is for sure is that we are hugely undervalued at current levels.
I have been accumulating more over the last few weeks for that reason.
Looking forward to the day it starts to HEAT UP!!

[serratia] 07/10/2020 21:27

I track progress in a similar but slightly different way which has been accurate so far working down to cash generation by month. The start of this half year 'customers' were up on H2 last year. Initially they seem to be settling on a particular growth target for H1. I could see them oscillating around a particular growth rate.
Then the bid interest kicked in and they accelerated the customer grab. This peaked in July/August. For those two months I would estimate they were generating revenue of around 3* the last half average revenue/mth. This would be to show bidders what they can do to justify their price demands.
They look to have ramped up their advertising costs, perhaps through some more expensive channels. At the end of August job done so they could back down on the spend. The figures from that link show September as a 19% drop in traffic, I have 23% in my figures so broadly similar. October to yesterday is the same as September so I'm looking at H1 revenue rate at around 60% up on the previous half by the end of H1 this month overall.
My view is that it's job done showing the bidders what they can do and backed off the possibly more expensive channels in Sept/Oct.
Predicting cash flow last year was easier. This half they've added mid week games which is positive against the trend but they've added marketing costs which is a negative. As they've indicated results will be ahead of expectations The drop in traffic in Sept and from my figure October is still at a level well in excess of H2 last year re revenue generation.

[perimore] 07/10/2020 19:31

Similarweb analysis reports a ~20% drop in visits and ~30% drop from the US. But some regions up. Wonder how this will affect things.

[peart] 05/10/2020 10:58

End of January, I believe....

[ryanc106] 05/10/2020 10:50

Does anyone know when we'll get the H1 results? Slow going at the moment after the upbeat trading statement

[ryanc106] 02/10/2020 17:24

Ditto my friend! Will pay for a nice curry and a bottle of red this weekend. Might even go wild and get a tub of Haagen Dazs too ;)
Only joking... auto re-invest

[peart] 02/10/2020 06:51

Very possible Ryanc106. In the meantime another nice dividend has landed on the mat this morning! Have a good weekend.