Best Of The Best Share Discussion Threads

[zingerburger] 14/5/2021 17:52

fewer people bored at home and fewer on net so fewer returns for BOTB marketing

will warn as year progresses

[farnesbarnes] 14/5/2021 12:41

Available in EU or US?

[3ootuk] 14/5/2021 11:32

Android app is very smooth.

I wonder how they will notify app players of the results?
Will they do a push notification rather than email?

[investographer] 14/5/2021 10:48

Android app finally launched!Game changer Https://play.google.com/store/apps/details?id=com.botb.winyourdreamcar&gl=GB

[investographer] 14/5/2021 07:27

Would not take too much notice of Finncap- they have been hopelessly wrong thus far, always lagging behind

[peart] 13/5/2021 11:55

Yes, I'd agree with that Shanklin. Unless that is it gave it a shot in the arm as it were, to build a solid foundation more quickly. We don't know, it's perhaps made no difference whatsoever.

[shanklin] 13/5/2021 11:26

If FY21/22 was purely Covid driven we would not see increases in business forecast for the following years... ...imho

[peart] 13/5/2021 11:11

It's looking pretty clear that EPS for the year just ended is going to be 125-130p. Moving forward are we going from about 250% growth in a year to 15% for each of the following two years as Finncap estimates. Sounds unlikely but not impossible. Another possible scenario is that management are trying to manage expectations, put a base floor in that they know they can achieve easily and to under promise and over deliver. The results in June should shed some light. No business is going to grow by 250% year in year out, but a drop from that to 15%, seems rather low to me. Unless that is that 2020 was simply a fabulous Covid driven world year for BOTB.

We'll simply have to wait and see.

[shanklin] 13/5/2021 10:34

feverfan

Not that the broker estimates are based on anything more than incremental change, per your post, something more fundamental to leverage the customer database or build momentum elsewhere in the world could be very beneficial to shareholders

[solooiler] 13/5/2021 10:22

Why do you keep posting a link to that guy who was ramping this stock and saying eps this year would be more like 144p snd 300p next year

No mention of that any more is there and he was utterly wrong. Near to Zero growth in half 2 over half 1. That is why you cannot extrapolate growth. REGULATION id something to watch out for this year i believe

[montynj] 13/5/2021 09:57

https://twitter.com/stocks102/status/1392779334742642691?s=19

[feverfan] 13/5/2021 09:56

Another thing I forgot to mention which gives me confidence in mgt - have a look each week at the promotions they do. You can see they trial different pricing / prize combos before rolling them out. I seem to recall they did this with the £50k cash before making it permanent. They’ve done £100k now for specials (Christmas and easter) - could they roll this out in future? Maybe. £100k suddenly is a huge amount of money, before you factor in the car. The competition can never compete with this level of prize giveaway. And it attracts more of the casual punters who’d play £1/2 worth for a fun flutter.

On lifestyle - they trialed £25k cash recently I noticed for “one week only”. It’s currently £5/10/15k prizes and I notice the winner always seems to win £15k ie the top prize/ ticket cost. It goes back to my point about the small ticket value and the psychological aspect - 25p for £5k win or 75p for £15k win... ie if I splash 50p extra I get another £10k! This small value repeatable transaction point reminds me of Terry Smith (read his new book... whilst it’s just a compilation of his previous writings it’s still well worth the £16 or so!). Terry likes small repeatable transactions with strong brands (think your Toothpaste brand lets say Colgate. You wouldn’t bat an eyelid paying £1.05 vs £1 because well, I think it’s great for my teeth etc etc). BOTB have the same power here and not only can they use it to keep raising prices as needed, they can also use the power of the small transaction to incentivise players to spend more - genius! I’m expecting £20/25k prize to show up on lifestyle soon...

Ramblings aside... my point here is. Management are agile and try things. They’re constantly innovating with new ways to attract customers. I like that - it shows they will find new ways to create growth in the business and keep growing and broadening their customer base

[this tea tastes of chicken] 13/5/2021 09:21

Sounds like one of my posts feverfan 😎

[ryanc106] 13/5/2021 09:03

Really good post Feverfan and I agree with everything you've just said.

I reckon they have taken their foot off the gas slightly after such an unbelievable 20/21.

I think this will be a much bigger business in 2/3 years time and so I've bought more this morning.

That decision will either prove inspired or completely moronic haha.

[henryatkin] 13/5/2021 09:03

Don't try to understand panic investors (often leveraged) its like trying to understand the meaning of life. In 2018 GAW increased revenues 40% but the shares price sold off 30% that year - crazy psychology. Happens with all high growth companies even the likes of Amazon, they too sold off 30% in 2018 in spite of 30% increase in revenues.

[jurgenklopp] 13/5/2021 08:53

A weak day for the market in general plus the illiquidity of the shares gave a wonderful opportunity to have a first dip in the water for me.

I'm in at 2749.999p

GLA

;o)

[arshadte] 13/5/2021 08:49

They did not need to update the market unless it was another beat. It seems obvious to me that they wanted the share price to fall so that they could buy more shares for the next update. I expect the next update to be a beat. I would be adding at these levels not selling you will all regret it at the next update!

[farnesbarnes] 13/5/2021 08:27

Also not the greatest day for a scheduled update.

[az4hr] 13/5/2021 08:23

wow i wonder what the reaction would be if it was a profit miss crazy

[feverfan] 13/5/2021 08:04

Question for me is...have they taken their foot off the advertising gas, knowingly so, so they don’t grow too fast too quick and can build something that can grow sustainably?

OR...has the business genuinely run out of steam (until they find new revenue streams...international or new competitions seem the obvious two!)

I hope, and think it’s the primary. When you’ve already gone from what 37 to 125p EPS why try stretch that to 140p? I was expecting 140p but perhaps management are controlling the dial very conservatively and sensibly (rather than going gung ho rocket ship emoji style).


The YE trading report on 16 June will be much more interesting and tell us a bit more about where the growth will come from I suspect.

But I’m holding...at £28 it’s at 22.4x PE, and less if you strip out the cash. So valuation wise...this is not what I’d call expensive hyper growth nonsense. It’s priced very reasonably for the quality, whilst discounting for the liquidity and regulatory risks. As someone who followed fevertree for years (clue is in the name!)...go have a look at that if you want over valued / high PE growth stock. 22x current year is hardly pressing. It’s under 20x forward PE with cash stripped out at 140p EPS FY22E. I don’t think that’s expensive at all. And clearly Mr Slater doesn’t either as he doesn’t buy high PE flashy growth.

The upside for me is the finncap forecast for next year factors in some margin decline despite revenue growth. Given the operational gearing in the biz, this seems strange...they forecast net margin 26.7% in FY21, 24.9% in FY22, 23.9% in FY23. But this is a business with fixed costs...and they’re covering those costs amply...and extra revenue should be dropping straight to the bottom line. They also have pricing power...who cares about 5/10p extra? Management put some prices up recently...minimum Up GTI is £1.60 on dream car now up from £1.50..so they clearly have pricing power here and I suspect this is to reverse some of the margin impact of adding the £50k/£20k prizes with all cars. Unless BOTB further up the cash prizes again to cement their moat / drive growth, but they just did this in December time...do they really need to again? I don’t think so (look at the competition...itR17;s all proper dodgy looking sites and they don’t have anywhere near the scale BOTB do so tickets are for used range rovers at multiple pounds).

I’m also looking forward to another tasty dividend which was flagged in the last trading update with the number of times William talked about cash conversion. Given their record of paying out almost all earnings.. 125p - 40p would give you 85p at best. I don’t think it’ll be near that high but would like to see a 50p special dividend.

These margin forecasts therefore look conservative to me so I’m holding till the YE update in June to hear more on strategy and growth. I’m also waiting for some more exciting news on either international tie ups or additional revenue streams which will drive the future growth.

EDIT: The point on the Twitter thread about increased FB costs might be what finncap are forecasting as the reason for the margin decline... if revenue growth can beat their expectations though, this would alleviate the cost pressure - makes me think we won’t see a huge growth on the dividend as they will hold back cash to invest in advertising over the coming period. I can’t wait to see! :)

[melody9999] 13/5/2021 07:51

actually whatever the share price does, the statement from the company read 'no change to expectations'. business has been very good and continues to be very good.

[invisage] 13/5/2021 07:40

Everyone trying to dump BOTB but little to no liquidity........can see a big spike down as day progresses

[az4hr] 13/5/2021 07:33

who the hell is selling where an earth are you gonna find a better company

[montynj] 13/5/2021 07:29

I never trust people who just appear on this thread from nowhere and start to deramp...

[jamessmith23] 13/5/2021 07:28

Wouldn't that give a PE below the market average based on this years metrics? Think that would put it in a PE of about 12. Even if growth was reduced slightly I don't know if that makes a lot of sense.