Best Of The Best Share Discussion Threads

[pireric] 15/1/2023 12:20

Here was the maths

[pireric] 14/1/2023 20:29

That's perhaps a fair point. I checked my maths and at this market capitalisation, the enterprise value of the business would drop to £22.6m on Finncap forecasts in April, and £17.7m at the end of April next year, versus Free cash flow of £5.1m for the year to April this year and £5.4m next year. That is reliant on getting back to 3% revenue growth in 2024. Web traffic has now stabilised over the last 8 months

That makes the EV/FCF yield 23% for 3 months time, and 30% next year.

Large margin of safety.

Eric

[feverfan] 14/1/2023 13:28

I interpreted that as calendar year - feels like a no go if they need till April! One of the lines clearly said they’d provide an update in late January update so I’m looking forward to hearing the detail then!

Given GIL took 30% and won’t be able to easily sell that on - I think they’re forced into a deal which means one will be struck. I don’t think they would have taken said stake if there wasn’t a rough consensus on the principles of any deal at first.

And agree re valuation upside. The stock looks reasonably priced to me on current forecasts without any international growth baked in. That’s a bonus. Not forgetting that it’s not just an international deal - GIL are also going to do non-exclusive UK marketing on a revenue share basis so it’s more revenue for them and mostly profit as the more tickets they sell the more money they make given the operational gearing of their business model (albeit we know how painful that is when it goes the other way!!)

[pireric] 14/1/2023 13:07

It's not strictly clear if end of the year refers to their financial year or calendar year.

In any case, at this valuation I think that is probably upside optionally.

Eric

[rambutan2] 14/1/2023 04:43

I suppose it's also worth pondering on what might happen if the two sides don't finalise agreements. To my mind, the "racy" Teddy Sagi and the straight batting BOTB management, are not obvious bedfellows.

"Further to the announcements in September regarding the signing of a Letter of Intent with Globe Invest Limited (GIL) and their subsequent strategic investment, information sharing and negotiations are underway regarding both the Licensing and Distribution Agreement and the Marketing and Collaboration Agreement. The Company hopes to finalise these agreements before the end of the year."

[...]

[pireric] 13/1/2023 11:48

I don't disagree, and think for the first time in a while that this is looking very interesting again. It is possible to credibly think it can be 50-75% higher on a 1 year view without making huge assumptions. Very low starting multiple always helps.

I'd just correct the starting market cap in your equation to be £31m now post buyback, which is even more compelling

I've been buying

Eric

[feverfan] 13/1/2023 09:54

The international thing is tricky. As do they start to open themselves up to rules and regulations in foreign countries which is then a minefield. Or is that where GIL comes in with their knowledge and expertise…perhaps? The additional expertise they have said they will hire will come at a cost - I trust they won’t go nuts as they’re an extremely lean operation and have barely grown their headcount at all over the years…but that combined with the additional growth aspirations does make me think they’ll need to hold more than £2m (the last flagged excess capital threshold). I despise reading predictions, they’re always wrong! So in the spirit of being wrong and ignoring my own wisdom…IF they can deliver in line and they raise that to £3m, there’s say £6m of cash to distribute based on the £9m net cash at April 23 YE per forecast . That’s a 70p ish dividend. Or my preference…another tender…£6m say at £6 again, 1m shares bought back which out of the 8.4m is just shy of 12% of the company. That would make current April 2024 FCF forecast £5.4m x 100/88 = £6.14m. Against a MCAP of £35m that’s 17.5% FCF yield or 5.7x fFCF, that’s before any upgrades from the international growth. Which I would expect there would be as otherwise, why are they doing it?

On the basis of the above I’ve just had a cheeky top up at 380p. PIs have been burnt on this and unwilling to return but there has to come a point where the bargain hunters come in, if they can show the ship has stabilised and is back to steady growth. Simple view of 10x fFCF would be well within historical norms and reasonable for a low capital cash generative business growing steadily…so a MCAP around £62m, on 7.4m shares (post tender) giving share price target £8.40…if they weren’t doing international growth…but let’s dream intl gives them a 5% FCF boost base case and 10% FCF boost stretch, £65m-£68m ish MCAP with a bit of rounding…£8.80 - £9.20 target. And repeat using the £6m odd FCF…either a special or a tender to further reduce the share count.

Now let’s see all of these forecasts go wrong !!! :)

I still think long term this is too small to be listed and GIL and directors plus Stancroft Trust will take it private for a nice return.

[feverfan] 04/1/2023 18:44

Details being released in the H1 trading update due “late Jan”. The last update suggested they were hoping to sign them by the end of the year so hopefully all on track. Hoping for a low risk boring arrangement - the directors strike me as conservative / low risk appetite. If I had to guess (or hope!) it would be some form of licence fee stream with the capital and running costs (risk) of any global comps sitting with GIL. I hope the deal is structured so the risk sits with GIL… (reputational, financial, perhaps some appetite to take on operational but tbc if they’d run the competitions for GIL as an outsourced type arrangement or the like). Just my two pence.

[chinahere] 04/1/2023 17:55

Are there any details about how GIL generated international revenue will come to BOTB?

[jackson83] 04/1/2023 14:21

BUYING Opportunity ..

looking like the seller is done onwards and up ... big news soon folks

[steveberyl] 25/11/2022 10:31

Tern holders, to a man, are completely ignorant or plain NAIVE, to say Sisto does not increase SHAREHOLDER VALUE.

SISTO most certainly DOES INCREASE SHAREHOLDER VALUE.

SISTO increases shareholder value in every Investee, the only share that SISTO neglects is, TERN.

But there can be no denying, SISTO DELIVERS and gets plaudits from the Investee shareholders, as do ALL TERN BOARD OF DIRECTORS. ALL DO A GREAT JOB FOR INVESTEES.

FINANCIAL BURDEN AND ALL RISKS TAKEN BY TERN HOLDERS, INVESTEES HAVE NO FINANCIAL WORRIES