Elixirr Share Discussion Threads

[toffeeman] 15/12/2023 08:28

ACC MC $228bn
Elix MC £224m

No comparison!

[eagle eye] 14/12/2023 19:25

Short video that features Elixirr's recent acquisition Insigniam:

[masurenguy] 13/12/2023 08:13

Thanks mginvestor - I think that the Accenture comparision is a very appropriate benchmark. It also just serves to illustrate that Elix is undervalued on current matrices although clearly without the clout of the existing Accenture brand value at this stage in their development.

[tenapen] 12/12/2023 19:52

Good work Masurenguy.

[masurenguy] 12/12/2023 18:15

The thread author Priapus has not posted here, or updated the header, in over 3 years so I thought that it was an appropriate time to establish a new thread after taking an initial position here last week.

I've added a long term chart, an up-to-date list of major shareholders and have also placed two excellent pieces of analysis by Harry Davis and ariquelme into the header for reference by other shareholders and prospective investors. I view Elixirr has an outstanding long term investment

The new thread can be accessed here:

[masurenguy] 12/12/2023 18:07

This is a new thread for Elixirr.

[masurenguy] 12/12/2023 18:02

Elixirr was established in 2009 and has become an award-winning global consulting firm working with a wide range of clients across a diverse range of industries and geographies. With roots in strategy consulting, the firm’s capabilities today range from business model innovation to digital transformation. The company listed on AIM on 9 July 2020 @217p per share raising gross proceeds of £20m for the company via an oversubscribed placing of 9,216,590 new ordinary shares and £5m for the selling shareholders (partners) via a placing of 2,304,148 ordinary shares. Consequently, the company's market capitalization at the placing price on Admission was £98.1m.


Elixirr has a capital-light business model with strong momentum and currently it is the fastest growing management consultancy in the UK and the third-fastest in Europe. It has increased its market share every year since 2011 and most recently posted organic revenue growth of 18% in 2022, with an adjusted EBITDA margin of circa 30%. Sales and EBITDA have both increased by circa 250% in the 3 years since listing on AIM and the current market cap is circa £225m (Dec 2023).

Last interim results, published on 18/09/2023 were as follows:


Current share ownership, as at 12 December 2023, is as follows:

Institutional Investors
Rathbones Investment Management Ltd: 4,342,901. 9.30 %
Slater Investments Ltd: 3,438,203. 7.36 %
Gresham House Asset Management Ltd: 2,275,980. 4.87 %
Chelverton Asset Management Ltd: 922,000. 1.98 %
JPMorgan Asset Management (UK) Ltd: 778,791. 1.67 %
Sub Total: 25.18%

Inside Investors
Stephen Newton: 13,239,895. 28.36 %
Graham Busby: 1,374,800. 2.94 %
Andrew Curtis: 1,367,651. 2.93 %
Brandon Bichler: 712,191. 1.53 %
Eric Rich: 671,769. 1.44 %
Sub Total: 37.20%

Here are two excellent pieces of analysis on the company from existing private investors:

Harry Davis:

ariquelme:

A link to the preceding thread:

Company Website:





Flag counter added on 3rd March 2024

[rimau1] 11/12/2023 09:12

Net cash is growing faster than historicals so business should still be strong. Net cash post acquisition of £13.5m add back 2 acquisitions total cash consideration of £10.8m makes underlying net cash as at today of £24.3m versus £19.5m at 30th June. Nice.

[masurenguy] 11/12/2023 08:05

Acquisition of Insigniam LLC and Insigniam SAS.

Elixirr International is pleased to announce the acquisition by its US subsidiary, Elixirr, Inc. of all of the issued and outstanding membership interests of Insigniam LLC, and by Elixirr International plc, of the entire issued and outstanding shares of Insigniam SAS, for a maximum consideration payable of US$18.5m.

Acquisition highlights

-- Insigniam is a US-headquartered consultancy firm with 50+ personnel specialising in supporting clients and executives to define and navigate large scale change and transformation.
-- This is the Group's fifth acquisition since its IPO in July 2020 and third in the US, enhancing the Group's presence in this key market.
-- In the 12 months to November 2023 (unaudited), Insigniam recorded revenue of US$13.7m, normalised EBITDA of US$2.3m and normalised profit before tax of US$2.3m.
-- The initial consideration represents a multiple of 5.7x 2023 LTM EBITDA, based off November 2023 LTM financials (unaudited).
-- The transaction is immediately earnings-enhancing.
-- The Acquisition brings specialist services in transformation, leadership alignment, cultural change, and executive coaching, complementing the Group's existing service offerings.
-- In addition to an expansion of capabilities, Insigniam has deep expertise in additive industries for Elixirr, and in particular has built a reputation as market leaders within industries such as healthcare, biopharmaceuticals, life sciences, consumer and retail. Insigniam also has a significant presence and client-base in continental Europe, complementing the Group's presence in this region.
-- Insigniam's top clients include Fortune 500 companies and household brands, many of which are maintained through the leadership's long-standing relationships with the C-suite, coupled with its unique service offering.
-- During due diligence and client interviews, Insigniam was found to be rated 43% better than their competition and has an NPS score of 66 - 85% of its clients report that Insigniam provides more value than any other consulting firm. Together with Insigniam, Elixirr will be able to enhance its existing service offering to its global client base.
-- The US acquisition goodwill will be tax-deductible, resulting in an estimated tax benefit of US$2.8m-$4.3m to be realised over 15 years.

Information on Insigniam and reasons for the Acquisition

Insigniam helps companies navigate large-scale, complex change and transformation. Its offering includes leadership alignment, organisational transformation, cultural change and executive coaching, and its unique methodologies are used to break down performance barriers for C-suite teams across industries. Insigniam operates within a broadly unaddressed and in-demand white space in the market, through a dual focus on catalysing breakthrough change and achieving return on investment. This distinctive market opportunity is a key reason for the acquisition, especially when coupled with Insigniam's proven success at delivering for clients over its 35+ year history. Elixirr leadership believes that both firms' blue-chip clients stand to benefit from a joint proposition between Insigniam and Elixirr.

Insigniam was co-founded by Shideh Sedgh Bina and Nathan Owen Rosenberg, both of whom will continue to spearhead the growth of the business alongside Elixirr moving forward. Shideh and Nathan will join the Group as Elixirr partners, alongside Katerin Le Folcalvez and Jennifer Zimmer.

In the 12 months to November 2023 (unaudited), Insigniam recorded revenue of US$13.7m, normalised EBITDA of US$2.3m and normalised profit before tax of US$2.3m.

Consideration for the Acquisition

The Group acquired Insigniam for a maximum consideration payable of US$18.5m. The Consideration consists of:

- Initial consideration of US$11.6m, from Elixirr's existing cash balances;
- Initial consideration of US$1.5m to be settled through the issue in December 2023 of 258,553 Elixirr International plc Ordinary shares at a price per share of £4.60 by 15 December 2023.
- Deferred consideration of up to US$5.4m in either cash or Ordinary Shares of Elixirr with, at a minimum, 33% of the deferred consideration being satisfied in cash. This is contingent on Insigniam achieving both revenue growth and EBITDA margin targets in financial periods up to 31 December 2026.
- Based off November 2023 LTM financials (unaudited), this constitutes a Day 1 EV/EBITDA multiple of 5.7x, and a maximum EV/EBITDA multiple of 8.1x if all deferred consideration is earned over the three year period.
- The Ordinary Shares will be subject to one-year lock-in arrangements and limitations on the Ordinary Shares that each seller can sell in each of the following three years under nominee agreements.

Following the acquisition of Insigniam, Elixirr will have net cash of approximately £13.5m.

Partner Promotions

As part of its strategy to align incentives for senior personnel, Elixirr is pleased to announce that three recently promoted Partners will each be subscribing for 107,527 Ordinary Shares in the Company at a £4.65 share price. The Ordinary Shares issued to the new Partners will be subject to one-year lock-in arrangements and limitations on the Ordinary Shares that each Partner can sell in each of the following four years. In total, Elixirr will issue an additional 322,581 Ordinary Shares to promoted Partners.

Application will be made to the London Stock Exchange for the New Shares to be admitted to trading on AIM ("Admission") and it is expected that Admission will become effective at 8.00 a.m. on 15(th) December 2023. After Admission, the total number of Ordinary Shares in issue will be 47,272,811 and the total number of voting rights will therefore be 47,272,811.

[masurenguy] 07/12/2023 13:00

Very interesting company. Current institutional and inside shareholders.

Institutional Investors
Rathbones Investment Management Ltd: 4,342,901. 9.30 %
Slater Investments Ltd: 3,438,203. 7.36 %
Gresham House Asset Management Ltd: 2,275,980. 4.87 %
Chelverton Asset Management Ltd: 922,000. 1.98 %
JPMorgan Asset Management (UK) Ltd: 778,791. 1.67 %
Sub Total: 25.18%

Inside Investors
Stephen Newton: 13,239,895. 28.36 %
Graham Busby: 1,374,800. 2.94 %
Andrew Curtis: 1,367,651. 2.93 %
Brandon Bichler: 712,191. 1.53 %
Eric Rich: 671,769. 1.44 %
Sub Total: 37.20%

No position but onto my watchlist.

[simon gordon] 06/11/2023 11:41

On the iOLAP website they have twenty vacancies, business must be strong.

Thought this a decent summary:

Investors Chronicle - 7/9/23

A capital-light consultancy with excellent momentum

Boutique consultancies do not often crop up on the public market. Pay attention when they do.

by Jemma Slingo

“The concept of a structured work-life balance almost seems to be expected in today’s society – especially in a typical 9-to-5 role, but I think it should be seen as a privilege.” So says Stephen Newton, founder and chief executive of Elixirr (ELIX), a management consultancy that joined Aim three years ago. It’s a fitting message from an entrepreneur set on driving growth and trimming the fat.

Elixirr presents itself as a new breed of management consultancy. It used a recent ad campaign to lampoon the industry’s jargon, swagger and reliance on under-experienced Oxbridge graduates, and continually stresses its “challenger” credentials. While it suffers from some of its peers’ breathless fervour, describing its workforce as “creative storytellers”, “brave contrarians” and “probing observers”, its genuine promise makes this just about palatable.

Punching above its weight

With a market cap of under £250mn, Elixirr is small – even compared with specialist listed consulting peers such as Alpha Financial Markets Consulting (AFM) and XPS Pensions (XPS). However, it benefits from a similarly capital-light business model and excellent momentum. Indeed, according to Investec, Elixirr is the fastest-growing management consultancy in the UK and the third-fastest in Europe. Having increased its market share every year since 2011 and posted organic revenue growth of 18 per cent in 2022, Elixirr has momentum. With an adjusted Ebitda (earnings before interest, tax, depreciation and amortisation) margin at around 30 per cent, it is also profitable.

The company was founded in the aftermath of the financial crash, and originally focused on financial services work, which is Newton’s area of expertise. Around half of group turnover still comes from the sector, but Elixirr is rapidly diversifying, and its 200-strong client base now includes names as varied and big-ticket as Diageo, LVMH, Tesla and Burger King.

The fact that big names are on board suggests this youthful small cap is an increasingly viable alternative to the ‘Big Four’ professional services firms and strategy houses such as McKinsey, Boston Consulting Group and Bain, which together account for almost half of the market.

A lot of the people who work at Elixirr cut their teeth in this world, so they know what they’re up against. Newton was formerly a managing partner at Accenture, while chief financial officer Graham Busby worked in Accenture’s ‘global mega-deal’ department. The quality of the wider management team is also encouraging, with former BT chief executive Gavin Patterson acting as non-executive chair.

The big question is whether Elixirr can keep luring talented people away from the corporate behemoths. The group has about 500 consultants but just 21 of them are client-facing partners. As partners generate the biggest invoices and bring in most of the work, swelling their ranks will be crucial for growth.

In this sense, Elixirr has a lot in common with Keystone Law (KEYS), whose success relies on a team of 400 senior solicitors and which has seen recruitment slow down in recent months. However, while Keystone’s self-employed “principals” take a chunk of what they bill and are enticed by the promise of flexible working, Elixirr depends heavily on share-based compensation.

Management claims that partners can earn 80 per cent more at Elixirr than they could at a big rival firm because, while cash remuneration is lower, the money saved on pay packets is pumped back into the business, fuelling equity returns.

“By investing £3.2mn in the business over five years and assuming 25 per cent compound annual growth rate (CAGR) share price growth, each partner can achieve an equity return of £7.2mn,” declares Elixirr, which loans new partners £500,000 to buy shares. It concludes that over a five-year period a partner can earn £9mn (including cash remuneration) compared with £5mn at a Big Four firm.

Non-partners are also strongly equity incentivised via share options and an employee share purchase plan.

On the one hand, this approach makes a lot of sense. One of the big conundrums posed by listed people businesses is how to align the interests of partners with those of external investors. Why would partners want to return profit to shareholders if they could distribute it all among themselves? Elixirr’s focus on equity means everyone is singing from the same hymn sheet. However, its logic falls apart if shares head south and partners watch their pay prospects wither.

Share dilution is therefore something to watch for. Management stressed that the “value created from our equity incentive schemes far outweighs the potential dilutive effect” and analysts note that there has been no material dilution to the share count since April 2021. As the business keeps scaling up, however, it remains a risk.

Growing pains

Organic growth is not Elixirr’s only option, of course. It recently deployed some cash to acquire iOLAP, a US consultancy specialising in data and analytics. The deal makes strategic sense and is reminiscent of Alpha FMC’s Lionpoint purchase. Elixirr now has a sizable presence in the US, home to the world’s biggest consultancy market, and should benefit from plenty of cross-selling opportunities.

It’s not easy to scale up a business at pace however, and Alpha FMC’s recent performance spotlights some of the problems that Elixirr could face. Fears about under-utilised consultants marred Alpha FMC’s latest annual results, where the group cited industry-wide “increased levels of competition as a result of overcapacity”. Its shares have fallen by 25 per cent since the start of the year after a bumper three-year period.

Elixirr has a more varied client base than Alpha FMC, but it is not immune to market conditions. Staff costs as a percentage of revenues have risen over the past four years, and margins could suffer if work dries up. To make things worse, it is tricky to predict when or if a downturn is coming as contracts only last for four to eight weeks on average, limiting visibility and management’s capacity to plan.

The firm’s resilience has been tested before, though: in 2020, the group achieved revenue growth of 24 per cent while the consulting market as a whole shrank by 18 per cent. Elixirr’s balance sheet is also reassuringly robust. The group has a net cash position, despite several acquisitions and dividend payments, and operations have proved reliably cash-generative so far: standard payment terms require settlement of invoices within 30 days of receipt, and the majority of trade receivables are less than 31 days old.

Valuing potential

Elixirr's share price has risen by 165 per cent since its IPO, so potential investors can be forgiven for feeling as though they’ve missed the boat. Small-cap valuations are slippery at the best of times, and the lack of publicly traded consultancies – together with a dearth of analyst coverage – makes valuing Elixirr even harder. However, there does appear to be a disconnect between its growth prospects and its price/earnings (PE) multiple.

Analysis by Investec puts Elixirr on a PE ratio of 15.4 for the 2023 calendar year, despite a forecast sales CAGR for 2022-24 of 17 per cent. By contrast, Alpha FMC is expected to grow by 10 per cent but trades on a PE ratio of 18.1.

Some will argue that Elixirr is cheap because it is small and risky. It has a short track record on the public market and is not widely covered by analysts. It is also exposed to partner and client exits, and its top three clients account for about a fifth of sales.

On balance, however, the risk-reward balance looks enticing. As a capital-light sector challenger, Elixirr’s momentum could well persist for years to come. Taken together, profitable growth, a burgeoning client base and US expansion plans make for an intoxicating mixture.

[harry davis] 23/10/2023 08:18

Very harsh share price reaction isnt it rimau, the company is very good. The valuation makes more sense now

[someuwin] 06/10/2023 09:14

Nothing stock specific about yesterday's drop imo. Just the general small cap weakness. Plus, this is a very thinly traded stock which magnifies the falls (and rises).

Now almost 100% gain to get to Cavendish's recently published 998p target price. Longer term I fully expect ELIX to list in US.

[eagle eye] 05/10/2023 19:01

No significant volume today but a delayed trade of 10,877 shares went through at 473.5p.
Market makers were looking for buyers and were happy to mark the price down.
Maybe a probate case where the bank just instructs the broker to sell and they don't care what price they get.

[gopher] 05/10/2023 16:36

Does anyone know of reasons for todays drop?

[someuwin] 27/9/2023 12:26

Part of Cavendish's ELIX note last week...

"Digital + data + AI = significant growth potential

Elixirr’s ambition is to become the best digital, data, AI and strategy consultancy in the world and H1 results evidence strong progress towards this aim. H1 sales grew +23% (+14% organic), adj. EBITDA +19%, margins strong at 30%, adj. EPS +23% and net cash £20m. Revenue per partner grew by +24%, supported by a broadening range of capabilities that have been further strengthened by the acquisition of Responsum, a US-headquartered AI specialist. Elixirr also continues to attract highly experienced Partners and consultants and promote talent from within, all of which support the long-term growth prospects in a $266bn global market. Guidance for FY23E is unchanged and, at this stage, we have assumed no change to FY 2024E and FY 2025E EPS from the acquisition of Responsum. However, as Elixirr has already worked closely alongside the business on several client engagements and identified 40+ client opportunities, it is a likely source of future, potentially material, upgrades. Elixirr is valued at half peer Accenture’s valuation for twice the forecast growth, and we maintain our 998p price target (+74% upside)."


Note: Accenture (NYSE:ACN) Current valuation $206.34Bn = £165.56Bn so 620 times bigger than ELIX.

[someuwin] 26/9/2023 11:16

I missed a few of the logos from the ELIX client list I posted above. A few more big names here...



See case studies here...

[someuwin] 25/9/2023 12:32

Some of their clients...

[someuwin] 25/9/2023 10:48

Fantastic growth record. No reason it can't continue...

[someuwin] 25/9/2023 10:42

New board with better charts.

[rimau1] 18/9/2023 16:15

Can't recall any other digital consultancy's continuing to grow strongly with a positive outlook statement. Class act.

[kalai1] 18/9/2023 13:49

Bango posted its Interims for the 6 months ended 30th June 2023 this morning. Revenue was up 88% to $20.3M, in line with management expectations. ARR grew to $5.6M and this growth will accelerate as DVM contracts won in 1H23 launch. Meanwhile profit margins remain healthy with the gross profit margin remaining high at 90% in 1H23. And margins could improve even more in H2, actions to deliver $19M of the $21M of guided cost synergies are already complete and the benefit will materialize through 2H23. Guidance given was encouraging as well, the business is on track to meet consensus market expectations for the full year and increasing adjusted EBITDA margins should deliver a substantial increase in adjusted EBITDA for FY24. Valuation look reasonably attractive with forward PE ratio at 13.7x in the top third for the Software & IT Services sector, PEG ratio at 0.2x is top decile. Share price has been drifting sideways for nearly 3 years now and lacks positive momentum, but this is likely to change over the next 3 years as the group moves more lastingly into statutory profit. Certainly worth monitoring for the medium and longer run...

...from WealthOracle