Facilities By Adf Share Discussion Threads

[disc0dave45] 04/11/2022 11:26

From their H1 cash flow they raised £13.5m for fleet expansion and acquisitions (which could include Glasgow office but that’s not what they said the fund raise was for), cash at 30th June £15.9m, less committed spend £13.5m gives £2.4m net cash…..cash at start of H1 was c £5m, so cash burn for existing operations in 6 months was £2.6m. Edit: correction, there was £1.5m for some carry over IPO costs, so cash burn in H1 was £1.1m.
You can’t keep spouting they have £16m cash, this will be spent in order to generate the earnings their broker has forecast, where’s any additional cash going to come from?.

[chubb24] 04/11/2022 11:22

all the best Disco, you do raise valid points and always healthy to get different opinions.

I will try and contact Neil Jones and get a couple of those points clarified.

[chubb24] 04/11/2022 10:13

Disco - are you a holder?

and yes Cenkos are NOMAD/Broker

[disc0dave45] 04/11/2022 09:48

rivaldoYou posted the Cenkos forecast 3 months ago and posted a few times after (yes not the notes).Are Cenkos the house broker?, can't remember now.So a forward PE of 11x seems fair value to me at current price and they've yet to deliver on those forecasts. Personally as posted previously I'd be surprised if they do, but hey wtfdik.Oh it's on a current PE of nearly 20x, wow that's pricey don't you think?.

[disc0dave45] 04/11/2022 09:33

Nope, net cash is £2.4m. They raised net £13m and that's already committed for new fleet (and acquisitions so they said but nearly £11.7m is for more vehicles).Their Hp and lease costs were £12.3m last FY, I can't find the terms because they haven't disclosed them so don't know how inflation has impacted on their terms (and can't recall ever mentioning it).If you do find out (doubt you will) how much the Glasgow "office" cost or will cost then please post up.

[chubb24] 04/11/2022 09:20

disco0dave45, to call you by your correct name, cash balances at the end of H1/22A were £16m. the fleet expansion is to meet increased demand. the sector in the UK is booming.

it's a valid point re the shorter duration hires but management would have to be incompetent if they do not adjust fees for their increased interest costs.

I've no idea on the cost of the Glasgow office. I may contact the CFO and get this clarified.

nice share price action today, are you going to dip your toe in Dave/reduce your short position?

[disc0dave45] 04/11/2022 08:59

They don’t have cash £16m, net cash is £2.4m. The £16m is for fleet expansion and already committed (well so they said!)
They are not recovering additional costs for (edit) shorter duration hires, they are not charging the client, thsts been my point, why aren’t they. Yes it’s simple but the business isn’t doing it, they clearly have missed that out of their contracts.
Do you know how much the Glasgow “office” cost or is costing?
Bye the way, name calling reflects badly on you not me.

[chubb24] 04/11/2022 08:46

Thanks for the update, Rivaldo - hope you had a good break.

Is there anything in the Cenkos update re increased interest rates and potential impact? Disco pants Dave keeps going on about the increased leasing costs on the back of higher interest rates, but to my mind that is a simple thing for ADF to manage by pricing that into the fee they are charging clients.

ADF are the dominant player in this space in the UK, which is clearly booming, so simple, sensible management, should lead to increased returns going forwards.

Cash of £16m = 40% of market cap, they are paying a dividend and modestly rated - all looks good to me.

I hold.

[rivaldo] 04/11/2022 08:27

Been away on family hols for nigh on three weeks, so nice to see yesterday's news and the share price now back above 50p.

Cenkos's comments in their post-results note haven't been posted before, so here's some extracts FYI - they forecast 4.6p EPS for the year about to end, and 5.9p EPS next year, with very respectable 1.4p and 1.8p dividends as well:

"Healthy Half-Year Results

Facilities by ADF have released interim results for the period ending 30 June 2022 and in-line with their prior trading update. ADF achieved record revenues in H1/22A and has continued to grow their fleet to support future growth. The current trading and outlook remain in-line with our expectations, and we leave forecasts unchanged. The valuation remains attractive with an FY23E P/E ratio of 10.1x and a normalised FCF yield of c15%."

"The second half of the year is more heavily weighted towards large productions and
is fully booked, hence providing excellent visibility and confidence of meeting the
full-year expectations of record adj EBITDA levels in FY22E. The typical lead time for booking productions remains c7 months and FY23E order book continues to fill up
strongly. Cash balances at the end of H1/22A were £16m (H1/21A: £5m), providing
dry powder for further organic or acquisitive growth. An interim dividend of 0.46p
per share has been announced and is in-line with our expectations.

 Operational Overview – ADF had a busy first half, supporting 46 productions
(compared to 39 in the whole of FY21A) including: The Crown, Sandman and Slow
Horses. Customer concentration has broadened out with Netflix now representing
c20% (FY19A-FY21A average: c25%), Disney-related companies roughly doubling
their revenue share to c18% and Amazon Prime more than trebling its revenue share
to c6%. This is a trend we thought likely to take place and one we believe will
continue as Disney and Amazon scale their content offering."

" Acquisitive Growth – The IPO has raised the Group’s profile in their industry and has naturally led to a greater number of acquisition opportunities being presented. ADF has c£16m of cash balances which could be deployed on potential targets such as national competitors to increase scale, regional operators to broaden reach and complementary service providers to make their offering more holistic."

" Valuation – We believe ADF is materially undervalued for a number of reasons. Following a successful IPO and a strong FY21A, there is currently c£16m of cash on the balance sheet that could be deployed into potential acquisitions or investment opportunities, none of which are included in our current forecasts and therefore presents significant upside potential. ADF currently trades on an FY23E P/E ratio of 10.1x; we believe they should trade closer to 15x, which is at the top end of the equipment hire peers and more in-line with streaming peers given it has superior earnings growth and higher net margins. Furthermore, the normalised discretionary FCF yield is a healthy c15%."

[disc0dave45] 04/11/2022 08:26

Four months ago they only had £2.4m, so doubt there’s much left now.
You and the premium downtickers seem to know how much it cost and how much cash they have left so why don’t you post up the numbers?.

[florence141414] 03/11/2022 21:31

Probably with all the money they have in the bank that is specifically earmarked for the expansion lol

[disc0dave45] 03/11/2022 11:45

No details on cost, are they leasing or have they acquired the office space outright?. Once again not enough detail IMO just spin.Net cash was only £2.4m and with increased Capex already on the books how is this "expansion" going to be funded?.

[masurenguy] 03/11/2022 07:07

ADF expands presence in emerging Scottish Film and TV market

Facilities by ADF announces the opening of its new office in Glasgow, set in Pioneer Film Studios' campus, Scotland's newest and largest film studio.

Pioneer Film Studios stands at over 1.2m square feet, providing studio space, workshop areas, backlot/yards, and training facilities which includes editing suites and production office space. The facility is in the heart of Glasgow enabling ADF to provide local support in the region and will provide the Group with direct access to the range of productions scheduled to be filmed at Pioneer.

ADF opened the new office in response to the recent growth in the film and HETV market in Scotland which has witnessed extensive studio space expansion and inward investment as global productions increasingly choose the country's natural landscape and strong creative sector. Amazon recently invested £50m in Pyramids Studios, which hosted the likes of Trainspotting T2, and in March 2022, Screen Scotland reported that the country's film and television sector could be worth £1bn by 2030. The new base will not only strengthen the Group's regional presence alongside global production companies, with the support of Pioneer Films Studio. ADF will also be able to capitalise on the growing activity in one of the largest emerging markets within the UK Film and TV industry.

[masurenguy] 19/10/2022 00:24

The picture is looking healthier at Netflix

Netflix expects to add 4.5m subscribers over the coming months as the world’s largest streaming service incorporates advertising in an effort to drive growth. The entertainment platform’s paying audience rose by 2.41 million in the last quarter, drawing a line under two consecutive quarters of contraction. “After a challenging first half, we believe we’re on a path to reaccelerate growth,” Netflix said, after finishing September with a record base of 223.1m paying subscribers.

Complete article:

[disc0dave45] 11/10/2022 15:50

Nice, providing you trust the management!.

[florence141414] 11/10/2022 12:36

I agree Disc0.

You can’t base the valuation on cash that won’t be there in two years time. The valuation should be based on what profits the fleet that will have been accumulated with that cash will be making once it’s fully assembled.

They are already operationally profitable with the current fleet (but not cash flow profitable due to capex spend). If the demand is as they claim, then they should make more with an enlarged fleet. How much more is anyone’s guess really but subject to the demand materialising, 4m seems like a low end estimate.

So in two years time you might have a debt free business, with a bit of cash left in the bank, making 4m a year, with a fleet that can’t be easily or cheaply replicated by someone else entering the space.

I’d say the risk reward is good value at 33m market cap.

[disc0dave45] 08/10/2022 16:04

From their H1 results:

“The Group has committed to new fleet capital expenditure orders of c.GBP7.8 million and GBP8.2 million for 2022 and 2023, respectively. Final capex for these years will be ahead of this with ad-hoc purchases and the fitout costs of some vehicles and trailers.”

So unless my maths is wrong 7.8 + 8.2 is equals to £16m, and unless I’m mistaken “ahead” means more than, so they will be eroding cash and some just on vehicles. Then there’s the fit out costs for the new premises as well as additional Capex on their new operational hub.

Don’t even know where you got £16m cash from anyway. They raised £13.2m net and at H1 net cash was only £2.4m.

[disc0dave45] 08/10/2022 14:20

PmslYou posted complete garbage so I corrected you. Then because you don't like to be challenged you call me a troll.Will refrain from replying by name calling as I'm better than that!.

[masurenguy] 08/10/2022 13:40

Doesn't take long for one of the trolls to appear with their usual delusory claims.

[disc0dave45] 08/10/2022 12:44

Very misleading and incorrect statement :- “with a current cash balance of circa £16m, even after the investment in additional vehicles”.
The £16m is to be spent on fleet, of which £11.7m spend is still to come. What cash balance then?.

[aringadingding] 08/10/2022 11:24

Masurenguy, thank you. Basic question but just to confirm that eps is after depreciation costs? These trailers don't last forever so while i hold and like this company i am keen to move from looking at ebitda to eps.

[masurenguy] 08/10/2022 10:54

The forward potential here is still looking strong with a current cash balance of circa £16m, even after the investment in additional vehicles, with the fleet expected to reach 600 by the end of this year.
"The overall landscape has not changed, our order book is now filled for 2022, market dynamics have remained strong, and we are confident that we shall see continued success going forward into the second half and beyond." Marsden Proctor, CEO, 13 September.

Cenkos are currently forecasting eps of 4.6p this year, rising to to 5.9p next year. On that basis the forward PE is only a modest 7.5.

[disc0dave45] 06/10/2022 14:01

Screenskills were predicting £7.6bn by 2025 earlier this year when sterling was 12%-15% higher, so as you say not new news. Just bored journo's. Its not just the film and TV industry that will benefit from weak sterling either.

[clanger66] 04/10/2022 14:33

https://amp.theguardian.com/business/2022/oct/04/how-pound-slump-could-spark-3bn-film-and-tv-investment-boomNot really new news, but interesting none the less.