Ffi Share Discussion Threads

[dave4545] 24/9/2018 14:38

33.08-33.64p

You can buy again online, perhaps somebody sold some not showing yet, somebody took advantage to get 39.5k

[mister md] 24/9/2018 12:24

hopefully a swift move to 35p+ and the chart will start to look nice too

[dave4545] 24/9/2018 12:21

Yep, those that wanted a quick buck last week are out and might not be easy buying back cheaper because I'm not even getting a quote at 33.8p offer now for a small 2500

NMS is 1500 so good luck getting any size until mm's up the offer

[greenroom78] 24/9/2018 12:17

Looking good now if sellers stay away. Bit of resistance around 35/36p from that previous spike up but then chart fairly clear above there.

[dave4545] 24/9/2018 11:41

No offer online for even 5000 shares at 33p

[dave4545] 24/9/2018 10:49

33.95p offer now

Obviously delayed buys to show but your guess is as good as mine when they show them, they can delay them until tomorrow if they wish

[mister md] 24/9/2018 10:49

no doubt waiting to see if some t-traders are left to close out, then they'll probably move it higher again - still think its in recovery mode now

[dave4545] 24/9/2018 08:22

morning

Guessing there's more delayed buys to show in 1-2 hours as buy price is rising online.

Terrible online spread 31.1-32.85p

[pireric] 24/9/2018 02:47

Yes I am making that assumption as I pointed out in post 478 - I try to be transparent :0)! 3 to 5x EBITDA, however, looks sensible to me for the acqs. The sorts of multiples the likes of Keywords have been good at integrating. They are below public market multiples which always helps and reflects the fragmented private market, many of which are family firms

You really can't judge the acquired company performance without them being part of the group for at least a year and with most not having a full trading year of operation. Some have also rapidly scaled their capacity, which ultimately hits costs, but is essentially up front investment

As I say, at this valuation more than comfortable. There are quite a few things I'm not a fan off with the business (as I have with a lot of businesses I look at). However, if I ruled out stocks on the basis of finding these I'd probably never buy anything!! The valuation here provides a substantial margin of safety and I think even very unrealistically bearish scenarios are priced into the stock. If this was still trading at 13-14x pe then that's an entirely different equation as it probably wouldn't be priced in

Equally, even heavily discount my analysis and you'd get to the CC business valued on 3x ebit. As I say, I think it's worth 10x+

As with all things, time will tell! No mega rush for me but would like to think that a return to 50p for starters would not even be much of a stretch

[eentweedrie] 23/9/2018 19:50

There are a few unknowns granted but there is more that is positive than neg now at this price imo.

[stemis] 23/9/2018 17:16

Ok, I understand your analysis now. You're assuming, of course, that the market values the acquisitions at the price (including earn outs) that the company paid for them. There's an awful lot in there for the brokerage side, for example, and it's fair to say that hasn't made the most auspicious start under FFI's ownership...

[pireric] 23/9/2018 14:08

You're comparing apples to oranges as many of the acquisitions were not in the base periods. In addition, many would have incurred initial integration costs. I posted the analysis a few pages back (post 334) in here in a massive image. If you strip out the total consideration paid (and multiples look fair), you get to the c. 1x number

[stemis] 23/9/2018 13:31

if you run the numbers, the completion contracts business is consequently valued on ~1x EBIT.

I don't think that's true but I'm willing to be convinced. At 32p current market cap is $66.2m. The completion contracts business made an EBIT of $13.7m. You must be valuing all the other businesses at $52.5m. On what basis? Combined they made a total EBIT of $2.2m...

[pireric] 23/9/2018 13:11

I held a paid call with an industry veteran last week before buying in. Essentially to get myself into a position where I was comfortable with the industry positioning of the company. It's hardly a household brand after all, but at this valuation, you end up second guessing yourself.

One of the more underappreciated aspects, IMO, is the substantial data FFI has on historic films made before the advent of the internet. Vast archives of paper documents on films dating back to the 1950s. I understand this carries substantial intangible value as you essentially not only have the finance data but significant production data, letters between producers, scripts etc.

Couple of public links if of interest:

[dave4545] 22/9/2018 08:48

I remember reading Luce results and thinking they were pretty poor yet the price having touched a low of perhaps sub 35p is now 54p

Certainly feel we will have a correction here soon. Like I said before there's a lot of traders who lurk on the coat tails of popular twitter investors and they all piled in on the momentum most at 30.3p and most took a quick profit which has stalled the bounce. Every dip on Friday to 32p offer was met with strong buying.

[pireric] 22/9/2018 06:50

Thought i'd made it clear but hey-ho :0)!

In short, if you think the completion contracts business, which has been rolling along for a very long time, will be around for just 1 more year, then either the market is saying at the moment, implicitly i) the businesses they bought on 3-5x EBITDA were bought too expensively (makes no sense + lots of contingent consid), or ii) the completion contracts business will die within one year (makes no sense).

Quite frankly, it's as simple as that. Obviously, I have no evidence for this following statement, but I'd be pretty confident, if FFI wanted to sell the CC biz (which they obviously wouldn't, it's the core of their biz), then they could sell it at least at a 10x EBIT multiple. Heck, let's not get into what they essentially IPO'd it on....substantially higher.

(NB: Arrival was a bonded film, IMDB Pro has some rolling disclosure on which are bonded by FFI)

Next Sunday (not 2moro) I'll try to mock a DCF for the CC biz and post the result.

[tsmith2] 21/9/2018 23:20

again, heavy lifting reported after close of play. Volume is encouraging

[tsmith2] 21/9/2018 23:15

this is a complete different beast to luceco and safestyle..slightly bemused by the comparison.Wouldn't invest in either of the two at all.This is profitable, highly cashflow generative, has stacks of cash on balance sheet..and ludicrously low valuation

[pireric] 21/9/2018 22:09

Indeed, SteMis, though if you run the numbers, the completion contracts business is consequently valued on ~1x EBIT. That's the (very extreme) valuation anomaly on offer at the headline 4.5x PE. When you look at how the likes of Luceco, Safestyle etc, which are far lower quality businesses in significantly more competitive markets have started to recover from similarly dramatic declines (even though their recovery is still quite nascent), the opportunity here becomes clearer IMO. Technically, the consideration is also contingent and so underperformance always negated ofc and so not quite apples to apples

[ronwilkes123] 21/9/2018 18:24

The mms have it in for you dave

[dave4545] 21/9/2018 17:32

Looks like yesterdays largest trades are showing now including some decent buys at 36p from the morning.

People happy to buy size at 36p and now it's sub 33p

[ronwilkes123] 21/9/2018 17:30

Come on mate - only positives - you know how these work

[stemis] 21/9/2018 16:53

Although there is $19.4m net cash, there is also $18.8m of deferred consideration and earn out 'payable' in the balance sheet.

[ronwilkes123] 21/9/2018 15:59

Twitter is dangerous when it comes to shares imo