Focusrite Share Discussion Threads

[hjfe] 23/10/2024 12:30

Disaster share!

[darrin1471] 28/8/2024 09:15

Higher than forecast debt is disappointing but not a significant worry going forward. We will have to wait for the results in November for the details.

[74tom] 28/8/2024 07:52

So revenue in line, but the net debt position is substantially worse than previously guided;

"As of 29 February 2024, the Group had net debt of approximately £26.0 million (31 August 2023: net debt £1.3 million), with the increase mainly attributable to the impact of working capital phasing across debtors and stock, and with one-off impacts of approximately £5 million due to investment in future technologies and recent acquisitions. This position is expected to largely unwind in the second half of FY24 as our working capital improves and to be close to net cash by the year end."

vs today

"As of 27 August 2024, the Group's net debt has improved to approximately £15 million (29 February 2024: net debt of £27.3 million). The Group has £50 million of committed credit facilities which provide strong liquidity for ongoing operations and any potential M&A activity."


Not good. It really is shocking that a business which enjoyed such a boom during 2020-22 didn't ensure it's balance sheet remained strongly net cash. If they start doing more M&A from the current position then it would put the company in significant danger IMO.

[bulltradept] 28/8/2024 07:50

Oh dear another 18% shaved off the price today..

[darrin1471] 01/8/2024 07:04

Liontrust continues to add slowly. They started the year with 12% and have just crossed 14%

[darrin1471] 19/4/2024 10:15

552,986 trade at 300p today may indicate our seller causing the recent price fall has cleared.

[darrin1471] 12/4/2024 14:44

There was an auction on L2 at 13:50. A 75,000 sell order appeared at 340p and a 74,000 buy order at 310p. Both were labeled LSE.
Average daily volume is 35k this week so TUNE may be being controlled within that range.

[rp19] 23/3/2024 18:58

Agree, nice to see some buying. Naysayers would say seems a bit of an orchestrated effort to prop up the share price after a significant fall and not huge amounts bought. Let's see where we are after the further update at the end of April.

[darrin1471] 22/3/2024 16:12

Good to see some director buying at these low levels.

Dominic Harter Managing Director of Optimal Audio Group Limited 290.000p x 3,048

Timothy Carroll Group CEO 295.260p x 3,386

Timothy Dingley Managing Director of Focusrite Audio Engineering Limited 294.89p x 3,725

Lisa Hawley, a person closely associated with Damian Hawley Group Chief Revenue Officer 299.000p x 6,655

edit: Liontrust added earlier as well

[tudes100] 20/3/2024 12:58

Unusual to see Keith Ashworth Lord selling given Buffettology fund principles. 12 mths ago TUNE was a top 10 holding, awful run since and no doubt he's having a decent number of fund redemptions given Buffettology's mediocre performance in recent yrs. I like Focusrite brands but I can't buy with the current management team who seem unable to manage one forecast to the next. Still puzzled about why the channel stock issues flagged in the March update weren't mentioned in the January update given they seem to have happened at the end of the last FY.

[darrin1471] 20/3/2024 09:13

RP19. I misread the notification. A 5% sale is 3m shares.
Nortrust still have another 3m they may want to sell.

Also a director purchase notification after yesterday's close:
CFO Sally McKone buys 6900 with a total value of £19,926.50

[rp19] 20/3/2024 08:12

Darrin1471 - Excuse my lack of knowledge, how does this work in practice? Does this leave a very large number of shares on the books of brokers 'waiting' to be sold? Or, is it more likely that another institution has bought some/all of them?

[darrin1471] 20/3/2024 07:44

Nortrust Nominees reduce from 9.97% to 4.95%
Around 3m shares.
Only just over 5m traded in TUNE since January 1st.

[74tom] 19/3/2024 08:49

Yesterday's update wasn't pretty, but do shares really deserve to be trading below mid 2017 levels when they reported revenues of £66m, adjusted EBITDA of £13m and operating profit of £9.5m?

Since then they've spent £97m on 6 acquisitions, most of which have performed well when you look at the revenue segmentation which TUNE discloses in their financial reports.

There were some huge bids in yesterday's closing auction & I suspect there will be US buyers interested at these levels. It's too cheap down here IMO.

[darrin1471] 18/3/2024 08:40

I've bought in this morning for a recovery but also a long term hold.

[blueball] 18/3/2024 08:20

Wow thats a bad fall.

[darrin1471] 18/3/2024 07:29

Trading for the year ending 31 August 2024 ("FY24") based on trading for the six months ended 29 February 2024 ("HY24").

The challenging market conditions highlighted in January's AGM statement have continued throughout February and into March. Consequently, revenues for FY24 are now anticipated to be not less than £155 million. FY24 EBITDA is expected to be in the range of £27 million to £30 million with a heavier weighting towards H2 than in FY23. Revenues for HY24 are anticipated to be not less than £75 million (HY23: revenues of £86.2 million).

HY24 performance has been impacted by similar factors across the Group's geographic regions. The Content Creation market globally continues to struggle due to a number of macroeconomic issues. Content Creation revenue in Asia have shown particular continued weakness with now 18 months of continuous decline, the largest negative impacts being in China and Japan, and no improvement is now assumed for the remainder of the year.

By product brand, Focusrite brand sales have been impacted by the load-in of stock for the transition of the Scarlett range from Generation 3 to Generation 4 at the end of FY23. Industry wide overstocking and general retail weakness is resulting in some softness and volatility in demand which in turn is affecting distributor and reseller reorders. Additionally, the launch of some higher-end Scarlett Generation 4 products, originally planned to begin shipping in April, has now been delayed due to engineering resource constraints until later into 2024 and consequently the related revenues are likely to move into the next financial year. Despite these factors, underlying registrations for Focusrite products reflect solid underlying end user demand, in-line with the prior year and significantly ahead of pre-COVID FY19 levels, albeit registrations this year include a greater proportion of the lower priced Generation 3 products than we had anticipated, reflecting cost-of-living pressures. Overall performance continues to be ahead of competitors in what is currently a very challenging market, indicating that Focusrite products continue to maintain or improve market share.

Sequential has seen sales decrease globally, particularly at the higher price points, impacted by cost-of-living issues coupled with necessary sales price increases resulting from component price rises. This is consistent with industry data for the high-end synth market. The ADAM brand has shown encouraging growth, reflecting increased market awareness, and the benefit and scale from Group-led activities, whilst Novation is trading in line with the market.

The Audio Reproduction division remains robust with strong overall performance in HY24 and with healthy pipeline projections for the full year, building on the strength of the recent acquisitions of Linea Research and the OutBoard and Timax brands.

Group gross margins remain strong and stable, and the Group continues to actively leverage synergies to optimise costs, following last year's investments, although this will not offset the impact of the sales reduction. This is expected to continue to yield benefits in the latter half of FY24 and beyond.

As of 29 February 2024, the Group had net debt of approximately £26.0 million (31 August 2023: net debt £1.3 million), with the increase mainly attributable to the impact of working capital phasing across debtors and stock, and with one-off impacts of approximately £5 million due to investment in future technologies and recent acquisitions. This position is expected to largely unwind in the second half of FY24 as our working capital improves and to be close to net cash by the year end. Our £50 million committed credit facilities provide ample liquidity for ongoing operations.

Notwithstanding the cautious outlook for the current financial year, the Group remains well-positioned for future growth, when market conditions in the Content Creation market improve, with a clear focus on increasing market share, and delivering new products as well as making targeted acquisitions. The Group looks forward to providing a more detailed trading review when it announces its half year results in late April 2024.

[rp19] 12/3/2024 19:54

Further drifting. Trading update any day now based on last year (14 March). See if they remain confident in achieving the significant second half weighting.

[martywidget] 02/3/2024 15:14

Focusrite, VAR Energi, 2023 Review, at London Value Investing Club on 22th, February 2024
Mar 1, 2024 LONDON
Company Presentations and Q&A at London Value Investing Club on 22th, February 2024.



Chapters:
0:00:00 : Intro, and discussion on hot market topics. 2023 performance and lessons.
0:29:04 : Ilias Ibnyahya presenting Focusrite plc ($TUNE.L)
1:06:06: Ildar Davletshin, CFA presenting VAR Energi ($VARRY)
1:34:40 : Q&A

[dimknaf] 02/3/2024 14:12

You can watch it on Youtube. The full event is uploaded.

The only part I would question in the valuation is that the discount rate was very high and conservative(15%), but on the other hand the terminal p/e multiple was very high at 20x, which is the opposite.

Overall, I like the company but I am not close to the industry, so I will just follow the company, and maybe buy at an even lower valuation.

[rp19] 22/2/2024 13:54

I can't make it but I would be pleased to read any feedback from those who do attend.

[dimknaf] 22/2/2024 11:14

Is anyone coming to the presentation at the London Value Investing Club today?

[tim1478] 15/2/2024 20:32

Thank you llama. Shrewd investor he is, trader he is not. Over 10 years, very successful although in some of those years underperformed the market. He marches to a different drum and a lot of the time I cannnot understand him. I hold focusrite

[llama_investor] 15/2/2024 13:24

Don't have Beddard down as a windmill-tilter Tim1478, but he has a shrewd eye for a quality company nonetheless.