Gb Share Discussion Threads

[robow] 11/6/2019 09:26

from todays Daily Telegraph Questor share tip: the identity verification firm is still growing strongly, although we must keep an eye on valuations It is more than two-and-a-half years since our first look at GB Group and, even after a capital gain of more than 120pc, there could still be more in the story if last week’s full-year results are any guide. The Chester-based company reported a 20pc increase in sales to £143m (with underlying growth of 11pc), a 22pc increase in (adjusted) operating profit to £32m and net debt of £66m, following the acquisition in October of Australia’s Vix Verify Global and the swoop for America’s IDology in February. Both of those deals look to neatly supplement GB Group’s strong competitive position in what is a hot market: identity data intelligence. It provides businesses (primarily of the “business-to-consumer” type) and government organisations with the information to decide who to trade with and who to block in order to prevent fraud, and does so within a compliance-friendly platform. Analysts expect further strong sales and profits progress in the year to March 2020, helped by full-year contributions from the recent Australian and American purchases, as well as good underlying progress. The fundamentals therefore seem solid, although we must still address the issue of valuation. A yield of less than 1pc is unlikely to attract income seekers, although they should bear in mind that GB Group has increased its dividend every year since 2009. The stock trades on around 35 times forecast earnings for the year to March 2020 and 34 times for the following year. This does, admittedly, price in a fair amount of good news about future growth. Should GB Group miss a beat and disappoint the shares could suffer, as they did in 2016, although this now looks like no more than the sort of speed bump that can hit young, fast-growing firms. On the other hand, if earnings momentum remains strong the shares could still offer long-term capital growth. The company’s strong competitive position and track record suggest it could continue to appeal to risk-tolerant investors. Questor says: hold Ticker: GBG Share price at close: 580p

[intelinvestor] 08/6/2019 01:34

is it correct to base the PE Ratio with the ajusted EPS when the diluted EPS is 7.60 less than half giving a PE Ratio of 76

[stig2] 07/6/2019 11:25

nigledough1 "It can be relied upon" rather than "has a history of" would be nearer the mark. MM games again.

[nigeldoug1] 06/6/2019 17:45

Don't worry it has a history of retreating after the results. It will return.

[sweenoid] 06/6/2019 16:44

That’s what I thought at £6 ;-) It will be immaterial when I sell at£7 plus though won’t it ....but it may take some time. I have max premium bonds and enough earning literally nothing in building society’s, guilts are so boring and bonds too, I use a few managed trust investments but the best and most exciting thing is always that high risk/ reward scenario, and frankly compared to many of my investments over the years ( many highly successful)this is comparatively very low risk. No more from me here now until we get news or there is something worth debating. S

[barnesian] 06/6/2019 16:15

I think best opportunity was between 1pm and 2pm this afternoon. That price may never be available again!

[gswredland] 06/6/2019 15:57

Me too tomax

[lomax99] 06/6/2019 13:42

In here, and sitting on a decent gain, but biding my time for an opportunity to top up.

[barnesian] 06/6/2019 08:31

Topped up at 585

[barnesian] 05/6/2019 16:36

Buying opportunity. Sorry for the accidental double posting. Nevertheless this is a great buying opportunity. Perhaps to double your stake and tuck it away for a year or two :) This reminds me very much of Allocate Software which was in the sweet spot of nurse rostering to save agency costs. Similar strategy, similar management approach. Eventually bought out at a big premium. GBG is in an even sweeter spot. Topping up more, even though I'm heavily invested in this share.

[barnesian] 05/6/2019 16:36

Buying opportunity.

[thefartingcommie] 05/6/2019 16:00

fwiw.... gap to fill...550-567

[sweenoid] 05/6/2019 13:33

Very pleased with the presentation and prospects, great organic growth, and major acquisitions will drive this business on. My original intent here was to trade this company, I am happy now to maintain my investment and have increased my holding today by another 10,000 odd and looking forward to the future. Toodly pip S

[hotfinance14] 05/6/2019 12:50

Barn..the auction final price will be interesting.

[wolansm] 05/6/2019 12:49

I just take my chances as they come hot

[hotfinance14] 05/6/2019 12:35

Good to see you are still here Wol. I expected a significant increase in the share price today but this has not come to fruition.

[barnesian] 05/6/2019 12:34

Very interesting WebCast including Q&A. My notes: 1. Customer synergies already coming through 2. 12 acquisitions already made. Priority now is paying down debt and investing in sales, marketing and technology before further acquisitions. 3. This is an early stage market. Anticipate 10-12% organic growth plus impact of acquisitions. 4. Growth comes 2/3rds from existing customers, 1/3rd from new customers. However strategic focus is on new customers. This is a "land grab". 5. Location, Identitiy and fraud segments will gradually merge over time into a comprehensive solution. 6. Little seasonality 7. Two main types of competition. a) Big credit driven companies who are multi-domestic. b) Smaller point solution companies. GBG can beat either with their reach and integration. Overall very impressive. They seem to be on top of their game in a fast growing high margin business. Sooner or later there will be an auction for them.

[wolansm] 05/6/2019 12:08

Still here hot but slowly slowly a few k at a time out, there is value elsewhere for example Hurricane from around 30p to current 59p, all eggs in one basket etc etc, whoooshs are getting smaller and smaller..... don't get me wrong I still luv these

[eaglebeagle] 05/6/2019 11:59

So true Barnesian. Someone should tell VISA, Mastercard, PayPal that they should buy these guys today. There whole business models are based on authentication and GBG can enable new payment rivals , or set existing payment schemes up for the next 20 years. All depends if they are independent or owned.

[barnesian] 05/6/2019 11:38

The £23m FCF is growing at a rate of at least 10% pa. With a discount rate of say 12% that leads to a value of 50xFCF. Change the assumptions a bit and you can justify any value you choose. The real value is what people are prepared to pay, including an acquirer.

[pj0077] 05/6/2019 10:51

Sorry to rain on your parade, but the re-rating has already occurred. The next change in rating will be a de-rating. Check out the valuation - it's well ahead of the fundamentals.

[pj0077] 05/6/2019 10:48

Net cash flow of £23million. What's the right valuation for that? A generous 20x multiple would be £460million. Yet the company appears to be valued at £1200million (!) A clear case of asymmetric downside risk.

[barnesian] 05/6/2019 10:33

GBG have a very healthy widely based free cash flow. It is very CAPEX light, so even after CAPEX and tax, the net cash flow is over £23m compared with dividend payout of just over £4m. It will be able to rapidly pay down debt, or finance more acquisitions and also finance a growing dividend policy. It is in a good place.