Gb Share Discussion Threads

[hotfinance14] 13/12/2021 08:20

What is your logic there ?

[nigeldoug1] 10/12/2021 12:46

Not long before the Americans start snapping up these shares

[wad collector] 09/12/2021 19:38

IC article last week suggesting high price paid for Accuant , with a lack of immediate earnings boost has killed off any immediate share price recovery. HOLD. fwiw

[hotfinance14] 07/12/2021 08:14

Our next trading statement is in April 2022.

[nigeldoug1] 06/12/2021 19:03

I agree despite positive broker notes and 1000p estimates trading news is the really important factor. The acquisition was a big deal and the first under new management.

[hotfinance14] 06/12/2021 16:11

I agree. I can only see the nest trading update possibly giving a good share price rise.

[shardview] 06/12/2021 14:35

The drop since results back to the placing price is disappointing. Difficult to see where a change of momentum comes from now.

[gswredland] 01/12/2021 12:21

Thanks hot

[hotfinance14] 01/12/2021 08:52

The Times has tipped GBG as a buy.

[hotfinance14] 30/11/2021 19:10

Good to see the director buys today.

[hotfinance14] 30/11/2021 07:37

Superb results as expected.Some great new customers:

Location

New customers to the Group included Nestle UK in the foods sector, GoPro and Garmin in technology retail and Harper Collins in publishing, demonstrating the breadth of the market opportunity

Identity

New customers to the Group included Welcome Technologies, Meijer, Dabble Sports, Cuna Mutual and Zilch Technologies.

Fraud Prevention

New contracts were also secured from a leading Vietnamese consumer finance company, EON and ATOS in Europe and a large financial services business in Indonesia.

[hotfinance14] 30/11/2021 06:54

Barclays upgraded GB Group to 'overweight' from 'equalweight' on Monday, hiking the price target to 1,000.0p from 865.0p following the company’s acquisition of US identity identification business Acuant.

"Following the deal, we have connected with competitors, customers and channel partners in an effort to contextualise the strategic rationale presented and have come away reassured," the bank said.

"The deal transitions GBG from low- to high-teens organic earnings growth, increases the likelihood of incremental margin expansion from operational leverage and improves the group's capability to enter new markets."

Barclays said this deserves a re-rating not the de-rating that has occurred. It added that the new price target implies more than 30% upside as it upgraded its outer year estimates following the acquisition.

"In our upside case we see organic earnings growth reaching the mid-20s per annum," it said.

[hotfinance14] 24/11/2021 09:32

Eddison Note :

hxxps://www.edisongroup.com/publication/accelerating-growth-with-acuant-acquisition/30236

[hotfinance14] 24/11/2021 07:46

Analyst at Canaccord Genuity lowered their target price on software business GB Group from 1,000.0p to 950.0p on Tuesday following the firm's acquisition of Acuant last week.

Canaccord stated it was "in two minds" about the £547.0m acquisition from private equity, noting that the deal strengthened GB's product stack in the customer acquisition/onboarding identity verification space and added advanced platform functionality.

However, the analysts also said no matter how it looks at it, the 12.7x last twelve months sales and 63x LTM adjusted underlying earnings multiples were "very high", particularly as they sit well above the roughly 8x and 18x, respectively, paid for IDology two and a half years ago.

The Canadian bank, which reiterated its 'buy' rating on the stock, said its new estimates implied mid-single-digit earnings per share dilution, and that it believes investors will probably need "a bit of time to digest this deal".

Canaccord raised its estimates to incorporate Acuant, adding in an estimated low-20s percentage operating margin, the guided £5.0m incremental revenue and cost synergies as well as £155.0m in new debt and £387.0m in fresh equity.

"Overall, this leads us to raise our sales forecasts by 8% to 24%, while adjusted EPS are diluted by up to 6% due to the ~28% increase in share count."

[stig2] 22/11/2021 23:06

I agree hot
Alphabeta4 as far as I'm concerned has the right of it. At the end of the day the management is looking to strengthen the company rather than keeping us happy. The figures could be better but as usual us small investors do not get to know whats going on (not complaining thats just how it is). That said GBG has tended to under project and over deliver in the past and I think this may well turn out to be the same here. Well time will tell as usual.

[hotfinance14] 22/11/2021 08:48

Gredt posts Alpha.

[alphabeta4] 22/11/2021 08:23

I don't plan to do this to death but I've already flagged I thought the multiple paid was expensive, just that £7.25 was also a bit silly as it valued the acquisition around a pe of 9. FWIW I expect the price here to settle around £8 in the short term.
If you look at the revenue breakdown for the acquired business you basically have one flat revenue division and a rapidly growing subscription business that within a couple of years will take the organic revenue to 25%, hence GBG referring to 'medium term revenue in excess of 25%'. The gearing is a bit harder to work out but clearly even if this is 1.2x then Acuant will be on over 30% organic Eps, rates well in excess of GBG. Seeing that the multiple paid with synergies is similar to GBG forward eps that will then constitute something that with hindsight will look an intelligent deal for shareholders.
Sorry that this will sound like stating the obvious but what I'm driving at is I can see how management view this as driving long-term shareholder value, if it was just about the short-term share price then no companies would ever do a placing at a discount.

[marktime1231] 21/11/2021 15:43

So this is a bargain if you wait the years for earnings to rise to make the price multiple adjust? Stark contrast to the post observing £540M is a steep price to pay for add profit of £5M (£10M even) in two years time.

[alphabeta4] 21/11/2021 13:11

Note it's not £5m, that's the synergies. The op profit is $8.4m so the £5m is on top.

A case can be made that combined they're paying around pe47 which is around GBG'S forward for a business that looks on a stronger growth profile. That does sort of make sense if the combined business is then on a stronger growth profile. Having said that it does feel they are overpaying as really they should be paying max 47x the existing profits and not need to be relying on synergies to get the multiple down to GBG'S level.

I made a point in an earlier post that £7.25 equated to around a pe of 8.8, at 7.60 that rises to around 17.6 which still looks to offer good value to me. IMHO there's an opportunity for those prepared to be patient at the current price.

[hotfinance14] 20/11/2021 09:43

It does seem a huge premium to pay for a company that only gives an additional £5m profit in FY 2023.I ould like to put that question to the CEO.

Results on 30th April.Hopefully the outlook is very positive.

[sphere25] 19/11/2021 18:22

It is past six and I am still waiting for the correction RNS, you know the one that will say that the sales and profit figures on Acuant were grossly understated.

Any moment now....

Anyyyyy moment now.....


It sounds nutty but these multiple's actually appear perfectly normal in this day, hell they're probably dirt cheap bargain levels!

Just making a note of this acquisition and seeing if any more exuberant (is that the word?) acquisitions follow in the market. Could they end up being market signals?

Perhaps most of 2021 was a market signal...

There is a rather long list of exuberance out there.

It does make you worry about the future. I wonder how we will look back on 2021...

Maybe this was the biggest signal:




The lines in that video...

Well done that lady for keeping a straight face.



All imo
DYOR

[bluntnib] 19/11/2021 14:51

To early to tell surely. Lots of execution risk, mergers don't always work, the multiples are very high, competition risks etc etc. If this was earnings accretive from the off then it would be much easier for analysts to price.

[ianhammond] 19/11/2021 10:07

This article from April looks at all of GB Group's acquisitions over the last eight years. The Risks section is also worth a read. https://www.thetwentiestrader.com/post/gb-group-annual-report-recent-results-investment-case

[b1nky] 19/11/2021 09:15

They had to pitch it so low. When they were conducting the bookbuild there was no demand for the shares. They weren't happy, but in order to get the shares away, they had to discount massively. All the buyers got filled at the lower level, so above there, there isn't the demand. That's why the share price has corrected all the way to the offer price. Having said that, there is support at 725. I anticipate a very slow, gradual climb from here. And wait for a positive catalyst to get the share price up. Such as good figures, good PR, etc. The IR manager should, hopefully be getting to work!!!!

[typo56] 19/11/2021 08:48

Very poor they had to pitch it so low. A case of directors getting carried away with empire building?