Gb Share Discussion Threads

[brummy_git] 03/11/2023 13:57

I talked about GBG here with Justin Waite on Vox Markets earlier today (starts 38:40)

[fruitfly2] 03/11/2023 13:28

The Naked Trader

This could be the time to buy some GB Group after a terrible couple of years where it tried to overexpand.

Profits are starting to rise again for this global digital identity outfit and there seems to be some green shoots but net debt remains high.

This might be the time for it to be rescued by a bid from a giant which doesn't mind the debt, others have been bought out that were carrying debt. It reports on the 28th.

[marktime1231] 01/11/2023 11:57

GBG will come again. The timing of the Acuant acquisition was not the problem except with hindsight perhaps, so much as the ridiculous high price paid, as we know and felt at the time. Let's remain hopeful. I agree the momentum of debt reduction has petered out, but this is still a company making a healthy profit out of providing in-demand tech services in the world's most important market.

GBG was a universal favourite pick for good reason two years ago, everyone was excited (then). Does one flat half-year really mean ex-growth?

IC a laughing stock in recent years, a contra-indicator, sometimes wise after things have unfolded, sometimes not even then. They are particularly good at switching to a Sell when the stock has already hit rock bottom and rising, and will shift to a Hold or Buy after the share price has appreciated.

[johnv] 31/10/2023 21:59

Paul Scott on Stockopedia doesn't like them either, ex-growth, not much cash generation, too much debt. He said he can't get excited about these.

[sphere25] 23/10/2023 14:29

An interesting holding RNS just popped out. A value fund seeks value?

I am sure we are all sat here wondering where the bottom is for so many shares right now and is there value here. The trends are still terrible, and sellers still swarm all over any price rises, so from a trading perspective it is case of almost knowing that you have to lob into a move higher, before the sellers kill off any cause for enthusiasm.

I had stuck this one on the watchlist for a possible trade on the trading update. There were buyers in size at 240p so I thought, if it held that mark, it could have a further pop higher, but the sellers kept coming in...over and over and just exhausted the buyers and straight back down it went. Clearly reminiscent of so many others, even if the update is in line when the market was expecting a warning.

The interesting thing was that the price did bounce on an update that wasn't great, but it was better than the market was expecting, so maybe a sign that alot of the bad news is in the price here. The chart seems to be trying to form a bottom.

It still feels early because you can't be sure of further warnings and the macro is horribe, but as far as AIM goes, this almost looks like a prize asset. It might be a case that it gets taken out on the cheap at some form of premium at these levels. It would be very surprising if another bid didn't emerge here so I stuck it on the list to see if any irregular activity happens at some point to try and nip on board.

Some broker comments here:

"A re-rating of GB Group (GBG) shares will rely on growth ‘reaccelerating’ but there is signs of stabilisation, says Peel Hunt.

Analyst Gautam Pillai reiterated his ‘hold’ recommendation and target price of 300p on the identity verification and fraud prevention group, which advanced 7% to 225.4p last week, but are still 30% down so far this year.

First-year revenue growth of 1.8% was ‘slightly soft’ but Pillai was ‘encouraged by early signs of revenue stabilisation in the identity segment, which is 55% of revenues’.

The group cut its operational expenditure by £6m and ‘cost rationalisation provides management confidence to meet full-year adjusted earnings before interest and tax expectations’.

‘We believe GB Group shares re-rating is contingent on growth reaccelerating,̵7; said Pillai.

However, the analyst thinks the ‘comprehensive product portfolio, blue-chip client base and solid cash generation’ mean it is at an ‘attractive valuation’ of 9x current year enterprise value/earnings before interest, taxes, deprecation and amortisation."

I wonder if so many folk piling into cash and bonds is an initial sign of give up type mentality out there. It is still very hard to go on the attack right now, more a defensive waiting game until the trends change and the good times come...EDIT that....the better times come...it is not like rates are just going to fall away back down so I doubt most of the valuations will go back to the extravagant highs in the more normalised rate environment, but if they are beaten down enough, and with so many single digit pe's out there, should still be a fair chunk of bullish upside.

But an interesting one here that caught the eye.

All imo
DYOR

[marktime1231] 19/10/2023 21:05

Relief at trading on track, nevertheless not much underlying business progress so the share price jump did not stick. Can't work out why there wasn't a chunk off net debt either, timings perhaps.

[sailorsam1] 19/10/2023 20:32

I wonder if fairly decent trading statement will bring back last years potential suitor

[hotfinance14] 19/10/2023 07:26

The trading statement looks encouraging.Still on course for the expected forecast FY24 profit.

I can't work out why the debt has not been reduced compared to 12 month's ago even though there was the £10.3m dividend payment.

[hotfinance14] 03/10/2023 08:27

1H24 results published
Tuesday 28th November 2023

[hotfinance14] 03/10/2023 08:21

Financial Calendar
1H24 pre-close trading update published
Thursday 19th October 2023

[lomax99] 25/9/2023 11:57

Thanks to the anonymous muppet for a down tick!

[lomax99] 25/9/2023 08:09

Back in, for the long haul.

[hotfinance14] 24/9/2023 21:09

Thanks for posting.

[lomax99] 24/9/2023 13:13

GB Group, which makes fraud prevention software, promises to "help your business build online customer relationships based on trust". Yet investors in the company, which carries out identity and location checks for online shopping and financial transactions, might be running out of faith.The technology company's stock has been mauled over the past 12 months. GB briefly attracted American bidders last year: private equity group GTCR expressed interest in a possible cash offer in September, before walking away a month later. That helped it trade above 600p last September, having been at 440p before the takeover talk ignited. Now the stock is changing hands at just 218p. Reasons for Aim-listed GB's decline clearly go beyond the withdrawal of the takeover: rises in interest rates and a weaker pound hurt its finances, and growth has been disappointing.GB rode the wave of the boom in interest in both cryptocurrency and online shopping during the pandemic, which led to more demand for its identity checks and fraud prevention software. But when interest waned, GB was hurt, too. It fell to a £118 million loss for the year to April from a £22 million profit a year earlier, mostly due to a huge write-down in the value of two acquisitions in the US. Partly in response to this, investors rejected a board pay deal earlier this year.However, GB, which processes some 210 million transactions each day for customers including Volvo, Barclays, IBM, HSBC and Lego, is in a structural sweetspot. Demand for its services looks set to rise alongside the proliferation of sophisticated fraud.Gross margin has remained a steady 71 per cent over the past two years, and Charles Brennan, analyst at Jefferies, concludes "that the slowdown in growth at GB is more cyclical than structural. For the patient, improving growth should be rewarded with a material re-rating."The stock is trading on a price to earnings ratio of 13, while its larger rival, Experian, changes hands at 23 times price to earnings.GB has transformed since it launched in 1989 as a business that checked customers' names and addresses for catalogue shopping companies, and its relevance now looks unparalleled.There remains a chance of a takeover bid at GB from a different private equity firm or a software giant. "While the costs of financing have increased, PE firms are still active and have equity to deploy. There is nothing in the [GB] share price for this," says Andrew Ripper, analyst at Liberum. Buy.

[brummy_git] 24/9/2023 12:44

No unfortunately I'm not hotfinance - but if you could then that would be great.

[hotfinance14] 24/9/2023 12:31

Good find. Can you copy and paste the article as you have to be a member.

[brummy_git] 24/9/2023 10:39

The Times Share tip: "As fraud rates rise, GB Group stands to benefit".

[brucie5] 11/8/2023 11:15

Waiting in patience here - as patience certainly required! £2 does look like the historic support back as far as 2016, though I don't know how many shares have since come onto the register. I do sense that when the time comes and the story regains credibility it will retrace very smartly upwards. In the meantime it shows willing to pay an albeit tiny dividend.

[nigeldoug1] 20/7/2023 16:11

The fall is disappointing given the positive trading update.

[expleaseme] 20/7/2023 15:20

@Hotfinance14: my understanding is that shareholder approval on RemCo matters covers a wide area of matters inc. the RemCo plan for the directors for the coming year (quantum and KPIs) and also whether the performance measures for bonuses paid and LTIPs vested in the last year have been applied correctly (i.e. that RemCo discretion hasn't been applied inappropriately to allow payments when actual performance would have meant no payment being made).

[togglebrush] 20/7/2023 15:14

Press extract

The shareholders have voted down its directors' remuneration report after the company slumped to a loss of almost £120m during its latest financial year.

Over 57% of shareholders in the Chester-headquartered business voted against the report at its annual general meeting.

The report sets out how much the executive team will be paid in base salary and bonuses over its new financial year.

According to the group's annual report, the executive directors and board decided not to receive a salary increase for its current financial year after "taking into account the financial performance of the business."

Chief executive Chris Clark was paid a total of £637,000 in the year to March 31, 2023, down from £1.3m in 2022.

The vote came after GB Group said its losses were due to an annual impairment review which resulted in a £122.2m charge against its identity business, which is formed of its IDology and Acuant acquisitions.

In its prior financial year, GB Group had achieved a pre-tax profit of £21.7m.

For the 12 months to March 31, 2023, the group's revenue increased from £242.5m to £278.8m.

A GB Group statement issued to the London Stock Exchange said: "The board notes that the advisory vote on the directors' remuneration report did not receive the required majority number of votes to pass.

"Prior to the AGM the remuneration committee conducted an extensive consultation with the company's largest shareholders regarding the directors' remuneration report.

"The remuneration committee values the feedback they have received on the company's remuneration arrangements and will continue to engage constructively with shareholders."

Shares in the group have fallen by more than 4% today (Thursday, July 20) to 251p each.

In the report, the group said: "GBG’s remuneration policy is fundamental to the delivery of the group’s ongoing strategic objectives and provides key incentives and support for sustainable long term value creation.

"We firmly believe that our remuneration policy effectively rewards and incentivises our executive team and senior management.

"It also makes sure we provide fair pay, as well as supporting and promoting all our team members’ wellbeing and engagement.

"We align our remuneration with the group’s strategic aims and consider how we distribute incentives across all GBG team members.

"In this way, we make certain that these incentives also create long term value for our stakeholders

End of extract

[expleaseme] 20/7/2023 15:07

No doubt a warning shot from major shareholders without wishing to cause too much issue with the rest of the AGM business - RemCo resolution is an advisory resolution.

If they had been that upset, I would have expected to see more votes against the reappointment of the CEO (Clark) and RemCo Chair (Gammon) which both passed with 95% approval.

Line in the sand drawn – do better or else voting won't be so neat next year?

[nigeldoug1] 20/7/2023 13:24

Well clearly the directors need to demonstrate performance!

[hotfinance14] 20/7/2023 12:42

Results of AGM :

Resolution 6 - Report on Directors' Remuneration

The Board notes that the advisory vote on the Directors' Remuneration Report did not receive the required majority number of votes to pass. Prior to the AGM the Remuneration Committee conducted an extensive consultation with the Company's largest shareholders regarding the Directors' Remuneration Report. The Remuneration Committee values the feedback they have received on the Company's remuneration arrangements and will continue to engage constructively with shareholders.

Is this regarding the directors current salaries and options ?

[togglebrush] 20/7/2023 07:25

AGM Statement is full of the "Right Stuff" and gives hope to the share price