Gear4music (holdings) Share Discussion Threads

[aimingupward2] 16/11/2017 12:00

Indeed! Especially after this morning's turnaround.

[taurusthebear] 15/11/2017 09:28

Wouldn't bet on it. :0)

[thevaluehunter] 15/11/2017 09:06

Could go a fair way lower than £6 in my opinion.

[taurusthebear] 14/11/2017 11:09

Looking for 6??p to top up. :0)

[joshgroeny] 13/11/2017 16:16

I took the opportunity to top up. The wider market is showing a bit of malaise too so don't think the drop is anything news related.

[mrx001] 13/11/2017 15:40

Things not going very well at the moment with the price, hope it picks up soon.

[mrx001] 13/11/2017 15:40

Things not going very well at the moment with the price, hope it picks up soon.

[taurusthebear] 03/11/2017 09:05

The problem is that, unless there's a hiccup, profit warning or market selloff, the valuation is unlikely to get much lower. A small growing company is arguably on a higher rating because the growth rate is expected to be higher. That doesn't necessarily make it any less risky, of course.

Objections to US expansion could be used for any expansion in any foreign country, therefore not realistic. Expansion costs initial investment, and always has. :0)

[thevaluehunter] 02/11/2017 16:55

The challenge with selling into the us will be the distribution costs which will need to be passed on to the customer. The model of selling online into the us is much more tricky with large high value, irregular or bulky items vs clothes. In my opinion they will need to build out the infrastructure first in the US and hold stock before attempting to grow sales. I would say the market is big enough in the UK and EU to sustain substantial growth for the next few years. I still like the company but the valuation is a bit rich for me at the moment.

[adamb1978] 01/11/2017 08:48

Valuehunter

Declining EBITDA margin would be a concern in a mature business but in a small growth business a lower margin for a period or two is perfectly normal if there's increasing investment or a step change to grow the business. For G4M, thats come from expanding geographically and those new sites were profitable in the final month of the period so we'd expect margins to jump back sharply in H2.

'Intangible capex' is simply them continuing to develop their website (e.g. launching the $ website) - the amortisation goes through the P&L so the capital spend is just the initial cash spend of that amort.

Perhaps G4M is the wrong type of company for you though if your investment approach is pure value. Understandable comments if so

Adam

[rathlindri] 31/10/2017 19:34

Nice quick recovery. What we were hoping for

[taurusthebear] 31/10/2017 15:49

Noise 😀

[aimingupward2] 31/10/2017 13:57

Sudden batch of big buys at 790p very largely makes up for that 200k.

[toffeeman] 31/10/2017 12:50

So who dumped 200k yesterday?

[ccraig69] 31/10/2017 12:40

i guess software development is just like fitting out a shop costs

[thevaluehunter] 31/10/2017 12:23

Declining ebitda margin from 6.2% to 2.3% and H1 2017 intangible capex is the reason I sold out.

[adamb1978] 29/10/2017 22:43

Finally got around to looking at the interims. I don't really see anything material and negative in there which wasn't flagged before so the investment story remains the same, with the potential massive kicker of moving into the US. As someone else has mentioned, that presumably would involve some material level of investment in one or more new distribution centres but their European success shows that they know what they're doing so I don't see a problem with them raising equity to finance that.

Results this year are somewhat irrelevant given the new distribution centres only started this year and became profitable in August. FY19 should be the year when the top-line growth more materially moves thorugh to the bottom line...this year should be yet another year of c.50% turnover growth in the meantime though.

Happy to keep holding

[thevaluehunter] 25/10/2017 11:22

They capitalised £768k of software platform development costs in the first half which seems quite a lot. It would be interesting to know how much of that is payroll costs.

[toffeeman] 24/10/2017 17:32

TVH and Monty

At what point did G4M look cheap?

[montyville2] 24/10/2017 16:26

I am out too....great ride but looking expensive!

[thevaluehunter] 24/10/2017 15:57

I sold yesterday. In my opinion the valuation is looking a bit punchy based on the results out yesterday.

[walbrock82] 24/10/2017 14:38

Some people may not like my opinion. But I think the market has raced ahead of expectations. Although sales look impressive, the weak profit generation, despite improved inventory management and low capex. Also, brokers’ forecast of 18 EPS by 2020 means forward-PER is 45 times.

All this led to my conclusion the stock correcting by 30%.

For my free full analysis on Gear4music and other companies’ analysis, click

[taurusthebear] 24/10/2017 10:58

It's a fallacy to suppose that a company on an upward growth trajectory will 'only' do H2 as a X% increase over last year if the H1 increase was X%. H2 will be likely be a tad more than an X% increase. :0)