Gear4music (holdings) Share Discussion Threads

[opodio] 19/1/2019 20:10

let it bounce to 500p and then we can short it

[dsct] 19/1/2019 19:25

Looks like G4M is stable today, and I expect the same for tomorrow ;^) - shame the same can't be said for some (most?) of the posts here !

Thanks @s1zematters (#2051)
"Thank you for your post, at least you revert in an adult sensible manner worthy of a chat thread!" - although I'm not sure the 'sensible' part is applicable - I'm a G4M holder, and doubled up on the way DOWN (not at the bottom)! lol

Anyway, I've had time to look at the Equity Development(ED) note (15 Jan), and am also revising my own figures.

ED have estimated for YE19:
£110,021k T/Over
£25,650k Gross profit (23.3%)
£3m EBITDA
1.2p EPS

In my calcs I've doubled H1 Depreciation (to £904k) and Amortisation (to 1,062k).

Taking those from the £3m EBITDA, gives an Operating Profit of £1,034k ! (0.94% margin)

Working back from the 1.2p EPS (based upon 20,906,055 average shares in H1) would only give a Profit of £252k, as per these calcs:

ED have used 15% tax figure which means the figures drop out at:
£1,034k Operating Profit
- £737k Finance costs
= £297k PBT
- £45k tax
= £252k Attrib. Profit

Fortunately the YE20 figures from ED are more positive, but I'd hope they would be upgraded during the course of the year !

I'm now looking at the B/S and Cashflow, but if anyone's got any comments/corrections with the above please let me know.

With my 'rose-tinted-glasses' on, I'd say G4M is suffering from Growing Pains :o) - Will it be Adrian Mole, or the Incredible Hulk ?

[74tom] 19/1/2019 11:51

@Niggle, please explain in more than 1 line why this company is worthless?

Firstly, as stated by a number of others, if you are trying to gain market share then price penetration is the best pricing strategy! This will constrain margins but allow much faster growth of the brand.

Secondly, their Trustpilot score is fantastic ; hxxps://uk.trustpilot.com/review/www.gear4music.com

Clearly showing that they have a satisfied customer base, who will repeat purchase in future and spread word of mouth on where to buy musical goods online. If they increased their prices by 10% I would bet the majority of customers would still buy due to positive prior experience.

Thirdly, their web presence is very strong ; hxxps://www.alexa.com/siteinfo/gear4music.com#

62000 visits per day/1.4m per month, with almost 5% coming from the US. These metrics are consistently improving, again showing the growing influence of the brand.

This business model is about economies of scale; in 3 years at 40% annual revenue growth we have the following top line figures;

March 2019 - £110m

March 2020 - £154m

March 2021 - £215m

March 2022 - £301m

The reality could be higher given the market size in Europe is 4 x the UK, and their UK market share is only 5.9% at present...

At current market cap, G4M appear a steal. With the founder owning 34% of shares you can be sure he will be determined to do something to return the focus to the fact this is a growth story & emphasise that margin constriction is a short term issue.

Should easily be back to £5+ per share this time next year, if not more IMO.

[niggle] 19/1/2019 10:51

It won't be the first time a director buy has propped up the share price of a worthless company.

[rugby] 19/1/2019 00:49

no wonder he holds his own charting skills in high regards, he's always correct, he does them all after the event in retrospect from 2016!
are you for real?

lmfao

[rugby] 19/1/2019 00:04

evidently not
I would take legal action against them, the voice in your head about BlackRock buying shares is possibly a dosage issue but could be symptoms of severe manic gimp syndrome (common on afn) or even candceraids of your charting arm.
do not mix with Aldi white lightning my friend, this may give ones sow's ear technical knowledge the illusion of it being a silk purse,,...oh hold on.

get well soon xxx

[s1zematters] 18/1/2019 13:55

i believe the catalyst for the next movement up will be the rns from blackrock showing they are almost or completely out and/or the rns from the new holder showing their holding.

[tomjones8] 18/1/2019 12:36

Yes, he sold a little bit to Blackrock who are proving to be tremendously stupid with buying high and selling low.

[tsmith2] 18/1/2019 12:34

Has he ever sold a share since listing?

[tsmith2] 18/1/2019 12:33

Andrew Wass holds 34% of the shares so can excuse him from not adding although a meaningful purchase from him would be v nice

[tsmith2] 18/1/2019 12:30

Ford is a non-exec so largely spending his own money

[aimingupward2] 18/1/2019 11:51

I agree, tsmith2. It's reasonable to suppose that he bought the first 10k lot in the belief that 240p clearly undervalued the company's on-going prospects and that, unlike some on this board, his view has not been undermined by the further price fall since.

[tsmith2] 18/1/2019 11:26

He bought 10k at 240p a few days back too. £42k isn't that bad, is it?Expecting others to be buying to.Andrew..?

[mr.elbee] 18/1/2019 10:42

ooh er! that's a lot innit?

[battlebus2] 18/1/2019 10:39

Director buys 10k....