Gear4music (holdings) Share Discussion Threads

[aimingupward2] 04/12/2020 13:48

I fully agree about 'a long way to go', The next few weeks are an opportunity to accumulate shares ahead of, first the anticipation and then the reality, of the trading statement scheduled for 21st Jan' which is sure to very encouraging and can be expected to propel the shares on their way again.

[gnome3] 27/11/2020 01:21

Largemerlot, You called that one spot on! And I thought you were just name dropping ;-)
I really think people are missing something with G4M. Profit margins were already rising significantly before Covid and I was expecting this years re-rating without the boost that it's given us. Going forward, the company have said that significantly higher margins than last year are sustainable and combine that with the operational gearing effect and this story has a LONG way to go.

[largemerlot] 26/11/2020 17:19

Don’t want to say I told you so but here’s my post from 9th October:

For what it is worth I once sat in a round table with the great Harry Nimmo who reckoned G4Ms technology,strategy and market positioning,customer and online execution were second to none in the online space.He was an early buyer and with growing issues resolved they will be back in buying again.This has a lot further to go IMHO.Ship them in.Still only £140m mkt cap.

All good
💪💪

[thaiger] 26/11/2020 16:44

Yes....Directors sold total 900,000 shares and Standard Life bought total 1,847,484 shares = 8.82%!!

[saracen3] 26/11/2020 09:59

Standard Life took virtually all the placing. Long term holders. Strong buy.

[rathlindri] 25/11/2020 11:01

up to 720 now

[johndoe23] 25/11/2020 10:38

Can buy any amount at 700p

[rathlindri] 25/11/2020 10:33

Unable to buy atm on H&L

[ali47fish] 25/11/2020 09:58

isn't this coming into buy opportunity?

[saracen3] 24/11/2020 17:56

G4M looking at the 3 trades £5.9m £500k, £100k maybe top ups and a new position

[saracen3] 24/11/2020 17:45

Deal done. Institutions wanted stock which is good as it adds to free float.

I suspect next years hike in CGT was a factor.

[ali47fish] 24/11/2020 17:21

placing by directos because of demand
The PDMRs have advised the Company that their sales of ordinary shares in the Company are to satisfy existing market demand. Following the sale, these PDMRs would in aggregate hold approximately 6,679,113 ordinary shares, representing 31.88 per cent. of the Company's issued share capital (a decrease from 36.18 per cent.).

It is intended that the Sale Shares will be offered to certain institutional investors.



The sale is subject to demand, price and prevailing market conditions. The results of the Placing will be announced as soon as practicable.

[saracen3] 18/11/2020 10:14

Excellent zoom meeting this morning. It seems that analyst caution is only based on a no deal Brexit which the company has covered through its 2 European hubs.

Only acquisitions might be of distressed legacy brands to add to own brand range.

Overall the shifting UK market from high street to online is as significant as lockdown sales.

Concentration is on further margin growth rather than chasing market share.

[largemerlot] 17/11/2020 17:18

I wouldn’t fret too much over the margin profile short/medium term.The levers the company can pull are significant.Volume efficiencies ,greater own label penetration(higher gross up 570bps at interims and on a trend) and the continue move to mobile all bodes well.There will be an element of reinvestment to drive volumes and share gains but most online retailers would chew an arm off to have the levers of G4M.
Acquisition risk is more of an issue for me given management ambitions but reassuring comments on how cautious they will be.All good and onward and upward.

[energeticbacker] 17/11/2020 15:49

Covered in Investor's Champion's latest update. Great results but those margins remain a worry...

[saracen3] 17/11/2020 14:46

Thanks Guys really helpful Am "meeting" the Co tomorrow . Will update later.

[masurenguy] 17/11/2020 14:22

Thanks for that up-to-date insight Martin. In addition to your own feedback from the company, I was also very interested in the current views from the two covering brokers.

"N+1 Singer is today forecasting revenue coming out at £145m with EBITDA of £13.7m and adjusted pre-tax profits of £8.5m providing EPS of 33.7p. At the current price that puts the stock on a PER of 21, but the broker does highlight risk to the upside in H2 revenue (+5%) and EBITDA margin (5.9%) assumptions on good execution over the remainder of the year.

Peel Hunt which also covers the stock adds further on this area in that whilst conditions are not going to be as favourable in FY22 as they were in FY21, G4M’s relative position is a very strong one and its growth prospects are impressive. The underlying market is growing steadily and shifting online, and G4M has the depth of pockets, the technological capability and the relationships with suppliers to make sure it continues to take full advantage. They add that "If we think of G4M as a retailer with £150m of sales growing at 20% pa, with stable high single-digit margins, we don’t think it’s too much of a stretch to hope for 1x sales and that would imply 825p as a target price. Even that lacks a bit of imagination".

[davro] 17/11/2020 13:30

Thanks for sharing Hastings, excellent write up!

[hastings] 17/11/2020 13:16

From this morning following speaking with management.Https://martinflitton1.wixsite.com/privatepunter/post/g4m-hitting-the-right-notes-17-11-20

[nfs] 17/11/2020 12:23

Agreed davro

[davro] 17/11/2020 12:21

Really interesting to review how Andrew Wass has worded recent RNS statements. In June we were told of “exceptionally strong trading” in July this was updated to “strong trading” which was used again in September and October releases and this morning we were told trading continues to be “very strong”.
Simplistically quantifying what this means in terms of revenue growth:
“exceptionally strong” = 68% (as seen by growth in Q1)
“Strong” = 21% (growth in Q2)
The question is what does “very strong” equal? Best guess halfway between the two so let’s call it 40%. If we do see revenue growth for the key Christmas period at 40% it’s hard to see how eps won’t exceed 50p for the full year.
Surprised by the muted reaction today given the exceptional results but it matters little, the price will have a long way to catch up with the rapidly improving earnings. For me this remains a strong buy both for the short and medium term.

[adamb1978] 17/11/2020 10:40

Congrats to holder who bought in earlier this year on this and have made a killing. I previous held a few years ago and managed to get lucky with timing my sale near the previous peak making good money.

However I didnt see these results coming at all so have stayed clear this year - in particular I didnt anticipate at all the extent to which they've managed to increase margins - changes the valuation proposition completely.

The main thing which I'm trying to now debate is how much they have benefitted from covid and the extent to which there might be a growth reversion post-covid, if there is any at all. If you believe there is none and that they can grow at double digit rates from here, then I think there's still very good upside

[masurenguy] 17/11/2020 09:24

Obviously COVID has provided them with a boost this year but even afterwards they will still have an enormous advantage over the high street due to the range and depth of their product range that no physical retailer has the space to stock. Furthermore they will have built and even larger customer database which will result in more repeat business from them going forward. COVID may have given them a short term boost but the momentum should continue well beyond that scenario.