Ig Share Discussion Threads

[lovewinshatelosses] 03/8/2023 10:36

I am not sure if this one has ever had a PE that high in my time here. Not disagreeing that it probably should, especially when you compare it to its UK competitors.
I did start pondering the prospect of a takeover last year or the year before (I forget now). Not sure if the regulators would let a competitor take us though, although I am less sure on that concept.
Agree that the next update is crucial. Struggling to decide whether to add at these levels in advance, or wait and see the numbers.
Given the founder was a (successful) gambler, I feel that I should probably honour his memory and buy some more before September :)

[gemlotte55] 03/8/2023 09:53

Prime takeover target at this price

[hunter154] 03/8/2023 09:38

I agree Adam. The company generated. ca £1 in earnings so is on a PE of 7, throwing off huge cash.

For the growth it has managed over the longer term, at least PE of 10-12 is fair. The broker forecasts have generally been around £11/£12.

A good revenue update for Q1, in Sept is the next catalyst…̷0;hopefully costs have been controlled better in current year.

[adamb1978] 02/8/2023 15:04

1knocker

I completely agree, and the amount of discussion relating to TT when it comes to IG I feel is completely disproportionate to its size. It's also not a liability nor has negative cashflows to finance so whilst I think IG overpaid for TT, the cash has been paid and is out of the door, so its a sunk cost. Amazes me how much focus it gets.

Adam

[gbh2] 01/8/2023 19:27

I picked up a few more today :)

[hunter154] 01/8/2023 14:06

Next revenue update is mid September….any positive news then should help.

[lovewinshatelosses] 01/8/2023 11:16

Waiting for 680p ish to take a few more. Could go lower than that of course, but the buy backs should stop it drifting much lower, IMO.
As long as no company-specific issues arise, I would be surprised if we did not at least test 750p or so as we approach ex div.
That we have not managed to even approach the 8's by now since the last update, speaks volumes for the opinion of the market on BOD strategy and TT in particular IMO, but it is what it is. GLA.

[1knocker] 01/8/2023 01:12

whatever the merits or otherwise of the acquisition, surely they are in the share price now?

The only issues for me are likely future profits and the dividend. Nothing is certain, but both seem to me to look promising.

We had quite a decent rise (happily after I topped up), so a bit of a pull back does not seem surprising or any cause for concern. I am currently 25% up on the cost of my holding though. Human nature being what it is, I am much more allergic to any pullback where my holding is in the red! Sometimes, it is better not to look at prices too often - altogether better for the blood pressure.

[gbh2] 31/7/2023 13:33

Added a few more, imo dividend is too good to ignore.

[gbh2] 28/7/2023 08:25

It started at the opening and hung on until later afternoon, my guess is someone with deep pockets taking Profits.

[adamb1978] 27/7/2023 18:48

Any views on what causes the sell-off just before 3pm? Can't think of any economic data - the US releases were at 130pm UK time

[gbh2] 27/7/2023 16:35

Opened 10p down closed 15p down, not a good day.

[lovewinshatelosses] 24/7/2023 12:56

Please feel free to disagree. I will never get angry or upset with anyone who does. As the saying goes, it is what makes a market, after all :)

[maddox] 24/7/2023 12:07

I'm exploring yours and other's views - here to learn - not disagree - testing hypothesise and still forming my own view. Coming fresh to IGG and there is always lots to understand - particularly of the market dynamics affecting the firm.

[lovewinshatelosses] 24/7/2023 08:53

pete: The answers to those questions can be found in several of my, and other long posters' comments in the past few days.
Maddox: They did not have to scale-up at any price. For a billion bucks, it is not unreasonable to expect more from the acquisition than we have seen to date.
You may disagree of course, which is absolutely fine.

[maddox] 24/7/2023 07:59

If they had to scale-up in the US through acquisition - they had to buy one of the few other firms in the sector of a size that they could buy.

Whom would you have preferred they had bought?

[pete160] 23/7/2023 22:41

IGG are a small player in a large global market.They had to hunt or be hunted.If people think that they over paid to enter the US growth market (via an established and successful team - and kept them incentivised to continue) and that it will have a disastrous effect on the parent group, I question why they are still shareholders?

[hunter154] 23/7/2023 22:32

Good points but ultimately the group board are responsible for tt given they thought it was a good acquisition at 1bn.

[maddox] 23/7/2023 21:56

As I understand it - we've kept tt's management as part of the takeover deal - to drive the business forward. tt's management team have 5.7% of IGG with Tom Sosnoff, Co-CEO of tt with 3.89%. They haven't taken the cash and walked - they're locked-in for 5 years (with a phased five year lock-up period - need to explore the phasing further). So, they seem well aligned with IGG and shareholders.

[lovewinshatelosses] 23/7/2023 18:57

Interesting. I wonder what the deal is with the current leadership team there? Cost of getting rid and I guess more importantly, cost of bringing in successful replacements?
Adds a lot to the risk profile then, IMO, although if done properly, obviously attractive.
And currently not doing well enough, in the opinion of at least some of us, so perhaps less of a risk than doing nothing. Not straightforward though.
Would then need to extend the 'goodwill runway' for at least another 12 months from the point of change though, to let the new guys have a chance to do their stuff. Feasibly 18 months, even.
Given where we are right now, if I was a major holder here, I would probably give it one more trading update. If TT is not generating even a small profit by then (no accounting smoke and mirrors), then I would look to make some changes. And management would already know that I was not content with things as they stand.
In reality, as long as the dividends keep coming, the big holders will probably snooze, until it is too late, based on what seems to happen so often with UK funds and ii's. IMO, a lot of people's pensions and other funds are in the hands of fools, but I am straying off topic now.

[hunter154] 23/7/2023 16:07

The business needed a strategy to enter US, but not at any price.
I liked the TT acquisition at the time based on the hyper growth that was promised.

We need to bring in management that can deliver on the promise.

[maddox] 23/7/2023 10:45

Thanks for your views - consensus is that IGG overpaid for tt. Let me pose another question for consideration - was it a mistake to expand their presence in the US through acquisition?

IGG had a pre-tt operation in the US - $15m turnover in FY2021 - so looked sub-scale in a large and growing market. The US is now 15% of trading revenue and grew 10% in FY2023 which was the growth bright spot against an otherwise grim or dismal picture. (UK -12%, EU +3%, AUS +4%, JAP +1%, SING -7%, EMEA non-EU +3%, EMERG -9%).

[hunter154] 22/7/2023 16:47

Thanks - IG blew the £80m windfall re NIM on overheads, including big salary increases.
I will be very interested to see the annual report and the directors remuneration section.

If we had got costs under control, we could have had >£1 in earnings which could have accelerated our Share Price….this management is out of control.

Jonathan Moulds is a non-exec director here. He is the chairman at LIT. This company is flying operationally and yet due to its size, is extremely cheap. I rate him highly and hope that he brings discipline that is clearly lacking at IG……I still cant get over CFO’s comment in the rns about being great capital allocators, when they blew our $1b on a vanity project and burnt £80m in interest income in FY23 on increased overheads.

I might attend the AGM to ask some of these questions.