Inspired Share Discussion Threads

[1224saj] 29/3/2023 18:24

Can anyone throw any light on the two big trades today?

[km18] 29/3/2023 17:07

Inspired Plc issued final results. The Group continued to make progress, with strong trading and performance across all divisions a continued improvement in underlying cash generation from FY2021. The Board states the group is ready to enter FY23 in a robust position. The business has been posting robust top-line growth for a few years now, both revenues and EPS reached new records in FY22. Meanwhile valuation looks increasingly attractive with forward PE ratio at 7.2x comfortably top quartile for the Professional & Commercial Services market. The balance sheet is reasonably solid, profitability ratios are better than last years. The share price is pulling back from the lows, currently trading at 10.79p with a 5.31% increase today. INSE is a share to monitor for now.....

From Wealthoracle

[rivaldo] 29/3/2023 10:44

As well as Liberum's initiation and 20p target, Shore Capital's new note forecasts 1.37p EPS this year, up from last year's 1.31p EPS despite higher tax, interest and deferred consideration shares this year.

They conclude (extracts):

"Good FY results, strong Q1...

The ‘ESG impact company’, providing specialist energy services and a partner to corporates in the UK and Ireland in the drive to ‘Net Zero’ has published a good FY report, in-line with our expectations as guided by the Company’s January trading update. The current year is indicated to have started well with momentum continuing. The performance achieved overall is against what has perhaps been the most challenging environment seen in UK energy markets. A testament then to Inspired’s strategy and deepening client relationships as a key partner to UK corporates."

"Forecasts and outlook.

The balance sheet performance delivered in H2, with cash collections meeting targets in the face of rapid growth in Optimisation, suggests to us a solid foundation to support Inspired’s strategy in leveraging the visible opportunities in front of the Group. We note the opportunities set out in the report to leverage Inspired’s growing client relationships, the Group aiming to drive ‘client lifetime value’ (CLV) across the divisions.

Management has set out a target of doubling EBITDA over the next five years and we can see how this may be achieved in our model. For now, we retain caution reflecting the still visibly challenging environment. We retain our EBITDA assumptions for FY23F and FY24, noting the significant potential we see for upgrades in normalising conditions. EPS forecasts are modestly diluted by higher interest, tax and deferred consideration shares due to vest in FY23F.

Valuation thoughts.

Inspired continues to evolve and offers investors solid ESG credentials and regulatory tailwinds in addition to long-term economic growth drivers. The Group trades (based on our updated estimates) on a FY23F PER of 7.5x (EV/EBITDA 5.9x), funded by a free cash flow yield in the 10% range. We look to further solid progress through FY23F."

[rivaldo] 29/3/2023 09:29

Liberum became joint brokers with Shore only three weeks ago.

Hopefully with these two relatively large players in the small company space now backing them, INSE's message might start making inroads at a time when its prospects appear to be improving nicely and its fundamentals cheap on a historic P/E of 8.

[1gw] 29/3/2023 09:14

Thanks rivaldo. Good to see liberum making a visible contribution as house broker.

[rivaldo] 29/3/2023 08:55

Liberum have today initiated coverage with a Buy and a 20p target price.

And they have a 35p fair value based on DCF....

They see the adjusted PBT rising from £14m last year to £16.2m this year.

It's an 84 page report, so will take some time to read through!

[1gw] 29/3/2023 08:10

Looking at the £10.9m loss from changes in contingent consideration (CC), this is made up of:
£7.7m increase in CC payable on Ignite and Businesswise
£3.2m decrease in CC receivable from SME disposal

The £7.7m is arguably good news - INSE is expecting to have to pay more for the businesses acquired because they are performing better than expected - and provided this can be sustained will lead to higher income in future years. Having said that some of the increase looks to have been down to extraordinary demand for optimisation services as a result of the energy crisis, so the extent to which that represents a sustainable increase in earnings is debatable.

[1gw] 29/3/2023 07:57

Cash generated from operations went from £5m in 1H to £20m for the full year, so £15m in 2H. That makes the £13m contingent consideration sitting in current liabilities look much more manageable.

[1gw] 29/3/2023 07:45

Yes, a lot of moving parts which make the results quite difficult to analyse quickly. But cash generation was strong and debt facilities look adequate. So it looks to me like they should be able to pay remaining contingent consideration without needing further funding.

[rivaldo] 29/3/2023 07:40

Results are as per the trading statement with 1.31p adjusted EPS.

The most important aspect is the extremely (and unusually) bullish outlook:

"Trading in Q1 2023 started with considerable momentum across the business which is consistent with management expectations of double-digit percentage EBITDA growth in year. Despite the ongoing macroeconomic and geopolitical uncertainties, the Board is confident of the Group's continued ability to deliver full year results in line with expectations"

Cash generation was excellent at almost £22m.

Some won't like all the adjustments to reach the headline numbers, but the core business is evidently doing rather well, and with (1) energy costs remaining a huge issue and (2) ESG's importance only growing, then INSE's prospects should remain bright for some time to come.

Nice 8% rise in the divi to 0.27p shows confidence too (and a decent yield at the current share price).

[1gw] 28/3/2023 15:12

We can hope.

[1gw] 08/3/2023 08:12

And now Liberum Capital as joint broker. Coincidence?

Could they be thinking about a raise to fund contingent consideration or further acquisitions?

[rivaldo] 02/3/2023 11:37

Impressive new NED appointed today - "over 25 years of capital markets experience, which includes positions as Head of Investment Banking at Liberum Capital and senior leadership positions at Merrill Lynch across cash equities and investment banking in London, Frankfurt and New York":

[1224saj] 17/2/2023 10:43

Stock for sale this morning at 0.1087, sell orders indicative only at 0.1050?

[diesel] 16/2/2023 14:26

And now a 2.5 mill trade!

[rivaldo] 16/2/2023 14:25

Looks like a further 2.5m buy from earlier today at 10.75p just reported late.

[peakyblinderssss] 16/2/2023 13:14

I quite like this company but I've been wondering if there alternatives to this that you find good

[1224saj] 16/2/2023 12:20

Very little stock around

[rivaldo] 16/2/2023 10:15

Nice buying first thing today - just over 1.5m shares bought already, resulting in a small tick up, including a 550k, a 500k and a 344k.

The buy price has been steadily moving up and is now the full 10.6p published offer, which hopefully augurs well.

[rivaldo] 08/2/2023 15:49

....and moving up again to 10p bid after just a £5k buy. Hopefully a signal that there's not much stock around.

[rivaldo] 08/2/2023 11:40

Good to see the bounce continuing - 150,000 shares just bought at 10.14p-10.19p seem to have made the difference.

[rivaldo] 01/2/2023 10:31

The price is moving up again with 10.2p being paid to buy now. Hopefully the director buying will attract further attention here.

[1224saj] 31/1/2023 10:37

Melody, interesting that all the buys this morning are shown in red as sells at mid mkt