K3 Capital Share Discussion Threads

[tizo100] 10/11/2021 19:10

What date do you have to hold the shares from to get the dividend please?

[w13ken] 04/11/2021 18:45

Good find km18 :-)

[km18] 04/11/2021 17:32

K3 Capital Group this week posted final audited results for FY21, i.e., the 12 months ended May 21 and also an outlook for the first few months of FY22. Both were positive, growth has been robust, FY21 was a transformational year and the Board anticipates that growth will continue across all divisions of the Group, both organic and through acquisitions in FY22 and beyond. Top line revenues, profits and EPS were all at record levels in FY21, the share price has not yet made a commensurate move higher. Valuation is still reasonable accordingly, forward PE ratio at 17.8, PS at around 5.4. The company is also reasonable high quality, cash at £14.3m, minimal debt. BUY....keep up to date with stocks with WealthOracleAM

[sdmbot] 03/11/2021 18:54

W13Ken

"it doesn't seem like they have ruled out further acquisitions and we can expect organic and inorganic growth in the year ahead."

Far from it by the sounds of it, they had a greyed out quarter of their business donut which he called the fourth leg and have employed a director of aquisitions, that would seem like a bit of a "tell" to me.

I like John Rigby as a CEO and, as others have said, he seems driven and competent, but as a company they don't seem to have a clear purpose.

On their web site they have the following:

"K3 Capital is a multi-discplinary and complementary group of professional services businesses advising SMEs"
That's simply descriptive, it would be like Coke saying "Coke is a beverages company that sells carbonated and flavoured drinks"

To my mind, they need a purpose or mission, currently that would read "... to grow EBITDA, organically or through acquisitions, to £25M in the short term and £50M in the long term to be a £1Bln Market Cap company"

Another investment of mine, Square Inc., has their purpose as:

"The aim of the company is the empowerment of small businesses."

Guess which one has performed better in a shorter period of time.

[robsy2] 03/11/2021 18:05

Me too . I think they are hugely impressive. ambitious , capable and with a clear plan . The opportunity is huge and they are well set to achieve their ambitions of 25m EBITDA then 50m EBITDA and onto a billion GBP turnover. Why not? They seem very switched on and can see how they can use their in-house data driven approach to cross sell complimentary services across the 3 divisions.
2022 growth is accelerating.

[w13ken] 03/11/2021 18:00

Just attended an excellent Investor Meet presentation from John Rigby (CEO) and Andy Melbourne (CFO) and will add some further comments tomorrow.

Just for now, to address Simba's point above, it doesn't seem like they have ruled out further acquisitions and we can expect organic and inorganic growth in the year ahead.

I remain a confident holder for the long-term.

[scooper72] 02/11/2021 22:10

I decided to take my capital out and just leave my profits invested. I was up 77 percent and still 2 percent of my ISA. Just see a lot of stocks like this struggling towards the end of the year to make their next move up.

[tizo100] 02/11/2021 17:04

We will move up once the profit takers move on there is nothing to stop it a well run company with a big future paying a decent dividend as well

[w13ken] 02/11/2021 14:15

Good question. As per your earlier comment, I have had concerns that were expanding too fast and that caused a 6-week delay in the release of the results. Having said that they are M&A specialists so should be able to merge companies effectively.

This was a modest M&A growth but there were mitigating reasons:
"M&A revenues grew organically from £15.0m to £16.0m (7%). Whilst a small amount of this was delivered through non-contingent fee income (2%), which was directly affected by the effects of the COVID-19 pandemic on the UK SME economy during the earlier stages of FY21, most of the growth was driven by a rise in the volume of transactions completed within the KBS divisions, seeing transaction fee income rise by 11% with K3 retaining its position at the top of recognised league tables as the most active dealmaker in the UK."

There was also a considerable increase in costs and there will be challenges ahead on merges of some functions to a centralised team:
"Naturally due to the acquisitions made in the period, the structure of our costs has changed dramatically in the period. These increased to £39.4m in the period (FY20: £8.5m). The major changes were in staff costs in addition to amortisation of acquisitions and acquisition costs.
Group headcount has increased significantly in the period due initially to acquisitions, followed by organic growth in all divisions. The weighted average number of employees across the Group in FY21 was 372 (FY20: 166). Efforts are
being made to create centralised functions for areas such as finance, HR and IT, without job losses, by re-deploying staff or moving new recruits into centralised functions. The Group encourages maximum utilisation of staff, with a number of client projects being carried out by employees across the Group, notably in corporate finance where a national team has been created between KBS, Quantuma and latterly Knight CF to share information and assist clients with a best in class service."

[w13ken] 02/11/2021 13:37

It will be interesting to hear more at the results presentation tomorrow.


Join K3 CAPITAL GROUP PLC's proceedings TOMORROW at 4:45pm, for all the company insights - Click below to register.

[w13ken] 02/11/2021 13:35

They have definitely had a transformational year so I agree that a period of consolidation seems sensible for the next year. I think we'd all like to see a year of like-for-like comparisons too.

Here are some extracts from the Annual Report:

AIM listed since 2017
337% turnover growth (2017: £10.8m, 2021: £47.2m)
234% Adjusted EBITDA Growth (2017: £4.7m, 2021: £15.7m)

“The period has seen the Group significantly outperform its original market consensus from September 2020...with multiple upgrades...culminating in revenues of £47.2m (FY20: £15.0m) and adjusted EBITDA of £15.7m (FY20: £6.8m), 34% and 57% above initial consensus figures.”

Tax specialist Quantuma bought for an initial consideration of £26.95m generated revenue of £23.19 million (audited), and normalised EBITDA* of £4.53 million (unaudited).

InTax bought on 15th Feb 2021 for an initial consideration of £1.3m, generated £1.2m of fee income and delivered an unadjusted £0.3m PBT (unaudited).

[simba_] 02/11/2021 10:35

Anyone else feel like they should now chill a bit with buying businesses?. Let the dust settle and see how things go?. I feel like they're trying to do too much. Adjustments galore. Let's see where we're really at.

[boadicea] 01/11/2021 13:16

There may be some profit-taking in the wings. One can buy below mid-price which then shows as a sell. Watch for late trades released at cop.
Possibly an opportunity for those taking a longer view.

[rapplications020] 01/11/2021 10:18

Does this now go on a good run - or does today prove that it's impossible to hit upper valuation in current market conditions

[tizo100] 01/11/2021 08:30

K3 CAPITAL (K3C): CORP Positioned to flourish across the cycle following strong FY 21 Full-year results to 30 May 2021 were ahead of expectations (post adjustments) with revenue of £47.2m (against our £46.0m estimate) and adjusted EBITDA of £15.7m. After taking into account an uplift in both revenue and profits following a detailed review of the WIP treatment, we see performance well ahead of our £14.3m estimate. This performance is testament to the Group’s transformation amid a very difficult trading environment, and positions K3 to capture upside across its diversified divisions as the economy begins to recover. We make no changes to our estimates and reiterate our price target of 477p, equating to an FY 2022E P/E of 24.0x, falling to 19.5x to May 2023E. With shares currently trading on a FY 2022E P/E of 17.5x, we see an opportunity to own this diversified, high-growth, fixed-dividend professional service offering ahead of a full economic recovery that has the potential to accelerate progress in Restructuring and deliver outlier profits in the M&A division. The outlook is currently in line with expectations, though the building blocks that have been put in place so far have positioned the Group to capture substantial medium-term upside.

[unnavailable] 01/11/2021 08:16

C'mon. We're all friends here. *flutters eyelashes.

[tizo100] 01/11/2021 08:15

Very positive not allowed to post it lol

[unnavailable] 01/11/2021 08:07

Anyone shed light on what the brokers are saying?

[simba_] 01/11/2021 08:00

We're about to find out.

[simba_] 01/11/2021 07:59

6m non recurring costs affects pbt. Get it roughly 13ish. Cogs and additional distributions costs could be a concern going forward. I still get it worth over £4. If it falls on this today, I'll buy more.

[tizo100] 01/11/2021 07:56

JohnDoe23
Ignore him mate he is wrong

[gswredland] 01/11/2021 07:56

That was quick for Fincapp but good to hear