K3 Capital Share Discussion Threads

[johnrxx99] 15/7/2022 08:07

Is the stock suspended?

[bwana4] 14/7/2022 08:31

The markets are dire at the moment. Today the cosh is on the Insurance industry.
The Admirals and Co are all down. The small Bio Tech have really taken a hammering !!
I suppose we are in a safer place for the time being here.
I am waiting for the results from BEG on the 19ththen FRP on the 22nd.
I know K3C is a bit diffrent only 20% from Co.s bankrupcies. More income from mergers. Let's see how it goes.

[2vdm] 13/7/2022 06:36

Agree K3C.I don't mind waiting. It's a well run company and will rise eventually imo.

[gswredland] 12/7/2022 16:10

Thanks
I have every confidence in K3C

[bwana4] 12/7/2022 11:08

Gswredland,we are traveling on the same boat. Not a problem at all to share information.
I wish us all luck in our investments. All kind of dodgy dealings happen in the market place !!
Who knows the truth ? We just waite and see what develops.
ATB

[gswredland] 12/7/2022 07:56

bwana4 thanks for the info on director sell.Very odd!

[bwana4] 12/7/2022 07:46

Good morning Guys' It is a very quite BB here.
I hold All three BEG, FRP and K3C. Well BEG results are out on the 19th and FRP's
on the 22nd of this month. I think those two will set a benchmark for the share price here though K3C is a bit different beast IMO. Have a nice day all.
GLA.

[bwana4] 10/7/2022 14:38

Well The Director sold 20K shares at £2.45 to give the money to a charitable trust. The market takes no prisoners though !!
He sure effected the share price. Why not give the money out of pocket and pick a good time to sell the shares? Like after results !! They sometimes take the confidence away from the share holders at times ! Just a bit irritating though !
ATB.

[bwana4] 08/7/2022 10:34

Well worth a read. I hold all 3 BEG,FRP and K3C.

hxxps://www.cityam.com/uk-financial-services-roars-back-after-pandemic-slowdown/
GLA,

[johnrxx99] 28/6/2022 07:45

This professional services firm released a ‘comfortably ahead’ trading update for FY May 2022. Market expectations based upon their broker’s research (Numis) were £63.5m revenue and £18.2m EBITDA. The RNS says £67.5m revenue and £19.5m adj EBITDA, so c. 6% ahead on both lines.

Organic revenue growth was +18%, there’s no mention of profits and management preferred measure is adj EBITDA which was up +24% including acquisitions. Looking at the H1 to November, around half of adj EBITDA of £9.4m converts into statutory PBT of £5.2m, and at the H1 stage cash from operations was less than £50K.

There was £12m of cash at the end of May, down slightly from £14m May last year. The update is reassuring because there was a sharp sell-off at the beginning of May when the shares fell -27% to 215p on no news. They did put out an RNS following the decline, saying that they were not aware of any reason for it, and they confirmed a strong start to their second half and market expectations. Looking at Sharepad’s DD tab, I can’t see any significant share sales reported in April or May, and neither are there any RNS releases suggesting either management or large institutions have crossed any thresholds.

Miton is still the largest holder with 14%, followed by the Chief Exec John Rigby who owns 10.3%, so the reason for the sell-off remains something of a mystery. Although it is not mentioned in the trading statement, I have written about how the company accounts for earnouts. My point is that earnouts and deferred consideration make sense, but investors need to understand that they are liabilities. K3C tended to use ‘fair value’ accounting and scenarios, with a much larger potential liability tucked away in the notes to the accounts, rather than the face of the balance sheet. The number of shares increased +64% to 69m last year, so it could be that a large block of shares owned by employees overwhelmed the market maker, who struggled to find a buyer to take the other side of the trade.

Background: K3 started life as Knightsbridge, a business broker that specialised in selling businesses with less than £1m enterprise value, that had leaseholds rather than owning the freeholds, in 1998. They came to market as K3 Capital in April 2017, at a placing price of 95p raising £2m, and valuing the firm at £40m market cap. Since then, they’ve acquired RANDD, an R&D tax credit specialist for £9m (75% cash, 25% shares) + earnout. They then raised £30m in a placing for further acquisitions and bought Quantuma in August 2020, which does restructuring and insolvency, for £26m initial consideration plus £15m deferred. Revenue has grown very strongly, but profitability has fallen – albeit from over 100% RoCE which was likely too high to be sustainable.

Valuation: The shares are trading on 11x May 2023F and May 2024F, which is not expensive. The quality measures are impressive, but I do wonder if they’re enjoying a favourable part of the cycle, and how well they’ll do in a recession, particularly as they are a people business that has grown by acquisition.

A final observation: When you have professional services companies like RBGP, SFOR and K3C growing by acquisitions made partly with shares, then management have every incentive to try to keep their share price buoyant because their own share price serves as currency for acquisitions (both purchases already made but only partially paid for, and future deals). We’ve seen recently that there’s a downside to that with NextFifteen’s 30% share price fall, following the attempt to buy M&C Saatchi for 40p in cash and 0.1637 NFC shares. When the deal was announced in mid-May, that represented a 49% premium to the M&C closing price, but the value of the shares has fallen by 30% since then. M&C Saatchi itself got into trouble a couple of years ago, with share-based compensation that proved a serious liability when the share price declined.

Via Bruce Packard on Sharescope 27 June

[starpukka] 27/6/2022 15:20

Naked Trader a fan here too.

[adipsia1] 27/6/2022 14:20

The other aspect that appears to be overlooked by many in the market - especially Investors Chronicle - is that K3C are now one of the largest players in Restructuring having acquired Quantuma.K3C began life as business sales company, but now have a very strong presence in restructuring, so I find it bizarre that in their most recent article on insolvency, IC only mentioned BEG and FRP.This will change over time, but until then just rest assured that like BEG and FRP, they're in the right place at the right time.

[bwana4] 27/6/2022 12:21

Melody9999, I think it could be the spread when buying the shares. Also the share price fell quite low a while back.
The Co. gave a very good trading statement recently. I am invested in all three and BEG has done really well for me. K3C will catch up in it's own time too IMO, just requires patience IMO.
ATB all.

[my retirement fund] 27/6/2022 12:01

chart looking like an early turnaround, that's yet another higher low been and gone.

[melody9999] 26/6/2022 10:54

Just had a look in here, and to me it does not seem surprising that K3C is doing well in the current environment. Good numbers for all 3 divisions.

I am comparing with FRP and BEG who are also reporting good prospects and their share prices have responded. Meanwhile K3C is 33% off highs.

Is K3C different? What is it that the market is not liking?

[tizo100] 24/6/2022 10:25

where do you do your research you clown

[bwana4] 23/6/2022 18:13

JohnDoe23.
I could not agree more with you .
I mean a shareholder says the PE is too high!! Then why is this person invested here ?? Perhaps wants to buy in lower ?
FUD spreader!!
FUD = Fear,Uncertainty and Doubt !!
GLA genuine holders.
ATB.

[bwana4] 23/6/2022 15:33

Daisylove, just a question by me .
Why should K3C not have a high PE ?
There are many Co's with a much higher PE in the AIM market.
As I am sure you know that the market is always forward looking. So in a nutshell
the recent trading statement alone should have propelled the shaeprice into £3+. I think the current market conditions are responsible for where the share price is today. If you feel that it is unnecessarily ramped up then perhaps you should sell up and look for a Co with lower PE.
I am just expressing my views.
ATB.

[daisylove] 23/6/2022 13:48

From whom?
This has an unrealistically high P/E and despite the share price being all over the place is still being ramped by some.

[tizo100] 22/6/2022 17:16

this must attract a bid soon at this price

[gswredland] 22/6/2022 12:09

Bring on the low 200's to add some more!

[johndoe23] 22/6/2022 11:59

Market makers dropping this again on a few small ish sells

[c3479z] 21/6/2022 11:15

good apart from the margin squeeze.

[toffeeman] 21/6/2022 10:05

I just sold the rump on the bounce.

I don't think the (general) pain is over for markets yet.