M&c Saatchi Share Discussion Threads

[tomboyb] 06/5/2020 13:42

Yep -

Petering into the 70s now -

Clearly a lot of interest in not only SAA but vin -

[qs99] 06/5/2020 12:48

Nice point Markie and tend to agree. Surprised not been any RNS as you say disclosing the sold position.

Looking strong again IMO given 72p on the offer....DYOR and nice to hit the leader board again!

[markie7] 06/5/2020 12:35

A further interesting thought is where did the Vin stake come from? There has been no corresponding RNS from any institution. One can only assume that it is perhaps a placing of the ex-director stock - they all held c.5% each. Maybe some of this has been offloaded. It is an assumption, and may well be wrong. If I'm right then that is a significant overhang cleared.

[qs99] 06/5/2020 12:09

Well £1 could be seen at this rate imo
Dyor

[kemche] 06/5/2020 11:00

According to Techmarketview and Holloway:

"The motive behind Vin’s purchase of the stake in M&C Saatchi are unclear. But Vin has huge experience of ‘fixing’ companies and I see no reason why those skills can’t be applicable in an advertising agency as much as a tech company. Indeed, Vin was a NED at Chime Communications, a competitor to M&C when it was quoted on the stock market up to 2015."

Worth reading the whole article IMHO.

[kemche] 06/5/2020 10:21

Will hopefully soon see what her plan is.

[qs99] 06/5/2020 10:14

yes Markie#s in particular! Looks like 70p should be given up shortly given spread has narrowed on screen DYOR and roll on that quid!!

[tomboyb] 06/5/2020 10:07

Heading now towards 70p -

Vin buying was the catalyst to get interest back here -

Additionally some good posts as well -

[qs99] 06/5/2020 09:36

moving again nicely, presume can't be much stock around?

[qs99] 06/5/2020 08:36

AND just as I posted, it popped above 60p and looking good for further gains IMO

[qs99] 06/5/2020 08:36

Noice approach Markie and for me this is about 2021, 2020 will be a write off year for most plcs (some exceptions I get that). so if you can survive, not have to much debt, we are approaching being half way through the year, so markets looking 6 months ahead and in these exceptional circumstances will just say, ok 2021, what "value" can I see there and buy accordingly....!!

DYOR but I am long and strong as they say for that quid!
Cheers
QS99

[tomboyb] 06/5/2020 08:25

Morning -

into the 60s -

[markie7] 06/5/2020 07:52

....of course if you want to follow 2019 results and look through 2020 completely, then you assume £25m pbt for 2021. This means £18.75m PAT which gets you to 12-13p eps. Times 10, or possibly 12 if covid recovery confirmed by then and you have a target share price of between 120 and 145pNot often you find a share that needs to deliver flat performance in order to potentially double

[qs99] 06/5/2020 07:33

More to come today? Gla

[kemche] 05/5/2020 15:19

Ta Markie - very useful.
Expecting a rather large kitchen sink which may all be priced in.

[qs99] 05/5/2020 15:02

Thanks Markie, don't often see those sort of informed posts!

I think most instis will see 2020 as a write off year. Buying for 2021 and beyond.

They will have restructured, taken cost out, albeit put cost back in for finance team etc!! But if it can get back to 2018 by your numbers above c.£30m Headline PBT next year or even year after that, then this market cap will IMO begin to look too low for this sort of brand.

DYOR, still holding for a quid plus at mo?!

[markie7] 05/5/2020 14:52

Put liabilities about £25m per the last results. A fair chunk of that has just been settled of course this week (about £4m maybe?)

If you assume full issuance of all these liabilities at 50p - that is £21m / 0.5 = 42m shares.

Total shares in issue goes to c.160m.

Headline PBT is about 25% lower than 2018; so about £24m for 2019. (this is already announced)

Assume that halves in 2020 due to covid - £12m.

Tax at 25% - Post tax profit therefore is £9m.

So 9/160 = 5.6p eps on the enlarged share capital plus Net cash of £9m.

Makes 60p look like about 10*earnings - and this is a pretty severe case, as it assumes a) 50p issuance price on the put options, and b) they all get issued immediately, and c) 50% profit fall from covid in 2020.

If you assume 60p issuance price (the current price), and 25% profit fall in 2020 from Covid then you get the following:

35m shares issued - ISC = 150m shares. Headline PBT in 2020 is £18m; using same tax rate - PAT = £13.5m

EPS in this scenario = 9p - so at current prices the ex cash multiple is c.6*

So - at 60p - the business is valued anything between 6 times and 10 times.

My guess is this is all pretty prudent, so BUY at 60p.

thanks

[kemche] 05/5/2020 14:24

Let's hope she knows her way around a balance sheet.

[kemche] 05/5/2020 14:22

Albert, Let's hope it has not escaped Vin's notice!

[albert zog] 05/5/2020 13:43

Material put liabilities here in £m

Significant equity issuance due to vendors. Will dilute existing holders

All in the accounts

Tread carefully

[tomboyb] 05/5/2020 13:24

Sphere -

I think you are right on one point and that is Vin clearly will know more than others to take such a large stake -

It is a big stake so lets see where this goes -

[qs99] 05/5/2020 13:22

think the accounting issues are historic, and think the "tech queen" obviously sees it as such as well IMO. New FD, team etc, should help ensure better governance.....let's see...

[sphere25] 05/5/2020 13:17

It's gone abit bonkers. I'm selling out into this spike. It's an enormous move in an absolute flash (highlighted at 35p, now 60p) and just downright sensible to take gains in such an uncertain market. The accounting issues are too much for a cloud personally (rules are rules!) and thus why I called it a high risker and it was a short term play alone.

The Tech Queen clearly must know alot better than trader folk like me in amassing a significant stake though, so there must be big upside here for holders. Nothing is a given in this market in the short term though, but good luck to all holders. Hope it goes even more bonkers higher than this!

[diku] 05/5/2020 13:10

No doubt they will have done some and a lot more due diligence before taking the stake...

[tomboyb] 05/5/2020 13:06

with the interest it will break 60p -

60p+ coming -