Citigroup Global Markets Limited at 5.8%. Threshold crossed in May 2024 but PINE only notified today. |
Christopher Harwood comments on PINE from 22.25
Also .... I hadn't realised that there was a recording of the October Capital Markets Day: |
Some progress here at last- decent tick up in vol last few days- overhang starting to clear? |
CFO buys c. £100K's worth |
MIDAS SHARE TIPS: Car sales software firm Pinewood plots global expansion |
The Oak Bloke's analysis is at
(Note that TOB is using the old year end of the 31st January, but PINE have now changed this to the 31st December) |
Today's CMD presentation is at |
FY27 (year ending Jan 2027) had previously been forecast to produce £27m EBITDA, pre tax profit of £23.6m and EPS of 20.3p. Today's 10% underlying EBITDA upgrade should also improve underlying EPS by 10%, so at 340p this is trading at around 15x the 2 year forward PER.
To me that seems very cheap considering the pending US rollout via Lithia & the fact that even with the Marshall's deal they are only in 4 of the top 20 UK dealer groups.
Loads of potential to reach £50m+ in EBITDA by 2030 and a share price multiple north of here (particularly as a US listing would become more attractive the larger they became). |
Pinewood Technologies Group Plc : Berenberg raises PT to 455p from 400pPinewood Technologies Group Plc : Jefferies raises PT to 575p from 550p |
 FY27 underlying EBITDA guidance increased to £30m Following the successful early progress that has been made since Pinewood began trading as a standalone business at the start of February 2024, and the ongoing positive growth drivers it sees in the market, the Group is also pleased to announce that it is raising its guidance for underlying EBITDA in FY27 to £30m from £27m.Bill Berman, Chief Executive Officer of Pinewood Technologies Group PLC, said:"Pinewood is a business with over two decades of industry experience and engagement with the automotive retail sector. We provide our customers with a single, secure software system that covers all aspects of the customer journey from the front of house reception team, the vehicle sales team, the service technicians, right through to the accounts team. We have very high levels of customer retention and are proud to partner with over 50 OEM brands worldwide, many of whom are long-standing partners. "This provides us with strong foundations to achieve our ambitions as a standalone company and I am delighted with the progress we have made this year. We have largely completed the rollout of our products to the UK sites of our strategic partner Lithia and earlier this week we were awarded a contract with Marshalls, further strengthening our position in the UK. Meanwhile, our strategic partnership with Lithia provides access to the extremely lucrative North American market and we remain on course to begin piloting our system in a number of Lithia stores in the second half of 2025, before the full North American system rollout starts during 2026. "Today, we are also announcing an exciting update to our customer-facing brand identity under the banner of Pinewood.AI. We believe this reinvigorated proposition will further enhance the steps we have already taken to strengthen our go-to-market function and deliver on the exciting plans we have for the future." A presentation of the event will be available on the Pinewood investor relations website at 9.00am on Thursday 24th October 2024. A recording of the event will be available on the Pinewood investor relations website on Tuesday 29th October 2024. |
Sounds like more to come. If this works out well, others will be looking hard at our offering. Capital Markets Day on 24th might give us more of an insight. |
Yes great new contract |
Yes great new contract |
yes that is a great win
I wonder what the plan is to deliver this, I guess their small implementation team will still on the UK Lithia rollout. I dont know how they recognise the ARR associated to the deal, common for the sector is for it to be recognised when the new sites are live.. |
Great news today. Well done Pinewood |
Full strategy update out to FY2030 in the London Capital Markets event on 24th October |
 Talking Talk - 10/10/24
Pinewood – time taken to create or sell does not necessarily reflect scale or quality
On approximately 8.5x EV/Sales for FY24 (Dec), much of Pinewood Technologies’ market value must be attributable to the considerable potential in the US, courtesy of its relationship with Lithia, the third largest new car dealer in the US.
Pinewood is an established car dealer management software business. It was previously a subsidiary of Pendragon, the UK car dealer, prior to its takeover by Lithia. Lithia retains a 25.5% stake in Pinewood and, in addition to the roll-out of Pinewood’s product across its around 50 non-Pendragon UK dealerships, it provides Pinewood with the opportunity to sell into Lithia’s 320-dealership US network as a springboard into the wider multi-billion-dollar US market.
To its great credit, management has stated that the US business is in many ways like a start-up. Although possible less of a start-up than Made Tech’s software adventure.
The Pinewood Technologies plc timeline does not fit with the Pinewood Technologies product development timeline. The US product isn’t ready yet and there is no established sales structure. There is a customer in place in the form of Lithia and beyond that there is interest from other parties. But interest in a software application is not a sale, and Pinewood’s management knows that.
There are well established solutions in place although, as Pinewood’s management is keen to point out, they are less than optimal, with management regarding the fact that Pinewood will be able to offer a unified solution as a key competitive advantage.
The attraction of removing up to 10-12 open windows from customers’ desktops is evident but that is 10-12 products that are on different purchase cycles, possibly attributable to different departments, all with die-hard fans within the potential customers. And for many customers, the integration work may have been done already.
There is no clear imperative, no industry trigger, to the adoption of Pinewood’s system.
It could well provide a more cost effective and user-friendly solution that improves its customers’ operational and financial performance, but it needs to be proven in the US. While working within the Lithia stores may prove its direct worth to Lithia, it may require third-party evidence to make a wider potential customer base believe.
On top of this, we have Lithia’s roll-out. Lithia’s priority is Lithia ($8.3bn market cap), not Pinewood (£279m market cap). And even if we consider it from the standpoint of Lithia as a long-term shareholder (25.5%), it makes sense to ensure that Pinewood is not driven by short-term UK investor relations targets – most notably the number of Lithia US stores served.
So many variables are at play in determining how long it will take for Pinewood to make its sales in the US. Much as Pinewood’s management might wish to provide detail on the milestones in the US, it really can’t.
The risk is that the market interprets slower sales processes or just the need to get ducks in a row as evidence of a smaller market size, or more likely a struggling product. Furthermore, the ‘market’ is quite capable of creating a narrative that is not about its own failure to listen but more about a perceived failure on management’s part to caution.
Pinewood has provided quite detailed commentary on what it hopes to achieve in European and Asian markets, where it has a product and knows how things work. This gives the market something to look at in the meantime, but perhaps in doing so it is creating a demand for it to set out targets for the US.
The challenge and opportunity for investors is that the thing that changes (timing) is the thing that makes the difference to the short-term share price, but not much difference to the long-term value.
That said, with the current key milestone being the ‘roll-out to start in Lithia stores in FY26’, if management does nothing wrong in the meantime, the challenge may be staying interested. |
Although expected, it doesn't help that the original founder and MD Paul Hodgkinson has officially now left the business. |
Perhaps worth listening to last week's presentation.
Mgt explain that the drop in PBT from £4.6m to £4m – presumably the main cause of the drop in the share price – was caused by a step change in costs, particularly on sales and marketing, but that there is only modest further expenditure to come.
They say that Lithia didn't really get moving pushing PINE's DMS until July and so we should hope for higher rates of user growth than the H1 figure of 3.6% in future, although greater revenues per user are expected to be the real driver of increased profitability. |
Almost 12% down at the moment |
modest revenue growth here with opex heading up by 20+% - not a massive suprise given they are a standalone business now and investing in growth but on a forward PE of 30ish and 10X revenue this valuation looks toppy. Especially given the outlook for the automotive sector.
Expansion outside of the UK will be a long runway, I think next year will also be challenging |
What's not good. |
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