Proactis Share Discussion Threads

[p1nkfish] 09/8/2018 16:59

Odey betting against the £ in run up to March 2019.
PHD might see some slight benefit on currency conversion.

[rubberbullets] 09/8/2018 12:40

Moving up on level2

[rubberbullets] 09/8/2018 10:31

Can see these back over 160

[aishah] 09/8/2018 09:09

Progressive Equity Research note out:

PROACTIS has given a (limited) update on current trading, and has announced another acquisition – a sensibly-sized SaaS business in The Netherlands. We update 2018 and 2019 forecasts, and are pleased to see the group has not been derailed from its strategy by the hopefully one-off issues affecting Q3.

New fcsts are Adj eps 9.3(2018), 11.7(2019).
EV/EBITDA 7.7(2018), 6.6(2019)
PER 11.2(2018), 8.9(2019)

[p1nkfish] 08/8/2018 22:39

Esize bought at approx maximum:

3x Revenue
8.8x EBITDA
25x profit before tax

3-5 yrs is a long time, we don't know what the debt level might be, but those metrics applied to PHD could give a very rough guide. By then at least one major competitor (VC backed at high valuation) will probably have blown up. Hamp Wall said he wants to be around when that happens and I guess there will be a lot of customers & talent to pick-up as a consequence, probably going cheap. 

The landscape will be different and scale matter even more.

I think the current price is a good entry for the patient.

[p1nkfish] 08/8/2018 22:20

Granted, below is a shareholder expectation of 100M+ but it is off Proactis website and management are also shareholders.

I wouldn't be too surprised if, behind closed doors, management are at the least this ambitious or even more so but daren't express it so call it "shareholder" expectation and give 3 years as the lower time limit and not 2.5 or 2.

"Proactis is expected to report record revenues for the year ended 31 July 2018 of more than £50m, with shareholders expecting this rate of growth to accelerate substantially over the next 3-5 years to £100m+."

[gargleblaster] 08/8/2018 10:48

So much so that it needs re-stating!

[gargleblaster] 08/8/2018 10:48

Good bounce-back

[gargleblaster] 08/8/2018 10:47

Good bounce-back!

[horndean eagle] 07/8/2018 20:16

Broker forecasts but for both this and next year. They are economical with the truth.

[rubberbullets] 07/8/2018 14:59

Full price being paid


Nice 28k buy

[eagle eye] 07/8/2018 12:27

I think Proactis has a talented management team, but I understand the criticism over adjusted EBITDA.
Recognizing profit before cost of financing does window dress figures and likewise, tax needs to be deducted.
PHD doesn't write off it's £5m R&D annual spend either, but capitalizes it which also flatters current earnings per share.
If Proactis hadn't lost two (non-core) significant contracts then I don't think investors would be so picky, but it's horses for courses and I understand why some people are critical.

[p1nkfish] 07/8/2018 11:12

In future £2 will be cheap.

[eezymunny] 07/8/2018 11:03

Try reading what I said PJ.

All I said is that using adjusted EBITDA is awful IMO, and they probably didn't make much, if any, cash backed profit in H2.

The future is another matter.

Just wish these companies didn't use such childish headline numbers.

[p1nkfish] 07/8/2018 10:58

It's a strong buy.
Was when aub 30p too ♧.

Watch what happens as supplier finance side achieves traction. Lower margin but boy can the numbers ramp quickly. Expect news there in Next 6-18 months now driver of that bus is on-board as of 1st Aug. Tie-in with Hubwoo and it's potentially explosive.

Extracting value from the sell side in both the buy-sell market and their invoicing. Not like incremental costs need to be high when the infrastructure is in place. Can scale quickly.

Exciting at this price.

[pj0077] 07/8/2018 10:50

You seem a bit grumpy EezyMunny, chillI see Finncap are forecasting a FREE CASH-FLOW yield of 10% for next yearMaybe the EBITDA isn't such a smokescreen after all!#LOLZ

[mfhmfh] 07/8/2018 10:45

This from finnCap:

'We adjust forecasts to match updated FY18 guidance, adjusting FY19 as trading stabilises and gains strengths and support from Esize. At an astonishing FY19 free cash flow yield in excess of 10%, Proactis retains strong upside from forecasts adjusted to offer an opportunity for outperformance, while representing a realistic take-over target, with peers valued at multiples of Proactis multiples'.

[eezymunny] 07/8/2018 10:31

Up to you if you want to kid yourself that adjusted EBITDA is anything but a smokescreen. Let's see what the world's greatest investors have to say about it...

www.oldschoolvalue.com/blog/investing-perspective/buffett-klarman-ebitda/

"People who use EBITDA are either trying to con you or they’re conning themselves"

Whatever, I expect you're much smarter than Buffett and Klarman...

[pj0077] 07/8/2018 10:21

EBITDA = gross cashflowNaturally it will be larger than cash generated, given thay to get from EBITDA to cash generated you need to deduct:* interest* tax* capex (incl. R&D)Capex/investment can be substantial for small, high companies. Proactis generated 64 new deals + 119 upsells in the last financial year. Do you not think this might have required some investment?!

[eezymunny] 07/8/2018 10:01

I didn't say the RNS was awful etc. I said the use of adjusted EBITDA is IMO awful. The increase in debt gives you an indication that they didn't make much, if any, money in H2. The adjusted EBITDA figure makes it look like they are hugely profitable. It's just a smokescreen IMO.

[pj0077] 07/8/2018 09:09

Today's revenue & EBITDA numbers in line with the June presentation (03:00-03:15) : https://youtu.be/Wg2DRsSN1nAIf analysts had higher numbers than this then they were asleep.And if today's RNS is too awful for words, I suggest you quit typing!

[pj0077] 07/8/2018 08:49

Proactis haven't missed on sales any more than the weather misses a weather forecast.Simply the forecaster got it wrong.The first Proactis profit warning was in April... when was the second?

[horndean eagle] 07/8/2018 08:44

Management have a huge credibility problem. Trying to bluff through today's announcement without referencing a big miss on sales is a continuation of their previous behaviour. I think they have an overestimated opinion of themselves. On the way up it worked. They managed to get a placing away at a premium to share price at the time. Their view was this is the price and institutions just ended up paying up. All that goodwill definitely gone after a couple of profits warnings.