Totally Share Discussion Threads

[nobbygnome] 07/6/2019 08:20

You invest by looking in the rear view mirror. I look forward which is of course what all investors should do. The absolute amount the company paid give or take the odd half million is not that relevant to me as long as a sustainably profitable company emerges from the deal. I was confident that Vocare was going to deliver that anyway but now with Greenbrook I am supremely confident this will come to pass, hence I am taking this opportunity to average down in a substantial way.

[grahamwales] 07/6/2019 07:29

You have to wonder why people like savage and 1gw spend so much time on this board even into late evening. Do you not have a life? Go out and enjoy yourself not stuck on here trying to convince those invested to sell up. What do you gain from it? Is it an obsession are you unable to switch off. Don't spend the rest of your life stuck behind a keyboard.

[sikhthetech] 06/6/2019 22:38

Look at the TLY presentation...
The Journey so far... In just over 3 yrs...


TLY are doing exactly what they said they would...


Building Totally into a leading ‘out of hospital’ healthcare provider to help address the significant healthcare challenges faced by the UK now and importantly, in the future

[sikhthetech] 06/6/2019 21:50

The rthm gang with their multiple ids are really rattled...

The deal must be really good.. the rthm/TAP gang and their multiple id shorters are really desperate and rattled..

The GM will be fun.. watch out for the lawyers...
;-)

[nobbygnome] 06/6/2019 21:03

There really is so much navel gazing from the bashers on this threads some of whom claim to be shareholders! Sometimes I lose the will to live...

[football] 06/6/2019 20:55

Doesn't the boiler room gang ever sleep here or do they just ramp 24/7

[1gw] 06/6/2019 20:36

And back to the question of "excess cash". Greenbrook have built up a successful business with a conservative balance sheet. The conservative balance sheet can be seen by the lack of intangibles, cash balance, net current assets and lack of any significant debt.

Net current assets have grown as the business has grown. £1m at end-FY16, £1.5m end-FY17, £2.5m end-FY18 and £2.8m end-1HFY19. Cash likewise from £4m to £4.8m to £6.6m and to £7.4m. That presumably carries some weight with both customers who outsource services to them and the doctors who choose to work for them - here is a responsible, conservatively-managed, solid company.

Along comes Totally with its talk of "excess cash". What happens if you take £4.5m cash out of the company? The cash balance obviously drops and the net current assets become net current liabilities of £1.7m. Doesn't look quite so solid now.

Well, never mind, it's bigger and stronger because it's part of Totally isn't it? Except that Totally already has an aggressive balance sheet. So the pro-forma accounts, even after accounting for the placing, show the combination with £11m of cash, but £8m net current liabilities. Definitely not looking so solid. Even worse, Totally has been consuming cash (before placings) whereas Greenbrook was cash generative.

So the combination has net current liabilities and looks to be not significantly cash generative. Risky. Potential for big rewards if they get it right, but what happens if they get it wrong (again) and get an unexpected big bill (e.g. integration costs or litigation award to the disgruntled seller) or fail to get one or more of their big contracts renewed?

[savagedstock] 06/6/2019 20:26

re post 9163

the reasons people sell a business are

1. retirement - and no family member is willing to take it on, doesn't apply in this case
2. you cannot take it any further - unlikely in this case given the enormous BS written about future growth on this board
3. someone has paid you any eye watering amount and even if you sweated that business as hard as you could, you could never make what is being offered
4. your business is about to take a downturn, so best to get rid - let's hope not in this case
there are i think 6 owners in the LLP that will trouser the cash. a. special divi of £4.5M or whatever they can take out to to get to normalised wc b. £9M of cash upfront. So 6 people are sharing effectively £13.5M, which of course will not be evenly distributed - some like the CEO and Medical Director will get more than the others.....however you look at it, its good money but not (probably) life changing...so has anyone asked TLY why does GBH want to sell?

[nobbygnome] 06/6/2019 20:23

Half empty muppet.... You over analyse every situation looking for every negative. I would go and see a therapist if I was you....

[1gw] 06/6/2019 20:13

I think you're being led, there, Nobby, but I'd agree with your answer. Possibly the idea to sell was triggered by seeing tly buy Vocare and seeing Vocare owners cash out so successfully. Would Greenbrook ever have imagined that someone would allow the Vocare owners to cash out for £17.5m, of which over £12m was in up-front cash?

So having been through a sale process, Totally has emerged as the best offer. They've offered a better deal than anyone else, have they overpaid as a result? Despite only having £7.4m cash on the balance sheet and net assets of £3m (at 31/10/18), Greenbrook owners are going to get around £13.5m of cash, plus some shares for their company. Not bad, when you look at when their current big contracts expire and think about the risk of political change.

[nobbygnome] 06/6/2019 19:52

What a naive question. To cash in on your hard work is the obvious answer.....

[grahamwales] 06/6/2019 15:13

Sikh. If you use the half year revenue of GBH you looking at total for the year of around £44 million.

[microscope] 06/6/2019 15:13

Go in the supermarket buy the weekly groceries and if you're 1gw you end up paying for the store... :))

[sikhthetech] 06/6/2019 15:09

Question is how much would you pay for a growing profitable company, operating in the lucrative London & SE area... a company which expands TLY's existing offering at a time when the NHS is rolling out the new IUC contracts????



£1.4m pre-tax profit on £33.4m revenue...




"For the year ended March 2018, Greenbrook generated GBP1.4 million in pretax profit on revenue of GBP33.4 million. Over the 15 months ended March 2018, Totally generated GBP2.1 million in pretax profit on revenue of GBP42.5 million."

[1gw] 06/6/2019 15:01

grahamwales - the cash balance may well have changed, but will the normalised level of working capital? Who will get to keep any extra cash? Or who will take the hit if cash has gone down?

[1gw] 06/6/2019 15:00

Tly is expecting to pay £16m to the Greenbrook sellers at completion for their company. The assets (including the cash) and liabilities will pass to Tly at that time.

If you look at the Tly accounts post-completion, if estimates are good you will see it goes on the accounts at a consideration of £16m. Just the same as if you look in the FY18 accounts, note 19, you can see that Tly paid £17.5m for Vocare.

Anything else is just optics IMO. Tly are buying a company, which includes assets and liabilities. They can't just look at the assets and net them off because the liabilities are still going to be there.

£16m of estimated goodwill and therefore effectively zero net assets (before goodwill) as I read the pro-forma accounts.

[grahamwales] 06/6/2019 14:58

1gw. One other point you are basing your figures on October 2018 half year report, we are now in June so that cash balance may well have changed.

[microscope] 06/6/2019 14:50

So you finally admit what we have bought is 11.5 million, not 16 million, 1gw.

Thank you.

[nobbygnome] 06/6/2019 14:44

So 1gw, do you agree that you shouldn't count cash which was never yours? Simple question, yes or no?

[grahamwales] 06/6/2019 14:41

Wow 1gw it’s a good job you are a shareholder I would hate to see your posts if you weren’t.

[1gw] 06/6/2019 14:37

And of course in addition to the £16m to be paid for Greenbrook, they've burnt £1.3m on placing and acquisition fees. So effectively it has cost TLY £17.3m (or £12.8m for the company minus the wc adjustment), hasn't it? And existing shareholders have been massively diluted at 10p.

[1gw] 06/6/2019 14:33

microscope - but the company you apparently valued at £20m and the one described in the admissions document does have that cash. So for £11.5m you're buying something a bit different.

If you look at the historical financial information presented in the Admisssion Document, you can see Greenbrook's balance sheet at 31st October 2018, with £7.4m of cash and £3.0m net asset value.

When you remove £4.5m of "excess cash", you will have a company with £2.9m of cash and negative net assets (£1.5m net liability) won't you?

Another sense-check is the estimated goodwill, which is just under £16m, before fair value adjustments. So I think that's telling us that they expect to bring Greenbrook onto the TLY books at zero net asset value, even including intangibles such as contract value (so perhaps £1.5m tangible liabilities and £1.5m intangible assets before goodwill). That looks to me like a huge premium and they're going to need a lot of synergies and profitable new contracts to justify it aren't they?