Venture Life Share Discussion Threads

[hydrus] 29/8/2017 08:47

BTW here's a lesson - I saw Frontier Developments on various boards but never looked at it as assumed it was s mining company - doh!

[discodave4] 29/8/2017 08:46

corkers! :)

[hydrus] 29/8/2017 08:37

I can't keep up with FDEV. Topped up this morning first thing which is good as it's shot yo again but I may want more.I'm ignoring everything except the fact the company is only worth £300m or so. Think it could be a very large company in a few years. Everything else is noise.

[redartbmud] 29/8/2017 08:34

APAD

T'was ever thus, Pip old chap.

Or a more modern tune:
Why does it always rain on me?

Email to red: Stop singing in the shower ;-)

red

[discodave4] 29/8/2017 08:24

Profits are a "matter of opinion" Dave.Morning APAD, you do come out with some corners!DD

[apad] 29/8/2017 08:04

....and of course the MMs have upped the BOO bid price, red.

Why does this sort of thing keep happening to me :-(

apad

[apad] 29/8/2017 07:55

Profits are a "matter of opinion" Dave.
Never look at them myself, because I assume the accountants can play all sorts of sleight of hand that I don't understand.

BUNZL keeps on giving. There are some companies that make one wonder why one owns anything else.

apad

[redartbmud] 29/8/2017 07:12

Citywire AAA-rated midcap veteran Richard Watts has upped his stake in online fast fashion retailer Boohoo (BOOH) as the shares hit pause following a near five-fold appreciation over the last 18 months.

The manager upped his stake to 15% of the business worth £394 million at a share price of 233p, up from 42p in early 2016 but just off from June’s 266p peak.

The shares are mainly held in his £2.9 billion Old Mutual UK Mid Cap fund, the largest external owner, with a small position in AAA-rated colleague Luke Kerr’s Old Mutual UK Dynamic Equity fund.

The company, which now boasts a market cap around four times that of Debenhams, has seen explosive sales growth for its discount high street clothing among a target market of cash-strapped 16-30 year olds.

The most recent spike followed a 106% climb in revenue to £120 million in the three months to the end of May, on a 24% increase in active customers to 5.2 million.


red

[lauders] 28/8/2017 14:43

I see SPE has come off the boil a bit. Since we are talking software type companies may be worth a look for the number crunchers?

Looks like we may break the US$ 1300 mark in gold soon. Very near now and has been a tough ceiling to break through.

[discodave4] 28/8/2017 13:04

Sorry APAD but have to disagree:"A balance sheet will tell you nothing about that."It will if they are massaging profits by dumping underlying costs onto the BS as development costs. Also, £10m negative equity, a negative net worth/book value!......mcap £182m, is a big warning sign for me.DD

[discodave4] 28/8/2017 12:55

The four acquisitions had revenue circa £10m (FY16 £8m, say +20% growth), that means development costs capitalised on the BS for the acquisitions represents 42% of revenue whilst "group" excluding acquisitions was 7.3%. This cannot be right, too much ambiguity in the finals around what makes up the significant increase in the intangibles.So, the P&L numbers / bottom line has possibly been "inflated" by how much of the £24m?.DDps put a long spread bet on Boo last Friday - hopefully it will get its backside up off the SMA50 and do its usual climb up leading to interims.

[apad] 28/8/2017 12:43

ps
I do like this Board.

pps
Still thinking of increasing BOO!
BBC news about BHS unused, unrented stores.
Feeling like betting the farm again!

ppps
"You can go your own way"
Fleetwood Mac

[apad] 28/8/2017 12:40

Isn't it just balance sheet accounting, Dave?

The software will have no value if the company goes bust and the goodwill is just to make the balance sheet balance. At the end of the day they are buying private companies that are (possibly) cheap because the owners who want to sell have little alternative.
If they are good companies and the people who set them up are class acts (kept on) then balancing weights on a balance sheet are neither here nor there.

When push comes to shove it depends on whether the management are bolting together a series of super little companies to create a niche.
A balance sheet will tell you nothing about that.

FWIW
apad

[discodave4] 28/8/2017 12:09

Idea development costs capitalised:"The level of intangible assets increased to GBP56.4 million (FY2016: GBP32.6 million) mainly as a result of the four acquisitions completed during the year. The Group capitalised GBP2.0 million (FY2016: GBP1.6 million) of R&D development costs during the year which represented 7.3% (FY2016: 7.5%) of total revenues. The increase is due to costs capitalised in respect of the products being developed by the businesses acquired during the year."Are they saying the increased dev costs for the acquisitions are not part of the £2m?, my take on it is they are, mainly because they say "the increase", the only thing that has increased is the intangibles as the "Group" dev costs as a percentage of Rev is less than 2016. So that must be a big chunk of the increase in intangibles (c £24m) is due to dev costs for the 4 acquisitions - seems a helluva lot to me.DD

[hydrus] 28/8/2017 11:29

Thanks Red - I tend to think it's more sector/company specific but maybe bit of both in reality. Still no reason to be overly worried about the stock market rating when interest rates are so low and staying low. However I've taken profits/sold out of some lower conviction stocks over last few months. Probably good practice anyway.

[apad] 28/8/2017 10:42

When revenue is recognised and entered on the balance sheet makes me unable to make too much sense of software company accounts.
Assuming it is a mature business comparing through the years is informative.
When it is acquisitive it is a nightmare.

What I most liked about IDEA is that it has a specialist SaaS niche and that it is keeping expertise from the private companies it has acquired.
I didn't buy that first holding as it is about 10% up due to the IC tip.
If I had bought the holding would be an incentive to learn more about the company and its market.

On the global issues. I don't think Trump is more or less dangerous than his predecessors - it's just easier to see that he is a dingbat. The more the metro liberals disparage him the more his voter base will turn out.

The issue that I think is an inevitable difficulty is the disparity between the european countries. The EU's ability to kick the can down the road is impressive, but I believe a currency split is inevitable. Switching Greek debt from the french and german banks to the taxpayer was a masterstroke that deprived Tspiras of his most potent weapon.

apad

[redartbmud] 28/8/2017 07:30

DD

Sorry forgot to state the blooming obvious.
It arises from timing differences in the transactions.

red

[redartbmud] 27/8/2017 22:45

DD
Back to the topic of Idea.

Working capital requirement is basically the net of Stock, debtors, cash/overdraft, and creditors/accruals all due in less than one year.
In Idea these numbers are corrupted by Deferred Revenue, which is up by £5 millions year on year and by
Contingent consideration on business combinations.
(Both need further investigation)

You can play with the combinations in a number of ways. Stripping out the odd balls gives £10 millions of working capital.

The other issue is the size of the Intangible assets that increased by £23.8 millions in the latest results, presumably driven by the acquisitions. One assumes that the Goodwill has an ongoing value.

I was looking at the prior year results that have a positive £1.1m compared to your -£10m.

Not sure that altogether answers your queries.
Idea is not a stock that I am getting excited about so, after a cursory review, I decided to drop my interest in exploring the accounts to any great degree.

APAD will now prove me wrong, and the share price will triple in a year!

red

PS Accounting entries as simple as possible
1. Raise Invoice - Debit debtors and Credit deferred revenue. (All in balance sheet)
2. Recognise Revenue - Debit Deferred revenue and Credit revenue in the P&L A/c.
(As the customer has value for the product delivery.)
3. Receive cash - Debit Bank and Credit Debtors (In balance sheet).

May not help.

red

[redartbmud] 27/8/2017 17:35

Hydrus

WPP
The results concerned me as a bellweather for the global economy.
The USA under Trump must be seen as a loose cannon. Trump is unpredictable and the captains of industry are making decisions based on uncertainty. It doesn't bode well for long term thinking.
On the other hand, maybe new technology is influencing how US companies advertise - to the detriment of the traditional providers like WPP.
The Europe scenario is a worry. Does it indicate that the economies, in that part of the world, are struggling more than we currently perceive?

Am I becoming more irrationally pessimistic?

red

[hazl] 27/8/2017 14:46

Indeed thank you Launders.
Only time will tell.

I keep being tempted into new stocks though but perhaps that is because old habits die hard!
Who knows!

[lauders] 27/8/2017 14:22

Thank you hazl. Many opinions out there on the markets and a correction, or not! It would just take one black swan event and then all bets would probably be off. I of course sincerely wish no such event materializes! Yet we have had an 8-year or so bull run and they don't usually last as long based on historical records and we know we have to expect boom and "bust" cycles. Apad may be correct though and things will just keep going and going for a while longer. Nobody really knows.

[apad] 27/8/2017 14:01

hazl, I suppose I think that the over-pricing argument is predicated on the past's equilibrium model.
So, if you think that the equilibrium position will be restored that is fair enough.
I don't.
Globalisation means that big companies are now on a par with country economies - perhaps.
I would rather own Amazon than the UK GDP, measured in its fiat currency.

apad

[hazl] 27/8/2017 13:50

lAUDERS I merely posted it because J Urquhart was quite fair I thought at saying there was a quite a bit of over-pricing in the market.

I think it is something that perhaps we are aware of but a reminder isn't a bad thing.