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VS has 6,388,947 shares in issue LEG own 447,428 shares in VS LEG has 2,964,636,893 shares in issue. Nick Jenkins bought in and valued the company at £58m This gives a VS share price of £9.078 Therefore at this valuation LEG's holding is worth £4.062m or 0.00137p shareprice. So, the difficulty is placing a value on the contract achieved since that point in time. If we say that VS is now worth £100m then LEG's share of this would be as follows VS = £100m then LEG sp value = 0.00236p VS = £125m then LEG sp value = 0.00295p VS = £150m then LEG sp value = 0.00354p
What is quite clear is the dilutive effect of the warrants and that LEG is very much under the radar. Hence the small number of trades on a daily basis. It will only be with clarity on VS valuation that LEG sp will improve. Some of us are used to investing in small private companies so understand that this can take a long time. Others here clearly aren't cut out for this level of risk
I keep getting lost when we use 3,000,000,000 figures along with GDP and pence. But Soup shouldnt your SP values be GDP? or VS = £100m then LEG sp value = 0.236p Other than that I agree 100% with your figures and will add two more. VS = £423m then LEG sp value = 1.0p - Party time VS = £1,000m then LEG sp value = 2.362p - Zaf's claim that VS could one day become a unicorn company 🍉
Good point Sam, always trying to find a clarity in communicating figures. What the numbers do show is that a lot needs to happen to increase the LEG sp, and VS valuations will only happen at intervals of their own choosing. Those invested purely have to sit and wait. They don't have a choice. After all, we are only tiny shareholders in a company who own a small percentage of VS.
Now we look at the company figures. VS is a private company so its difficult to find a great amount of detail on revenues and profits. But the last accounts for VirtualStock Holdings Ltd give us a little clue. They show debtors being £1.35m for the year to March 2016. This is pre-Shelford, John Lewis, Dixons-****hone etc. but includes revenues from Tesco contract, so we get to see a glimpse of how much is coming in from one of the biggest retailers in the country. So, using the debtors column as revenue. VS had revenues of £1.35m p.a up to March 2016, interestingly Andrew Mills says he has increased VS revenues by 100% in one year, he joined in Sept 2015 so revenues should be a decent bit higher through to 2017. Anyway, £1.35m quid in revenues, lets say they have a good profit margin of 70%, we don't know the overheads so its a bit optimistic, say they acheived say £950k profit. The revenues equate to about £0.211 per share in earnings. With VS valued at £58m or £9.07 per share this gives a price to earnings of 43. Which is not bad for an established tech company. Obviously this stretches if VS is valued at £100m, the p/e would be 74 Lets imagine the revenues are circa £2m for year to March 2017. EPS would be £0.313 with a p/e of 29 (based on the £58m valuation) I don't know quite what p/e ratio would be appropriate for VS as I don't get how folk decide those things. But it shows that VS is still a low revenue company and have yet to prove they can monitise their contracts.
Basically this shows VS at a crossroads, hence LEG's bouncing shareprice. On the one hand you can say LEG is fairly or over priced given the last proper valuation of VS was £58m. On the other you can say that VS have signed a number of contract since then and revenues should be increasing accordingly. Personally I see fair value around 0.18p to 0.20p area at present until VS can evidence a revenue stream from these contracts. But at least I'm trying to find reason rather than moaning.
As I can't edit the original post, here are the figures corrected as Sam points out. Therefore at this valuation LEG's holding is worth £4.062m or 0.137p shareprice. So, the difficulty is placing a value on the contract achieved since that point in time. If we say that VS is now worth £100m then LEG's share of this would be as follows VS = £100m then LEG sp value = 0.236p VS = £125m then LEG sp value = 0.295p VS = £150m then LEG sp value = 0.354p