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Trading update will be coming out sometime this month. expecting lower revenues across the board. slightly improved EBITDA, net debt flat around 13-13.5 million. new product category announcement which is clothes, why not expand tech category, they could add dysons whole range for example. clothes was a poor choice imo, nothing to do with the existing business, low margin and unskilled (literally anyone can buy and sell clothes, not just anyone can buy and refurbish tech, it requires skilled labour, so theres a small barrier to entry on that side which is why margins are better) rental subscribers flat to down so somewhere are 35k subs. declutrr is gone and the american potential with it, which was a huge part of the IPO story.
Why is Peter Hargreaves, a guy with a net worth of $3b buying 4 % of music magpie. Genuine question
Secondly why is another Manchester based investor, Damian Hansen also buying into this.
And why is the offer period lasting 6-7 months.
Anyone not joining the dots is missing a trick here IMO
Big news tomorrow ⚠️
You’ve already said Moniman…
What?
It's probably unrelated. He's probably on about the Euro's starting tomorrow or something equally benign..
Yea just checked his posts and he had the same posts for THG, HELD and other stocks. Clear ramping
There must be some fierce negotiations taking place for the offer period to have lasted this long, and now deep pocket billionaires are getting involved, that is a clear sign for someone to either put up or shut up, because people like Hargreaves won't be accepting a pitiful offer.
I wouldn't be suprised to see an update as part of the interims in relation to what's going on, but maybe the wise amongst us would recommend they walk away from those negotiations, and get on with running the company for shareholders.
Then let them get taken out at 5-10x current SP in the next 3-5 years.
My opinion is they are building a consortium of investors to support an MBO. As yet, no-one's name has appeared that would easily replace Oliver and considering it's highly likely management actually want the 50p plus value, an MBO and sale in 3-5 years would be a smart play if you believe in the business. It blows the idea of 25/30p and the like out the water. By carrying on talks they can say they had 18p or the like on the table but consider their MBO at 20p, better value for shareholders ... no-one actually knows but I'm happy to play the guessing game. I also think it will be lower than 20p ... more like 16-18.
Agreed on the consortium, it looks very much like that. I worked out that Hanson must be at an average of 10p/share and Hargreaves is in around 7p-10p range (guessing as I have no visibility of any accumulation or large purchase from all recent transactions). They would typically expect to see 100% on their investments so that price of 20p or thereabouts seems realistic.
I also think MBO, the CEO still believes in this. The reason I am leaning towards MBO was because why else would they be so bothered about keeping the potential suitors private. Unless its Amazon and they just dont want to spike the price
Should also add that in relation to Hargreaves, in having him, it could well sort out the issue they would have in maintaining financing post MBO. The revolving facility they have would likely reduce greatly if not completely as they take the business private...these high net worth individuals can establish a mezzanine type facility against which I think there are various tax benefits on the return.
If you go on Hanson's linkedin you will see he just left his previously sold business and founded Propeller Holdings - I presume that is his new investment vehicle. He could be buying for part of that or being involved in a MBO but its pure speculation at the moment. I just fail to see why Peter Hargreaves would out of the blue take 4% of the business unless something was in the offing.
My main concern on the risk side was a de-listing. However, I think a quick dilution event afterwards would have to happen to address financing which should in theory put many holders off rolling into the private entity. Tough for them to get to 75% still. Also not sure that's a game Hargreaves would want to be associated with.
Hanson setting up the holding company is a good sign for sure.
P.S to address you comment about averages, I think Hanson includes the execution price of his tranches on the 8.3, so I think your ballpark figure is about right. I would think that the end game is close, others have said they expect there to be a trading update for H1 but I noted that the AGM statement was issued with comment on trading, but no numbers - this wasn't the case last year I believe - was that a stop gap - perhaps, but to be negotiating this long I would have thought it must be nearing conclusion either way now
Yeah, I used those to make the calc. Only issue is his purchases prior to the 1% threshold cross were not publicly disclosed, but if you assume somewhere between 10-12p then the ave works out at almost exactly 10p.
Fingers crossed we see some announcement soon.
In 2011, LDC, a private equity firm invested £10m in Music Magpie.
'Sales in 2009-10 from from £2.5m to £11.3m and are expected to hit £30m in the year to the end of May. Earnings are expected to have increased from £1.5m to £4m in the same period.'
Someone can buy the whole company now for less than the investment, and sales are £130m+ I think if a profit can be turned soon, this would be worth multiples of current level
15p would be a great return, that's circa 100% from here. I'd take 15p today. Why don't they just get on with it instead of issuing another 500 pointless RNS's.
I noticed a few things when looking under the hood at the FY23 results too - from ops the business is cash generative. The increase in debt was to buy inventory for rentals, and can be readily turned back into cash if they so choose. User figures are actually growing and the crack down on fake stamps that rivals may have sued must boost their position on resale platforms..I just think they need to focus on getting the bottom line profitable as they have alluded to. The margin improved in FY23 so I believe they know what is required here. Fail to see how the business is not able to turn around, grow and make a profit then be refloated at a massive premium if it were taken private. The clothes side of the business needs some refinement but I am sure there are lots of household products that could be resold.
Yep, 7mil cash from ops. Profits can be engine
*engineered to some extent.
... Still no trading update I notice... Some nicer buys today however which is encouraging.
Is a trading update mandatory or will we have to wait for interim results in July?
I don't think it's mandatory and if an MBO or similar is going to happen I can't see us hearing anything but the minimum. Would imagine this gets routed again and another holding RNS suddenly appears. Still, all just a game and all that .. .ready to buy in the 5.5-6 window again!