"The UKGC's review is progressing and Kindred currently anticipates that the UKGC will make a determination in the near future. Kindred anticipates that the Offer will be declared wholly unconditional upon the UKGC making a positive determination."
To decipher, until the offer goes wholly unconditional you will not receive your money. Once you see a posting to that effect, you will receive your money 14 days later - assuming you have tendered your shares.
No one is coming in to offer a higher price, because the stock has gone unconditional (not wholly unconditional). The bidder therefore holds > 90% of the stock.
It's simply that large institutions that hold the stock will sell out at 196, for example, because they can access the cash and reinvest immediately.
A month ago I bought a ton of stock at 195 simply because I can wait for the 197 payout and make the 1% as a cap gain and pay no tax on it - and it's more than I can achieve in a bank account.
Every day that goes by the stock will inch up towards 197. Of course there is perhaps a danger on the downside that the deal could fall through on licensing issues but I suspect that is about as likely as Labour winning the next general election....
No idea Mick Mack, but a rival bid cannot be ruled out. I have read with interest about the 'irrevocable' commitments they have from a majority of shareholders, but i wonder what would happen if a rival tabled 240p? Also, for the record, i think it is a bit rich to include the dividend earned by 32RED as part of the bid premium!!! For the record, I am going to hold and see what happens.
Today's trading update seems to me to more than justify the 3.6% (at time of writing) increase in the share price. Edison has also put out a report on the company which will of course be positive (as it is a paid for report) but nevertheless does emphasise how lowly rated this company is relative to its growth prospects.
"32Reds brand punches above its weight in the UK online casino market. Management has adopted a more aggressive stance since mid-2015, both in terms of marketing and with the highly accretive £8.4m Roxy Palace acquisition. Interims show H116 EBITDA rising to £4.5m (H115: £1.2m) and we initiate with forecast EPS more than doubling in 2016 and growing by over 65% between 2016 and 2018. Yet the 2016e P/E is only 13.5x and our peer group comparison and DCF suggest a value of 193-247p per share, 46-86% above the current share price."
Not sure where you're getting 20 from. Stockopedia gives a 12 month rolling forecast PER of 12.
My DCF is a purely mechanical calculation. For this company there's been a much better correlation between revenue and FCF than FCF and other measures for which forecasts are available. On average over the last 5 years revenue has been 10X FCF (albeit with a lot of variation in the ratio from one year to another). Working on current FCF of £6.7m (average of last, current and my forecast for next year), forecast growth in FCF of 27% over the next 4 years (that's an extrapolation from the past) and 13.5% over the 4 years after that (allowing for slowing growth as the company matures), a long term growth rate of 3% and a required return of 14% for the risk (Stockopedia's suggested rate for TTR) the calculation gives a DCF value of 204.5. The latest (13/5/16) Numis target according to Hargreaves Lansdown is 200.
The figures for forecast revenue in my last post have remained unchanged since the trading update.
I agree with Dave 2608's post on advfn: http://uk.advfn.com/stock-market/london/32red-TTR/share-chat
Does anyone know if Numis have issued revised guidance on forecast revenue?
On my calculations revenue of £83m would imply FCF of £8.3m.
I see that Numis have maintained their price target of 200 which is maybe not too wide of the mark.
I'm a holder and take a different view from the last two posts.
POCT was introduced on 1/12/14 so affected the 2014 results only to the tune of £0.4m in 2014 but £4.8m in 2015. If POCT is disregarded, cost of sales as a proportion of revenues held steady at 64%. The fall in post POCT profit before tax was entirely foreseeable before the recent results announcement.
I disagree that the price is 'astronomical'. On a 12 month forecast rolling basis it trades on a PER of only 8.4, a PEG of 0.15 and it yields 3%.
FCF has grown from £0.73m in 2010 to 6.48m in 2015. There is a strong correlation between TTR's revenue and FCF. Revenue is forecast to grow to £65m in 2016 and £79m in 2017. If the correlation holds, this implies FCF of £6.5m and £7.9m respectively. My 'mechanical' DCF calculation gives an estimated value of 148p.
Since reading Aronson's 'Evidence based TA' I've become very sceptical of chart patterns. However I've found an interesting paper on the H&S pattern: http://www.biz.uiowa.edu/faculty/gsavin/papers/HSrevision_paw_10%2019%2006.pdf
This finds that H&S gives good risk adjusted returns but 'provide no support for the more extreme claims of some technical analysts...that trades based on the occurrence of HS patterns alone are consistently profitable.' The paper suggests that the pattern may 'work' as it spots stocks with flagging momentum. Despite TTR's disappointing recent weakness, momentum remains very strong on a longer term basis.
I would keen to follow technicals and buy in here towards the end of the year.
With a cash balance of £10.3m I see no way on earth how the share price is so astronomically high, in fact this is dream stock to short. I don't short myself but I understand there is scope to generate better profits (pehaps £5-10m) given the revenue.
I'm not a holder, but had a quick look at this.
I think the reason for the price drop is the 2015 results published on 10th March.
Turnover up to £48m from £32m in 2014.
BUT, cost of sales up to £35m from £21m in 2014
and profit before tax DOWN to £1m from £3.4m in 2014.
So turnover up and profit down.
From a technical point of view, TTR entered a downtrend in early March as a result of these numbers.
On my analysis, it's just broken down below the neckline of a Head and Shoulders top reversal pattern. It might pop back to the neckline but I think the next main move will be down to around 92-93p.
The sell signal for me would have been the 8ema crossing below the 34ema in late March at around 150p. Both these MAs are now declining. My chart won't give a buy signal for this until the 8ema crosses back above the 34ema.
Look at the size of the selling volume over the last two sessions. This sort of volume level is seen as confirming the neckline break and comes after weak volume during the formation of the right shoulder.
This is just my own opinion and could always be wrong, but this seems to me to be a classic example of a company chasing turnover and ignoring profit.
£48m turnover and £1m profit.
This is why I think that price is going down.
As puzzled as everyone else. Everything looks good here. the momentum is really building, the directors are buying. Does someone know something we don't? Even volume looks fairly small. Strange. I will top up again when funds allow.
Important message from the Financial Conduct Authority:
Posting inside information that is not public knowledge, or information that is false or misleading, may constitute market abuse.
This could lead to an unlimited fine and up to seven years in prison.
If you have any information, concerns or queries about market abuse, click here.
The content of the messages posted represents the opinions of the author, and does not represent the opinions of Interactive Investor Trading Limited or its affiliates and has not been approved or issued by Interactive Investor Trading Limited.
You should be aware that the other participants of the above discussion group are strangers to you and may make statements which may be misleading, deceptive or wrong.
Please remember that the value of investments or income from them may go down as well as up and that the past performance of an investment is not a guide to its performance in the future.
The discussion boards on this site are intended to be an information sharing forum and is not intended to address your particular requirements.
Whilst information provided on them can help with your investment research you need to consider carefully whether you should make (or refraining from making) investment or other decisions based on what you see without doing further research on investments you are interested in.
Participating in this forum cannot be a substitute for obtaining advice from an appropriate expert independent adviser who takes into account your circumstances and specific investment needs in selected investments that are appropriate for you.