Small Cap Value Report (25 Oct 2021) - SHED
Good morning, it's Paul & Jack here with the SCVR.
Paul here - a very boring weekend here in Madeira - but at least the weather is pleasant.
Agenda -
Jack's section:
Urban Logistics Reit (LON:SHED) - logistics REIT specialising in units that store products just before they reach consumers. Rental collections are strong, the dividend yield is around 5%, and a main market listing beckons.
Explanatory notes -
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Jack’s section
Urban Logistics Reit (LON:SHED)
Share price: 170p (pre-open)
Shares in issue: 324,916,587
Market cap: £552.4m
This company looks for buildings that sit between ‘big box’ units and more traditional industrial estate outlets, between 20k-250k sq ft.These buildings are fit for purpose logistics buildings where products typically have their last stop before arriving at customers’ homes. It’s an opportunity as these are mission-critical points in an increasingly complex supply chain. You can see more of its estate here.
The share price performance has been positive since listing and, although SHED trades at 1.43x tangible book, it manages to pay out a c5% dividend, which should hopefully continue to appreciate as rents for this type of property increase.
The Quality metrics are also encouraging.
Highlights:
- 99.4% occupancy across 91 logistics properties,
- Rent collection over 99% for the half year ended 30 September 2021,
- Deployment or commitment of capital from recent fundraising across 8 transactions for £103m (5.5% weighted net initial yield),
- Around £50m of further investments in advanced stages and are expected to be completed in the near term at a weighted average 6.2% NIY,
- New pipeline of over £400m of high-quality logistics properties identified, ‘utilising the Company's extensive proprietary network to source off market deals’.
There have been 15 new lease events completed across the portfolio, totalling 813,939 sq. ft. generating an uplift of £1.6m in contracted rent. These events comprise 11 new lettings, 3 regears and an open market rent review.
Notable asset management events include:
- The Unipart Group (part of a logistics contractor for the NHS) has extended its existing lease for the 136,383 sq. ft. property for an additional 10 year period. The rent rose 18.0%, from £593,250 to £700,000 (£5.12/sq. ft.),
- An open market rent review was completed with Meritor Aftermarket UK Ltd, for the 26,179 sq. ft. property they occupy in Redditch, just south of Birmingham. The rental rate increased from £117,806 (£4.50/sq. ft.) to £138,749 (£5.30/sq. ft.), an increase of 17.8%,
- Wincanton has signed a new 15 year lease for a 132,487 sq. ft. unit in Paisley, near Glasgow. The building was purchased a year ago and the lease in place at the time was extended on a short term basis before the unit was substantially refurbished, The agreed rent was £828,044 (£6.25/sq. ft.), up 13.7% from the previous recognised rent of £727,986 (£5.28/sq. ft.)
The company is also now planning a move to the premium segment of the Main Market.
Richard Moffitt, CEO, comments:
The logistics real estate sector continues to enjoy very positive market conditions in recent months with an ongoing supply and demand imbalance for suitable properties. We remain highly focused on our last mile, or last touch, strategy, where we have built a market leading position. Last mile logistics assets play a crucial role in the supply chains of our tenants demonstrated by our occupancy figures of 99.4%. Our activity in this sector is underpinned by a focus on acquiring high quality, well located assets let to robust counterparties as demonstrated by our recent rent collection figures, in excess of 99% for the past half year.
Conclusion
The rental uplifts here suggest there is a high demand for the type of logistics space that Urban Logistics specialises in. Meanwhile, the move to the Main Market plus the recent capital raise shows an ambition to grow. Everything we are hearing suggests supply chain issues and likely an increased demand for space, which could help push rents up.
Going forward, the group will focus on active asset management to drive capital value creation in the existing portfolio. It will also use its network to access ‘attractive off market deals at compelling valuations’.
Urban Logistics is building a strong reputation here, and it now has a major portfolio of 91 ‘last mile’ assets. REITs tend to be more geared towards income investors, so it’s good to see a couple of special dividends in recent years. The £50m pipeline also bodes well though, as the group is operating in a bit of a sweet spot, away from the troubles of Hammerson et al.
Disclaimer
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50 comments
the thing to bear in mind with Shed is that the replacement cost excluding tenants fittings is now nearer £165 a foot rather than £125 a foot at the beginning of this year
I hold Urban Logistics Reit (LON:SHED) as an inflation hedge, I like that the management have a policy of acquiring properties at below build cost, not sure whether this is still possible in the current hot market for warehouses. They also seem savvy in flipping assets for a profit which enhances the return over and above the rental yield typically c. 6% with index linked rent reviews. Not gonna shoot the lights out but limited downside IMO.
I hold Urban Logistics Reit (LON:SHED) as an inflation hedge, I like that the management have a policy of acquiring properties at below build cost, not sure whether this is still possible in the current hot market for warehouses. They also seem savvy in flipping assets for a profit which enhances the return over and above the rental yield typically c. 6% with index linked rent reviews.
I hold as an inflation hedge too, and good signs on that front with the rent increases highlighted in todays update.
I don't agree with Ken (below). Most REITs are perpetually on discounts to NAV for very good reason i.e. they hold crap properties that are not in high demand with poor quality tenants who don't pay the rent in bad times. The exact opposite of Urban Logistics Reit (LON:SHED) . Look at the quality of the tenants and % of rents collected in the FY2021 (ending March) results which fully covered the worst 12 months of the pandemic:
"During the year, the Group has collected 99.93% of all rent demanded and 0.07% was written off. "
How many other REITs could claim that? As with everything else in life, you have to pay up for quality. As such, I can live with the premium.
All the best, Si
Simoan
I avoid Property REITS and shares that hold “crap properties.”
You mention the superb 99.9% Urban Logistics Reit (LON:SHED) rent collection.
EDISTON (one of my supposed “crap” Trusts) also collected 99%!! And rent collection was quite high even at the depths of the Property slump last year.
See their excellent update last week here:-
https://www.stockopedia.com/sh...
If that’s “crap” I’m happy to hold a crap Trust that is also paying a big and increasing dividend. AND I bought EPIC when many agreed with Simoan that such Trusts were crap , at just 45p. So I’ve got a 60% or so paper capital gain as well as a dividend yield around 10% and rising compared with under 3% for £SHED.
Best for readers to check out updates from the Investment Trust REITS I hold and posted about. I think people will be very surprised at the high rent collections and the overall positive performance of every one of them.
Yes. The likes of Urban Logistics Reit (LON:SHED) and £ SUPR are very secure investments but investors are having to pay a premium price for that quality. And the quality of the likes of Ediston Property Investment (LON:EPIC) is not much behind and available at big discounts and with way better dividends!
EDISTON (one of my supposed “crap” Trusts) also collected 99%!! And rent collection was quite high even at the depths of the Property slump last year.
Yes, that's good, but I just don't want to hold anything with exposure to retail and office properties. Logistics is a different matter. I normally have no interest in REITs but looked at a few before I decided on Urban Logistics Reit (LON:SHED) and Tritax Eurobox (LON:EBOX)
As I mentioned, my interest in "real assets" is quite recent, as an inflation hedge only.
All the best, Si
I think a big risk with leisure, retail and office REITs is the likelihood of rents being re-negotiated downwards due to weak demand. This would hit both yields and valuations, the rents are currently being collected but doesn't mean they won't fall in future hence the NAV discounts.
I've just lost a long post on Investment Trusts, including Urban Logistics Reit (LON:SHED), while editing it. This is the second time that's happened. Last time Stockopedia couldn't even find the post. I'll copy this second attempt and won't attempt to edit it. And I'll put links to check out in a separate post to reduce the risk of it happening again!
Anyway! I can't share the enthusiasm for Urban Logistics Reit (LON:SHED) because the very strong plus points look priced in. A KEY attraction of Investment Trusts over Open Ended Funds/Unit Trusts is that they can often be bought at big discounts to NAV and so for LESS than they are worth, whereas Unit Trusts are always bought and sold at par. .
But Urban Logistics Reit (LON:SHED) is trading at a big 12%PREMIUM to 151.56P NAV with share at 170p.
There are FAR better alternatives in the UK Commercial Property Sector imo. I hold all of these bought when discounts were as high as 45% during the sector slump last year and when some of the Property Unit Trusts banned all selling! e.g Aew Uk Reit (LON:AEWU) dividend at my buy price is a whopping 13%!
Aew Uk Reit (LON:AEWU) 109p Discount to NAV 1.4% Dividend 7/4% paid quarterly.
Alternative Income Reit (LON:AIRE) 59P Discount to NAV 15% Dividend 7.1% paid quarterly.
£EPIC. 76p. Discount to NAV 15%. Dividend 6.54% paid MONTHLY. AND another dividend increase soon following excellent update last week.
Regional Reit (LON:RGL) 87p Discount 11%. Dividend 7.36% paid quarterly.
Schroder European Real Estate Investment Trust (LON:SERE) 105p Discount 16%. Dividend 5% paid quarterly.
There are many hidden gems among Investment Trusts.
e.g Vietnam. FEW seem aware of this exciting market of of the 3 hugely successful Investment Trusts by which to invest in it. All 3 Vietnam Enterprise Investments (LON:VEIL) Vinacapital Vietnam Opportunity Fund (LON:VOF) and Vietnam Holding (LON:VNH) are superby performers yet still trade at big discounts to NAV. Just check out the Monthly Manager reports as a starting point! I hold Vinacapital Vietnam Opportunity Fund (LON:VOF) and £VNH.
AIC link for U.K. Commercial Property Investment Trusts:-
https://www.theaic.co.uk/aic/f...
And link for Vietnam (and a few other also interesting) Investment Trusts:-
https://www.theaic.co.uk/aic/f...
I made money in Vof but took the profit earlier this year as Vietnam remains one of the most repressive govts in the world.It is a police state where free speech is heavily curtailed.
Apart from the free speech as a political issue i am not sure such censorship helps with building innovatory companies or stopping a talent drain out of the country
Vietnam does have some issues but it’s not as bad as China. Do you invest in stocks that produce goods in China?
Anyone looking for some current stats on Urban Logistics Reit (LON:SHED) , (or any other investment trust for that matter) a link here to the AIC website as another data point. Shows the current NAV as 151.56p.
https://www.theaic.co.uk/compa...
Gus.
Aren’t the strong plus points for Urban Logistics Reit (LON:SHED) largely priced in?
A key plus point for Investment Trusts is that (unlike Open Ended Funds/Unit Trusts) they can often be bought at a big discount to. NAV.
Yet Urban Logistics Reit (LON:SHED) in contrast (as can be seen from the link posted by Gus) is trading at a big PREMIUM to NAV. NAV is 151.56p and the share price 170p.
There are imo FAR more attractive alternatives in the UK Property Commercial sector all trading at discounts and not Premiums. .
Here’s the AIC link for those:-
https://www.theaic.co.uk/aic/f...
The AIC site is a must for Investment Trusts.
I’ve held several of the REITS in that list or over a year. The big and easy capital gains have been had now, but there is still some upside as discounts continue to narrow and NAV’s increase. THE big attraction still is the big and sometimes increasing dividends.
Note that Urban Logistics Reit (LON:SHED) is not only trading at a premium to NAV but the dividend yield is only 2.56%.
I hold the following UK Commercial REITS and they are still all worth checking out:-
Aew Uk Reit (LON:AEWU) 109p. Discount to NAV 1.4%. Dividend 7.34%. (Dividend at my buy price last year was 13%.
AEWU pays an 8p a year dividend paid quarterly and did not cut it during the sector slump when some Unit Trusts banned their investors from selling.
Unit Trusts are unsuitable and dangerous for Commercial Property. Investment Trusts do not ban selling as Unit a Trusts can and do! .All that happens to them if there’s a wave of selling is that the NAV discounts get very wide. Most of the ones I hold were at 30% to 40% NAV discounts ŵhen I bought them last year during the Commercial Property sector slump.
£AIRE. 59p. Discount 15%. Dividend 7.06% paid quarterly.
Ediston Property Investment (LON:EPIC) 76p Discount 15% Dividend 6.54% PAID MONTHLY! AND another dividend increase is almost certain soon. Ediston Property Investment (LON:EPIC) issued an excellent update last week. If only able to buy 1 now Ediston Property Investment (LON:EPIC) would be the one I would go for.
£RGL. 87p Discount 11% Dividend yield 7.36% paid quarterly.
And in the Property Commercial Europe sector I also hold Schroder European Real Estate Investment Trust (LON:SERE)
Schroder European Real Estate Investment Trust (LON:SERE) 105p. Discount 16%. Dividend 5%.
There are hidden gems in the Investment Trust sector.
e.g the 3 Vietnam Investment Trusts Vietnam Enterprise Investments (LON:VEIL) Vietnam Holding (LON:VNH) and Vinacapital Vietnam Opportunity Fund (LON:VOF) have been superb performers. Yet all 3 are at big discounts to NAV partly because many UK investors fixated on (the far inferior) Open Ended Funds either don’t know they exist, and/or because they have no idea about the positive case for Vietnam. Just read the bullish monthly updates from the Fund Managers as a big starting point for Vietnam Investment Trusts.
I’ve held VNH and VOF for a long time. VOF has underperformed the other two recently for no obvious reason and with NAV (they update it daily) over £6 and share price a tad under £5 looks perhaps the best one to check out first.
Here’s the AIC link for the Vietnam Investment Trusts:-
https://www.theaic.co.uk/aic/f...
Do check the “performance” “portfolio” etc headings AND always the monthly Manager updates.
Finally. I did a post on the plus points for Investment Trusts compared with Unit Trusts on Mike Walters site last year, and will post it here if requested.
I too would be interested in reading anybodys thoughts on today's trading update (profit warning) from James Fisher And Sons (LON:FSJ) . Is it a one-off bad patch which provides a buying opportunity or a sign of longer-term problems to come? I am inclined towards the former but haven't actually bought yet.
Re James Fisher And Sons (LON:FSJ) i am holding off for the moment. The balance sheet is weak with too much debt and NTAV of only £63m at the last balance sheet date. Plus a pension scheme. That could spell pressure to raise new equity at a time of weakness.
I looked carefully at the RNS - some of the items are probably exceptional such as the bad debt provision and the failure to resolve the contractual issue. But they are related to trading and so could repeat. This is a project business with all of the problems of stage payments and long-term WIP associated with that.
There are also some more positive comments about ScanTech and EDS but those need to be balanced with the rather alarming statement about Fendercare 'market shifts'. So quite a mixed bag. Against the backdrop of a rather soggy market today. I could see this getting smashed down quite a bit further as the problems seem to have escalated recently and there's little sign that they have even started to address them. Or that they know how to.
But a 10-year low is bound to stimulate some interest.
James Fisher And Sons (LON:FSJ) (I hold )though so far underwater I might well need one of their submarine rescue ROV's to find my shareholding! I'm not alone - the new exec team will also need one to find their options!! OK so I am exaggerating a bit - I've held Fisher since I first bought at 70p and bought and so a bit along the way, but even so with the fall from grace in the last 2 years its hard to avoid that sinking feeling!
mammyoko -- I think that's a fair summary. Too much debt.
This is the second profit warning. They are notoriously suggested. like London buses, to come in threes. Troubled waters. Is this the kitchen sink - or will it sink without a trace. Apologies for the nautical references I just can't resist it.
They now expect 27-32m underlying operating profit for the year. Given that H1 was 13.3m then they actually expect 13.7 - to 18.7m ie flat to slight better. But you'd be forgiven for thinking its much worse than that - given that they put all the bad news at the top,
Which makes me think its a bit of a kitchen sink - but not so much that they can't have another go later.
I suspect it's all about the cash given the poor balance sheet. Loan headroom was £115m at H1 and now its £100m so £15m has disappeared in Q3. Probably a lot of that has gone into working capital of projects that were expecting to reach milestones and reduce working capital in Q4 - but now perhaps slipping into next year. They should get through this providing that things don't just keep slipping. But.........
As we all are aware energy prices have risen dramatically in the last couple of months - it will take months for the opex and capex to turn back on again and flow down the supply chain. So I'd expect demand to remain subdued in Q4 and its going to be an uncomfortable few months for shareholders and the company. Which I expect is what the warning is what the warning is all about.
The are some very good businesses here with bright futures particularly in renewables, decommissioning, ship-to-ship transfers, remote handling and submarine rescue - but there are also a lot of underperforming assets stemming from bad decisions in previous years.
Getting to the bright future is looking a little more risky than it did yesterday. You'd be wise to wait and see, and there are perhaps better opportunities elsewhere and I certainly will - but the downside risks are lower than they were yesterday, and like you say its at a 10year low - I might be tempted for a small topup on a long term view,
cheers
Mark
Apropos nothing, I have an irrational dislike of companies with 'gimmicky' EPICs like £SHED and Strix (LON:KETL) . Snoozebox (ZZZ) was another one. That didn't end well.
I agree. Plus, of course, Patisserie Holdings (LON:CAKE) !
Rua Life Sciences (LON:RUA) marked down 6% this morning - does anyone know why?
Over the weekend I listened to Tamzin on PI World interview Simon Laffin.
Mr Laffin was Chairman of Flybe for several years were the Board of Directors
made mistake after mistake. I would not buy his book if you paid me.
If I had my way there would be a Public Enquiry on what went on at Flybe on Mr Laffin's watch.
Jack I am afraid the Stockopedia NAV ratios for £SHED are wrong as the company has had a share issue. I have corresponded with Ed but the inacurracies have not been highlighted or corrected. The company's NAV is around 153p per share.
Jack I am afraid the Stockopedia NAV ratios for Urban Logistics Reit (LON:SHED) are wrong as the company has had a share issue. I have corresponded with Ed but the inacurracies have not been highlighted or corrected. The company's NAV is around 153p per share.
Hi,
Yes, I also complained to Ed about it on 7th September. It's still wrong!
All the best, Si
I then suggested putting n/a for the data if known to be incorrect. I received no comment. Regards steven
I then suggested putting n/a for the data if known to be incorrect. I received no comment. Regards steven
It's important to understand what causes the problem. IMPORTANTLY this problem relates to any company that does a placing to raise cash because Stocko uses the increased number of shares in issue (post placing) to generate the Per Share TBV and BV to calculate the PTBV and PBV values shown on the Stock Report BUT still uses the NAV from the last FY or HY report i.e. the cash raised in the placing is not included in the Assets!!
It's a shame it has now caught out one of the Stocko staff leading to a misleading article and other comments here. Maybe a solution for this error will now be a higher priority :-)
All the best, Si
Please, what is meant by NAV for a property company like Urban Logistics Reit (LON:SHED) ? This suggests it's a red book valuation updated each 30 April and 30 Sept https://www.urbanlogisticsreit... So it could be out of touch with fair market value over the course of the following 6 months, especially in times of market stress or exuberance, or if major improvements have been made. But hopefully not too far adrift normally?
In contrast to another poster, I love 'meaningful' tickrs - so much easier to remember. SONG, GRID, TUNE are other nice examples!
Please, what is meant by NAV for a property company like Urban Logistics Reit (LON:SHED) ? This suggests it's a red book valuation updated each 30 April and 30 Sept https://www.urbanlogisticsreit... So it could be out of touch with fair market value over the course of the following 6 months, especially in times of market stress or exuberance, or if major improvements have been made. But hopefully not too far adrift normally?
I believe (when I checked recently) that the NAV for Urban Logistics Reit (LON:SHED) was based on the Red Book. I generally don't like holding companies where the NAV is based on Discounted Cashflow type models, but that is what is used. It's very common for REITs. That's no excuse for the PTBV and PBV numbers being wrong on the StockReport though!
All the best, Si
Decent case for SHED but at a 12/13% premium when logistics costs are rising faster than almost any other part of the economy, not to mention the problems with increasing online returns - judging by my daughters' behaviors - effectively a guaranteed loss. There may be better value elsewhere in the property space, especially if the premium valuation comes under scrutiny.
Yes if you want to play then logistics theme there is better value elsewhere if you look carefully Bmo Real Estate Investments (LON:BREI) is now about 50% in industrial assets and is on a more than 20% discount after a very strong NAV update last week. Assuming the industrial assets are priced at par this means you are getting the other 50% of the portfolio (mainly offices and retail parks, and performing reasonably well ) at a more than 40% discount.
I don't follow - they rent out the warehouses so having to deal with returns isn't their problem as such.
Could be a benefit, more returns, longer in transit due to lack of drivers, means more warehousing is required?
@LeeBod: On the basis that a problem for tenants can become a problem for the landlord? Especially in the context of trading at NAV premia. Bricks and clicks - like NXT being increasingly attractive.
Hi Paul
Any chance you could take a look at James Fisher And Sons (LON:FSJ) ? I don't hold but have been tempted in the past by their ip and, I believe, some family skin-in-the-game. A nasty TU today and quite a lot of moving parts but I can't hep feeling that there is a good business in there. It seems as if some of the problems may be temporary with orders shifting to 2022. The balance sheet doesn't look too bad with tangible NAV but debt to PBT is much higher than I would like and there is a pension scheme.
Probably too early to take a position as there could be further weakness for the next few days but they seem to be taking immediate action to sell off non-performing bits
Thanks
Agreed, it has been on my radar for a while now and a downturn of 33% today is incredible for what I thought is not a bad company
The "family skin in the game" is a charitable trust who's only income is from FSJ divs re 23% of FSJ shareholding. The Trustees are aware of their rather concentrated protfolio 100% in FSJ and can if they wish diversify. Divs increased steadily upto 2018 then fell away. New FSJ management though, and it looks like a kitchen sink job is coming. Will the trust want to wait and see or diversify, i.e. sell off it's holding for a more diversified portfolio?
Re £ FSJ I would agree that there is a whiff of kitchen sink about this morning's news release. But in these long-term contract businesses, management can often be surprised at the stuff that is lurking in the cupboard beneath the kitchen sink. It all depends on whether they have a good grasp of the business. My feeling is that this release suggests that they don't because not much more than a month ago they were saying that 'The Group is expecting performance to improve during the second half of the year' in the outlook part of the half-year results.
Tracsis (LON:TRCS) FY results to be released 10th November. Management presentation w Q&A 12th November at 1.30pm. Register here.
Join us for the Stockopedia/PIWORLD StockSlam this Wednesday 27th October, 6pm. Register here.
Finally, if you haven't seen the Secrets of the Boardroom - what every investor should know, a PIWORLD interview with Simon Laffin, you should! We've had really positive feedback that this gives investors a unique perspective. Video & podcast.
Tamzin, that link for Simon's video should be https://www.piworld.co.uk/educ...
Thanks John, not sure what happened there, and I can't edit now!
Hi Paul, lovely to see you are enjoying Madeira, the island of my mother! Go easy on the madeira wine though, pretty potent stuff! And the food is good there, be sure to have the beef skewers (espetada)!
best Edmund
Paul
“- a very boring weekend here in Madeira”
Indeed, Madeira is not exactly rave central. More like genteel village fete. Each to their own as the saying goes and sometimes enforced relaxation is just what you need. I remember being told by a member of the hotel staff when on holiday in Antigua one time that I should slow down because I was walking too fast. Only then did I realise that, yes, I really did need to relax for the time I was there and not try and pack too much in.
Is the basket toboggan operating again now? If it is give it a try. It will give you a welcome adrenaline buzz and liven the day up.
Alternatively, amuse yourself by spending a morning looking round a timeshare that they are flogging and bamboozling the salesman with lots of tricky financial questions until they get so fed up they kick you out.
…..in the next episode of Paul’s Travel Show he uses a bungee jump from a bridge in a yet to be named country to illustrate the volatility of the stock market!
You could always do a couple of levada walks - definitely not boring!!
A shame it is then that you missed the Red Arrows performances last Wednesday and Thursday on the Bournemouth sea front Paul.....
Their last performances of the season.
Carefully worded RNS this morning from perennial jam tomorrow (should that be macrobiotic fruit preserve?) life sciences company Optibiotix Health (LON:OPTI) confirming approval by Health Canada for its food supplement Slimbione.
https://www.investegate.co.uk/...
While it’s not the US FDA, it appears to be a big tick in the box for possible growth in North America although we’ve seen extravagant claims before. Release states the Slimbione product can be sold as “safe and effective with approved health claims” for the following:-
“· Helps to lower cholesterol levels by reducing cholesterol absorption from the gastrointestinal tract
· Helps to maintain normal blood glucose levels and supports a healthy glucose metabolism
· Helps to prevent chromium deficiency and maintains the body's ability to metabolize nutrients
· Complementary to a healthy lifestyle with a calorie-reduced diet and regular physical activity for individuals involved in weight management
· Helps to support a feeling of fullness
· Is a source of fiber and prebiotics”
At face value a panacea for a range of modern health issues but saying it can “claim” to my mind isn’t necessarily the same as saying it’s proven to work. Still better than a poke in the eye with a sharp stick. For my sins, I hold.
Gus.
My sins too, seem to be holding Optibiotix Health (LON:OPTI) forever.
Silver
hmmm - just looked at Optibiotix Health (LON:OPTI) and I think this may now be at an inflection point. Fundamentally it is a royalty business. Yes, it has its own direct sales and subscription business but pretty low overheads and appears to now be edging into profitability. The operational gearing on it should mean that most of the royalties should drop straight to the bottom line from here on in.
Didn't realise that their investment in Skinbio now equates to £25m so the Optibiotix Health (LON:OPTI) business is actually valued at £15m stripping that out. That doesn't look unreasonable to me. I'd like to see how H2 pans out though - I want to see that gearing effect in action but I might pay closer attention to this over next few months I think.
Lol, possibly the most random post I've ever seen from you Mr Scott! And there have been many random ones! :D
Doh, it's been edited, it's pays to check here early
his 1st takes are always the best.
Sometimes it's the random bits that are the best, like the rants about poor broadband infrastructure in this country!