#BOWL's bowls up.

#ZTF.L "Zotefoams, a world leader in" issuing RNSs justifying further capex. The new plant will be completed in 2028/29, pretty much when ZTF's exclusive contract with Nike expires (31.12.29) creating a risk of stranded assets. And if the new assets aren't stranded, can ZTF fill freed up capacity?

#SXS.L (2/2). Q3 sales down 10% LFL despite £22m revenue being pushed into H2 on the shift to a new ERP system. RNS says some of the catch up will be in Q4 but doesn't specify how much occurred in Q3 and therefore boosted sales.

#SXS.L (1/2) Hefty PW. Operating profit for FY24 now guided at c. £200m, whereas forecasts were c. £220m per Sharepad. Guided figure now includes 2 acquisitions, whereas the "in line" guidance at interims excluded. Not clear whether analysts included acquisitions in their £220m forecasts.

#ALU.L On 25.7.23 they said “expected operating synergies” would reduce the ARP multiple to <5x assuming full earn out. Today they say “delivery of the initial synergy targets is well advanced.” Reference to “initial” suggests more synergies are available than were baked into the acquisition plan.

#FRAN.L Opportunistic buy back of £5m to take advantage of selling before budget unrelated to FRAN's prospects. Good capital allocation IMO. No change to targets for debt reduction for FY24 (2.0x) and end of 27 (bank debt eliminated) implies that cash generation is ahead of plans.

#MPAC.L Historically cash from operations has been erratic (minimal in 21, negative in 22 and YTD 24; strong in 23), so interesting to see confidence that leverage will fall from nearly 2.0x to <1.0x by end of FY25.

#TRT.L (1/3) 3 components: Bridgestone needs a DCF on the royalty flows to expiry in 2030. TRT estimates future flows at £13-16m. Their figures need to be discounted for time. But are arguably conservative as growth was 30% in FY24 and they use 10-18% annual growth.

#TRT.L (2/3) Let’s generously use £16m as the NPV of the Bridgestone royalties. At EV of £27.6m, the rest of the business is valued at £11.6m. It generated £1.57m revenue with costs of £2.95m (Bridgestone is almost 100% profit as a royalty flow).

#TRT.L (3/3) Translogik is profitable (£380k op profit) with positive outlook let’s say £4m value. That leaves SAWSense at £7.6m for trailing revenues of £450k and significant costs. To buy here you need a very positive outlook on SAWSense IMO.

#LTG.L sold off because (i) GS said AI would eat its lunch – AI hasn’t; (ii) too much net debt – down to £1m on 30.8.24; (iii) no organic revenue growth; fair enough, but a change in the cycle will address this and should rerate. While wait, best capital allocation wd be buybacks not acquisitions.

WIL (1/2) WIL prelims. Net cash £65.0m. Deferred consideration due £16.5m; discount at say 30% as disposals structured so that WIL shared risk of failure = £11.6m. Cash + discounted deferred consideration of £76.6m.

WIL (2/2) WIL is now pure play GRC. Trading in line for FY25. Forecast FY25 EBITDA of £26.2m. Marlowe sold its GRC business on debt free/cash free basis for 16.2x trailing EBITDA. For WIL 16.2 x £26.2m + cash & discounted deferred consideration of £76.6m = £501m or 559pps, cf 384p close.

MAB1 (3/3). Never underestimate FCA, but if MAB1 charges a flat fee (typically 0.3% of sum borrowed), its incentive is to recommend the best deal (not the one with the highest commission) and £750 fee on £250k advance seems fair value to take details, review options, help with process.

MAB1 (2/3). May be some CGT selling. But main fall has been since FCA published draft TOR for pure protection products on 28.8. At para 3.2 FCA says it will look at loaded commissions and whether they distort adviser incentives or affect fair value. Peers have not fallen in line.

MAB1 is an interesting set up. H1 TU on 25.7 said in line with modest pick up in activity expected in H2. Shares closed at 900p that day. Housing and mortgage data and updates from eg TPFG suggest expected modest pick up will come through. But at 590p MAB1 is down 34% with interims due 24.9. (1/3)