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PPE Interim Results Analyses:
Please note: There may be slight deviations in my calculations as these are only interim results and therefore there is a limitation on information and detail reported. I have tried my best with what has been provided. Please comment in the thread.
Please note: There may be slight deviations in my calculations as these are only interim results and therefore there is a limitation on information and detail reported. I have tried my best with what has been provided. Please comment in the thread.
Understanding the Group: PPE ( @PurpleGroupPPE) holds the following companies:
1. EE ( @EasyEquities) - included in EE’s reporting is EE (SA), EE (AUS), EasyProperties ( @properties_easy), RISE and DCX ( @DCX_EC10).
2. GT247 ( @GT_247)
3. Emperor Asset Management ( @EmperorAsset)
1. EE ( @EasyEquities) - included in EE’s reporting is EE (SA), EE (AUS), EasyProperties ( @properties_easy), RISE and DCX ( @DCX_EC10).
2. GT247 ( @GT_247)
3. Emperor Asset Management ( @EmperorAsset)
Revenue Analysis:
- Group Rev up 79.5% to 100.6M
- EE contributed 85M to this (85%) (EP contributes about 2% to group Rev / EE (Aus) is growing slowly...Rev at 100k)
- GT Rev = 13 M (13% of group Rev)
- Note: EE Rev + GT Rev = 98% of Group Rev.
- Group Rev up 79.5% to 100.6M
- EE contributed 85M to this (85%) (EP contributes about 2% to group Rev / EE (Aus) is growing slowly...Rev at 100k)
- GT Rev = 13 M (13% of group Rev)
- Note: EE Rev + GT Rev = 98% of Group Rev.
Profit Before Tax Analysis: (att. to SH)
- Group PBT = 8.3M
- EE PBT = 22.3M x 70% = 15.6M (Rise loss of 700k inc)
- GT Loss= -3.3M (due to Rev down due to less trading activity, not the usual - long term contributed to PBT)
- Emperor PBT = 1.35M
- Head Office Costs= -5.2 M
- Group PBT = 8.3M
- EE PBT = 22.3M x 70% = 15.6M (Rise loss of 700k inc)
- GT Loss= -3.3M (due to Rev down due to less trading activity, not the usual - long term contributed to PBT)
- Emperor PBT = 1.35M
- Head Office Costs= -5.2 M
Cash flow Analyses:
- This concerned me
- CFO = -24M
- CFO after expenditure on PPE= -25M
- Note: Reason for neg CFO is the change in Working cap
- Reverse changes in WC (from 31Aug to now): Debtors +22.6M Creditors +63M
- Adj CFO (exc WC changes)= 60.6M
- This concerned me
- CFO = -24M
- CFO after expenditure on PPE= -25M
- Note: Reason for neg CFO is the change in Working cap
- Reverse changes in WC (from 31Aug to now): Debtors +22.6M Creditors +63M
- Adj CFO (exc WC changes)= 60.6M
Comments on EE:
- 70.3% growth in platform assets is incredible
- Retail investment accounts now over 800k - this growth has also been incredible.
- Opex per client down to R106 from R246 (really NB)
- Costs of client acquisition down to R71 from R73 (really NB)
- 70.3% growth in platform assets is incredible
- Retail investment accounts now over 800k - this growth has also been incredible.
- Opex per client down to R106 from R246 (really NB)
- Costs of client acquisition down to R71 from R73 (really NB)
Does @EasyEquities have an economic moat?
- Qualitatively: Yes, EE is becoming a household name. Also, has a patent over fractional shares in SA I believe? (Please confirm) - can others do it in SA?
- Also; no other investing service in SA like EE (pls challenge me on this?)
- Qualitatively: Yes, EE is becoming a household name. Also, has a patent over fractional shares in SA I believe? (Please confirm) - can others do it in SA?
- Also; no other investing service in SA like EE (pls challenge me on this?)
Economic most cont:
- Quantitatively: Rev, EPS and Equity all growing well.
- Quantitatively: Rev, EPS and Equity all growing well.
Management Assessment
- Charles Savage (CEO) ( @CharlesHSavage )has a significant holding in PPE and Is the founder. These are good signs. Owner mentality achieved to a large extent.
- Not going into detail here re other mgt, can do that when we analyze annual results
- Charles Savage (CEO) ( @CharlesHSavage )has a significant holding in PPE and Is the founder. These are good signs. Owner mentality achieved to a large extent.
- Not going into detail here re other mgt, can do that when we analyze annual results
Liquidity and Solvency:
- Cash on hand of 188M is very comforting. Liquidity should not be an issue and PPE can take hold of opportunities
- Current ratio at 0.98:1 (<1 but not worrying)
- Debt: Equity at 0.74:1 (>0.5 so not the best but this has been reduced )
- Cash on hand of 188M is very comforting. Liquidity should not be an issue and PPE can take hold of opportunities
- Current ratio at 0.98:1 (<1 but not worrying)
- Debt: Equity at 0.74:1 (>0.5 so not the best but this has been reduced )
Concerns:
- Shareholders are being diluted... there has been a 9.33% dilution in your ownership rights since the comparable period which is concerning
- this is due to shares being issued at an avg issue price of R0.1469 (am I incorrect in my calc or is this shockingly low?!)
- Shareholders are being diluted... there has been a 9.33% dilution in your ownership rights since the comparable period which is concerning
- this is due to shares being issued at an avg issue price of R0.1469 (am I incorrect in my calc or is this shockingly low?!)
Calc: R12595/(1004643-918914)=R0.1469
- My suspicion is that the low avg price is due to mgt options. We need to have a discussion over options as incentives and the mechanics over this. Buffet deals with this extensively in his annual letters
- My suspicion is that the low avg price is due to mgt options. We need to have a discussion over options as incentives and the mechanics over this. Buffet deals with this extensively in his annual letters
I’m not against mgt options at all- they can be very effective for mgt motivation but I think we need to chat more about the price and mechanics of the options - the price is very low and it hurts SH. But again, it might not be down to mgt options I am just speculating.
Conclusion: What an awesome set of results. I hope I have given a balanced view here of the results. I am very bias to PPE, they the biggest stock in my portfolio. Well done to the mgt team and all involved. My hope is that this stirs more conversation. LONG PPE! 
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Would love you guys to add your views:
@FinanceGhost @JuniorBuffett @ChrisRBest
@CharlesHSavage @carelnolte Sorry for the spam this morninghttps://abs.twimg.com/emoji/v2/... draggable="false" alt="😉" title="Zwinkerndes Gesicht" aria-label="Emoji: Zwinkerndes Gesicht">
@FinanceGhost @JuniorBuffett @ChrisRBest
@CharlesHSavage @carelnolte Sorry for the spam this morning
