A Rapidly Growing UK Business for 3x FCF
It's also paying out a 15% shareholder yield while we wait for the rerating.
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Today’s business is a highly profitable, asset-light technology platform currently priced at severely distressed multiples.
In fact, if you bought the entire business today, you’d make your money back from the FCF in roughly 3 years, and enjoy 30%+ annual yields after that.
At these prices, the market implies the business is in structural decline and will soon cease to exist.
In reality, the company is achieving record revenue, operates with extreme capital efficiency, and generates consistent FCF.
The company holds a net-cash balance sheet and is aggressively returning surplus capital to owners through massive share buyback programmes and dividends.
The ownership structure is fragmented with a large free-float.
There is no risk of an involuntary delisting and an activist could comfortably build a significant stake.
This extreme disconnect between the market price and the underlying cash generation gives us an exceptionally wide margin of safety.
I also believe there are highly probable near-term catalysts occurring that will unlock the value.
Let’s take a look…