Forum Topics FDV FDV Going Forward

Pinned straw:

Added 6 months ago

Okay, these are my rough thoughts about the future of FDV. All speculation, no skill!

FDV is pretty much a SPAC. It's been buying up potential companies with the prospect of growth, amalgamation into groups and then sale. 360 LATAM has been pitched as a NASDAQ float at some point in the future and Zameen, of which they own 30%, has been talked about being floated or sold as well.

Firstly, Zameen. It was started by the Khan family and was going gangbusters until Pakistan's economy hit the skids. Things appear to have stabilised here, but we'll see. Now the Khan family have other interests, namely what was the Emerging Markets Property Group (EMPG), now based in Dubai. This group bought Bayut and Dubizzle and has now rebranded under the Dubizzle name. The Dubizzle Group is a collection of property, motor and classified companies similar to FDV and focussed on the greater MENA region. They have bought a few companies this year, namely Hatla2ee, an Egyptian car trader site in Feb and Property Monitor in May. This gives them a strong focus in the MENA region and is fattening them up for their float. Apparently Emirates NBD, Goldman Sachs, HSBC and Morgan Stanley have been working with them for a year or so and the latest talk is of a float later this year targeting $500M to $1B.

If Zameen is in the float, then that is the catalyst for a rerate of FDV as they sell into the float.

If the float of Dubizzle group is a success, then they will be a cashed up group looking for acquisitions. Which is where MENA comes in and maybe Pakwheels. Dubizzle have the second or third place in these MENA markets where FDV has 1st through Avito and Tayara. Ripe for a takeover by a cashed up behemoth wanting to dominate the region.

Next is 360 LATAM. The aim is to list this on the NASDAQ and no doubt the structural review will have this as a focus. They were targeting $100M revenue, first USD then AUD, but revenue has stalled a bit. There was a problem with IRIS 1.0 and lead leakage, but apparently IRIS 2.0 has fixed that, so hopefully revenue will start to pick up again.. I think there's a good business here and the listing could work in the right environment, but the group needs to return to the growth it was previously experiencing. Nothing will happen here this year or maybe next, but watch this space.

And finally FDV Asia. These are more nascent businesses where the founder is still involved with approximately 50% ownership. There's work to be done, but if Patrick Grove and Catch Group want to wind up FDV after the above comes true then an approach to someone like the Digital Classified Group might create an exit.

The privatisation of Property Guru at $1.1B in 2024 and the recent equity raises by Dubizzle shows there's money looking for a home in these markets. FDV has a stable of quality assets which have just passed into profitability and are set to take off in the right climate. If you annualise the revenue across the group stated in the FY25 Q1 trading update, then FDV is currently trading on a touch over 1x revenue. And todays bounce to recover most of yesterdays fall makes me think there's a few others out there that can see a path to the future as well.

Bushmanpat
Added 2 months ago

Shaun will stay on as non-executive director after he steps down as CEO.

Market seems to like this idea.

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Bushmanpat
Added 5 months ago

And once again we see the share price run up in anticipation of the quarterly. Up 54% in the last 30 days.

Pretty sure it'll tank again. If I had more conviction (actually, that should read if I was a trader!) I'd have bought at 20c to sell sometime next week before the quarterly comes out

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UlladullaDave
Added 5 months ago

Could be wrong here but I assumed it was running because Groves has rolled the chairman and the CEO and he (Groves) loves doing a deal?

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Bushmanpat
Added 5 months ago

@UlladullaDave in my casual observations, FDV tends to run up leading into a quarterly, then drops when the results aren't superb. FDV got a lot of hype a few years ago and I think there are a heap of fundies watching it, waiting for the story to come true.

As another side story, Dubizzle is getting up for a float, supposedly this year, which will most likely give FDV a jump.

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UlladullaDave
Added 5 months ago

Fair enough @Bushmanpat . You would definitely know better than me as I don't follow it closely.

The only reason I commented was that someone I was speaking to the other day made the observation that Groves has recently joined the board of FLN and installed himself as chairman of FDV, and that he probably isn't doing it just to draw the salary.


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Bushmanpat
Added 5 months ago

@UlladullaDave He's definitely going to sell it off to recoup his investment. It's just how he does it and the prices he gets.

I just think the price run up into a quarterly is becoming a common occurrence, not a given but it seems to happen fairly regularly.

I'm just consoling myself for not trading it.

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Slomo
Added 5 months ago

@Bushmanpat I think they don't need to do quarterlies anymore.

They hit Op CF positive for 4 in a row so they were excused. Shame the ASX doesn't look at Capex in this calc to better approximate Cash burn.

Good intel on Dubizzle going for an IPO, agree that should help.

The other 70% of Zameen that FDV doesn't own is due to be floated too via its parent, timing unknown but expected with markets are more favourable....

Hopefully this coincides with the Pakistan economy seeing more stability.

The LATAM business has been packaged up for a float in the future so is likely available for sale at the right price too - that will be a lot less than previously expected now that growth has dropped off.

So some potential catalysts on the horizon for FDV

Will be interesting to hear what new mgmt have to say at half year.

Disc: Held.

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Bushmanpat
Added 5 months ago

@Slomo you are correct about the quarterlies. They don't have to issue them but they still do.

And Zameen is owned by the Khan family who also own Dubizzle. I suspect Zameen will be part of the Dubizzle float but it's not clear from what I've been able to find. I'm hoping it is along with Pakwheels. That will give FDV the exit they need.

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Bushmanpat
Added 4 months ago

@Slomo They must have been listening to you. First time with no quarterly. There are definitely changes afoot.

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Slomo
Added 4 months ago

@Bushmanpat, they've been listening to someone (possibly the market) because the management takeover / rescission is now complete per today's announcement.

https://www.marketindex.com.au/asx/fdv/announcements/board-and-management-changes-strategic-review-update-3A672819

They're still one CEO short of a functioning Exec team but 2 of the original 3 co-founders are back on board.

Co-founders Patrick Grove (Chair) and Luke Elliot (NED) from Catcha Group have taken full control after rejoining 4 months ago, to then exit co-founder and LT CEO, MD Shaun Di Gregorio 2 months ago, they've now exited the rest of the board. They even walked the CFO and replaced him with the old CFO from 5 years ago!

So they have much of the original band back together including some of the old roadies and now just need a new lead singer.

The execution of this coup was pretty slick, in terms of the timing and messaging (from the outside at least, must have seemed a lot bloodier on the inside).

Grove and Elliot came back on just prior to the AGM giving them 3 years until they face re-election. No strategic pitch given at the time, but would have been hard not to get elected with their history and significant shareholdings (9% each). After the AGM they exited the rest of the board as well as CEO and CFO (at least).

They've now installed their own picks - former colleagues and trusted lieutenants with just the CEO to come.

They've also stopped the strategic review to focus on "operational execution" so this is looking like a resumption of the old strategy but with some new tricks no doubt to kickstart the turnaround.

Their full intention will hopefully be known in the next few weeks with a 'strategic update' at the half year (their EOFY is Dec).

LATAM exit less likely now I would suspect until they restart the growth and fatten the margins. Interested to hear how they plan to do that...

Disc: Held

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Goldfish
Added 4 months ago

Thank you for that, I hadn't spotted it

It has to be a positive that these guys still see some value in the business. Shaun leaving was obviously a huge negative

Let's see what they come up with

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