05-June-2024: After market close (5:39pm): Outcome-of-First-Court-Hearing.PDF

Good-o, all going to plan so far. Here's the indicative timetable from the second page of today's announcement.

Looking forward to getting the cash for this one - average price paid was $27.20 over various buys - and the takeover is at $68.50, so there's not too much Arb up here (they closed at $67.00 today), but a decent outcome for longer term holders considering we've seen the odd approach knocked back by the ALU Board over the journey - they clearly held out for something better - and they got it in the end.

$ALU has announced their 1H FY24 results this morning.

From a quick reading, I've breathed a sigh of relief to have the $68.50 takeover price locked in, as I think the market would have reacted quite negatively to the result, given the SP run-up ahead fof the takeover offer.

For context 1H23 the eps growth was 29% and FY23 was 19.4%. So this morning's 1H 24 11.2% is a distinctly softer result, and below consensus (if I have done the FX correctly).

Within the softer number, sales in the enterprise segment grew 60% to $20.4m - albeit from a small base.

Nice to get the $0.30/share dividend, as a last hurrah.

Life's too short for a more detailed analysis. I just need the deal to complete.

Financial Highlights

Disc: Held in RL and not on SM

I hoped to hold this one for years to come but I can't complain too much. It's a good price and seems inevitable an acquisition was going to happen one way or another.

The market price is still below the takeover price, plus there is the possibility of an interim dividend. According to the announcement:

Altium has certain rights to pay dividends under the terms of the SIA. An interim dividend for the financial half year ending 31 December 2023, remains at the discretion of the Altium Board. If paid it will not be deducted from the Scheme Consideration. Any additional dividends, beyond any interim dividend, will be deducted from the Scheme Consideration.

I'll hold for now:

1. It looks like a serious & considered offer, so I think it will go through at 68.50. Market price should increase to reflect that
2. There's a possibility of an interim dividend which would be a small but welcome bonus.

Returning to strawman after leaving premium some months ago, working where to put the Altium money.

Reflecting on previous small cap mistakes, the once popular (3DP, ALC, EVS), and the more recent medium to large spectacular successes (AD8, MP1, CTT, ALU) and still running PNV, I am thinking of a mix of downtrodden still forecast to grow stocks IEL, RMD and TYR.

Silly question to ask on a service with a ranking system, but what are everyone’s best ideas as to what to do with the proceeds of such a high conviction portfolio staple?

Wow $68.50 acquired and approved by the board.

I feel very fortunate it is one of my largest holdings but goodbye to one of the best ASX tech stocks by the looks of things. ALU has been an absolute wealth winner for many years.

whether ALU would have grown into its share price over time but you need to back management that they have made the right call. They knocked back autodesk takeover during the Covid period which at the time looked a decent bid given where the share price was at and where it slid after rejecting the offer. Turned out to be a great call.

lets hope a counter offer occurs. I never know what to do in these situations where it’s likely the offer will be approved. Do you sell some at this price or just hold and hope for a better offer to come for a high quality tech stock.

Altium agrees to be bought for $68.50a share:

A little bit sad at this news. I don't own it but they're one of the highest quality growth stocks on the ASX. There aren't a great many of them and it's likely there will be one less now...

Back in August Altium released a an update, sending prices soaring from $37 > $46.

However, since then the share price has come back to near where it was at the time of announcement. There has been no bad news.

However directors have been buying parcels ~40k worth at prices around $42.

Just an observation

$ALU have just released their results, with the investor call at 5:00pm.

Their Highlights

My Quick Analysis

Top and bottom lines generally advancing around 20% marks a solid year.

Results vs. Market consensus were:

• Revenue: US$246m consensus vs. US$263m result
• NPAT: US$0.49 consensus vs. US$0.504 result

So a minor beat on revenue and a very minor beat on eps.

The strength of the result lies in the outlook. $ALU are holding to their long-standing FY26 $500m revenue goal, but the kicker is that they are now forecasting that this can be achieved with only 75,000 of the 100,000 aspirational seats, due to increasing value of subscription seats AND that they are holding to the aspirational seats target (upside? - need to hear what CEO ARAM says in the presentation.)

In line with this goal, FY24 revenue target is 20%-23% growth, and they are holding to an EBITDA range of 35%-37%.

My Key Takeaway

Overall - a rock steady performer. (Slow-down? What slow-down?)

SP is just under consensus, so depending on what NASDAQ does overnight, could see a modest lift tomorrow.

Time to go on the call.

Disc: Held in RL (3.8%) not on SM

Altium

Revenue:

Customer Reciept

Total Expense