05-June-2020:  @ndthl's Bull Case and Valuation are both based on IVE (IGL) having a share price of 53c, which would have been circa 9th April (i.e. two months ago).  IVE closed yesterday at $1.24 and are currently (as of right now) trading at around $1.20, so they've MORE THAN DOUBLED from there, and are now way above @ndthl's 85 cps valuation, being the Good Shares Cheap (GSC) valuation. 

@ndthl's other valuation, called Growth With Value (GWV) is way up at $2.29/share.  I don't see any justification for a $2.29 price target, other than that's around the levels that IVE were trading at throughout most of last year.

I do not know this company well, but what is clear is that it's essentially a marketing company with a catalogue delivery division which they bought off Salmat (SLM) late last year. 

The catalogue printing and delivery part of IVE has probably chugged along OK, although with reduced volume because not all businesses were open or advertising during the past three months.  However, the content creation and general marketing work that IVE usually do (outside of catalogue work) would have had some major headwinds in recent months - to put it mildly.

I'm not sure you can value a marketing company in the current environment based on where they were trading at last year.  They've had some serious headwinds this year and they also have significant debt, limited cash, have withdrawn their FY20 guidance, have deferred $25-$30m of previously announced capex, and have cancelled their interim dividend.

Here's what they had to say in on March 23rd:

COVID-19 update, FY20 guidance and unpaid interim dividend withdrawn 
 
IVE Group Limited (IVE or the Company) today announces that due to the unprecedented uncertainty surrounding the on-going impact and duration of the COVID-19 pandemic, the Company considers it appropriate to withdraw the FY20 EBITDA guidance previously announced to the market on 26 February, 2020.  

Additionally, the Board considers it prudent to cancel the interim dividend of 8.6 cents ($12.7m) announced on 26 February 2020, as permitted by the Company’s constitution.  This measure is precautionary and reflects a desire to maintain strong liquidity in an increasingly volatile and uncertain time.

The foreshadowed capital expenditure of $25-30m on catalogue collation automation is on hold, with the Company incurring essential capital expenditure only until there is greater certainty.  

Chief Executive Officer Matt Aitken said: “IVE moved quickly at the outset of the pandemic to implement appropriate measures across our operations to protect, to the extent possible, the safety and well-being of our customers and staff during this time.  

We are very well placed to continue to serve our customers with duplicate operations and capacity if required to ensure business continuity across key segments. Currently our supply chain is solid and current inventory levels provide us with additional flexibility”.  

The Board considers it prudent to maintain a continuing high level of liquidity as the full extent of the current uncertainty unfolds. At the end of February 2020:

• Cash on hand was $29m
• Undrawn committed credit lines were $18m
• Net debt was $174.0m (includes Salmat/Reach Media acquisition(s) on January 1, 2020)
• IVE’s net trade debtors exceed trade creditors & accruals by circa $30m

IVE refinanced its banking facilities in April 2019, with the facilities maturing in April 2023.  IVE remains within its banking covenants with available headroom.  Given the unprecedented volatility and uncertainty of the current trading conditions, this position will continue to be closely monitored.  

[click here for the rest of that announcement]

That was back on March 23rd.  They have NOT raised fresh capital during this crisis (yet), but would not be in the same financial state today than they were then.  The situation would undoubtedly be worse.  However, on that day (23-Mar-2020), their share price bottomed at 27 cps ($0.27), giving them a market cap of only ~$41m, but with over $200m in debt - and $174m in net debt.

Today, they're up at around $1.20/share, with a market cap of $184m.  Their SP has more than quadrupled from that March 23rd low.  They were cheap then, if you thought they would survive, which it looks like they have.  However, they do NOT however look cheap to me today.  Sure, they are trading at lower levels than they were last year, or in the first two and a bit months of this year, but there are very good reasons for that.

It all depends on your investment timeline or investment horizon (i.e. how long you intend to hold them for), but I can see so many better opportunities out there right now than a highly indebted company in a highly competitive industry which has been through what they've just been through (with unknown damage to the business) and that faces the headwinds that they face today.

GLTAH, but they are not for me.  Certainly not at these levels.