There are a few buyers. I have got a small speculative position....

There are a few buyers.
I have got a small speculative position. I normally don’t invest (even in spec end) with such dodgy balance sheets but am moderately confident the prepaid balances can be unwound without too much incremental costs and cashflow has been solid for many months now.

One of my preferred value situations where you have multiple parts some of which are declining (eg London) and some that are rock steady increasing (Hong Kong), where once the increasing business component becomes a larger part of the whole it flows directly to the bottom line. If management figures from various announcements are to believed EBITDA margins in Hong Kong are 35-40% which on 4m revenue equates to about 1.4m, which gives an approx 2yr payback at current share price of HK business alone.

Don’t see too much/any downside here as the losses are also worth something so have taken a punt- and also reassured my Michael’s large and increasing stake.

If my thesis is correct regarding the turnaround, 2 good quarters should trigger a fair and substantial rerate. Then again am sure other buyers are thinking the same as me, and have seen demand evaporate in these illiquid companies when even average reports come through, such that rerates invariably take 2-3x longer than I expect!!