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Monitoring tech firm Buddi ‘going to be a true unicorn’ soon after London float, claims Sara Murray

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Tracking tech company Buddi ‘going to be a real unicorn’ after London float, says Sara Murray
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he founder of Confused.com plans to float her monitoring technology business in months in a London IPO that could value the business at all over £500 million. 

Serial entrepreneur Sara Murray launched Buddi in 2005 following staying “horrified” when her daughter Ro, then aged 4, received shed in a supermarket and there was no effortless way to obtain her – or any GPS tracking unit compact plenty of for a youngster to carry on sale in the British isles. 

Currently Buddi technological innovation is made use of to watch vulnerable persons and bought by felony justice programs around the planet.

Business pre-tax income jumped from £2.1 million to £6.2 million for the year to December 2019, its most current accounts demonstrate, with revenues increasing 64% to £18 million.

The company materials in excess of 80% of Uk councils, and has nationwide government consumers “on just about every continent” and significantly in Asia and Latin America, with criminial justice clients now accounting for the majority of income progress.  (Murray claimed that to assure the technological innovation is not currently being misused, the firm liaises with the FCO prior to signing promotions with foreign prison justice units.)

She informed the Standard: “We have the most important contracts in those emerging marketplaces. We are undoubtedly marketplace chief in the area now. 

“Over the past couple of decades we have experienced additional than 70% progress in revenues, and persons have been expressing ‘you should assume about general public market’, so it is a pure evolution for us alternatively than an exit… It is [happening] in the future number of months, we’re surely making ready.”

The entrepreneur just employed Town heavyweight, former KPMG United kingdom chairman Simon Collins, as Buddi’s chair in advance of the prepared float. 

She reported: “Personally I expand organizations to hand to my grandchildren, so I believe that in extended-time period advancement. 

“Since the beginning men and women have penned to us expressing: ‘Is there any chance I can buy shares in Buddi? How can I obtain shares in Buddi?’ So that kind of tells you that this is something that must be publicly owned… This is a phase in our journey. I’m not a seller, so we are likely for doubling as speedily as we can. We are likely to be a genuine unicorn.” 

If it goes ahead, the IPO will be most current in a string of massive tech-enabled enterprises to float in London this calendar year, which includes Moonpig, Trustpilot and Deliveroo.

Murray is sceptical of the float boom, and warns that “lumping all tech organizations alongside one another and declaring ‘any tech is great’ is wherever we are heading to have some disasters”.

She pointed out that her firm is worthwhile, compared with Deliveroo.

She mentioned: “Everyone has obtained into this check out that tech is useful and consequently we should really all pile into tech and place any kind of valuation on it… All it normally takes is one disaster for everyone to eliminate a whole lot of dollars. If our pensions are investing in these corporations, it’s essential that they are serious price that is becoming grown and shipped. 

“There will be a couple of disastrous floats and it will wreck it for everyone, which is specifically what happened in 2001.”

The tale of Buddi

In 2005 Murray experienced already arrive across semi-conductors while looking around at the fastest-escalating US organizations at the time .

Murray mentioned that when she discovered her daughter in the Kent supermarket that day, she assumed: “That’s completely mental. We have to just be capable to set a little something on our youngsters so we can locate them anywhere they are”.

But the entrepreneur was unable to come across a gadget supplying a answer in the United kingdom, and was told there was a a few-12 months wait for one currently being supplied by a firm in the states.

Murray, who released her to start with company at 22 and went on to sell her promoting software products to Publicis Groupe, applied her contacts to enable assemble a crew of techies and invested three years developing a new gadget.

The workforce, which tends to make all its possess hardware and software package in-residence in the Uk, named the gadget Buddi.

Murray commenced providing Buddis on a site in 2008 and promptly noticed need from nearby authorities to assist vulnerable aged persons who were obtaining misplaced, or required to be ready to alert their carers.

The organization then expanded into slide alarms, as nicely as into wider justice program checking.

It is now about to release a FitBit-like wrist product that is “cool plenty of to have on that you’re not embarrassed”. It is water-proof, and app settings allow wearers to ping loved ones members if they slide more than, or if they are dropped.

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The 30 major companies doing £8 billion of share buybacks, and why they’re doing it

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The 30 major companies doing £8 billion of share buybacks, and why they’re doing it
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he City is calling it a Buyback Bonanza.

In the past fortnight, both Unilever and Diageo have announced they are buying back their shares to the tune of billions of pounds.

Research for the Evening Standard by share trading platform AJ Bell shows major UK companies have announced pland to buy back more than £8 billion of shares so far this year.

Of the 30 top names, some of the UK’s biggest companies feature, ranging from BP and Standard Chartered to Barclays and Balfour Beatty.

But what do buybacks mean, who does them and why?

When companies have built up a lot of spare cash from selling their products and services, they have three choices; invest it in something new that will hopefully generate more profits further down the line; keep it for a rainy day; or hand it over to shareholders.

If they choose the latter, they can either give it to the investors as cash – usually done as a dividend – or they can do it by spending the money on buying back the company’s shares from the investors.

What’s the point in that?

A share represents a slice of the value of a company. If you reduce the numbers of shares in issue, theoretically each share should be worth a bit more.

Also, it means that the big institutions get cash back for their shares when the company buys them. They can then invest that money elsewhere to get a higher return.

Generally, a company will tell a broker to go into the market and buy up a certain amount of stock, generally from the big City investors. UBS is doing the deed for Diageo.

Retail investors don’t generally have their stock bought back but they do benefit from the appreciation in the share price and a bigger share in the future dividends.

Why are so many buybacks happening now?

Through the Covid crisis, companies cautiously held onto as much cash as they could to get through the economic calamity brought on by the pandemic.

Many held back on paying dividends to investors, or reined in their spending on marketing, research and development or takeovers.

Now there seems to be an end in sight to the pandemic pain, those who can’t think of anything better to do with the cash are handing it back to shareholders.

Russ Mould at AJ Bell says super low interest rates are also driving the buyback trend: “Low interest rates mean firms are not gaining a decent return on any liquid assets,” he says.

Does the share price always rise when buybacks happen?

Not necessarily. BP has been doing them for years and it’s had little impact on the price, although you could argue that it’s impossible to say exactly what influences a share fluctuation. It’s possible BP stock would have fallen further if it had not been buying some of it back.

How should investors interpret a share buyback when considering a company?

Views are different. Most investors see them as a sign of confidence coming out of a recession, in that it shows management are less cautious about holding onto cash.

AJ Bell’s Mould says buybacks may also suggest management considers the shares are too cheap. After all, everyone in business wants to buy low and sell high. It is, then another vote of confidence in the company.

But it can also suggest management has run out of ideas about where to invest. That can be an indication either of unimaginative management or a boring, low growth industry. It could also mean management is risk averse, which could be a good thing.

E-commerce player The Hut Group this week issued new shares to expand its fast growing operations. That diluted existing shareholders but the stock rose because investors hoped the company would be worth more in the long run as a result of the deal.

Fast growing companies, particularly in tech, will often issue new shares to raise to cash because there is so much to go for in their markets to boost future profits. The slice of the pie may be thinner, but the pie itself will be larger.

Yes. Buybacks have come in for criticism because management teams have been accused of using them to juice up their bonuses.

Some bonus schemes are based on earnings per share (EPS) of the company. EPS is a measure where you take the total profit made by the company and divide it by the shares in issue. Naturally, if you reduce the number of shares that are out, hey presto, the EPS rises.

Some investors see buybacks as a form of financial engineering rather than improving the actual operations of the company and investing for solid, long term growth.

There is also evidence to suggest that, while management teams may think the shares are cheap, buybacks are generally done during bull markets when shares are actually at their highs.

More than £10 billion of share buyback plans were cancelled in 2020 when shares were probably at their cheapest. Buybacks done in, say, March last year would have been at rock bottom prices, producing a maximum EPS boost.

AJ Bell also warns that some companies are under so much pressure to give back cash to investors that they go into debt to fund the buyback. That could destabilise the business.

So, be wary of companies who buy back shares at any price, preferably setting a maximum they are prepared to pay and explaining why, and be cautious of those who do buybacks when their debts are high.

Diageo is quite highly indebted and its share price relatively fully valued, some analysts have warned. While the shares shot up more than 3% today, some of that could have been due to big profit upgrade it also announced rather than solely the buyback plan. It remains to be seen whether the buyback alone is a significant factor.

Mould says the final word should go to Warren Buffett, the so-called Sage of Omaha who, with his sidekick Charlie Munger, has been beating the markets for decades: “Charlie and I favour repurchases when two conditions are met: first, a company has ample funds to take care of the operational liquidity and needs of its business; second, its stock is selling at a material discount to the company’s intrinsic business value, conservatively calculated.”

Diageo

£1bn

Unilever

£2.6bn

BP

£360m

IMI

£200m

Quilter

£187m

D4t4

£300,000

Natwest

£1.13bn

Ferguson

£290m

Arix Bioscience

£25m

Raven Property

£7m

Somero Enterprises

£1m

IP Group

TBC

Balfour Beatty

£150m

Gamesys

TBC

Domino’s Pizza

£45m

CRH

£216m

Sage

£300m

Trans Siberian Gold

£1m

Rightmove

TBC

Griffin Mining

£7m

Spectris

£200m

Standard Chartered

£181m

Berkeley Group

£129m

Glanbia

£44m

CML Microsystems

£8m

Barclays

£700m

South32

£180m

Plus500

£18m

Zytronic

£10m

Contour Global

£23m

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