By Reus Investments
In this video we introduce Regus, which in our view is a cash compounder that can be bought at 10% FCF yield with very little debt.
VALENTUM – Regus Investment Case
Since its founding by Will Thomson and Chip Russell in June 2016, the Massif Capital Real Asset Strategy has outperformed all of its real asset benchmarks. Since its inception, the long/short equity fund has returned 9% per annum net, compared to 6% for the Bloomberg Commodity Index, 3% for the 3 MSCI USA Infrastructure index Read More
Regus manages business centers around the World with more than 2.800 in 1.000 cities and more than 100 countries. It is the only company with a worldwide scope, being one of its main differentiations vs. competitors. About 40% of their sales come from the US, 21% from UK, 21% from Europe and 14% from Asia.
The business model generates a lot of cash (above 100% EBIT) due to low capex (they co-invest with the landlord) and negative working capital (2 months of guarantees, and they charge the month in advance). This is the key driver to have a sound balance sheet (0,5x NFD/EBITDA) even with new openings.
Management has skin in the game. CEO Mark Dixon owns 27.8% (although he recently did a placement fo c3% we believe he is very committed to the company) and new CFO Dominik de Daniel