Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
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At the end of the day, all we can do now is sit and wait for the next news - something we're all well used to doing....
If nothing else, it's livened up this discussion board!
Raza gets it for 14p per share is my bet
I guess one thing. If this is the end - at least we will be put out of our misery.
Agree with Pianista - both about the brainstorm and impending announcement - perhaps from both Trak and ML. I suspect there are some on the ML BOD questioning the wisdom of getting into bed with Trakm8 in the first place. I believe it was to salvage an order at the time and they foolishly bought Trakm8's nonsense (like so many of us). Interestingly, Raza has made a number of personal share purchases at way about current prices.
Anyway, they have only £0.4m of cash at hand (whether this includes revolving facilities isn't clear )- never mind what kind of covenants may be on the verge of being breached (or have now been). They also say they are having a bad time of it in the insurance market currently and a 'hoping for' (read, completely relying on) a sudden surge in demand for Trakm8 products. Even with the contract and projected revenues, they basically said there is no jam at the end of FY-2025. The first RNS that has no jam for the long, stale toast of long-suffering holders.
No, they simply must raise cash or sell. So, whilst ML are brainstorming, JFW is probably calling around the city with his cap in hand. Either option will be the next announcement, I believe. My money is on sell, as I can't see how anyone can be persuaded to back this almost fatally wounded horse. Unless, Watkins and the BOD come to rescue entirely alone - which is possible, but at what cost to PIs?!
You have to hand it to them dc2, they've managed to fool everyone, including Microlise, Allenby - and the lenders probably.
As implied by a recent posting of yours, they could miraculously secure the contract and the insurance market could miraculously recover. But in the meantime, I hate to think what the balance sheet at 31/3/24 will look like. It certainly won't look pretty, so I'd expect further announcements shortly.
Microlise will be particularly put out - 20% of the results of Trak are reflected in ML's profit and loss account, so the swing of £3.2m represents a "hit" of £0.64m. In a company with PBT of £3m that's gonna hurt, so this fiasco arguably requires an RNS from ML too!
So I'd be amazed if ML weren't holding a brainstorming session entitled "How do you solve a problem like Trak?" as I speak.
Surely the swing is more of a reflection of the untapped value of the software contract and then the rest is made up from losses incurred in recent months. As KBYK points out the real problem is the £1.4m loss itself - how did that just suddenly happen when they were £0.4m in profit 6 months prior. Some must be attributable to the software contract itself but that is quite a difference.
That software contract raises a lot of questions (which we have gone over before but I like to vocalise):
i) How much is it worth
ii) Why is it front loaded to signing (or why is does it have such a large sign up value) - although, there may be a simple answer here i.e that they are not doing a SaaS but selling it as a stand-alone product so no on-going revenue.
iii) Why would anyone be so confident of signing it that they would announce it in the way they have done. i.e. 6 months early
iv) Like iii) above - why would Allenby buy into this.
v) I thought the client may be Microlise - this would explain iii) and iv) above BUT if ii) is correct about it being a one off purchase then it is unlikely to be ML as they would be paying circa (made up figure coming) £2m - they would be better taking the company.
vi) What work has been done - at what cost and has the client paid towards it - if so, why is this not under a contract.
vii) Why did Trak decide not to sign it this FY if they are signing their own death warrant by not doing so - even getting 25% of the contract value is worth it if you need the cash. Perhaps the contract is linked to renewed bank terms and this is the real issue (that the terms will not be strong enough to persuade the banks). If the software is done, the ongoing costs won't be much, so take as much cash as you can (if you are sinking)
viii). Will the contract ever be signed. Perhaps the client won't meet the demands of Trak.
This contract, or the announcement of it, has been the most perplexing thing I have read in a while. It just makes no sense. They obviously know something critical that we don't know (yeah doh!). What will Allenby say (they too look like ars*s at the moment for buying into this garbage).
As per usual, we are kept in the dark, left fearing for the worst (which is the very definition of Trakm8). The glimmer of hope for me is that they have enough cash to survive the next 6 months - enough time to get this contract over the line.
Finally, QTX pulled out of the insurance game a long time ago - looks like they called it right. If I am honest, Trak always appear to be behind the curve - take the RH800 - now multi camera DVR - whilst not a complete package, mDVRs have been out for donkey's years.
Waffle over.....
Your right
The end is nigh
Come on razza make your move
This lot would struggle to run a bath
As recently as 24/11/23, Allenby were expecting an adjusted PBT of £1.8m. Trak now say they are expecting an adjusted loss before tax of £1.4m, i.e. a £3.2m turnaround. And that's even after cutting out £1m of overheads. Incredible! Heads must roll, surely.
How does Trakm8 soak up a £1.4m loss?
And what if the hoped for surge doesn’t turn up?
Two huge questions I’d want answered, personally.
They have to raise cash or sell the business. Perhaps I’m missing something but that to me seem obvious.
I know I have Stockholm syndrome when it comes to this share....On reflection of today's announcement, was it really that bad - I mean, is this really the last nail in the coffin - I am not so sure?
1) From their H1 update they had £0.87m in cash with net outgoings of £0.25m. They now have approximately £0.4m (and this was expected by Allenby due to capital investment). If they maintain the same burn as H1 going forward then 6 months are assured. They should even do better if these data centres do provide immediate ROI. Obviously there are bank loans to pay back soon.
2) This is the big one for me. If JW is being honest (no clue) about the motive for not signing the contract (not the best commercial outcome) then it implies a deal was on the table. If Trakm8 are in such a desperate state you would expect them to sign whatever i.e. something is better than nothing going into the abyss. Obviously, if the talks broke down then they should not be saying there is a deal is still to be had. Main point it why sign your own death warrant.
Don't get me wrong - the RNS does not read well and JW and the team excel in disappointment. I sometimes wonder if they just hate the share holders and long for the share price to be so low that they can take it private.
All this speculation would be moot, if the company provided clear and detailed RNS. What was provide seems rushed and ill-thought-out. It probably wasn't but that's the impression.
Lots of sells over at SAAS - Probably feeding through a little. At the very least, their continuing faith in Watkins must be denting the credibility of what was/is a pretty stellar reputation.
ML now also have the recoverability of their £1m convertible loan note to worry about, so I don't think it would suit them to just allow Trak to fall into admin.
Agree.
This is pure take out play now. Question is simply how much.
Could Micro let it fall into admin before picking up or picking over the bones? (genuine comment - not being facetious)
At the current SP, ML are nursing a big loss - over £1m - on their investment in Trak. ML's annual PBT is only around £3m, so it must be quite worrying for them.
The question is, will it galvanise them into action at last?
If not, is there anyone else who would be interested in Trak? A bid at, say, 20p from someone else may even be attractive to ML as a way of ending their own misery. Either that or they'd be prompted to match it.
Indeed - I noticed a 10 today - translation - suckers!
We now know what all the coded messages in those minuscule trades mean!
"Hopeful ???"
Yes, that word sent shivers down my spine.
"Why is it necessary to delay the signing for the best commercial outcome? What does that even look like - any ideas?"
No, it's bizarre. For me, the RNS raises more questions than it answers, which is why I held off from topping up.
*Why is it necessary to delay the signing for the best commercial outcome? What does that even look like - any ideas?*
Sounded to me like they hadn't even got the deal over the line.
This was also pretty worrying:
"the Group anticipates that its FY-2025 results will be adversely impacted by the lower levels of insurance connections, as outlined earlier. At this stage, the extent of any shortfall is unclear as this will depend on insurance capacity returning at which point the Board is hopeful there will be a surge in demand."
Hopeful ???
Plucky spirit and optimism only take one so far...
Not an ideal basis to go cap in hand to the market..?
Interestingly, when the Sainsbury's contract was delayed they sounded much more confident. To me, this sounds a whole lot more uncertain about whether they can even get the deal over the line.
Unless I a missing something (and that is quite possible given the poorly detailed TU), the only thing that should happen is that JW falls on his sword and resigns. The fact that none of them seem to take responsibility for this monumental fail is either down to arrogance or something we don't know. I still cannot understand the contract. Why is it necessary to delay the signing for the best commercial outcome? What does that even look like - any ideas?
No. Problem is Watkins and Co have run what was once a profitable company (£2m-odd, one year) with decent revenues (£30m) completely into the ground. They simply can't be brought along for a further ride. So, two questions then become pertinent:
1. what will Micro be prepared to put up to take control of the company and show Watkins and Co the door?
2. what will Watkins and co accept?
Is there a 3rd take private option?
It certainly feels like we're entering the endgame, because I can't see ML just passively shoring up the company once more.
It's time to take the bull by the horns and bring Trak (minus the company's senior management) into the ML fold.
Easy 2x from here no matter what tbh
Very low risk
This is 0.37 book value, even on that basis there is a 4x
I imagine a buyout with microlise shares and management will be absorbed into Microlise
Good enough for a dable
The obstacle is surely Watkins and Cronies - a buy out would mean the end of the gravy train. Broadly speaking they have eaten well over the years. I suspect they will try for a placement first. MO of Aim companies.