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BeingTheBanker - what absolute drivel.
The company does not have a loss making pricing structure and have never suggested it is a problem for the cloud business, on the contrary they have said it is a massive opportunity.
When you have few customers and a massive sales effort during a growth phase it is obvious costs are not covered - but the business plan is not for steady state, it is for rapid growth in signing up profitable business, not buying it with cheap deals as competitors are doing. Even the majors and most other small companies lost money when growing their businesses - in fact many growing IT/Comms companies make losses for years and enjoy a great SP as long as shareholders believe in the business proposition and back it
You have no evidence whatsoever that the contracts they are signing are anything other than very lucrative with good margins and it's not very hard to get unit costs down, signing new clients does exactly that.
plenty buyers and buying. you are reading the reported trades wrong (prob from the face of the colour on LSE).
no one buying still..... nice one LOOP!..... Think the presentation didnt rake any potential buyers in . Want to see the pipeline turn in to reality. A couple of biggys and some faith restored. Funny that Steve F felt the 25p was a joke price to place.... yet peeps do not want to buy today at 22.5p........ lucky it wasnt 20p then Steve F.......B
Bigsmoke - the pipeline is/was definitely growing but has slowed from the initial burst - I suppose there is a right size for it, it can't grow too much until they right size for the growth which will be ongoing (recruit staff and rollout infrastructure). All appears to be going great and I'm sure they can service what they currently have, but if they convert a good proportion of the £20 late stage negotiations and continue growing on that line then I suppose the support staff will have their hands full.
I suspect the sales staff will be maxed out dealing with the current enquiries and could even be deciding to no-bid on poor leads at some stage or they could end up overtrading (sales effort swallows up too much cash and they can't service anything properly) - they already appear to have made a decision to only go for large (ish) contract and just pick up the small ones, SME's if they fall in their lap. Nice problem to have though.
We can also assume some of the leads will have faded out or recognised as a waste of time (it's important they recognise those where there is no real intent to complete ) and some will have converted in Q3 - so the the pipeline is being refreshed/expanded IMO.
Keeping an eye on recruitment efforts, as some are doing, could provide a good insight into how well they are doing - those new marketing/sales jobs suggest there is high demand to service.
IMO what we really need to hear about is New clients then we can get closer to understanding the conversion rate.
Wonder if the contract pipeline is growing. Will there be a form of Q3 trade update?