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It looks like Frost & Sullivan are a business consulting provider.
So are Brandshield a paying customer of Frost & Sullivan's business consulting services ?
Based on H1 cash burn is c$400k a month. There was cash of $2.2m at 30/6/22 so this would have been spent by YE. We had the c$2m placing in November so that will give the company another 6 months.
Unless revenues increase substantially and/or costs are reduced (and it appears both staff costs and marketing spend just keep increasing) they will need another placing or debt finance within the next 3 months.
Best scenario IMHO is another placing at 4p unless Leahy have got fed up funding this.
Such a shame as the tech looks great.
I see someone put their "idle spare cash" to good use at 9.53 this morning!
Nd
I don't have a brighter mind but I will try my best to help. If the business burns more cash than it makes, eventually the coffers run dry and we all lose our money (that can happen in many ways, it doesn't even mean the end of the company - it could just mean that you are no longer a part owner). The negativity is because those risks are getting higher the longer it takes for the company to get to profitibility.
Try to learn about balance sheet fundamentals. Dismissing something such as fundamental as 'burning cash' is a major error.
I don’t understand the negativity around Brandshield.
Financial highlights
· H1 2022 Annual Recurring Revenue1 ("ARR") up 71% to $6.67m (H1 2021: $3.89m)
· Strong momentum continued with the August 2022 ARR figure reaching $7.26m, up 68% vs. August 2021 and up 39% vs. December 2021
· Delivered revenue growth of 59.9% to $2.83m in H1 2022 (H1 2021: $1.77m)
I understand they’ve had to do several raises and they are burning cash but they’re definitely growing revenue and their portfolio of clients.
Please someone with a brighter mind than mine explain this to me.
no point commenting, we need an act of God to fix this
And not even a comment from us poor shareholders….I guess we really are poor now :o(
yeah, u know in 1 year one of my clients took a $24mill bonus just for himself , ******.
Yes agreed Draft, I'll try and rephrase it, they will have a basket of investments so whilst not singularly important to them if this comes off or not, they have picked it as a risk / reward worth taking..
I like Leahy and Currie, but liked the idea behind Brandshield before there were prominent investors.. needs to cook for another year.
CC - -ve seen plenty of people waste their spare money, in fact pretty much everyone i have seen has done that
I worked for over 15 years in the city and tbh we should not look too much at leahy here, it may well be just his idle cash. ive seen people get bonuses of over 20mill just for 1 year. a lot of people in the city have idle spare change.
They don't waste 'spare money' theyve seen something that is worth the investment risk imo.
Will take another year to churn and grow then take off or get taken out suddenly.
Or implode.
I'm holding to see what happens.
maybe its just spare money these tr1 guys are playing with, or they want to buy this out in a MBO kind of thing?
What is interesting is that all three large TR1's in
1.William Currie Investments.
2.Sir Terry Leahy.
3.Mark Horrocks family.
Have all averaged down and caught the falling knife, they grasped it again at 6p without any warrants, previously at 12p with a 18p warrant.
The RNS said clearly its looking at breakeven and not a lot going on until 2024 yet they are still gobbling up everything that is offered on the way down.
What have they seen that even in this overall depressed market, in its equally depressed cyber security sector ?
"BrandShield will be in a position to maintain growth in ARR and to further capitalise on a significant market opportunity taking the company through to profitability on current projections.
Brandshield has built a best-in-class, highly scalable platform offering a comprehensive solution that detects a myriad online threats. The business has seen strong cross sector demand including financial, Pharma & healthcare, Consumer products and Media & entertainment"
Whatever it is this looks bottom and end of funding requirements?
I was hoping for another increase in the share price today after that increased holdings RNS
Hey ho!
I pity the fool who buys these shares!
.......and he is no fool
TR1 just out informing the market the ex CEO of Tescos has increased his share holding in BRSD
The optimist in me would hope the fact they are raising less at 6p than at 14p indicates the breakeven 2024 target is within sight and won't need as much to reach a positive cashflow, I don't think they've ever indicated a breakeven target in RNS before, a turnover target yes but not breakeven.
However, the realist is saying sell my holding now to pre-empt the next raise at 4p next year!
exactly shandypants. i dont know why everyone is justifying the placings. as u sau the placing price has been getting lower and lower and lower. Really does feel like they are burning up cash and they havent even raised that much at 6p.
In hindsight it would have been better to have raised once around that 14p level and have raised a sufficient sum - three raises leaves the market concerned that costs are out of control...
We have to take the company on trust that this third raise will take them through to profitability, but difficult to trust the board.
The positives are customer growth and that ARR number growing quickly... That is impressive and needs to continue apace.
Target has to be to get ARR through $10m soonest.
some cash burn is clearly expected, however, this is the 3rd placing in 10 months (14p, 8p and now 6p) so there is clearly something wrong here .
They massively increased marketing spend yet the revenue increase in the last results was less than the extra expenditure. Yes it's good that new contracts are now slowly coming in but each contract is quite a low value (between £25k and £50k p.a. i think) so they need many more to get to breakeven - i think the loss was £6m last year.
This placing is clearly to keep the lights on so i'm not convinced they won't need more money in 2023 as the cost base is now so high. Happy to be proved wrong
Fair points there NorthernBoy. Companies usually list on AIM to raise cash after all. I must admit, I didn't have time to check this morning, but I was trying to remember if the 2024 date was a change, or just a reiteration of previous BOD expectations.
My post wasn't intended to be derampy, though perhaps it looks a little negative. I'm still smarting a little at buying in at the top. 19% dilution (my calculation of the result with the new shares) isn't too horrendous, as long as that's not repeated.
#unexpected sorry
I don’t think a ‘cash burn’ is at all expected for a young business.
A break even point early 2024 is a positive!
A raise to further the business slightly lower than the current sp is also not unusual, especially consider the current ‘risk off’ sentiment.
Customer and ARR growth are impressive!
:-)
The takeaway from this RNS for me is that the company would be going bust next year without it. They are hoping to sort out the cash burn problem by breaking even in 2024. That's how I see it - any differing views?