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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.
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.
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.
@shandypants2 - what do you make of the level of director remuneration with respect to level of cash burn and share price performance?
From 2021 report (assuming I have read this correctly):
Total Director Fees $859,303 (20.8%)
Yoav + Yuval (CEO, CTO) Total Fees $627,124
Surely large shareholders like Leahy/Currie would have an opinion on this ?
And what do you think the prospects are of Brandshield being able to offload their stake in WeShop in the forseeable future at something resembling its carrying value in the accounts ? I think the Weshop deal/acquisition at the back-end of 2021 had an 18-month lock-in for existing shareholders which theoretically means Brandshield could look to offload in 2023.
i have to say i've lost faith in BRSD and have sold the majority of my holding at a large loss. For me the big red flag in the last accounts was a marketing spend increase larger than the increase in revenue. This is madness.
I had high hopes for WeShop, especially as the book value of c$4m looks quite conservative. However, it seems quite a complicated process if they want to materialise its value. The updates regarding this are few and far between so that's the only info i have to go on. Hopefully we will suddenly find out it's been sold for maybe £5m, however, i'm not holding my breath.
Regarding costs i have many concerns. Considering this is essentially a family business the BOD is massively overpaid and they are loads of warrants and options too. Another red flag. No cost saving measures seem to have ever been implemented.
The 2 most recent RNSs are essentially PR with no info re current trading etc. Another concern IMHO.
Hopefully this will come good one day, the tech is good and i think when signed up customers are quite loyal, however, the cost of acquiring them is the big issue here.
Financial Highlights
· Annual Recurring Revenue2 ("ARR") up over 60% to $8.42 million1 (FY21: $5.22 million)
· 53% increase in new business and upsells to $3.87 million1 (FY21: $2.53 million)
· Stable upward revenue trajectory; 55% increase in revenue to c.$ 6.39 million (FY21: $4.13 million)
· Increase in net dollar retention of 104.6% (FY21: 96.4%)
· Cash of $2.6 million1 at period end
Operational Highlights
· Increased client numbers to 183, up 41% from FY21
· Hired 17 new employees reaching 70 employees (FTE total: 65.74) at the end of 2022
· Named business consultancy group Frost & Sullivan's third best Digital Risk Protection ('DRP') service provider in 2022 review
· Launched NFT ShieldTM in October 2022, a bespoke AI solution aimed at the NFT economy
· BrandShield in robust position to deliver long-term growth
good to see revenues significantly increase, albeit from a low base.
For me the cashburn is key.
In H1 2022 there was c$2.2m cash after burning c$2.4m in the 6 months.
Now, 6 month later, we have $2.6m but raised c$2m in the period.
So cashburn in last 6 months is reduced to c$1.5m. A big improvement but still too high.
With more staff being taken on the cost base is only going one way.
It will be interesting to see the cash figure on 30/6/23. Anything above $2m would be fantastic, c$1.5m would be ok, less than $1m would spell trouble IMHO.
if the rate of client wins continues it wouldn't be improbable for a larger cyber operator to acquire BRSD and integrate their offering within a bigger suite of products. industry M&A tends to be 4-5 SAAS so we're talking 15-30p (assuming progress and contract wins continues)
You would expect this share to gain more attention after today
https://mobile.twitter.com/ZaksTradersCafe/status/1630539723792953344?ref_src=twsrc%5Egoogle%7Ctwcamp%5Eserp%7Ctwgr%5Etweet
I think Brandshield will come good. This is definitely worth more than current price
Hi all, I bought in today and my buy is showing a sell .........I believe the majority are actually buys
Karl
I’m with you on this journey. This will fly at some point