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Good afternoon Noel. If not a director then quite a statement of faith by someone. They have paid at the current top as shares can not be had for under 1.75p. Quite interesting that even after that volume that the ask sank quickly.
It would be a deserved xmas present for you if it makes 5p. I am saying it will be back to 1.25p on the bid by then. These rises without substance have littered the history fo FLX. Always followed by a sharp retrace. The posters on here will tell me this time it is going to be different. We shall see.
Could this be the director buying I spoke of last Friday?
If it is - more on the way?
5p by Christmas?
From the trades screen -
12:18:50 1.89 2,116,402 Buy* 1.65 1.90 40.00k
Nice!
this morning and the Station Master has not
blown his whistle...what’s going on ?
So much for confident results - the CCS share price has dropped by nearly ten per cent.
Confidence at Crossword in its Interim Results.
"Crossword Cybersecurity plc (AIM: CCS, "Crossword", the "Company" or the "Group"), the cyber security technology commercialisation company, today announces its unaudited interim results for the 6 months ended 30 June 2019.
Financial Highlights:
· Orders received for Rizikon Assurance during the period were more than double those received in the same period last year
· The Rizikon Assurance pipeline more than doubled in the first six months of this year and now stands in excess of £3 million over 100 companies in a wide range of sectors
· Product and Consulting revenue increased by 21% over the same period in the prior year
· Total revenue increased by 5% to £570,757
· Total comprehensive loss for the period was £1,077,595, an increase of £246,804 over the same period in the prior year, following investment in product development and sales and marketing
· Cash and Cash Equivalents at 30 June 2019 of £1,294,491.
Operational Highlights:
· The Consulting division launched its vCISO service (virtual Chief Information Security Officer), securing its highest value, multi-year contract to date
· Worked with Imperial College London on enhancements to our second product, Nixer
· Appointed a new world class Advisory Board made up of senior figures from academia, the corporate world and government.
Outlook:
· Continuing to convert pipeline into revenue, aiming to close several large opportunities in the final quarter, and the Board remains confident that full year results will be in line with market expectations
· Next version of Rizikon Assurance which includes Supplier Assurance Framework dashboard was launched on 4 Sept
· Nixer, our second product, on track for release in Q4 2019
· Close to agreeing one or more distribution deals over the coming months.
..."
https://www.investegate.co.uk/crossword-cybersec--ccs-/rns/half-year-report/201909230700081991N/
From the results - EBITDA, for each division, in the second half of the year - and did we miss this "Revenues grew by 222%" -
Falanx Cyber -
"Our core division recorded a much stronger performance in both revenue and EBITDA performance than in the prior year (see note 4). This was due to the acquisition of First Base (acquired 23 March 2018), increased contract momentum and stronger professional services utilisation. Revenues grew by 222% to £3.57m and the final 6 months were 46% greater than H1. Gross margins were 49% (2018: 21%) and this was attributable to business mix and stronger professional services performance. The division invested in sales and marketing expansion as well as infrastructure investment in the second half of the year to support growth plans such as SolarWinds which is expected to start benefiting in the year ended 31 March 2020. Overall adjusted divisional EBITDA was £0.05m (2018: loss £0.87m) and the division was profitable on a similar basis in the second half of the year, reversing similar losses in the first half of the year.
...
The combination of strong and growing demand for the Falanx Cyber portfolio of services, market pull of the MSP 'Channel' model and the unique opportunity offered by SolarWinds, indicate another year of high growth ahead. In 2019, the division had overall organic growth of 10% although our key service line of monthly recurring monitoring grew by over 90%."
A while ago, we had a debate about "mindset" and the dangers of looking only for good news in announcements, so, on that point, perhaps I shouldn't get too excited about "Revenues grew by 222%" - shouldn't, but I am.
Then it says about Falanx Intelligence (Assynt) -
"Revenue and EBITDA reduced in H1 as a consequence of remodeling and investing in the business to move away from historic 'spot' revenues and toward a greater proportion of high-quality recurring revenue. In 2018/19, the two recurring revenue product lines represented 85% (2017/18: 72%) of total Intelligence revenues. The remaining 15% of revenues were from one-off Business Intelligence ("BI") and Strategic Intelligence consulting projects. These 're-balancing' measures ensured a return to growth in H2, with revenues growing by 32% compared with H1. For the full period 2018/19, revenue of £1.64m (2017/18: £1.89m) was generated with an adjusted EBITDA loss of £0.05m (2017/18: profit £0.25m. The second half turnaround led to a much-improved monthly recurring revenue performance and was achieved after a planned increase in cost base to build expansion capability to support future growth and the division was profitable at an adjusted EBITDA level in the second half of the year."
Do these sections give us hope that FK's forecast of 0p will never happen, and the share price might actually get back above 3p?
Although I agree the results are neither great nor terrible (disappointing revenue, better margins (v. broadly)), a market cap of £5.3m is only 1.8x ARR (£2.9m), excluding other revenue. This is cheap, in fact, crazy cheap when considering SolarWinds' Threat Monitor product, which is based on FLX tech, hasn't even been released...
Yes your comments are fair Michu. I believe you are mistaken if you believe that FLX can become net profitable in due course if by that you mean short term. Their own number one priority is break even. The evidence we have after a four million pound placing is they could only reduce losses by 10% last year while INCREASING ADMINISTRATIVE EXPENSES by one million quid, That will be 3.5 mllion recurring at a minimum and remember FLX is a company that likes to talk about expansion of its headcount.
IDK if that ten grand trade will be voided but the SP hasn't budged. On a thinly traded share like FLX it can only mean the MM's have shares to burn, there is a large sale to be declared or an inputting error. Investors have had time to assess the results. Some in my view have had a look at the smoke and mirrors presented by RNS and were sucked in by the headline figures. A proper mirror held up the company which the excellent GLR did within one day shows what is behind the headlines is rotten to the core. During all my previous predictions I have not once said this company is worthless but only the best short on AIM. The company want you to believe there is jam the day after tomorrow. If you have faith in the BOD then sure stick around and see if you get rewarded. You can how desperate some posters are here as all they can offer is personal abuse. Yours is the first even handed defence I have seen for ages here. I would also not get too fixated if you are on the 20p,10p4p,3p as your downside is still 100%. Every placing, every director buy is a loser here. Quite something.
-+
fine analysis GLR and insightful feedback Fk…
so you're predicting failure for this co. in due course FK and zero s/p .. fair enough, you might be right.. but you might not.. anything can happen in the future...
Generally, the market is more efficient than some give it credit for imho..eg It has further strongly punished flx for this lack of progress.. as the s/p was in the 4p range a year ago and is now an awful lot less than that now.. and the market is also pricing in a very strong chance of failure here as it has marked the s/p down from 50+p to 1.25p, in fairness ....
however, while obviously struggling to make headway the company has at least not deteriorated significantly in the last 12 months.. and has always has some sort of chance of becoming nett profitable in due course.. if it does the s/p can of course rally hard from here .. (or even on news it can spike .. be that a dead cat bounce or not, it's a trading situation from where there can be winners, or loss cutters etc.. )
This is AIM... it's all gambling... place your bets or not .. some you win, some you lose.. you just hope that overall picture is winning and, of course, meaningfully so too..
By the way, you can read chapter one and most of chapter two for free - see the "Look inside" link - and you don't need a Kindle to read it. There is a free app that lets it be read on any device.
Interesting word "Jeez". It is close to "Geez".
In my novel I used the word "Geez", but it has a hard "G" - "Geez a trowel" - my attempt at saying "Give me a trowel" in Glaswegian.
Treat yourself to a few hours engrossed in a complex, mystery thriller that will test your powers of deduction to the limit. Physics, astrophysics, computer hacking, investigators using the latest technology and much more in this outstandingly original novel.
"The Perdix Project"
https://www.amazon.co.uk/dp/B07SJNP9S4
Investors have spaffed 20,000 on this since 1130am. Maybe Tom Winnifraud is saying give FLX one last chance. Jeez what a waste of 20000 smackeroonies! Watch the gargantuan spread be maintained which in itself maintains the classic bull trap here. Any shorters out there will have xmas come early if they short into any rise in the next few trading days.
1.64 608,994
maybe I won't have to sell
The missing word - "way".
I learned the hard way
FK tell us that 0p is on the cards. I learned the hard that you ignore FK1 at your peril.
If, by this time next week, there has been no director buying, I will be very seriously considering cutting my losses.
Expect, over a period, a drip feed of millions.
The worm compliments GLR - but doesn't GLR1990's post prove FK to have been right all along - so come on worm - compliment FK1 for his astute analysis.
Prove you are a man and not a worm and give him the credit he deserves.
Thank you Nice to Michu. You make some interesting and valid points. There is no bell to call the bottom of any share unfortunately but honestly I think the only bottom here is 0p. FLX will need shareholder approval at an egm to issue shares below 1p and they are a long way off cash flow break in my opinion. Read GLR's excellent analysis below to see some financial red flags.
1.25p has been a support level of sorts. TW and Zak Mir have at various times helped to plug this. But the current spread is wide, progress is slow, the company don't communicate and when they do it proves to dubious, news lulls kill shares, speculators and bottom fishers will quickly shift out for faster bucks. These are all a perfect storm for FLX. This is cheap no doubt but bad cheap. 6 Million MCap with 3.5 million in admin expenses.
On their track record what gives you any confidence of a turnaround? They only managed to reduce losses from £2.1 million to £1.8 million. Do you think investors are going to risk their money for the length of time it takes to get from £1.8m to zero operating losses?
I heard it all here so many times. 6p. 8p,10p,15p 20p. All ludicrous projections and labelled as such at the time. If you ever see your 3p back here Michu I would get on the ground and kiss the God of good fortune. Watch FLX hunker down, pick up their phat salaries, switch on radio silence, announce a few jollies while your ahem 'investment' dwindles away.
Just stirring it up a bit.
From the INTERIM RESULTS for the Six Months to 30 September 2018 -
"Recurring revenues remain strong and grew by 41% to £1.2m and provide a strong underpinning for the Group"
https://www.investegate.co.uk/falanx-group-limited/rns/interim-results-for-6-months-to-30-september-2018/201811140700022535H/
Excellent scrutiny of the facts GLR.
Amazingly the RNS has painted a very different slant on progress.
Smoke and mirrors comes to mind.
However, as previously stated, I will stick with it in the hope it has some potential.
Fantastic post Glr! Great analysis honestly
"So the recurring revenue was 0.24m in July 2018, but in the 2019 results they state that it is still 0.24m? which means this has not increased at all since July 2018?"
I wonder does the above and other anomalies have anything to do with the resignation of the last Auditor -or as Fairview likes to say the company decision to change to a new Auditor- or the delay in publishing the accounts with the new auditor?
It would be great if some of the Pavlov's dogs slobbering over their investment here could answer some of the points you have raised.
clearly FK has called this very well so far.. fair play to him.. and clearly business progress here has been MUCH slower than flx management team expected. And given the appalling s/p performance so far I offer than many long term holders who haven't brought their average down meaningfully thru the journey so far are likely at least fairly stuffed here now anyway.
So lets talk about new players here or relatively new ones (for eg averages under 5p .. includes me as my average is decently under 3p)
NS recently mentioned that players should wait for FK nod before going ahead more bets but I offer that calling the bottom
for this s/p might be trickier again for Fk:
If a turnaround to nett profitability is to actually happen here - it may not - FK will perhaps look to see an ongoing period of progress to be sure the co. are indeed genuinely making sustainable progress.. but the way AIM often works is a spike on early signs of potential genuine progress.. especially when the s/p is at a perceived as 'very low' level already - 50 odd p to 1.25p for eg would be that in many peoples eyes -so FK will 'sit out' that spike and see if early potential genuine progress continues in a sustainable fashion ... in the meantime any such spike might be broadly sustained and soon after added to and this is quickly 2.5p/3p for eg and he's still waiting and seeing .. etc.. (while buying at the bottom is extraordinarily difficult to come close to achieving, buying 100% off the bottom for eg is bad performance by traders and will have a big impact on returns for new medium terms buyers too..)
I decided to take a look at the 2018 results to see where the company had come from, as the 2019 results did look better than I expected, however...
Had you invested in 2018 on the back of those results, here is what was forecasted
· Monthly recurring revenue at the end of July 2018 has increased to £0.24m
So the recurring revenue was 0.24m in July 2018, but in the 2019 results they state that it is still 0.24m? which means this has not increased at all since July 2018?
· Recent acquisitions combined with contract wins have approximately doubled proforma revenues to £6m, placing the business in a strong position to exploit growth
But revenues showed in the 2019 results, that this figure was not met - 5.4m in revenue was achieved, so why the drop if in July 2018 it was estimated 6m? This doesn't make sense...
· EBITDA Profitability in July 2018 following strong deliveries
EBITDA loss for 2019 1.2m - how did it go so wrong from July 2018? Maybe they should not have informed the market July was so strong and waited a few months to see if this trend continued, as it clearly now looks like a massive anomaly
So even though the results look better than 2018, actually the company appears to have regressed from July 2018 to the point it is at today, they forecasted way more than they delivered, and in my humble opinion, massively over-estimated what they would achieve, almost dangerously over-estimated because if you read that back in 2018, especially the July comments, you would have likely been easily led into investing thinking the company had turned a corner
They have also burned 1.6m of cash in less than 8 months, yet still not hit any of their targets from 2018 Results
The Monthly revenue is the strange one, it has not increased at all since July 2018, even with a 4m GBP investment, if I am correct?
Just to be clear - that "EBITDA positive by the year end, around £200,000 positive" was a projection.
Worth watching.
My memory was slightly wrong FK. He didn't mention a pound, talking about the results to year end 31 Mar 2018, he said that he would have been happy if it was only a penny into positive territory, but it was more than that - but does he mean only in one month, July?
At 5 mins 20 secs - EBITDA - "EBITDA positive by the year end, around £200,000 positive"
https://www.youtube.com/watch?v=X3DkRhI9AhE