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Yesterday's news didn't move the needle much. Question is now, do I hold out until December's results? I have an issue with the inconsistencies in their reporting. Its not the numbers, but the metrics they choose change. Sometimes we get figures on cancelations, other times its stopped transacting, one report we'll get a breakout of numbers between the different solutions, other times its high level numbers. What are the chances they will start reporting on each solution with all of the below? Active in community of solution Stopped transacting in period Cancelled in period New accounts added Dipping in and out of metrics does smell like window dressing. To my earlier post, if we have this information we will have a lot clearer picture on whats going. If several thousand free suppliers cancel, who really cares. But if they are subscription suppliers thats a big issue. Can't even back calculate this as a cancelled annual subscription wouldn't show up as a hole until next year's report.
Shortsupply, you make a good point there. Why not take it up with David Williams or Rick Hurwitz? I'm holding out way past December. They've spent millions on getting the system to the stage where they can increase revenue without increasing costs as before, so I think they can spring the ebitda positive news at will now.
K3VMC - you are very right. It's more than that, since there are many development costs which could go, but will not, since the business is about growth.
Why did Gupta not complete on the bank sale? Either there's some more conditionality, or he doesn't have the wonga.
Hmmmmmm "Why did Gupta not complete on the bank sale? Either there's some more conditionality, or he doesn't have the wonga." No idea. I'm having a wild guess, that you have sold as many banks as I have, which is zero. Am I right? I'm guessing that selling a bank is a little more complicated than selling a second hand Reliant Robin, but I'm always willing to learn.
I apologise to the bb for the sarcastic tone of my previous post. I think we are all familiar with new posters, who start off with a negative post. I let that obvious prejudice influence my reply, so I will follow p with a slightly less sarcastic one Hmmmm, the information you seek is in the latest RNS. "Why did Gupta not complete on the bank sale?" Because both parties agreed to delay it. "Tungsten has agreed a staged completion with the purchaser, Wyelands Holdings Limited, on behalf of Mr Sanjeev Gupta and his family." "Either there's some more conditionality," There is none. "All regulatory approvals from the Prudential Regulation Authority and Financial Conduct Authority required for the change in control of the Bank have been received and there are no further conditions to be satisfied prior to the completion of the transaction." "or he doesn't have the wonga." This is not a payday loan. I'm sure Mr Gupta does not keep £25m sitting in a high street bank account. It is probably being used to make some profit between now and then. He won't be paying over millions, then pulling out, if that is your inference. "Mr Gupta's interests, which include the Liberty House Group, are part of the Gupta Family Alliance. The final completion date for the transaction is 21 December 2016." "As previously announced, Tungsten will receive a consideration of approximately £30 million, representing net assets of approximately £25 million plus a premium. Tungsten has received from the purchaser a cash consideration of £3.95 million in part payment of the premium, with the outstanding consideration to be paid in cash at final completion." A £5m premium is going to lood very good on the balance sheet, PLUS they lose the £1m/month in bank overheads going forward. Under the terms of the agreement, the purchaser will cover all ongoing expenses of the Bank during the period to final completion.
K3VMC - According to the 2016 annual report Tungsten Bank’s adjusted operating expenses were £2.8 million for the year. A monthly reduction in expenses of £250K is nice, but it does not significantly move the dial on the costs. Hopefully they will have done more to reduce the Tungsten Network operating expenses, which,forthe same period were £31.7 million
Burnt, thank you for setting me straight. Maybe I was thinking of £1m for the half year, but I should have checked out that figure. :)
@burnt The sale of the bank does not just equate to £250k. It also removes the burden of the staff, the systems, a failing area of the business etc. We should be looking on this as a real positive move by Mr Hurwitz. I've long been ignoring the shorted price. This was always a long game and should have been for most. However, despite the positive bank sale, I think we're in for a much longer game than first thought. Let's look at the evidence. OB10 was a slow growth business and it appears nothing has changed in that respect. As others have said, they keep changing the metrics so its hard to truly know. There seems to have been very little traction in SCF. Regardless of their margins, the volumes have been poor to date and if they don't improve I'm worried this will die a death. Speaking of which, anyone remember Analytics? When we started this journey, we had an e-invoicing business, a bank and the prospect of SCF and Analytics delivering huge value. The question is what are we left with? Well, when you scour LinkedIn, you find most of the OB10 stalwarts have left. Change can be good of course, but if the business is now just based around e-invoicing, the loss of knowledge seems really worrying. There is this investment tech. Usually a good thing unless you read somethijg like Glass Door, where staff are actively criticising the CTO. The less we mention about HMRC the better. Its not all doom and gloom though. There was the purchase of Docusphere (a profitable business I believe) and there is the foreign exchange deal. If the latter has made real traction and the SCF has had a big jump then Tungsten is more than just an e-invoicing business and we will start to see things moving in a positive direction. If progress is slow but still positive then as predicted it's the very long game. I think it's fair to say the update in Dec is a big one.
@BPSF I think thats a fair and balanced appraisal. @K3 I wouldn't know how to contact these people. Even if I was able to blag their email address, I'm sure an unknown retail investor's email would get short shrift. Though, it would be good to officially call them out on this. If they don't take up the challenge and report as was suggested below then we know they are window dressing. They can't knock back the request due to already having a standard set of reporting data points, because they change every time!
Good point on reporting metrics. The metrics do seem to change; I recall when we were given clear info on volumes, margins etc.
Personally, I'd prefer simpler metrics. How many suppliers in 2015 were paying customers How many suppliers in 2016 were paying customers It seems one type of supplier can send 50 transactions a year for free. If they send less than 50 transactions, whilst a supplier on the network, they aren't generating any revenue. We do need clarity on this as it will, hopefully, show real progress for e-invoicing as a revenue generating business. I'd also like to see the foreign exchange service having taken off with numbers showing real usage and revenue. This allied with big improvements in SCF and we've got a growing business. If not then they positive ebitda just means they are shrinking their way to success.
@BPSF - those numbers would be good to add to what @shortsupply asked for a few posts ago; To paraphrase: for each solution with all of the below? Active in community of solution Stopped transacting in period Cancelled in period New accounts added In essence we need a service by service breakdown of performance and a historic context to know if we are moving in the right direction
@Burnt, I simplified those figures because the ones @shortsupply stated can still be misleading. There is a type of supplier who gets 50 free invoices every year. So, if they only send 50 or less in a year, then they don't generate any revenue. Whilst these may generate revenue in later years they aren't today. Active suppliers only interest me right now if they are generating revenue. Given the poor performance of the other parts of the business, they need to show an accurate and clear indicator they are growing the e-invoicing business and reducing costs. This will generate the confidence needed.
I will post this again for these 2-3 post new posters :) "@Shortsupply You should start reading half-yearly and full-yearly reports. I suppose those are bit more informative than the website. I wasn't talking about IDC service. First from 2015 full year update "During the year, 28,000 suppliers were added to the Network, while 18,000 suppliers that transact mostly in paper invoices ceased transacting over the Network, as we focused on transitioning the Network away from non e-I Invoicing suppliers. As a result, at the end of the financial year the Network had 181,000 suppliers, an increase of 7.7% over the previous year." from 2016 full year update "A total of 1,000 new Integrated and 24,500 new Web Form suppliers were added to the network during the period. Around 3,500 supplier accounts were closed, the majority of which had stopped trading with our buyer customers. The net impact of these changes was that the total number of suppliers increased 12% to 203,000." Supplier numbers FY14: 171,000 FY15: 181,000 Fy16: 203,000 Net added in 2 years => 32000 (New one => 53500 and left=> 21500) If I believe your assumption that paid supplier's has cancelled, revenue should have gone down from 2016 full year update "Suppliers· Revenue of £15.8 million (FY15: £13.1 million), split 80% Integrated suppliers and 20% Web Form suppliers (FY15: split of 86%/14%)." Supplier revenue numbers FY15: £13.1m FY16: £15.8m And bit more for your info:- Tungsten got two types of supplier's - Web Form suppliers (receives 52 free transactions per year, with a higher per-transaction fee charged above that level) Integrated Suppliers (pays around 1000usd or 1000gbp based on region) Tungsten has around 12,500 integrated supplier's. Integrated Suppliers revenue is about 50% of total(even more than buyers) One good news In 2015 half yearly report " Signed nearly 500 new integrated supplier customers worth c.£0.5m in first year revenues and a further 13,000 web form suppliers" and in latest update in September 2016 " Suppliers were added to Tungsten Network at an encouraging pace, including adding double the number of Integrated Solution suppliers compared with the same period in the prior year. " So we are expecting around 1000 in 6 months compare to 1000 in the last financial year. And Last thing- Tungsten can go Tradeshift way and keep inactive suppliers. Tradeshift in last 3 years has gone from 500,000 suppliers to 800,000 suppliers and Tungsten has gone from 171,000 to 203,000 In Alexa's supplier portal world ranking- Tungsten has over taken Tradeshift Ranking on 31st Dec 2015 Ariba - 25,143 Tradeshift - 129,113 Tungsten-network - 152,855 Taulia - 187,495 Basware - 321,161 and on 30th June 2016 Ariba => 14,500 Tungsten-network => 103,868 Tradeshift => 117,998 Taulia => 127,659 Basware =
@BS76 - I think the point is that there is not the transparency across all of the services There is detail on einvoicing suppliers as you highlight. However, there is not the same transparency for the rest of the business. For example, in the report there were 11 new buyers. Its easy to assume that all of these were for einvoicing, but that may not be the case because Tungsten also has the Workflow business from the Docusphere purchase. The future revenue from einvoicing and Workflow are very different as Workflow does not necessarily come with associated supplier revenue. So, of the 11, how many were workflow only and how many were einvoicing and how many were both Secondly, there was £33K from analytics - OK, is that 1 user I would also love to know what constitutes an 'active' supplier as part of the 203K number. Transacted at least once in a defined period and what is a sensible period for this (six months; 1 year; 18 months) So, I agree they are telling us a lot, but it is what they are not telling us which seems to be the concern.
Thanks @BS76. I can't speak for the others but I have read the reports and this previous posting. The point I was making (and I believe the others too) is these figures are misleading and lead to more questions. We are merely looking for clarity. This removes doubt and allows us all to more accurately assess our investment. We all need to know if we are still backing Tungsten and its mix of complimentary services, or Tungsten the e-invoicing company. Hopefully the former.
I seriously suggest read last 2 years half yearly and full-yearly update's. You have to go to Capital market day or AGM to get answers to any specific questions About transparency - I have never seen any other company admitting as Tung (Under new management) did on Analytics "at the initial pricing levels quoted none agreed to purchase the product" About 11 buyers => Tung mentioned - "11 new buyers signed for contract value of at least £1.9 million" "We added 11 new buyers to Tungsten Network, including Duracell and Sanofi" "Eleven new buyers contracted to join Tungsten Network in FY16. Total buyers as at 30 April 2016 amounted to 175, of which 124 take e-invoicing and other associated solutions, and 51 take Tungsten Network Workflow services." I suppose you can check previous statement to figure out e-invoicing/worklow of previous year to find the difference About "there was £33K from analytics"- Rick mentioned in Capital market day about one -off data sale of analytics data. About "'active' supplier as part of the 203K"- you can get an estimate from the below statement and using pricing info from the website ""Suppliers· Revenue of £15.8 million (FY15: £13.1 million), split 80% Integrated suppliers and 20% Web Form suppliers (FY15: split of 86%/14%)."" About "We all need to know if we are still backing Tungsten and its mix of complimentary services, or Tungsten the e-invoicing company." Tung is still mix of complimentary services => Invoice finance is still going on. Bank is replaced by Insight funding. Hired an expert to lead TEP => Limited functionality Analytics is given free to existing buyers but able to get 60% increase in buyer fees => Adjacent services added- Rick mentioned about FX in Feb 2016 and it went live in 6 months. First time in history of this company some thing got released in time.
@Burnt - Another great extension to what I was talking about. Its not much effort on their behalf to be totally transparent on each solution. When they aren't it raises suspicions. @BS - I understand what you're saying. Though, I and probably most others on this board have read the reports and we are still unclear, debating and asking to know more. That in its self should tell you that TUNG need to be clearer and more consistent with the metrics they are providing the market.
Brilliant - I tried to go to the Tungsten website to get previous financial statements and it is coming up with an Easyspace page!!! Apparently it has been doing this for at least the last 24 hours - so much for the technology investment!!!!
Not sure what you looking at :) https://www.tungsten-network.com/uk/about/investor-relations/downloads-reports/
The link doesn't work for me either! My techy guy is suggesting they had a problem or changed something with Easy Space. If some people can access it then it could be they work for Tungsten and access the site through a different route or the issue is resolved but taking a while to propagate across to all the servers.
:) change your internet then. It will help to pay extra to get good connection ;)
@BS76 Thank you for re-posting. Always good to read your views. @BPSF Not had any problems accessing reports. @Shortsupply Consistently negative. Anyone interested in your opinions should read back over all your posts. I got as far as September 2015 when you said you were out. The one after that was in November 2015, when you said you were"glad you put this one down".i won't be paying much attention to you from now on. GLA
@K3 I've been in, out, long and short several times on this one in a bid to get back some of the initial hammering I took. I'm holding two lots at the moment bought close-ish to the bottom. With all the talk of the bank sale going through I thought it would be some easy money once it was announced the sale is approved. Negativity is due to getting sucked into the hype and throwing in money I couldn't really afford when it was rocketing after IPO.