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It could be the modern equivalent of a numbers channel - or maybe I have been watching too much project blue book.
Used to work for a sole owned 'partnership' (only one partner). He was a bit eccentric but at times like this he did absolutely nothing.
I called it a 'policy of masterful inactivity' or 'success through sheer incompetence' depending on my mood.
So, I will be doing absolutely nothing (apart from waiting for the numbers).
Not a TA person but never forget 'breakdown' is possible as well as 'breakout'
... but I hope all the optimists are correct as I hold too.
After ~3 years of lurking I went long on weds
:)
Burnt, BOD - actually Hurwitz - said that TUNG will go EBITDA positive on a monthly basis in calendar 17 in the RNS 24 July. "Outlook We successfully delivered against our targets for FY17. Our targets for FY18 trading are as follows: ● Constant currency growth in revenue in excess of 15% (FY171: 12%); ● Gross margin reduction to a minimum of 90% (FY171: 92.8%), reflecting a higher mix of our lower margin Invoice Data Capture sales; and, ● Adjusted operating expenses of less than £40 million (FY171: £40.8 million). This excludes one-off restructuring costs of approximately £2 million expected in FY18. We remain on track to achieve monthly EBITDA breakeven in calendar 2017. (continues...) " So you can see that they may make a small loss in FY18 as they have not promised EBITDA +ve in FY18 (ends 30/04/18), but the numbers will move in the right direction. So I disagree with the thought that this stock is doomed On the other hand, I see no reason for it to be zooming up any time soon. TUNG is making a loss and so all things being equal, absent events, the price should drift down. There will be (imho) 2 events that will change this 1 EBITDA +ve announcement - promised this year 2 Financial forecast from tung that FY 19 will make a _real_ profit - I live in hope (disclaimer - a long suffering long)
The way the trend is atm, sackcloth may be a bit of a 'stretch goal'
Good afternoon. Divining the reasons behind the random movements of one company's sp is nearly impossible. However - my 2p... TUNG has announced that they will be turning EBITDA positive at some point in calendar 2017. Some people thought it might be early in the year - pushing the SP up. The TUNG y/e is 30/04. Last year they gave trading updates 9/2 and 24/5 and final results 25/7 (Just IMO:) If they don't announce pretty soon, chances are they wont make any announcements until end May at the earliest. Every day that goes by reduces the chance of an announcement. This reducing probability helps push the SP down. ... or it could be 50 PIs decided to sell out because they wanted to buy new cars.
"I'm optimistic for the company long-term. I've almost given up looking at the SP as the short-term fluctuations don't have much relation to what's going on in the company." As am I. The current issue (for me) is when will the SP move? ATM on fundamentals, they will stop burning cash in 17, and (hopefully) a small real profit in 18 So I would not expect much change until late 18. Of course I would be delighted to be wrong.
(Disclosure - long tung for probably too long) Q - what is the difference between a couple of marketing people and a 'digital command centre' A - probably ~70k pa On the CTO, it does not matter if he is part time as long as there is someone delivering operationally. Form what I can see, not sure there is.
on K3's opinion of DW: Completely agree. Would add that he presents himself as someone who plays a long game. He is thinking about TUNG in 5-10 years. Short term SP movements do not overly concern him. (however if a few weeks after I was in at 60, I could buy at 55, I would be sad)
SJ disagree with the "speculative and risky" comment - to some extent. TUNG has ~175 clients & growing and the number of invoices being passed over their network looks to be growing ~10% pa and the fees they are extracting are growing in contract renewal. The clients go through a lot of c*** to implement in terms of system implementation and process change and human factors, once in, unlikely to be replaced. This produces an annuity style income stream that is growing rapidly atm and will grow with the growth in client size and number of clients in the long term. i.e. the income side is lower risk than (say) a mine or a new start up or a business in a declining area. Personally I would put it up there with the defensives as along with food and power, the economy relies on money processing business like TUNG. The riskier side is whether the management can keep control of costs (so it makes a nice profit) and is also able to reinvest enough to keep the product current. When the management under ET stood up and talked about beelions, and that seems to be more like the capitalised loss now, I completely understand scepticism. I would apply that same critical thought to Coupa - hopefully everyone who has followed TUNG understands you just cannot do 'agile' in this area - this is not moving your home email from yahoo to google. Or, actually it is possible to be agile if you are a 1 man business, but in the UK/EU SAGE has that covered.
In the AGM I was told that they are confident the ebitda positive point will be announced by the time the full year results are announced (expected Mid July 17) Before you start sipping the fizzy wine, the key unanswered question is:- Will income really continue in the same upwards trajectory ie / and costs stay flat ie ~ (I don't know for sure either). ... and for how long However am gratified that the general discussion has moved on from 'when will TUNG run out of money'
90p - Maybe. In the short term I would be surprised if the sp moves much. As others have said, the bank sale may trigger something Also - more critically - an announcement that they are cashflow positive and will make £xm ebitda for fy end 30/04/18. If that is the case it depends on the forecast profit - my personal guess would be anything from 2-8m My maths says 2/126*25/1.1 = 36p and 8/126*25 = 144p i.e. no idea really, except the market at 64p seems to be calling about 3.5m ish.
at the CMD they definitely said bank sale was due summer '16 I think they said expected June-Sep.
I'll have a go: ob10 made a loss of ~6m pa before tung bought it. as there are many competitors, no-one has pricing power, also difficult to obtain economies of scale as all others are doing the same thing. so the invoicing side is unlikely to produce much if any profit. Early payment may produce some income, but so far take-up seems to be low and as above, there is not too much pricing power and there were some unnecessary steps in the sign-up process in the early months. Some have said an overdraft is actually cheaper. TA has great potential but it is very early days and there is no income yet and everyone is trying to do 'big data' now. TUNG need to about double their income to break even and we are not sure how that will happen. The management said they could get to breakeven on EBITDA without needing more money but did not say HOW this would happen. (precis from sources here, advfn, shareprophets etc). There is a lot of specific negative sentiment atm against TUNG as the management style has gone from publishing an rns if a bag of crisps opened to saying nothing even if they have decided to keep the bank. The change is style is rather unsettling. Many feel rather angry at ET for massively overselling. There is also in the last year or so a big negative sentiment move against companies that are burning cash. And momentum effects are real - both positive and negative. Having said all that I am long.
In roughly the same boat as you and I would like you to be right, but no. The sp currently seems to be bouncing along a support line that is about cash in bank @30/04 - cash burn + 20m for the bank. I make that to be ~53.5 right now and dropping by ~ 1p per month (of course ymmv and dyor). On the basis that 53.5 is less than the value of the business if they just turned the lights out on 31/10, there is not a lot of room for the sp to fall dramatically in the short term. If the sp fell to (say) 40p before h2 2016, you could say the directors, being bound to represent the best interests of the shareholders have a duty to do something radical like shut down. In any event whereas a 10p fall was not too uncommon in 2014/ 2015 jan feb mar, another 20% fall (10p) is unlikely any time soon so I expect the shorters to reduce their positions over the rest of the year. Seeing a reduction in shorting positions will bring in some buyers. The true catalyst to an upwards price movement would be affirmation that tung can break even (early) in fy 17 without needing more money and the next trading update 12/11 is the time. On the other hand you may see a spike downwards at that point if the news is not good. As they need to pretty much double company income to break even, and the pace of reported client growth is not at the level the brokers were hoping in the agm in sep, i think the odds are towards the downside, but as the sp is so bombed out, there is not much down to side with.