RE: Placing or buy out23 Mar 2024 10:29
Surely the swing is more of a reflection of the untapped value of the software contract and then the rest is made up from losses incurred in recent months. As KBYK points out the real problem is the £1.4m loss itself - how did that just suddenly happen when they were £0.4m in profit 6 months prior. Some must be attributable to the software contract itself but that is quite a difference.
That software contract raises a lot of questions (which we have gone over before but I like to vocalise):
i) How much is it worth
ii) Why is it front loaded to signing (or why is does it have such a large sign up value) - although, there may be a simple answer here i.e that they are not doing a SaaS but selling it as a stand-alone product so no on-going revenue.
iii) Why would anyone be so confident of signing it that they would announce it in the way they have done. i.e. 6 months early
iv) Like iii) above - why would Allenby buy into this.
v) I thought the client may be Microlise - this would explain iii) and iv) above BUT if ii) is correct about it being a one off purchase then it is unlikely to be ML as they would be paying circa (made up figure coming) £2m - they would be better taking the company.
vi) What work has been done - at what cost and has the client paid towards it - if so, why is this not under a contract.
vii) Why did Trak decide not to sign it this FY if they are signing their own death warrant by not doing so - even getting 25% of the contract value is worth it if you need the cash. Perhaps the contract is linked to renewed bank terms and this is the real issue (that the terms will not be strong enough to persuade the banks). If the software is done, the ongoing costs won't be much, so take as much cash as you can (if you are sinking)
viii). Will the contract ever be signed. Perhaps the client won't meet the demands of Trak.
This contract, or the announcement of it, has been the most perplexing thing I have read in a while. It just makes no sense. They obviously know something critical that we don't know (yeah doh!). What will Allenby say (they too look like ars*s at the moment for buying into this garbage).
As per usual, we are kept in the dark, left fearing for the worst (which is the very definition of Trakm8). The glimmer of hope for me is that they have enough cash to survive the next 6 months - enough time to get this contract over the line.
Finally, QTX pulled out of the insurance game a long time ago - looks like they called it right. If I am honest, Trak always appear to be behind the curve - take the RH800 - now multi camera DVR - whilst not a complete package, mDVRs have been out for donkey's years.
Waffle over.....
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