Member Info for Merciaman

Hello Basher, no I don't work for BT and never have. Retired from work now, just an investor making some money from the shares and hoping to make some more.

A bid would certainly help in that regard, but I'm not sure one is coming. I suspect it would fall foul (rightly or wrongly) or regulatory concerns. I'm also not sure how it would be financed, as I assume it would be difficult to load any debt taken on to buy the company onto their already considerable debt pile ?

HI Velo, my foci with BT are 1) their strategy, which I think is sound, and 2) their execution, which will be key in the next few years. I think if they get these things right the cash position takes care of itself.

I think BT have done what they should have done, ie invested significantly in infrastructure to create a network that should enable them to gently increase revenue and more sharply reduce costs, all to the benefit of their margin. Then they can make a hole in their debt pile.

BT seem to have been ok at communicating the end game message, but I think a criticism of their investor relations has been a lack of short / mid-range forecasts, making it difficult to assess or measure likely progress. I think the new CEO recognised this in her first reporting a little while ago, and I think this helped the share price spike upwards.

Now she has to drive delivery against this plan, and I would guess she'll need to get specific about that plan / performance over time.

I see BT as a long term hold.

Hi Velo, thanks for your detailed response.

As a general comment, having managed at a senior level in a few organisations of varying sizes in a range of sectors, keeping your debtors low and your creditors high is sound practice full stop. Not always possible, but nice if you can do it - a couple of them that I worked for / with had no need for their own working capital as a result, and they used their own cash to invest further in developing the business.

Your point about the other metrics flashing red is a fair one. BT does need to execute really well to maintain / enhance revenues while reducing costs, and thereby start to pay down the debt it has accumulated through its investment in infrastructure.

Velo, interested as to why you think working capital (or rather current assets less current liabilities) of negative £1 billion is an issue ?

This "deficit" is driven by receivables being £2.7bn lower than payables - ie they are effectively using their suppliers to help finance the ongoing business. That is good business practice.

Does anyone think that, with such a bombed out share price, Dowlais might be a takeover target in the near future ?

Wise words IP3LY. I suspect the share price will rise gradually / steadily over time so long as further announcements confirm progress against the agenda outlined in the results last week. I doubt tomorrow's CPI for April will move markets much unless it falls short of expectations - with all that would mean for interest rate cuts in 2024.

Agreed LL. I've tried to estimate as best I can Mirriad's quarterly cash position through to end 2025 based on the broker's turnover estimates / forecasts. At best the business stays borderline ok through the period, becoming cash positive during the 2nd half of 2025 - but that's cutting it too fine, and there are the risks of revenue not meeting targets, or being delayed.

I'd guess at a cash raise early 2025 - and then, all / programmatic being well, there is a profitable business supporting its cash needs from its own resources from later in the year.

LOTM, as a shareholder of 3 years standing, I can comment that there's been one or two "perplexing" things about Mirriad.

They have been very shy about making specific financial predictions for the future. In part, given the nature of the business / the step into the unknown, this is understandable. It has been difficult to forecast revenues, and no-one wants to potentially "mislead" shareholders. But I also suspect it relates to the fundamental questions of how does their tech get monetised, and what revenue will it truly generate. There were some "scenarios" - my word - in webinars last August. Like you I would have thought they could now be presenting worst case / best case forecasts.

As I've posted earlier, the comment in the funding doc about having enough cash to fund activities to end August is about where they were some months ago. So has turnover risen at all ?

I don't really understand why the previous CFO left mid last year, and why the Chair is leaving shortly. At a time when they should be close to everything coming together - that's what the company is saying - why would they leave ?

I imagine the low fundraising price might be driven by the institutions who hold well over half the shares. I expect that fundraising will go ok and they'll raise the £5 million plus accordingly. Mirriad have raised over £70 million from shares since they listed, and I imagine institutions will be keen to maximise their chance to make a return on their investment.

Reading the proposed fundraising document - it indicates that without the fundraising the company can fund its activities only until end August 2024. Suggests that for all the positive activity about relationships etc there's been little or no difference to turnover over the past 6 months or so ?

Stampee, if the share price did fall by 60% there'd be no point participating in the retail offer - you could buy the shares (should you so wish) cheaper on the open market !

Spot on I think LL - the potential has been increasing for some time, with lots of positive activity, but until that manifests itself in a monetisation of the technology then the jury will remain out and the share price will be vulnerable.

As I've said before about Mirriad converting its technology into financial performance and shareholder rewards, given all the activity then "if not in 2024, when will the monetisation happen ?" And to me the monetisation means a turnover in the tens of millions and growing, a gross margin of 75%, and increasing profits replacing losses.

The absence of a cash call so far this year may be a good sign - that turnover is rising, that the cost control put in place in 2023 continues, and the time when cash is needed recedes a bit further into the future - but we need the board to tell us where we are and to clearly forecast where we're going.

I've wondered the same thing Jarv. Perhaps any interested parties over the past 18 months might have thought they'd step in when Mirriad to buy the intellectual property once it ran out of cash / went bust ?

Something that probably supports Mirriad in this regard is its collection of institutional shareholders who own a majority of the shares (I think that;s still the case). Any bid would need to persuade them - and as per a previous post I reckon shareholders have stumped up around £72 million, or around 15p per share, between the initial IPO and 3 subsequent cash raises.

490 million shares at current midprice of 1.9p = £9.3 million market cap.

Probably worth noting that, I think, through its initial capital raise in late 2017, and 3 subsequent raises, Mirriad has tapped investors / shareholders for £73 million, or roughly 15p per share.

2phevs is probably amongst the most positive of the posters ont his board, but his reasoning is entirely sensible and logical. However, the company has taken and is taking an age to fully monetise its technology. Hopefully, speaking as someone with a reasonable number of shares, a large scale monetisation is just around the corner - in which case, happy days. But there are no guarantees.

One other thing to note is that they did do a decent job last year of trimming overhead cost - so if they can exponentially grow their sales then a large % of that should flow to the bottom line and their cash balance.

Audited final year results for 2021 and 2022 were issued around the 10th May, so unless there are other major developments I'd expect something similar this year. The results for 2023 were issued about a month late, but that was because of the strategic review, subsequent cash call etc.

I'd certainly expect a trading update for 2024 by or at the audited results announcement.

Interesting to see what else might come up between now and then. While activity has increased and overhead costs have been controlled, Mirriad is likely still burning cash. If a cash call is needed you'd expect it at least 6 months before cash is projected to run out. The longer we go without a cash call, then I guess the better the monthly financial performance.

Agree with the logic 2phevs. It is about execution / delivery.

I think we're at the point regarding monetising the tech where "if not 2024, then when ?"

I don't think revenue of £2 million in '24 would cut much ice with investors.

I guess their breakeven revenue must be something around £11 million, so a step change is needed to get to that level of sales.

Mirriad has, I think, raised around £70 million from its initial offering in late 2017 and subsequent 3 cash raises, so clearly the current market cap of £8 and a bit million is a poor return for investors / shareholders at the present time. I think that step change in revenue - proof that programmatic can translate to the bottom line - is needed to prevent investor patience becoming exhausted.

Agreed Bentley. I've flagged up before that maybe Mirriad will pursue a US listing or uprated listing given their exposure to the US market, and maybe the greater appetite for risk across the pond.

I liked the cost control numbers, didn't like the revenue numbers, interesting that there was no mention of a future cash call.

Assuming they keep their overheads at £700k per month = £8.4 million pa, and they maintain a GM of 75% of sales, then they'll need a revenue number of around £11 million in the year to break even, or 6x the 2023 figure.

It's very possible with an increased market share, assuming they maintain the same level of penetration / conversion of share into revenue. They could also continue the good story on reducing costs, although I suspect that greater sales will need greater resources of customer liaison and development. And of course if programmatic takes off.....