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... personally, I suspect that if they were to start to grow the company earnings to justify (and more) the share price then they would become a serious candidate for a generous takeover if only to eliminate them as a competitor. So I think there's a range of angles which makes this really interesting. It's also got me wondering about the future of work practices. For example- how often do you find yourself writing an email reply that could be dealt with much more quickly by zapping off a voice message to someone's inbox? I'm beginning to see the cloud as being a nexus where email, voice, personal organisation, conferences etc all converge in integrated applications. The field could be massive.
Thank you for the detailed report. It would have been easy for you just to drift away and sell. Did you get any feel for seat expectation parameters?
I reposted the workings below as an indication of the upside on Synety. There's quite a few variables and there's a lot of room for debate. I also think his PE calculation is dodgy as he seems to base it on turnover rather than net earnings- and of course the MCap has now increased to about 15 mill. But the key points are salient and strong. I would frame them slightly differently- that £1mill turnover could be generated by take up of 8,333 seats. And that this excludes set up charge and call charges. The 8,333 seat figure represents less than 1% of the claimed domestic UK market, and about 0.14% of the combined UK and international market. In the annual report the Chairman says ... "We have already sold more seats this year than the whole of last year".. And last year it would seem they only had about 600 seats. This indicates an initial take- up this year before even the latest major integrations of several hundred a month. I am hoping that this will increase dramatically with an expanding number of platforms and testimonials. Even a modest market penetration could support revenues that are significant in terms of the current MCap.
Credit to Millipede START Courtesy of poster malhashemi malhashemi - 17 Apr 2013 - 10:07 - 414 of 416 Here is some simple back of envelop maths that makes this company look very interesting for me, and I will try and be "realistic": They charge ;10 pounds per seat per month, plus 20 one-off setup charge. So far, they said their addressable market post all the partnerships singed is 1mn in UK, and 6mn outside, and they have built infrastructure initially to handle 100k seats (which is good indication of what take up is realistic in their minds in the next year). Even a small, and I mean small and take of say of 25,000 users (rather than 100k) would translate to 120x25,000 = 3mn in annual fees, plus 500k in setup fees. That's 3.5mn in revenue, not even including the actual revs from billing of the calls. This is for a company with 7mn market cap? And they have cash of 2mn. All IMHO and DYOR To compare tech "peers" (and at the risk of apple and pears etc) Wandisco which also has interesting technology/software, has a market cap of 160mn and revs of 5mn for 2013 (according to forecasts on Morning Star) that gives a market cap/revenue multiple of 32x. If we apply even half of that multiple to the 3.5mn figure I give above for Synety, then the market cap should be around 57mn instead of 7mn. All things being equal , that should lead to 8x fold increase in the share price over time, which would be 12.2 instead of 1.5. All above IMHO and DYOR, there are all sort of high risks in forecasts for high tech companies etc End
Thanks Dibs. Looking forward to it.
Nice £10k buy at 340p.
Well done sir on your multibagger. I've taken a small stake in here on a very crude reckoning- so crude I'm reluctant to post it. But I'm hopeful they can break even in a year to 18 months and the justify a PE of 10 after the same period. I think this is extremely conservative and hardly factors in any acceleration in take up. However, growth could be exponential and that's what I'm in for. I do have a concern about ability of new entrants and of existing customers to develop their own solutions but it's one I'd rather be in than out of. Thanks for leading me here and good luck.
If you're looking for your post, it may be collected on the MAGP board. Cheers.
A bit of research shows that the share price is quite close tithe recently announced NAV per share which is fair enough. But why has the NAV/ share decrease 5% year on year? Does anyone have any insight into how the Baron proposes to recover and increase our asset value?
Hey Guys This is a quiet board but if anyone's around I'd appreciate your views on what's going on. The Baron's share price has lost about 10% of it's value over the last 6 weeks! Thanks for any insights you can offer.