Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
Respectfully I disagree. A lot of news and information was given at the Strategy Day. The path to significant profitability is simple. The payment business sales will grow by more than 40% per year for the foreseeable future with costs growing very much more slowly. The data businesses, including Audiens, will grow fairly rapidly and remain high margin business. Ray will concentrate on developing the data business in the Far East where the big bucks are to be made.
The problem with the share price is caused not by the lack of data but the lack of articles by the likes of Simon Thompson. These articles normally come out after the audited results come out which will be next month.
Detailed post. Blaine Tatum was there.
https://www.progressive-research.com/company-coverage/bango-plc/
I was there and there were a lot of positives and nothing really negative. One analyst said to me that it was better than last year's presentation and I agreed. Key points:
1. The justification of why EUS would continue to Double for years into the future.
2. Many new opportunities for the data businesses.
3. Expectation that Marketplace will begin to show significant sales in 2020.
4. New version of Bango Boost.
5. Telus video full of positive comments about Bango by Ibrahim Gedeon.
6. Extension of Bundling to companies other than MNO’s.
7. New product under development to take advantage of changes in Gaming technology brought about by 5G.
Sales increased by more than 40% YoY. Share price a year ago was 90p it is now 125p, a 40% rise. Sales are projected by Finncap next year to increase by 58%. Profits should increase by much more. The market seems to have difficulty in determining what the share price should be and difficulty in accepting that it is normal practice for people to allow contracts involving large cash payments to slip into the next financial year.
One thing I believe is the forecasts which have been issued are old forecasts and do not reflect the data business. I believe this is doing very well and has high margins so the year end figures should be interesting.
https://bangoinvestor.com/2019/11/01/more-about-the-bango-nhn-ace-announcement/
At the AGM I queried the capitalisation of development costs, which appear in the accounts as intangibles.. The amount is very large for a company the size of Bango. I was told that this was a new product. To be accepted by the Auditors there would ultimately be a clear significant financial benefit. Perhaps Netflix mobile is part of the benefit.
I think this article is timed to remind people of how Bango will benefit from Disney plus, due out in just under three weeks. This will benefit Bango significantly yet it is not reflected in the share price.
To understand the difference between Bango and Boku you need to put 2 and 2 together to make 4. In other words the differences are not spelled out but need to be deduced. The problem is in identifying the 2’s. Let me give an example. There is a new accounting standard IFRS 15. Both Bango and Boku took advice on this. Boku was advised that it was not required to defer revenue. Bango was told that it was required. If you look up the accounts of both companies they mention this topic.
The difference is that Boku simply handles the payment and that is it. Bango splits the transaction so that there is a payment element and an ongoing process to manage the customer’s entitlements. This is one the things the Bango platform does. The payment element relates to the MNO and once the Bango platform has been integrated with the MNO’s payment system additional streams can be added with minimal involvement of the MNO. A very attractive approach for the MNO.
As far as the merchant is concerned they do not hold user data and so do not have to worry about data protection. The Bango platform gives them a code which the Bango platform matches with the MNO’s user data. So the MNO does not reveal its confidential user data to the Merchant. Bango has access to lots of valuable data which feeds the data business (something Boku does not have). The MNO receives a proportion of the money Bango receives from selling this data. Once an MNO has integrated the Bango platform he does not have much incentive to look elsewhere. It almost seems that Bango is targeting one significant MNO in each of the major countries to integrate its billing system with the Bango platform. The rest will ultimately have to follow.
Boku is more focused than Bango on selling directly to major games producers. Major games producers have turnover running into many millions of dollars. If these sales are channelled through Google Play, Google takes a huge cut. A lot of money can therefore be made from this market segment. If you look at Boku’s staffing they have many more sales and marketing staff than Bango. So Boku has a good business.
Bango is based in Cambridge as are its developers. Boku’s Software is developed in India. From a systems point of view it is helpful if users, designers and developers are co-located. It is also helpful to be near the client. Amazon, Microsoft, Apple, Google and Spotify all have offices in Cambridge. When Amazon entered into a relationship, in 2011 with Bango it was announced that Amazon had become a client of Bango. People who sell through Amazon are termed partners by Amazon. Clients pay you remuneration, partners sign up to be taught how to sell through Amazon. https://aws.amazon.com/partners/ . If a company claims to be a partner of Amazon it may simply mean that they have filled out an online form. The development of software for Amazon took several years and is quite complex, dealing with Taxes returns, partial deliveries etc.
I agree with you KingBarola. I have a significant holding in Bango and make it my business to understand everything I can about the business. SavvySwede says his objective was to correct misinformation on the relationship with Amazon yet his initial question did not mention Amazon. His real objective was to get something to which he could apply misinformation. He chose Amazon. He does not understand the Bango Platform nor the difference between Bango and Boku. The Bango Platform has been a great success and both Vodafone Qatar and Idea have integrated the Bango Platform into their payment system. Effectively they do not have to do anything when another service such as EROS is added, the work is done by Bango hence the assumption that they would take advantage of the Bango Platform.
I believe what I posted about Amazon is substantially correct. Fortumo started working on their platform last year and seem to have a contract with BSNL which has severe financial difficulties. https://www.thehindubusinessline.com/info-tech/hit-by-financial-crunch-bsnl-closes-1000-towers/article28212612.ece
Bango handles the video streaming for Vodafone Qatar and also Vodafone IDEA both Stream Amazon Prime Video and Bango is the only DCB company with a contract to stream Amazon Prime Video. Both Vodafone Qatar and Idea have packages with Amazon Prime Video. Smaller companies such as Eros are added into the packages as an extra, in a similar way to the way Sky operates. The Bango platform entails contracts with the MNOs and the Merchants. It is quite sophisticated and was developed with Amazon and Netflix etc over a number of years. The MNOs do not share customer details with the Merchants.
The only other DCB company with a platform is Fortumo. They use this to stream Spotify but it is not comparable. Bundles based on Spotify can include Hulu. This is a video service that is now owned by Disney and Disney appear to be planning to use this route when they launch in November. You will be aware that Bango recently entered into a partnering arrangement with Spotify.
SavvySwede you need to understand bundling and how the Bango platform works.
Simon, it is not just the big names but also lots of smaller streaming companies that are taking advantage of the Bango platform. For example Eros Now and Vodafone Qatar.
https://www.businesswire.com/news/home/20190821005428/en/Eros-Announces-Vodafone-Qatar-Partnership
https://seekingalpha.com/news/3492985-vodafone-idea-teams-lionsgate-play-india
https://zoek.uk/jobs/78cc72d27ab74b23a248cf965732542a
In the above job advert Lionsgate is mentioned:
This position is a customer facing role and presents a great opportunity for an ambitious and capable sales executive to win new businesswith YouTube, Disney, Warner Brothers, Netflix, Pandora, Tidal, Spotify, Hulu,Lionsgate and many others.
Disney own Hulu and, for some time, Spotify have been offering the basic Hulu video package, with adverts, as part of the Spotify subscription. This is where Hulu is available. Effectively Hulu is being distributed using Spotify's streaming infrastructure. It is my understanding that Disney will use the same route for its main offering in November. Disney's contract is with Spotify not Bango. Recently Disney granted a licence to Spotify to stream all of Disney's music. Spotify itself has been setting up new hubs around the world referred to as Disney Hubs. My understanding is that the main purpose of these is to distribute Disney video content.
https://newsroom.spotify.com/2019-07-17/sing-along-to-your-favorite-tunes-on-spotifys-new-disney-hub/
Yes it is a big deal. Disney will be bigger than Netflix when it comes to Streaming. Disney does not have streaming expertise and so have an arrangement with Spotify to tap into Spotify's experience.
The share price will take off on 26th December 2019, assuming this is when the trading update is issued.
https://uk.finance.yahoo.com/news/bango-plc-lon-bgo-worth-130839434.html Simply rubbish.
If revenue and costs grow at current rates for the next few years then the net present value would indicate a price much higher than £3.87.
The key issue for me is whether the growth rates in DCB will be maintained. It looks like the professional forecasters are projecting it will for the next few years. 5G will give it a big boost.
https://amazingherald.com/direct-carrier-billing-market-trend-shows-a-rapid-growth-by-2027-key-players-like-bango-boku-centili-digital-turbine-dimoco-docomo-digital-gemalto-infomedia-nth-mobile/