Member Info for Phermic

When will they give visibility of recurring revenue? Still can not see the investment in Dev etc despite Exec Chairs statement on increasing investment. It looks like the additional expenses are driven from the Sales hires, no problem with that but the solution has to perform to customers satisfaction :). Perhaps they are capitalising the investment in Dev. As always very poor visibility from a board that has a strong record of opaque reporting.

The company is already valued at 'mad' multiples of 'non recurring' revenues. 'Mad' because the growth rate in those 'non recurring' revenues are non existent on a true like for like basis as per the last Q1 numbers. So unsure why a pilot converting should drive a significant upwards revaluation unless it was for a very substantial TCV.
Look for evidence that the company has invested and continues to invest in world leading AI dev. It hasn't and I do not see any going forward. Getting on Frameworks and obtaining pilots are easy. Has it really developed world leading IP from so little investment?
This company and the 'Exec Chair & Non Execs' have very poor form. They are exactly the same team that promised world leading Fintech IP at their AIM launch. It was all smoke and mirrors until the story was unable to be kept going, the Chair then uses the remaining company resources to rescue a private investment he had made and gain control.
Again, very poor AIM communication and visibility. It looks like the same playbook.

It's not yet a first win it's a pilot. Just like the ones 'won' in Japan & Aus!!! Look back at the RNS posts. How about more informative updates, like potential contract values and MRR numbers. They do not give any recurring revenue numbers as they are either zero or very insignificant. That would be a disaster to the share price for any sane person running the MV/ARR numbers. Any idea on the Dev resources building out this product? Nope, not disclosed. This company should have a 'Red Flag' warning.

Robrin

Interesting release today that supports my thesis that this is principally a Drone mfg with a surveying arm. Nothing wrong with that, but gross margins will struggle to hit 50% and hardware is a very tough business without scale.

Sure, they would like to generate subscription revenues. However, the investment required in the platform and functionality would require significant resources that this company has never employed and still doesn't. I would have expected the 'Executive Chair' to have notched this lesson with the spectacular failure of the banking platform solution.

This company is worth 10% of the current price but very tightly held so I don't expect any significant fall in the short term.

Usual very poor transparency from this company. No ARR information, appears projects still in evaluation stage, no information on product development and significant losses as I expected. I guess that's why this Chairman loves AIM.

Given all the hype driving MV to £25 - £30M. One should expect circa £2.5 to £3m ARR giving a 10x ARR value. A 10x value is about right for high growth SaaS tech companies like this one.

Anyone else with any view?

111 - Where is your research :). 'This is a Cloud based platform offering insights to banks' -- They exited this area two years ago!!!!

Do we really think the board would appoint reporting accountants to look at the numbers unless they had reasonable doubt?

All the talk of 'profits of £x million' in the PAST is irrelevant. It's always about future profits and actually cash generation in the medium / long term. Provided your in it for dividends and the med/long term. Ie. institutions and the majority of private investors.

If you are day trading or a short term 'pump & dump' player then fine, I get the comments that don't want to use reasonable facts. I am not against these buyers / sellers, they create liquidity which is great.

Barclays and others will look at the future cash flow generation in a lot more detail than almost anyone on here.

Because it has high debts and the board are not sure profits are over £250m in 21,23 etc. BTW £250m is not enough to generate free cash flow. How about doing some research?

ProxL

What analysis have you done and would you share your valuation calculation with us please.

£307 million USSP expiring in March 2021? Have not looked any further. Agree, that they can repay with the cash held. It does need to generate material free cash flow to restore confidence. Cash generation is more difficult to fudge!

Cookie 2906

I don't have any motive. Have lost £7K on this share over the last few years, due to it being in my SIPP and not researching properly. Like most on here, wondering if there is a possibility to trade this stock a little and recoup losses. Trying to calculate a sensible price to buy-in at is very difficult IMO.

I also wonder about the Corporate Governance. Most common is boards allowing aggressive revenue recognition etc to keep Op.Profits up for share price, bonus payments etc.

We will in time find out the reason. However, not giving any guidance is wrong unless the new team have strong evidence of accounting irregularities.

'Anyone not filling their pockets at these levels need to have a very compelling reason imo and I certainly don't.'

How about this:

Strong indications that margins are dropping – Half Year presentation and recent profit warning. Fact, Bab has far too much debt going forward which challenges resumption of dividends. My calculations for current debt – Approx. £2.2Bn!!! (£1.2Bn Net Debt + ££0.6Bn FRS16 + £0.4Bn Pension Def). Servicing this debt will result in £130m of cash (£45m Interest + £75-£95m excess pension payments) outflows pa for at least the next three years assuming no rights issue.

If you assume an Op.Margin going forward of 6% on £4.3 m turnover you get profits of circa £250m. After tax payments and debt servicing you have little cash left to fund contract growth, debt reduction and nothing for dividends.

Bab**** as generated poor levels of free cash for years, a clear RED FLAG. IMO Bab needs a rights issue; the debt is far too high.

Strong indications that margins are dropping – Half Year presentation and recent profit warning. Fact is, Bab has far too much debt going forward which challenges resumption of dividend payments for what is ………. An Income (Not Growth) Stock.

My calculations for current debt – Approx. £2.2Bn!!! (£1.2Bn Net Debt + ££0.6Bn FRS16 + £0.4Bn Pension Def). Servicing this debt will result in £130m of cash (£45m Interest + £75-£95m excess pension payments) outflows pa for at least the next three years assuming no rights issue. Add tax payments to this outflow and you have little cash left to fund new contract growth and nothing for dividends.

IMO Bab needs a rights issue; the debt is far too high.

Spelling....sorry

My expectation will be a drop. As mentioned, not even the board will call the profit or losses in the next 12months. However, they should have been able to take a stab at the cash generation (or lack of). They now the costs for cash flow & they should now the dates of milestone payments and monies attached. Poor show and very concerning.

What do you think? Having been inaccurate today.

The point.... bringing attention to boards that have history of deliberately providing shareholders with information that misleads investors on the true potential of their product/service/asset in order to pay directors remuneration.

The MCap is over 10x revenues. Revenues generated from services and hardware sales. The company is also loss making and cash negative. The product (that fits to drones) offering increased LIDAR performance is up against much larger players. Do you really think that a company with such a tiny headcount can keep up with major hardware players. Look for their technical specialists and research the backgrounds. Its just a drone surveying company (maybe a good one). Its not a great tech startup. 10x revenues???

When the fundraising starts, will the insiders who own 50%+ of the equity cough up any material amount. So.....what dilution will existing holders have to take.

Please engage with the debate.

Robrin

I have researched it. Why is it unique? What IP makes it so valuable and why are they not showing any recurring revenue? See you are also interested in CloudCoCo.