Member Info for Silverblade

Likewise Sunday - always good to hear your thoughts. Anyway, wouldn’t want to risk a heated debate given your recent sabbatical and rebirth!! SB

Sunday - I’m certainly not doom and gloom so apologies if that is what is being conveyed. I am as the title of my post suggests - frustrated. I expected a robust trading update with actual numbers that’s all - and it almost got there - but the stuff that’s missing makes me wonder if there is something else to this tale.
We have all - esp SJL! - had an opportunity to debate, review, vent our current understanding of the update - and I think we have all managed to do so without falling out, being petty, or point scoring (almost). It’s almost like a proper BB.
I look forward to the end of March to clarify what is clearly going to be an interesting set of results - and the continued good spirited debate here.
All the best to those who contribute here and to a bright future for mmx. SB

I hope we are on the right course too Sunday I really do. How do you feel about the TH and MS remuneration packages now being behind closed doors? Back to my point about being open and transparent. And the huge options package last year. Reward where its due - i have no problem with that. But as a shareholder in return i expect better that's all. And who is to say we have got it all wrong and revenue is great, profits are good and the vip write offs are minimal - but we left guessing and that's one of the main issues for me. SB

Sunday - for sure there are positives amongst the negatives. But lets not forget the strategic review (and we all have an opinion on how that was handled) and ICM purchase was likely conducted out of necessity and lets also make an assumption that any potential purchaser was 'wary' of our revenue treatments, balance sheet and contract structures - hence the lack of any credible offers. The dividend payment is likely to represent the balance of the buyback funds with a cash top up. Believe you me I want to see positives, I'm just disappointed where we are again.
Now is the time for TH and MS to buy some shares and show some tangible support. SB

Some further thoughts.....I don’t think there is any major disagreement here from a shareholder perspective. We all want to have confidence that the company is operating in a transparent, open and accountable manner. This is not Wall Street - we are a medium sized operator in a pretty simple marketplace. The key to success is centred on generating enough annual income to cover our costs and make a surplus which can be distributed to shareholders – it’s hardly rocket science is it.
It is bewildering how such a simple company proposition shows repeated failure in both its financial management and market communication.
At individual level - is Toby H a good CEO – he is pleasant to deal with and appears knowledgeable on our industry, but the fact is he is a highly paid executive who more than likely relies too heavily on Michael S to run the financial operation – and that’s where the problem lies. There is too much miscommunication on financial performance (we like to use a lot of financial reporting terms - sales, deferrals, revenue, cash flow, cash generated) – and the deals on London, vip, law and goodness knows what others were all bonkers. We have likely raised $100m+ in auction income and flushed it all away. Even last year we were having to make last minute adjustments to write off revenue which had been recognised in prior periods – hardly good accounting practice in the first place. It appears there may be similar on the way on the .vip debts. MS appears to have presided over some almighty poor financial decisions and performance – and yet there is no accountability – just reward. There is no point being a sales led business if those sales don’t earn income. What happened to our premium sales business – radix sold $3m in the last year – do we really care it they are one off if they help to support revenue growth – we were led to believe we had a strong inventory? Its all fine and well wanting to be an annuity business but that should not preclude other initiatives to drive revenue.
We can’t be the only ones looking in and wondering about the ability of the team to deliver.
2020 was meant to be different. For me it was all about regaining trust and confidence in our team, the business model, the resolved legacy issues, the clean balance sheet, the future – and it’s not there yet. SB

Thanks SJL. By Chinese debtors we are basically talking about sales in .vip. In the 12 months from June 2016 to June 2017 we 'sold' $8m+ covering standard sales, premiums, and portfolio's. As far as the current accounts go - we are carrying a $2m bad debt - the majority of which appears to be subject to a write off following some cash collection. That is not to say we have other liabilities in relation to .vip sitting in our accounts. I thought we had moved away from the smoke and mirrors policy used to mask P&L and Balance Sheet issues - perhaps not.

If you take away the auction income we 'collected' about $4.6m in cash - I'm going out an a limb and suggest this was largely icm cash collections. The financial reporting needs to much clearer and robust - we have a highly paid FD and year after year we seem to score own goals.

And just to add salt we are going to have a huge share based payment accounting treatment for the 30m options awarded last year to contend with. The scale of these appears to make up for the 15m 2016 awards forfeited in the year - and the way we are going the 6m 2017 awards will be forfeited as well.

If your golfing with Guy, might want to ask him what is really going on here. SB

Sunday - i don't disagree on the fincap opinion - but as mmx broker i would expect they have access to certain info/conversations on which to base their reporting - and their trading forecasts have been relatively accurate. At the point of audited accounts i expect we will see a Fincap update on predicted 2020 trading (revenue, editda, eps, div etc) - which will have some level of agreement with the company. As for the 17p target........we wished. As you say - SJL - what's your take? SB

Its now 24 hours since the company published its trading update. Depressingly, like previous updates and results, the share price reaction has been negative – despite what appeared to be good news. Why; well possibly it is linked to what wasn’t said as opposed to what was. Why no detail on our actual revenue – we expected $18.5m as per forecast – so why not make a clear statement of the ball park number as opposed to ‘significantly ahead’ of 2018 performance (of course we are – we have a full year of the adult domains). In relation to renewals – we were led to believe they should now cover all costs (although again – no mention of total costs) – and now it’s a claim that they are at 60% of the unstated revenue – why not be unambiguous and report renewals cover all costs. New sales revenue makes up the 40% balance – and yes there are less brokered sales – but in combination our sales appear flat – but again without knowing the numbers this is guesswork. Percentages are meaningless without the quantum. There are decent signs on cashflow, cash in bank, London sorted (but the accounting gain for this year is being used to write off Chinese bad debts). In relation to the dividend – I am hoping this has not been introduced to mask overall trading progress – will have to wait until March to find out. I just feel there were opportunities for greater clarity which were missed. I imagine fincap’s divi estimate will be pretty accurate – this will not have been plucked out of thin air. SB

All sounding good - only concern is - why no actual numbers? Of course we are ahead of 2018 we have a full year of ICM. Previous trading updates always included revenue, but not this one. So no gauge on that yet - but all else appears positive and what we wanted - and the dividend timetable was as predicted. Let’s hope we get to double figure share price by then. SB

SJL and Hucks - sorry i might have confused on the issue of cash. The c.$20m i referred to was actually the $17m-$22m combined cash generations from the three years to Dec 19, Dec 20 and Dec 21 on which basis part of Toby and Michaels 13m options will vest in 2022 if achieved. Lets see what FY 2019 brings in - we know H1 was $2.2m and net earnings of $1.7m. I agree with the potential timeline you laid out SJL should a dividend be announced - and the realignment of the AGM would support any required approvals for a distribution. SB

Hucks - not mentioning shareholder returns doesn't mean there is a buyout in the wings....anything official in that regard would have to be made public anyway. I just think it would be disingenuous of the board to introduce the subject and then fail to follow it up; although there has been a bit of previous in a similar vein. In the same way the issue of the buyback has just been allowed to drift - as investors we should expect clear communication from the company on its operations and business objectives which affect shareholder interests. SB

Morning Hucks. I guess we were expecting the update today - so likely to be tomorrow or Thursday. I take your earlier point on retaining cash in the business; but if such a decision was made - then why make reference to introducing a progressive dividend or tender offer. It needs to be addressed. If we are a growing, profitable business with no debt, and aiming to generate c.$20m cash (as targeted in the director options) in the years 2019, 20 and 21 - what's the plan for that cash? And as much we like to think us PI's have a voice, the reality is our major II's will have a significant influence on company direction and a timeline on how to extract value - and a number have reasonable investments here which will be accountable to their investors. Hopefully 2020 is going to be a very interesting year. SB

Scotty - I'm hoping we beat 2019 expectations by 5% - which are reported as revenue of $18.5m, editda of $6.3m ie i'm looking for $19m+. We could benefit from a $2.8m accounting benefit after the settlement of .London. Revenue mix, renewals, sales, cash, adultblock all deserve a mention - but lets face it the real risk is lack of any update in relation to shareholder returns (div, tender, both....). Lack of this being addressed runs the risk of a negative reaction, and I fully expect it to be dealt with positively. SB

For those partial to a song, a dram and the company of friends; Happy Birthday Rabbie. SB

Bakky - realistically we can expect to see a whole heap of deletes - look at the growth in vip and work last year and we knew a lot of these would not renew - although vip looks like it might buck the trend based on the analysis that current renewals are at 70%. That said - I am less concerned about volume and more about revenue. It will be interesting to see how we perform v fincap 2019 predictions - and what the updates they have in relation to 2020. SB

I’m hoping SJLs latter comments were in relation to the current appetite for consolidation/scale as evidenced by the numbers of sector deals in 2019; rather than the demise of gtlds. Now expectations have been reset I don’t see any reason why the gtld sales market cannot progress in the coming years, albeit without the stratospheric growth once predicted and let’s be honest priced in way too early in the cycle. SB

Depends on what price you paid Scotty!! The majority here would be selling at a loss at current levels - and despite previous share reaction to 'good news' i think there is real optimism we are finally due a positive reaction to what should be an interesting, informative and shareholder focused update. SB

Good effort hucks - i've added a fair few in the last couple of weeks. I've kept a record of my trades in mmx - hard to believe i've been invested here for almost 10 years back to the TLDH days. Lowest price paid - 5.2p. Highest - 13p - ouch!! Average above where we are at present.....like a lot here i suspect!! ATB for next week. SB

Great tune SS. All we need is tap back and we're whole again! SB

ram - there were very high expectations for .law initially - and we did not even get close to early sales targets. Whilst we are adding sales - and I'm not even sure if we are selling to the Chinese legal market yet - the domain was a 50/50 JV with a third party and as such there are likely to be partner payments and expensive salary overheads for the management team which were based on expectations which have not materialised. Hopefully not on the scale of .London liabilities but another area where mmx are probably looking to strike a better long term deal. SB