Member Info for tommy15

FWIW: I used to work in a lab that was funded by DARPA. The thing we were working on was a moonshot - this was 12 years ago, and today the goal of that lab still hasn't been achieved. Yet DARPA poured so much money at us that the labs motto was "more money than sense".

Nothing wrong with DARPA acting this way - fund 100 moonshots, one of them pays off, and you maintain your superpower dominance for anothr decade. Plus what felt like a huge amount of money to that lab is a rounding error to US govt defence spending.

But it might be some helpful context to indicat that DARPA investing heavily in something certainly does not mean that thing will be a success.

"What's so fundamentally changed in that time??" the company has completely switched strategic direction, away from their remote meeting offering (which couldn't possibly compete with quality products coming from well funded silicon valley startups employing talented engineers) and towards this harder-to-grasp (for me anyway) cloud telephony offering, which seems to be mostly around saying to customers "we'll do the boring negotiations with national carriers so you don't have to".

Profits from the old business model continue to shrink, due to higher competition and product decay, while the new strategy has yet to prove itself in any meaningful way. So a pretty huge fundamental shift!

Personally I'm furious with myself for not getting out of this sooner. The writing has been on the wall for months, but I let myself be pulled along by all the blind optimism on this board. Lesson learnt the hard way.

yrabsmurruc thanks so much for emailing and reporting back here!

I hate to be "that guy" but why do you think the response is likely to be positive? Surely it's never too soon for good news; bad news is the sort that has to be handled carefully :-/

Exception being a takeover - appreciate that this might be bad news for some but personally I'd happily take it!

lol careful what you wish for!

...if I had any of the courage of my own convictions I'd stop checking the price and this BB multiple times a day! Really should just not think about it for a month or two.

Just remember that it is exactly this kind of market irrationality that gives minnows like us the opportunity to buy. It’s not reasonable to expect that irrationality to disappear as soon as you take a position. Patience is essential.

I'd take it to be honest.

I'm interested in this bit: " in order to reflect increased levels of competition against each of those divisions' long-distance coach units."

This somewhat goes against the narrative that NEX is benefitting from the collapse of smaller operators that haven't been able to get through COVID, and difficulties at FGP.

Does anyone know more about this "increased competition"?

"""
Liberum, which reiterated its 'buy' rating on the stock, noted that the dominant impact on its revised forecasts for the current year was the decelerated pace at which Covid-19 restrictions were being lifted in all of the primary countries in which National Express operates.

"This postpones the start of the recovery further into H2. The large percentage reduction in our 2021E estimates reflects the depressed level of profits more than a large change in our assumptions," said Liberum, which added it now also has "more conservative assumptions" in the UK and at Alsa in order to reflect increased levels of competition against each of those divisions' long-distance coach units.
"""

I welcome people asking questions and posing alternative view points, especially negative ones. Otherwise the board just turns into a workable as echo chamber - which let’s face it is already the case for most tickets

You're quite right, I did overstate it.

I was going off this line in the report:

"Operating cashflows before new investments and corporation tax (non-statutory layout) increased to
£2.8m in FY21 (FY20: cash outflow of £0.8m) hence cash inflows from completed cases exceeded
payments to lawyers and IPs incurred on those cases and all overhead payments"

So the cash flow position is definitely improving, which I take as an extremely positive sign since this is, to me, the biggest flag around the business model. But it is not yet positive.

The cash flow statement also provides a powerful argument for why dividends feel premature right now :-/

Also following up to my point on cash flows, I'd be happier if there were NO dividend. MANO is attempting to grow at warp speed in a business where there is severe lag in cash flows, and in a situation where we know there will be less cash next year. Cash is precious, and they shouldn't be wasting it on a miserly dividend.

On the face of it the results are good, but there is still some risk here.

MANO is focussing heavily on growth. The fact that it was able to complete enough cases this FY to overall increase revenue is good, but also expected, as it reflects the growing number of cases taken on in previous years.

in 2019 the number of cases was 61, and in 2020 it was 141, so ~130% growth. In 2021 it was 198, so "only" 40% growth - a significant slowdown.

Again this is expected, but it means we shouldn't forget the impact the current moratorium will have on next year's results, where there will be far fewer cases than there "should" have been able to complete.

To me the big news here is that MANO was cash generative this year, and has access to plenty of credit, which gives me confidence that they can get through a cash-flow-poor year (i.e. next year) without having to raise capital from the markets.

The extension of the moratorium on WUPs is definitely a blow though, as is the new "arbitration mechanic" announced by the government (and not menioned in MANO's results) that may complicate the picture further.

Hats off Paddy, great call!

Completely agree that this is a broad market sentiment issue. Less convinced that this will fly back upwards today. But I can't imagine this being below 350 3 months from now, unless there's some very bad COVID news before then.

Just topped up. Couldn't resist. This price is crazy.

Also bear in mind that historically NEX was viewed as a dividend share, but it hasn't been paying dividends since COVID. That won't be the case forever; when (not if) NEX returns to profitability and reinstates the dividend the price should see an uptick (if it hasn't already).

Agreed. This company has a proven track record, is operating in an industry that is not about to disappear, and has been gobbling up contracts while competitors have floundered. If the price continues to go down I believe the correct thing to do would be to buy more (I won't, but only because my portfolio is already approaching 50% NEX already).

I can't see anything bad...

4th biggest drop on the FTSE 250.

FGP is the biggest drop - but they have a bunch of their own problems. Are we just getting dragged down?

Or is this a wobble over the new variant? Or something else?