Member Info for uhlf

From the 14th December update

‘ and is well positioned to become one of the key solutions providers in its marketplace. ‘

That little statement could do with expanding on.
What valuation would a key solution provider muster?

Just to add re deferred revenues etc, the market consensus last year was for revenues of $6m and comments were and are made on that basis.

Hi Dallo
And thank you for your comments and it’s good to know you’re thinking along the same lines.
I agree re deferred revenues. There is a shortfall of $3.2m, assuming the final figure for 2021 is $2.8m.
I note in the two revenue warning RNS that deferred revenue is given as $1m-$1.5m in the interim release then $1.2m in the December release. As I’ve previously noted, those figures don’t add up and it looks to me like they’ve conveniently dropped $0.5m to $1m, given deferred revenues total $2.2m-$2.7m. Perhaps this suggests some orders cancelled rather than deferred? They need to clear this point up.
Regarding revenues for 2022, I would hope they are able to make a decent stab at it before the half year. I think by end of Q1 is sufficient. After all, they told us in December they have sourced the critical components they require for 2022, as well as other components.

In addition, given the expected ongoing components shortages, the Company has purchased and secured sufficient critical components for its 2022 system solutions delivery (UEP and ACE-NIC100 products), and is in the process of securing all components for the mass production of our UEP products targeting innovative solutions for the existing wireless connectivity market, to safeguard against delays in 2022 deliveries

I think it’s fair and reasonable to say that ENET must have forecast their expectations for 2022, given the above.

Furthermore in the same release they tell us:

… Ethernity will meet its growth plan objectives for 2022 and 2023

A very positive statement to make, no ifs or buts there!
It is surely something of a disgrace that we are kept in the dark about what exactly their growth plans are and what the forecasts for 2022 are when they have clearly already forecasted?
What gives here, what are they playing at?

Hi 01234

Yes, that would be a cracker of a release 01234, rather than companies that experience a fantastic rise put out a ‘we know of no reason ‘ etc rns, you seem to be suggesting our boys, with the sp on its knees, could put out a we can’t think of any reason to buy the shares type RNS! Even by ENET’s ‘own goal’ standard, that would be a corker!
Onto more serious stuff. Yes, the damage has been done and they probably can’t even see it. There is no consistent sensible IR strategy. There is no on going company/shareholder relationship, which helps things through good and bad. There has been no attempt to explain what their growth plans are, what the exponential and transformational situation they say we are in means. IR isn’t something you can switch on and off.
They are doing us and themselves a massive disservice by not putting the required effort into IR, as it will and has resulted in low ball cash raises, investor churn, reduced valuation for the company, vulnerable to a bid etc. Now the correct IR policy won’t totally mitigate the above, but it will help.
Yes, due to their lack of attention to this side of the business, they now require big news, nothing less. But it’s never too late to improve, and let’s be frank, you would struggle to do worse. Get some serious news out there, properly explain it and kick off the sort of IR policy that other companies have without too much effort. It ain’t that hard .

They’ve left us in a news vacuum but teased us with exponential, transformational and we will meet our growth plans for this year and next. All the above would be fine if we had some idea what the above means in hard $m.
But no, they are just taking the pi55, quite frankly.
No doubt when they need the coffers topping up again they will cobble some half ar5ed strategy together and throw a few bones in our direction.
All imo.

I think a valid recent point is how things drop off the table never to get mentioned again. The three China Telecomms is on, SE Asia telecom another.
I understand you put your best foot forwards, as most companies do, but a concerning number of projects/developments just seem to never get heard off again.Perhaps it’s just the nature of the business, perhaps it’s DL & co bulling stuff up. Difficult to say with the lack of continuity and explanations from the co. We seem to move from one great hope to another. Hope the DU development with 3 major tier 1’s doesn’t go the same way.

ENET already know what they intend to sell in 2022, as they’ve already told us:

From Dec 14th
In addition, given the expected ongoing components shortages, the Company has purchased and secured sufficient critical components for its 2022 system solutions delivery (UEP and ACE-NIC100 products), and is in the process of securing all components for the mass production of our UEP products targeting innovative solutions for the existing wireless connectivity market, to safeguard against delays in 2022 deliveries.

So I don’t buy that nonsense that it’s difficult to forecast etc as they’ve already told us they have forecast for 2022 and purchased sufficient critical components on the back of their forecasts.
So how comes they won’t share their forecasts with their shareholders? (Via a brokers note, which is the only way to stay within the rules)
I’ve got a strong feeling if they do put out forecasts they will not be genuine, ie reflect what they’ve ordered. I suspect they will dumb down any forecasts , say a measly $10m or something like or less. First option will be to see how long they can maintain the status quo and get away with saying nowt.
I’m watching them like a hawk, and if they dare come out with ‘exponential’, transformational’ or ‘ will meet 2022 growth plans’ I will be onto them in a shot.
ENET, you have been warned!

GtheG
I prefer to contact the company direct on these matters rather than a BB and I have done so and my thoughts have been received and acknowledged. There is some indication they may act on some items, we will see.
I think it’s untenable and blatantly ridiculous to tell investors in the 14th December update that:

‘Ethernity will meet its growth plan objectives for 2022 and 2023 and is well positioned to become one of the key solutions providers in its marketplace’

Without letting us know what those ‘growth plan objectives are’.
If they don’t let us know, they are treating us with utter contempt. To put out statements like that with no explanation is a joke, quite frankly. My concerns are not limited to that, but I’ve no wish to write another marathon post. There’s plenty of companies out there that I can invest in that treat investors in the correct manner.
Clearly the IR policy is not working as the m.cap is a ridiculous £25m or so, what bigger indictment could you have?
Still, if investors hard are happy, then I’ve no wish to push a rock up a hill and if ENET won’t change I will simply move on to pastures new
atb
uhlf

skid35
Thank you for your efforts.
I would urge anyone else who has concerns re the poor IR, poor communications, no forecasts in the market to make their views known to the company.
Otherwise there’s little use complaining on here!
atb
uhlf

Steve17
Not retiring but will take a back seat for a while now I’ve said my piece.
I have some serious thinking to do. The complete lack of IR strategy and no forecasts in the market give me something to think about.
atb
uhlf

Well, I’ve aired my views.
There doesn’t seem to be any real appetite for investors to take any coordinated action and that’s fine.
I will continue to make representations as and when and I urge others who have concerns to make their views known to the company.
Mark’s email is on the web site but here it is anyway.
mailto:MarkR@Ethernitynet.com

I will now retire gracefully!
GLA
uhlf

Cheers for your take GtheG.
I’m not selling, but my patience is not unlimited.
I think a lot of people are missing the main point re brokers note.
It is this.
ENET are not allowed to put forecasts into the market.
The only way to put forecasts into the market is to use a broker. Wether house broker or paid for research, it makes no difference, ultimately it’s all paid for.
Now we all know the brokers note is derived from discussions with the company, but the figures are always something the company is happy with, even if not their figures per se.
The last few years there have been fugues in the market to measure ENET against. This year, so far, nothing.
So when a company tells me their going to meet their growth objectives, I feel it’s perfectly reasonable to say what are those growth objectives?
There’s trust, blind trust, stupidity. It can be a fine line.
I’m afraid that , like it or lump it, ENET are a plc and hsve duties to discharge. They can do the bare minimum and if you’re happy with that, fine and dandy. But I would like them to embrace while heartedly with being a plc. Take your investors with you, we will all have a more pleasant journey, albeit there will still be bumps and twists along the way.
I’m not suggesting rigid quarterly reporting btw. I’m suggesting, as appropriate, reaching out to investors. It could be a virtual agm with q&a session. It could be after an important contract has landed a mind a web cast would be the ideal way to flesh out a rns and answer investors questions.
In the scheme of things, it shouldn’t take much in the way of resources and the regards, from a loyal and attentive investor base will in any case far outweigh any time and costs spent.
atb
uhlf

GtheG
Just a quick point. I like your posts and we might have to agree to disagree.
But your suggestion seems to be that rather than try to improve the quality and overall competence of the IR side of things that one should just sell the shares. Now that’s an option all of us if we come to the conclusion that company has too many traits we don’t like. But I much prefer to see if the company will do the things that are asked instead of just walking away, that seems a bit defeatist to me.
atb

Thanks for your comments.
Just a couple of quick points
Re broker, I’m suggesting getting a suitably qualified person to do the job, and more than one note. The main reason for the note is so forecasts can be put out into the market, otherwise there is no way to marry up ENET’s managements growth plans that are ‘transformational and exponential’. They need to be held to account, no ifs, buts, excuses.
Second point, in no way am I suggesting fluffy news, broadcasts every 5 mins, hand holding etc. What I am suggesting is a joined up IR policy that includes, for example, quarterly web casts with Q&A at the end. Other companies do this very successfully. I can’t see why ENET can’t do it.
I agree they can’t issue mega $m news till they have it, but they can do a helluva lot more to prepare the ground, to tell us what their expectations are, to inform us about contracts landed, etc etc.
If folks are happy, fine, but I think their performance is very poor and we deserve a lot better.

Should Ethernity bod be called to account for statements made in RNS, AR, interims etc?
And don’t we deserve better than the ‘mushroom’ policy they currently give us? Ie kept in the dark and fed bullsh*t?

Sorry for any typos, obvious one is 2922, too long to wait even by long suffering ENET investors!
Love to hear what other people’s views are.
Should we, as investors, be proactive or just take what they give us or just vote with our shares?

Part 5, last part!

Dallo, I remember a while back, at your instigation, we worked out roughly what % of shares we PI’s had and I think you said words to the effect that as a block we could talk to the company and given the % shareholding, it would be hoped we are listened to seriously.
If you are quite content with managements current IR performance, then I’m wasting my time. But , if not, is it worth saying our concerns to them as one voice?
The question is open to others on the thread as well. I believe this can be a great company but, quite frankly, the IR , timing and other things look a complete mess to me. Eg,the last RNS, reactive, proactive, what the hell was it?
The market got it right, in my view and marked the shares down. But if the groundwork had been done, it might have been well received.
If any of you have read this far, thanks!
ENET are doing the hard bit with the products, now do the ‘easy’ bit and give us the IR that a great company and great investors deserve.

Part 4

The 14th December lays out the revenue streams, we can work out that some could be $5m or $6m in a year, but we are given no idea of when we might expect ‘full steam’ . Invariably these things start small and build up over time. How long are we looking at? ENET must have some idea, how about sharing that with your loyal investors?

I would like to see the following done:

A root and branch review of the IR strategy
Brokers notes, done by suitably qualified and knowledgeable people/companies and ensure they are available for all shareholders. Consideration given to use of paid for research in addition to ‘house broker’ or other broker research.
Regular web casts with Q&A section, say every three months. Other companies do this (eg SRT, PANR)
RNS to clearly explain the market opportunity, the usp for Ethernity’s product, time to market, future prospects. Much of the above is often lacking and the RNS often leaves as many questions as it answers.
Honesty with investors. Eg the last fund raising was clearly to buy more components but they decided to dress it up as something else.

Part 3

Less than two months later they now tell us:

‘As a result of these delays, and the worldwide components shortages, we now expect that approximately $1.0m to $1.5m of anticipated revenues may be pushed from H2 2021 into H1 2022’

So the market expectation was $6m.
Now it’s $4.5m-$5m

Then on the 14th December, a matter of days before the year end they come out with this gem:

‘-- Approximately $1.2m revenue delays for the remainder of the 2021 year, to be realised in 2022.
-- Anticipated revenues for the financial year ended 31 December 2021 of c. $2.8m (subject to year-end accounting adjustments) with c. 74% gross margin.’

Hmmm, the maths don’t work out, does it?
$1.2m off the revised $4.5m-$5m is $3.3m-$3.8m, yet we’re coming in at $2.8m
Sounds like the boys have dropped another $0.5m -$1m and hoped we wouldn’t notice!

So exactly how much has been pushed into H1 2922.
Multiple choice
Is is $1.2m from the 14th December
Is it $2.2m-$2.7m from the interims and 14th December?
Is it $3.2m to account for the ‘missing’ revenue?
And exactly what are our expectations for H1 2022? And total for 2022.

Part 2

t’s interesting that you and TL have at least one thing in common. You have both said words to the effect that $20m revenues this year would be peanuts, and I assume from that statement that, at the time, your expectation was north of that. With two revenue warnings in the last 4 months of last year, you may wish to revise that downwards.
I can understand , to a certain extent, ENET’s reluctance to put forecasts out there, as with the finishing line in sight, ie end of year, December 31st, they still couldn’t forecast right. That is despite telling us in the results they had a grip on the component situation. Let’s face it, they couldn’t forecast their way out of a paper bag.
Talking of forecasting, what a mess they made of it. The market expectation last year was for $6m. At the AR in June we where told:

‘Furthermore as highlighted above we anticipate securing orders for 2022, and along with the 2021 carry over, will result in achieving the planned growth for 2022 from the current existing customer base and that the market evolution, uptake and deployments as have been long anticipated will now be realised from the latter half of this year and the long anticipated and expected growth will now come to fruition.’

No mention to investors what the ‘planned growth’ actually is. And no ifs or buts, the expected growth ‘will now come to fruition’