||EPS - Basic
||Market Cap (m)
Crossrider Share Discussion Threads
Showing 251 to 275 of 275 messages
|Excellent read rathair :-)|
|The business model of online distribution and digital products specialist Crossrider (CROS) has evolved since the company floated on Aim in the autumn of 2014, when it raised £46m at 100p a share. The business is no longer solely focused on monetising web and mobile media through the use of big data, but now has an app distribution platform that its customers can use for marketing their own products. The board is also using the company’s cash-rich balance sheet to add to its product portfolio.
A good example is Crossrider’s bolt-on acquisition a few months ago of DriverAgent, a PC maintenance software products company offering a leading device driver search and update service, which scans computers for outdated drivers. The product is designed for use with desktop computers, tablets and mobile devices and is compatible with all Windows operating systems. It’s popular too, having been downloaded more than 50m times in the past decade. Before the acquisition, Crossrider had successfully promoted DriverAgent on its own proprietary app distribution platform, achieving a 125 per cent increase in revenue from the product and doubling the monthly average gross profit achieved before launch on the platform. In a trading update a few weeks ago, Crossrider’s directors revealed that DriverAgent has been fully integrated into its own proprietary app distribution platform and the $1m (£800,000) acquisition is expected to be earnings accretive in the first year under the company’s ownership.
Crossrider’s web app distribution business also offers Reimage, a patented Microsoft-based product tool that enables customers to clean up their computers. Users are offered a free scan that identifies infected files and then offered the product for $99 before incentives if a repair to their computer is required. I understand that the conversion rate is around 5 per cent, thus providing a decent income stream for Crossrider.
The transition from an advertising technology company to one that provides a distribution platform and product hub for companies focused on digital products as well as its own consumer base makes commercial sense. App distribution accounted for almost two-thirds of Crossrider’s first-half revenue of $28.7m, and at sharply higher margins, reflecting more than 250,000 individual product sales. Rising profitability from this segment is being supported by a move to reduce reliance on outsourcing activities and increase direct control over distribution, thus improving customer service and retention rates with the aim of shifting towards a more recurring revenue base.
The company’s other main activity has two business lines: Ajillion, a white label mobile ad server for ad networks, and agencies; and DefinitiMedia, a mobile ad network. Ajillion enables ad networks to buy and sell mobile advertising capacity from publishers and advertisers and takes a cut of the value of traffic generated across its platform. DefinitiMedia is an advertising network that uses the Ajillion hub to offer managed services through the Ajillion platform. The profit contribution from Crossrider’s media division rose by around 13 per cent in the first half of 2016.
Under the leadership of chief executive Ido Erlichman and finance officer Moran Laufer, who were both brought in last year, the company has successfully restructured its operations, cut $2m of annualised overheads, and hit analysts’ cash profit estimates of $6.4m on revenue of $56.5m in 2016. True, full-year pre-tax profit of around $5.9m will be a quarter below the prior year’s result, a reflection of the decline in its web apps business, which was focused on providing software code to large numbers of independent code developers and small publishers. These developers then incorporated Crossrider’s extensions into their own products, pages and apps, allowing adverts to be served to users, thus generating revenue for the content owner. The problem being that the monetisation methods were intrusive for end users, prompting Crossrider to withdraw from this previously profitable business line.
Clearly, investors have been concerned that Crossrider’s business is in structural decline, hence a share price trading at half the flotation price. However, with the company’s year-end cash pile equating to £58m at current exchange rates, representing 83 per cent of the market capitalisation of £70m, its profitable and growing media and app distribution platform businesses are effectively being valued at only £12m. That’s anomalous considering Crossrider is cashed up for further bolt-on acquisitions, and analysts expect a return to growth in 2017. In fact, Gareth Evans at Progressive Equity Research believes that Crossrider can grow pre-tax profit to $6.7m and generate EPS of 3.4¢ (2.7p) this year, estimates that don’t look out of place to me.
So, with forthcoming full-year results on Tuesday 14 March set to highlight the successful business transition and upbeat trading prospects, a substantial share price re-rating is in order. Buy.|
|Board position for the CFO...|
|Its one of the Investors Chronicles Bargain Portfolio of 2017 just announced late last night.
Here is a small snippet.
"Crossrider cashed up for further bolt-on acquisitions, and analysts expect a return to growth in 2017. In fact, Gareth Evans at Progressive Equity Research believes that Crossrider can grow pre-tax profit to $6.7m and generate EPS of 3.4¢ (2.7p) this year, estimates that don’t look out of place to me.
So, with forthcoming full-year results on Tuesday 14 March set to highlight the successful business transition and upbeat trading prospects a substantial share price re-rating is in order. Buy."|
|ST value play....|
|I wanted to have a look at this company and went to crossrider.com only for my anti virus software to block access! First time that has ever happened which is a bit odd, anyone else had that problem?|
|Yes looks like we may have been tipped :-)|
|I'm wondering if it's in Simon Thompson's Bargain Portfolio in the IC, announced today?|
|What's going on here then ?|
|Interesting recovery play, but it needs to do a good acquisition to show the market its capable of doing so and bring potential investors back on side after very disappointing IPO. Not much stock around, so when it goes, it will fly|
|Very nice looking chart too :-)|
|long way to go here chaps
|I've been adding today also, should double in time, clearly undervalued imv.|
|Agreed, I have added here post the update.|
|Decent update today. Cash is about 42p a share. Existing business being thrown in for free. Not bad when it makes about 2.5p a share in earnings.|
|Thanks Horndean, very good article.|
|Interview from Dec. Ido sounds pretty bullish:-
|Good to see u here shrout, hopefully we can continue the upwards direction. Maybe an acquisition along the way. Still only valued around cash.|
|good stuff bbus. I bought a few of these a couple of days ago, mainly on the chart formation.. but reading this thread certainly helped sway my decision. Hopefully this can go a long way :-)|
|Well done bb noticed you had it for one to go in 2017 nice looking chart if it plays out, see there was a TU on 1st Feb. last year, will be interesting to see how the Oct. Acquisition has been doing :-) DYOR|
|Bit of buying this morning, my NAP for 2017 fwiw.....DYOR etc|
|Miton group showing confidence with that 2.5 million buy, now holding 6.19 %.|
|2.5 million shares seem to have changed hands.|
|Hi Rhomboid, yes the points you raise are all valid. It is still a positive that the directors bought shares imv. What we have is a co worth cash and moving away from the old Ad-Tech, as with most Isreali based co's they seem very cautious and won't jump into any rash decisions but the review should bear fruit as we are starting from zero if you know what I mean. Very confident the share price will be a lot higher in the future.|
|I'm slightly confused by the new regime have they really just bought c.£50k of shares between them, not much of an expression of confidence in their new employer is it?
I'm tyre kicking here and the shifting sands of the business model would seem a little less unstable had the new hires actually dug deep, the EV here is crazy cheap but I'm confused by the longevity of the business model and indeed the intentions of Mr Sagi as what he does drags minority shareholders along whatever.|