|Sat Sol World
||EPS - Basic
||Market Cap (m)
|Gas Water & Utilities
Sat Sol Share Discussion Threads
Showing 801 to 820 of 825 messages
|Thanks Tightfist appreciated.|
|A very useful presentation this afternoon by the CEO, CTO, CFO and acquisitions lead (CCO?).The CEO made a satisfactory (for me) explanation of Monday's fracas with appropriate humility; I am confident it won't happen again. The point was made that the BoD plus Senior Management hold ~25% of the equity so they have real skin in the game.I will post a few highlights over the next couple of days.Cheers, tightfist|
|Cheers Zho - had already seen this. Would just say that his comments are based on earnings at Y/E 11/16. Would give far more credibility if forecast earnings for current year were applied to valuation comments.
|Hi Tightfist - yes agreed on valuation method. Will be interesting to see if the in house broker forecasts follow suit. We should see them later this week.
Re complexity - I agree. From my accounting background (Group FC of Aim listed company) there is a heck of a job to do to incorporate the new acquisitions into the reporting stream and to gain overall cost control, BUT revenue control should be far simpler given the (majority) subscription model. Interesting also to see they've retained an FD in Australia. All in I expect this year is about gaining control, seeking easy cost wins, and leveraging broadband agreements with satellite providers to increase margins.
Re Mondays mess up - I honestly think this was a mistake - I've never seen results issued on one day then the roadshow a few days later. That just doesn't make sense. I expect the brokers, financial PR, and management team hadn't co-ordinated this properly and cross checked days. Believe me this can happen! I'm hoping this is a lesson learned and very much a 1-off event.
Re is the market right - difficult to tell. I think trading fundamentals are strong but they need to keep one eye on the balance sheet. It certainly doesn't help having so many shares in issue as investor perception could be "penny share" when the company has a market cap just under £50m. I'd look at consolidation - say a 1 for 10 just to give the impression that the company isn't a penny share monkey.
On balance the management team have a tricky job - they need critical mass, and are well set to achieve this during the current FY. But there's a tonne of work to do to incorporate acquisitions into the business, finance further acquisitions and maintain Balance Sheet integrity. The HSBC loan recently announced is a VERY positive piece of news to support current strategy but is a Balance Sheet risk. I wouldn't be at all surprised if there is a cash call this year to strengthen.
Would appreciate if you could share your thoughts following todays event. Specifically, why haven't the numbers been audited!
I'm in here for 160,000 shares and plan to stay invested for 2-3 years.
|Sir G,Yes, this co. begs for developing a decent model and seems amenable to a DCF to best judge real value from incremental additions. It has felt that way for quite some while, but the business is becoming more complex (segmented) which has dissuaded me, so far.I am attending later today and will see how I feel then. I was not expecting to see this price level again - is the market "right" - or is the market spooked by Monday's delayed event and the unfavourable spotlight it created?Cheers, tightfist|
|Agreed. This is a buy and build strategy. Consolidate and grab as much market share as possible, maximise efficiency and cash flows, then profits will fall to the bottom line.
Don't forget other revenue opportunities will arise in due course.
For me this is a share to hold for 2 to 3 years. It will take that long for this strategy to bear serious fruit.
|This is where Seargeant has gone
Former Dominos boss Stephen Hemsley and serial investor Nigel Wray are backing a new venture in medical technology that will list on the London stock market next week after raising £2.3m from investors.
The company, Derriston Capital, will float as a cash shell with the aim of making its first acquisition in the med-tech space three to six months after listing.
Mr Wray, known as the Buffett of Britain, and Mr Hemsley, who is chief executive of Unitedhealth Group, each have an 8pc stake in the business, having invested £200,000 apiece.
The new business is also backed by property investor Warren Todd, through his vehicle Courtney Investments, and Harry Hyman, founder of Primary Health Properties, a real estate investment trust focused on healthcare. Other big-name investors include Hargreave Hale, which as a 10pc slice in Derriston.
Derriston’s finance director, Rodger Sargent, said Derriston’s first purchase would be a company, rather than a product, to give it instant scale, staff, infrastructure and a distribution network in which it can pump other products into.
The strategy is to find medical devices that are already on the market, but which are under-invested and unloved by their parent companies.
Derriston will acquire them into the cash shell through a reverse-takeover, outsource areas such as manufacturing, and ramp up sales to drive volume growth and bring costs down.
“These products are basically non-core to giant med-tech companies,” explained Mr Sargent. “If you have a product with X turnover, and others with 500 times X, you won’t focus on the smaller ones. But we can take those, give them some love and attention and greatly increase the distribution and sales.”
He said there was a growing market in the med-tech space for devices which are perhaps not the very best, but acceptable, lower-cost solutions for health authorities around the world which are coming under increasing strain from burgeoning and ageing populations.
“We have had a decent look around and nothing is definite yet but we have a wish list of companies we are interested in,” said Mr Sargent.
“Where we think we can really generate decent returns is getting into a particular genre or niche, be it by the technology type or the geographic region. The key will be forming relationships with distributors or clinics and sell a number of different products into the same distribution network. That is where operational gearing will come from.”
After the first acquisition, Derriston might consider moving to an Aim-listing, which would allow it to raise money through the tax-efficient Enterprise Investment Scheme as it looks to expand its portfolio and tap investors for more cash.|
|thanks sir g i think they are building for a sell off.|
|Hi Sir Gimli,Thanks for your review. However if their ARPU was only £266 I would be concerned ( I think you calculated £21.4m/79k?).What we need is the average number of customers for the FY -,if it was straight line acquisition that would be around 52k for an ARPU of £413 which is more like it should be. Before the Oz. acquisition I was looking for around £500pa., but we now understand Oz. is 37% of customers so that will skew the numbers.As the customers become more differentiated (service, ARPU, margin) it becomes less easy to understand SAT. A bit more transparency would be appreciated?Cheers, tightfist|
Thanks Sir G.|
Re cash - Net cash flow from operating activities, after interest paid on loans was an outflow of £178k. Before interest payments was inflow of £640k. Assuming interest payments will continue in the current year I do expect net operating cash-flow, after interest payments, to be positive this year. I caveat this with how the business manage their current books (current assets & current liabilities) and would like more insights into "other creditors and accruals" in the BS.
The fundamentals of the business model are however strong which gives me a high level of comfort. Average revenue per customer last year was £266, and gross margin increased to 34% from 24%. So each customer added in 2016 £90 contribution to gross profit, compared to £63.60 in 2015.
Since most, if not all retail customers will pay by direct debit, cash recovery should be very high (high 90%'s), so those contributions above will largely all convert to cash.
Applying some scale to the above figures and assuming the 100k customers are hit this year gives revenues of c£27m; gross profit at say 36% (add in 2% for efficiency savings on cost of acquisition) = £9.72m. Assuming distribution and admin costs drop 5% due to efficiency savings and depreciation/amortisation and share option costs remain constant, and £1m for acquisition and deal related costs, this year will have costs of £11m, so a loss of £1.3m.
To break even on this cost base your then looking at the loss/contribution per customer - i.e. 1,300,000/90 = 14,444.
So Reported P/L needs a customer base, on the above assumptions of, requires 114,444 customers.
This is/should be easily achievable, and given growth rates/acquisition I would not be surprised to see this achieved this year.
Hope that helps.
p.s. Can you tell I'm an accountant?!!!|
|The only way a company like SAT can grow in this industry is through acquisitions then nurture them to grow organically.
They are doing that successfully at the moment but the BOD have to watch that each one is integrated correctly and with so much going on they must keep there eye on all the projects.
I have trust they are going the right way about it and yes bottom line profit will suffer short term for one off outgoing costs but long term it will pay off.|
|SAT is generating lots of cash - think of them as a telecoms utility company. Loss is due to write off of intangible assets and acquisition costs. They are on for turnover of £40m+ this fy, based on projection of current trading going forward.
Risks are, loss of customers to competitors, pricing pressure, and failure to integrate acquisitions. This market still seems in a strong growth phase and competition becomes stronger in mature markets.
|All very well Sir G but if the market was expecting net profit then one could argue the current valuation is factoring that in - which brings into question the valuation. Eventually with more consolidation they might generate say £40-50m revenue. What net profits could they make? £2.5m? What valuation would be reasonable then for a company growing organically at 10% but with acquisitions mainly done. I wouldn't think it would be more than a PE of 20 which would roughly equate to the current Mcap. That's why I would be a little wary of the valuation.|
|Did they generate any cash though in real terms, I'm being open as I cannot work it out and gave up trying last night.|
|Hydrus - What's important here is underlying trading. On an EDITDA basis (that effectively measures underlying trading, before accounting adjustments) the company over-delivered on all metrics.
The loss was substantially made up of amortisation of goodwill - largely as a result of acquisitions; depreciation - ditto, and fundraising costs - one-offs
Whilst the company continues its acquisition strategy do not expect "net profit".
That will come in spades once the company has reached a "steady state".
Whats important for the business over the next 24-48 months is growing the user base; retaining recurring revenues; and cash generation. Profit will follow.
Best of luck.|
|What about profits and cash generation though weatherman? Broker forecasts were to move into net profit yet they made a massive loss.|
|"Revenue, underlying EBITDA and cash at bank all ahead of market expectations." Organic growth this fy is 12%.|
|Im out Boys, late Results was unnerving. The last TU ahead could have been a profit warning really as well. I cannot understand the cash flow and the tangible balance sheet is a wreck.
Basically I have short term lost trust in the BoD. Still on the watch list|