Smartspace Software Share Discussion Threads

[outlawinvestor] 22/5/2020 07:52

Anyone understand the frequent oscillation in holdings by HSBC (flipping between c. 5% and below threshold)?

The direct holder is the bank business rather than asset management, custody/nominees or other investment management business. Seems unlikely that they are trading the shares as trading volumes don't reflect it. Possible they are pledging it as short term collateral although I would find that quite incredible!

Any ideas?

[mcfly79] 23/4/2020 12:18

I’ve been looking at SMRT for some time but I’m put off by the high overhead costs, which could be a real issue at the moment.


I’d welcome any comments.


Does anyone have a good handle on what fixed overheads are at the moment?


In the Interim results admin expenses were £5m, of which non-cash expense were £0.8m. So that’s annual cash overheads of about £8.4m. Looking at the breakdown in the last annual report staff cost may be about £5m of the £8.4m.


Today’s announcement says they have reduced their headcount in the enterprise software division, as previously announced. I can’t see any previously announced figures on this, other than the announcement of the Space Connect acquisition in Oct 2019 which mentioned a £1.2m cost saving in group product development spend.


So perhaps overheads have now come down to £6m-£7m?


The problem is that I don’t think the company will be generating anywhere near enough revenue to cover this. From today’s announcement the Enterprise contracts delayed from last year are being completed but after that it looks like there will be little new business so they will be reliant on their recurring SAAS revenue.


The interim results showed that recurring revenues were just £782k. This may have grown to £2m annualised, creating perhaps £1m of gross profit. That doesn’t compare well to £6m-£7m of fixed costs. The Covid-19 response will bring those costs down by perhaps a million or so (11 staff have been furloughed). So cash burn could currently be £5m per annum.


Cash as at 31 Dec 2019 was £3.2m and as at 22 April 2020 was £1.9m (a £1.3m drop in just under 4 months). I think this cash burn will also have been flattered by the benefit of Enterprise projects completing in Q1.


I’m not sure how long the £1.9m current cash will last.

[techgeek12] 18/4/2020 11:47

HSBC increasing their holdings again recently.

Interestingly HSBC is Smartspace's large client that is alluded to here "Material contract with leading International Bank - 5 year licence for Workspace Management Software - 86,000 employees across 650 floors, 60 countries and 2,800 meeting rooms"

At this low valuation of five million pounds with £3.2m in the bank I think there may be interest in takeout to a much larger player as a bolt on. Over £20million in investments has been made by Smartspace in developing their offering since 2018 with now some large global clients such as HSBC locked in to 5 year contracts. One I am watching with a keen eye from this level.

[ali47fish] 10/3/2020 07:43

hsbc invests above threshold

[daz] 21/2/2020 15:05

I've bought some today as I'm hoping that the shares are somewhere near the bottom after the dramatic fall. The company looks very good value on a price to sales ratio if the forecast revenue for the current year of £14m is achieved, especially as the enterprise value is £3.23m, allowing for the £3.2m in cash.

As you say VV, I'd feel much more confident if the directors started buying as well, they don't own many shares and could easily buy more.

[value viper] 31/1/2020 18:27

Directors have bought none despite the price collapse PoorAnd gives no confidenceSuspect they own very few shares but will get options repriced lower no doubtTaking their salaries though Sorry to be downbeat but this has been nightmarish Guess Braund likely saw this comingA well timed exit indeed

[cordwainer] 28/1/2020 20:56

might be an idea to sell the non-SaaS actual smartspace part of the business to WeWork, it's a drag on this small company ?

[ali47fish] 28/1/2020 11:55

hsbc invests 5pc

[bookbroker] 23/1/2020 10:49

Was this company doing work for WeWork?

[weatherman] 23/1/2020 09:23

Once this bottoms out it may prove a good buy. But what price will be the bottom? Current £3.2m in bank, mkt cap now near turnover. Nearer to good value, but markets often go lower than expected on the downside. If these contracts are confirmed in a few month's time that may be a good time to buy - but all imo.

[susiebe] 23/1/2020 09:09

Cash at 3.2 million at 31st Dec 19

[owenski] 23/1/2020 07:13

At one time this was a promising business - when Mick Braund was around - now it's a train wreck.

Bargepole.

[the shuffle man] 22/1/2020 16:03

Getting a bad feeling with this continuous drift lower. Need an announcement one way or the other. The Market doesn't normally get things wrong.

[cordwainer] 07/1/2020 03:09

Well from the interims the hopeful outlook of doubling revenue doesn't seem enough to me, it needs to be quadruple.

[value viper] 06/1/2020 16:59

Ouch, what a crockSold the solid bit of business to keep the pie in sky bitRaised very good cash for business sold but had to raise more last autumn - ??I suspect no profitability so difficult to invest with any degree of confidence I agree with previous posters points on state of accounts re acquisitions etcThis is the opposite of growth and the business strategy not convincing anyone

[cordwainer] 06/12/2019 13:50

i just briefly skimmed thru the interims, looks like approaching a crunch point of increasing revenues vs decreasing cash balance. If i had more time i would look carefully at revenue recognition and be wary of management bamboozling investors with more (potentially dilutive) acquisitions, whether such acquisitions were being overvalued, and whether there is likely to be any goodwill impairment.
On the other hand, interesting business case they could even tack on some comparative ESG metrics for users (unless they already have). need tight reins on IP and cash and a bit of patience and i hope this takes off but I'm on the sidelines for now.

[value viper] 19/11/2019 11:40

Just looked here for first time in a whilePretty disastrous stuff unfortunately

[owenski] 31/10/2019 08:44

I can see why Mick Braund left

[weatherman] 31/10/2019 07:47

I sold out a while ago. Impressive growth in recent acquisition, but still turnover is over all quite small with ongoing cash outflows. I can't help feel they are over paying on latest acquisition with little turnover. A large cash balance has now almost disappeared with not much to show. I may consider buying back in if they fall further.

[gleach23] 31/7/2019 14:35

No idea who it is ashehzi but I note it was a late reported 105k @ 95p which is encouraging

[ashehzi] 31/7/2019 12:45

any idea who bought yesterday 100k+ and similar and why?

[gleach23] 10/6/2019 21:07

Hopefully the line of least resistance will continue to be up for the foreseeable...

Nice move today and would be great to be back over £1.