Smartspace Software Share Discussion Threads

[cordwainer] 30/11/2021 21:54

weatherman, it's a competitive market but MS Teams and Office365/Outlook are or can be integrated rather than competitors. It's basically a one-stop shop for visitor and workspace management software and hardware. You may notice that health screening, covid security and contact tracing have been included fairly prominently among the features and marketing.
Apart from the company website(s), you can check 3rd party sites such as getapp.co.uk, capterra.co.uk, softwareadvice.com for some sense of competitors and reviews. Canaccord Genuity describe the competitive environment as follows: "Key competitors in the mid-market include Condeco, Teem/iOffice and Cloudbooking. In the SME market, competitors include Envoy, ProxyClick, Sign In App, Traction Guest and Sine."

[weatherman] 30/11/2021 19:49

Thanks for comments - which makes me interested in buying. The other potential concern is that this is a market that Microsoft already touches upon with its Outlook calendar, and Teams. What is the risk of fierce competition, and ongoing working from home?

[longtermgains] 30/11/2021 16:33

If worried about the efficiency of sales/marketing spend, look at both the existing world class CAC:LTV ratios and the strategy of increasing ARPU at Swiped On and also look at the low s&m expense and therefore high operational leverage created by both the indirect channel at Space Connect and at the distribution channel behind Evoko.
Group p&l is less important (particularly in understanding the value being created at SMRT) than understanding the multiple growth levers that SO and SC have at moment while recognizing that high levels of ARR growth can be achieved on cash neutrality because of the efficiency driven by the increasing ARPU model at SO and the indirect channel model at SC. Relating to your last point, SMRT has focussed on reducing implementation time and cost partly through self configuration by the customer. Hope this is helpful and look forward to continuing the discussion.

[nico115] 30/11/2021 16:25

Thanks long termI added 35k at 67.5

[cordwainer] 30/11/2021 12:49

Thanks for those insights longterm.
"efficiency of sales and marketing spend (LTV:CAC ratio)and the long term ability of the company as it matures to generate free cash flow" probably encapsulates what the market is worried about lately, which is why the multiple has been down to within 5 x historic ARR at SMRT. And the fact that the market mostly does not take a long term view.
The share price will be determined by what extent management addresses those concerns. I presume establishing a good LTV:CAC ratio more or less ensures good long term FCF and includes development costs to keep abreast / ahead of the competition..?
What we do know from looking further down the last update is that gross margin was good / improving, customer support operations have been merged to a single location, and there's now an emphasis on larger ARPU customers. That last point should I think be part of an important marketing initiative because the suite of products needs to preferably demonstrate exponential benefits when combined rather than mostly disparate pieces of virtual furniture, and be as easy to install and integrate as possible for the sake of efficiency.

[longtermgains] 30/11/2021 11:32

How to value SMRT. The best answer is to say how to value a SaaS (Software as a Service) company because SMRT is one of the best examples of a SaaS co in the London stockmarket. The best answer is to follow the money and look at how the US market, Private Equity worldwide and corporate purchasers value these type of cos. And the short answer is they look primarily at ARR (annual recurring revenues) and a series of other metrics :gross margin, efficiency of sales and marketing spend (CAC:LTV)and the long term ability of the co as it matures to generate free cash flow. But ARR is a good starting point. Sales and p/es do not feature and for good reason, SaaS cos are a new type of software co that will increasingly dominate the world over the next ten years and their financial models need different valuation techniques to properly capture their visibility and ultimate ability to generate long term cash flows from the installed base of customers where the software is deeply embedded into the way the customer works ie its processes. The ARR multiple is ultimately justified by the yield on this long term free cash flow margin. This is complex but that is how value is established in the real world. Remember when thinking about value, the big difference is between value and the price established by the last marginal trade. The BVP Nasdaq Emerging Cloud Index ( hxxps://cloudindex.bvp.com/) which covers $2.4tn market capitalization of SaaS cos trades on c23x historic ARR,(its probably expensive but..), recent PE transactions in the SMRT area have been at 10-15x ARR and these cos have inferior metrics and prospects to SMRT. Brokers are estimating £4.7m ARR in Jan 22 and 15x would be 235p. And thats only looking 8 weeks ahead. And takes no account of growth over the next 3-5 years (and if you dont think this co will grow over the next few years, what are you doing her). I suspect management would look for rather more than 250p. Shares are undervalued.

[cordwainer] 29/11/2021 12:33

haven't attempted to project eps from here yet. i think late december update will show management actions are having the desired effect on costs and efficiency - but its a question of how quickly. At this point I can only roughly say its a buy below 60p and a sell above 100p, and I am holding. Despite management's fabled 500p options I think they'd accept an offer of 250p if it came in tomorrow.

[nico115] 29/11/2021 11:55

Thanks ,what do you see as fair value here ?

[nico115] 25/11/2021 18:18

I've sent a few messages in.Hmmmmm

[dodger777] 25/11/2021 17:57

Agree, if he and the management believe in the company and he believes in his price targets then surely a no brainier for management to buy at this ridiculous price. But they won’t listen to me moaning unfortunately 😬

[nico115] 25/11/2021 17:43

Frank kept stating 500p reasonable target price Then why not a BOD buy at 67p? I don't believe all of the board can't afford to buy any stock here .just don't believe it

[nico115] 25/11/2021 17:42

Totally agree How many times did Frank say words similar to "our internal forecasts are much lower as we don't want to earn again but the BOD are much more bullish "Then buy the bloody shares Directors own a paltry amount ..it's not on This stock looks bloody cheap now but if the directors don't have confidence why should I ???!! I've had a pretty decent year thankfully but this is now my worse investment ..shocking

[dodger777] 25/11/2021 16:28

If the management want investors to take the company seriously they need to put their hands in their pockets and buy a meaningful amount and not the pathetic token gesture they did recently. The have done nothing to stem the collapse of the share price. All this talk of £5 quid future share price is making them look stupid and like spivs.

[nico115] 25/11/2021 14:34

I bought 30k at 67.5Really not happy about director buying BUT there's always a price Too cheap here Imho

[wanttowin] 24/11/2021 19:50

Lol no nico115...thats not my league, mine was the 4k.

[nico115] 24/11/2021 17:08

Did you sell 50k ?

[wanttowin] 24/11/2021 15:47

Just sold all my holding, and it has been my single biggest loss over the last two years..

Why I held on to this crock for so long stinks of stupidity, lesson learnt the hard way.

[cordwainer] 24/11/2021 15:01

That's also a good point I might check up on .. in the sense that Evoko and Space Connect could easily be at least launchpads for popular software such as Teams. I forgot whether Teams has actually been mentioned by the company.
edit -

[loglorry1] 24/11/2021 14:45

Yep all good points. I guess my worry would be that Microsoft could just add a module to teams to support all this stuff and integrate with people working remotely.

Good luck.

[cordwainer] 24/11/2021 11:10

@loglorry1, They are focusing on ARPU rather than userbase because of the high internal costs we have been seeing.
The alternative is higher revenue but with higher customer churn rate, losses and shareholder dilution going forward - which would not support management ambitions and share option targets. I think previous announcements have suggested that new customer sales with minimal subscriptions were a bit too easy and probably loss making because of higher churn.
The management response to the situation seems sensible, as they must convince investors that they can construct a scalable business model without self-defeating runaway costs.
Maybe there will be periodic cycles of growing user numbers vs. growing ARPU as they gather experience for honing customer management and marketing for a more controlled growth, but an emphasis on ARPU implies engaging more closely with customer needs and creating a virtuous circle.

[nico115] 24/11/2021 08:56

I agree with all you say but you still see decent director buying in many stocks so there's a choice out there.Frank came across very bullish at Investor meet yet not one Director made a decent purchase Do as I do not what I say ...or something along those lines.

[loglorry1] 23/11/2021 14:43

I know but it almost always is.

I'm impressed by large director buys where they actually put their hands in their pockets for meaningful amounts but to be honest they seldom need to bother as they can just award themselves generous stock and options schemes then claim they are closely aligned with shareholders.

I quite like what SMRT are doing but I fear it is easy to replicate by a bigger corp with better sales channels. Also their decision to grow ARPU rater that grow userbase was puzzling. Getting a large SAAS userbase and then focussing on ARPU makes a lot more sense. It strikes me that a new sale isn't at all easy.