Altitude Share Discussion Threads

[sheep_herder] 10/10/2016 20:43

I think it's understandable WHI being cautious but it's Varley's quoted "dreaming of £5" that is strange.

[allstar4eva] 10/10/2016 20:41

Could be WHI being cautious. No one has any clue what the take up will be. Given the disruptive nature of the solution it could be spectacular but right now no one knows...

[ihatemms] 10/10/2016 19:56

The revenue guidance from WHI doesn't tie up really with the expectations given by SCSW where you would expect much higher revenue given the analysis that they have provided. On the other hand it is difficult to understand Varley's target of £5 per share because we're expecting more distribution deals - with 1 bigger than Aprinta- surely his target should be much more unless it's a medium term target. The shares are now very tightly held with very few in free float- if the company delivers SCSW expectations the share price will be explosive. I think everyone's awaiting the real figures with bated breath!

[value king] 10/10/2016 16:45

A new closing high.

Technically the last rally was 65% and the biggest rally so far. On that basis I am expecting 25-35% on this rally up. 22p to 27p above the last closing high. 110-117p is my target therefore and possibly more if there's strong buying before Small Company Sharewatch is next published in early November I expect.

That's my tuppny worth anyway and we will see.

[sheep_herder] 10/10/2016 15:54

Thanks revoman, those are quite conservative - they match mine but have a zero missing. If I was Varley, I'd keep quite until after Feb when I've had the last chance to give my staff options/shares at these low prices. Or until they've all started a 5 year SAYE. :-)

[ihatemms] 10/10/2016 15:52

Mine's drafted at a fiver!

[revoman] 10/10/2016 15:49

2016 4.5M2017 6.8M2018 8.9M

[melf] 10/10/2016 15:45

at 800p my notice will be drafted :-)

[sheep_herder] 10/10/2016 15:45

I'm glad it's not just me then.

For those that have seen the WHI note, does it give revenue guidance for the year? If so, are ALT legally obliged to RNS when they are going to materially beat it? I.E. might we actually see some guidance from the company now that they're out from the shadows?

[melf] 10/10/2016 15:41

SH, like you I keep running the numbers through various models and even when I'm very conservative I keep coming up with numbers I can hardly believe. I'm waiting for someone to bring me back down to earth!

[sja123] 10/10/2016 15:38

There's a first time for everything of course :-)

[sheep_herder] 10/10/2016 15:36

Has a share ever done 80p to 800p in three days?

[sja123] 10/10/2016 15:34

USA is the second largest e-commerce market in the world....but 72% of small to medium size businesses are not yet selling online....

[inlovewithaltitude] 10/10/2016 15:25

:))

Im buying Easyjet

[sja123] 10/10/2016 15:24

You have to remember that the 50:50 deals they are striking is because there are no upfront costs to these companies for site set-up....they are in effect allowing them to use their software, which has taken years to develop and perfect, for nothing in order to share profits with the distributors....

The distributors must believe that taking sales online will cut costs for themselves and ultimately, grow their businesses, enough to warrant the 50:50 deal or they wouldn't be interested....

Although some of these figures seem ridiculously large, it's introducing a disruptive technology to a market which is already massive, with enough profit to go around for all concerned....

Much of the $22b market is presently constituted with catalogue sales and the like...this is bringing it into the 21st century...Click2Ship.....online....customizable on the fly....nothing like the industry at present....

All IMO etc

[melf] 10/10/2016 15:11

SH, I think 38% is perfectly reasonable in terms of gross profit how we understand it. You buy a t-shirt for $5 and sell it for $6.90. that would appear to me to be a normal mark up. What we don't know is how GP is determined as part of the agreement. For instance, does it include staffing costs and marketing? Usually, as far as I understand it, GP is calculated as revenue less cost of goods sold, with adjustments for opening and closing sock. In which case FOUR's GP margin is 38%.

[sheep_herder] 10/10/2016 15:03

Melf, thanks for that. It still can't be right though. If I put 38% margin in for Aprinta and assume we get 4100, or 10% of the distis signed up next year, and if each disti has 3 customers with £4200pcm, then I get EPS that is over twice today's share price. :-)

Edit - to get an EPS of 80p you only need 4100 customers giving Aprinta £56K revenue per year each.

[melf] 10/10/2016 14:35

I've been looking at FOUR's 2015 accounts with regard to ascertaining their margins.

Firstly (all these figures are in dollars - not that it matters)....

The accounts show revenue of 497m and 465m of operating expenses giving an operating profit of 32m.....there's your 6%.

However, importantly, the 465m of operating expenses include a whole host of costs including staff costs and marketing. The actual costs of "purchase of goods for resale and consumables" was 308m.

Therefore the gross profit (as we know it) was 497m - 308m = 189m. Giving as GP margin of 38% (189/497).

38% does seem a reasonable margin to me. I think much depends here on how the GP is calculated according to the agreements.

SH....if we are looking at 50% of 38% that's fine by me :-)

[sja123] 10/10/2016 12:31

Doing a little research on promotional product distributors margins....seems quite complex and with no definitive answer but I came across the following:



"The distributor will resell with a 30 to 40% markup over these figures"

"The distributor sells the product for another 25% or so"

Both these possibilities are well above 6% margin!

All IMO etc

[ihatemms] 10/10/2016 12:26

Yes Sh - as regards creation of web-sites the FAQ said that they could create hundreds of web-sites for customers within 24 hours - so ramp up will be very fast. I think once they've proven on b testing etc, and initial customer platforms are working fine the roll-out will be extremely fast.

BTW - I think we'll have news of more distribution deals b4 the end of November. Distributors will not want to be left behind (behind Aprinta, AIM etc.) with modern Click to Ship working and will want to get onto ALT's plaforms ASAP.

[sheep_herder] 10/10/2016 12:19

Yes, I think that's an important fact, that there is no cost barrier for the end customer to sign up. The FAQ's that were posted stated that it takes seconds to enable a customer website so I think we could see a fast ramp up of customers signing on. Just gotta sit back and wait for some real numbers now. Going to be very hard waiting until the FY results.

[sja123] 10/10/2016 12:14

Indeed SH....some very big numbers if you extrapolate....and just on these two deals!

Suffice to say, on low estimates of take up and with nothing else known, it would appear to be well undervalued still, even after it's progress to date...

(Bearing in mind, there is no up front costs to apply the software and take business online, I would say take up would be a no brainer for these companies!)

Can't see any reason to part with my holding for a long time...as long as the plan unfolds as it would seem....

[sheep_herder] 10/10/2016 12:10

I have to say I don't believe my numbers. The 33% margin to Aprinta can't be right. If I put in a similar margin to FOUR of 6% then it looks much more reasonable.

10 year ramp to 10k distis, each with 3 customers making monthly revenue of £4200 gives me an share price ramp of:

£2.45 £5.74 £9.03 £12.32 £15.61 £18.90 £22.19 £25.48 £28.77 £32.06

[martinthebrave] 10/10/2016 11:54

Just bought a few more ALT & G4M. I am now officially "full" of both!!