Altitude Share Discussion Threads

[northwards] 22/10/2020 12:33

It's so difficult to know. If they can show broadly cash neutral since last update, that will be very positive. The share price is bombed out for sure, but I'm keeping my powder dry until we have some clarity.

[billster2018] 22/10/2020 12:20

So, if they haven’t burnt through their cash and they report that, what do you reckon the share price does? I am just trying to figure out what the market is pricing in here. It’s trading like a company that is almost done. So surely any news that proves that not to be the case should be very bullish and it should bounce big. No?

[northwards] 22/10/2020 11:01

1.5m US for Q to end September ?

[billster2018] 22/10/2020 10:45

That’s interesting North. I noticed the golf is getting spectators back in the States. So if we take it that the revenue for the whole industry is down 25% from last year? and Altitude’s penetration within the network stays where it was in the last quarter, can anyone extrapolate our the numbers?

[lucicavi] 21/10/2020 20:34

is this finished

[northwards] 21/10/2020 20:01

US promo industry sales down c 25% in Q3 year on year. Better than the c 45% drop in Q2.https://bit.ly/35oEU62

[john09] 17/10/2020 14:39

Again I ask 😂👍🤭

[billster2018] 15/10/2020 12:13

John. Again I ask, if you aren’t involved, why do you care? Is it to see how wrong you were at £1.20?

[john09] 15/10/2020 11:06

When’s the results? I need to get the popcorn in

[northwards] 14/10/2020 16:27

Bills - not sure the market has baked in any numbers. An update on cash will be key and any evidence that the promo market has stabilised will be seen as a positive.

[billster2018] 14/10/2020 16:01

So here’s a question for you all. Clearly numbers are hitting the tape soon. What do you think and what do you think the market thinks ALT need to report to A) go up B) stay flat C) go down? I guess A+ is what they need to go up a lot and C- Voce versa.

The reason I ask, is that we are potentially at a critical point and it’s interesting to see what people think the market has baked in.

[northwards] 12/10/2020 14:58

ASI research shows traditional promo product searches on the internet were on the rise, albeit PPE still dominant, in August and September. A glimmer of positivity.

[john09] 08/10/2020 21:56

Lol ^

Yep Everton are doing well so Man United must be

[northwards] 08/10/2020 12:50

Peel Hunt issued a buy on Four yesterday - share price doing well since. Commenting on the promo industry, the note states:'market commentary speaks of stabilised, but not materially improving conditions, which in a Covid-19 world is encouraging.'Hopefully a positive for ALT.

[northwards] 06/10/2020 08:55

Trump looked like he was struggling for breath on his return to the White House. Nothing to fear ... let's see.

[billster2018] 06/10/2020 08:39

Alternatively we just say that far more will die of poverty than of the virus, if we keep the economy closed. We should fully open up, whilst shielding the most at risk.

[thebigshortfella] 05/10/2020 22:14

If Trump and Boris are basing their strategies on a vaccine, then we are doomed. What will turn Covid around is this approach:

hxxps://unherd.com/2020/10/covid-experts-there-is-another-way/?tl_inbound=1&tl_groups%5b0%5d=18743&tl_period_type=3

[northwards] 05/10/2020 21:13

That's exactly the conundrum. Trump going big today on vaccines very soon. We'll see. Thats the only thing that will really turn Covid around.

[thebigshortfella] 05/10/2020 20:01

Billster and Northwards - many thanks gents. Very good point Billster about the average perhaps being higher and that all suppliers are potentially charged something.

Northwards - re: Covid. Absolutely, the question on my mind is whether ALT has become a potentially hugely rewarding investment at these prices. On the risk side, it seems to all come down to whether it can survive the demise of Covid before running out of money (or needing a fundraise). I am hoping that the rate of infection starts to weaken sooner than later (which some studies appear to show).

Best of luck.

TBSF

[northwards] 05/10/2020 19:23

Big, I think your analysis is good.But as we know, Covid has put a huge spanner in the works at an early stage in alts growth. My understanding is that the AIM biz model is very scalable / no need for a big increase in headcount to get to the 30m dollar revenue goal.

[billster2018] 05/10/2020 16:08

TBSF, I think you put it well. There are however a few variables, that I am not sure we know the answer to yet. What is the average rate charged to preferred suppliers, you say 4%, but I believe it is often higher. Also do they not charge all supplier something? I don’t know the exact answer to either of these points, just a guesstimate. Also what is the mark up charged by distributors, you assume 70 odd%, but I am not sure that anyone knows what the exact number is, nor will they, unless it is disclosed by the company, which for obvious reasons it won’t be or unless someone on the board is a distributor. But in short, I think you have it spot on, bar the lending arm, which I assume is something for rosier times.

[thebigshortfella] 05/10/2020 10:03

Morning John09,

With regards to you comment about revenues:

“8m revenues... in 15 months ... despite them apparently taking a cut of £2.2bn a year lol and 25% of the 8m is not reliant on transactional volumes so have they taken 6m from transactions (In 15 months ie £400k a month revenue) ? Didn’t the aim group used to take 5m a year... ta dahhhhh!! If they are genuinely taking a transaction cut I make it 0.2% I.e a fifth or one percent lol”

If this is the case it would be a worrying situation. I am not convinced that this is correct though as they are not taking a cut of the $2.2bn revenues, but a cut of purchase orders placed with “VIP” suppliers.

Picking up on Kemche’s point that there is still confusion as to how ALT’s business model works.

Here’s my summary on ALT (some of it is based on a discussion on this board that included Billster and Northwards):

In January 2019, Altitude acquired the trade and certain assets of AI Mastermind LLC. its key client. AI Mastermind, now AIM Smarter LLC (AIM), represents the largest promotional products network in the US.

AIM has a membership base of 2,103 (down from 2,185) distributors across the US, representing approximately 10% of US distributors. Altitude purchased AIM in order to own the 2,103 client base and thus created the opportunity to become an aggregator. The expectation is that if you own the customers, suppliers will come.

AIM members place $1.2bn of purchase orders annually through suppliers that AIM allow to service their clients. Altitude now provides suppliers with the opportunity to become “preferredR21; aka “VIP” suppliers. By doing so, these suppliers have greater access to AIM’s members and, as a result, can increase their revenues. In return, Altitude charges a 4% commission* from the VIP supplier. (*The actual percentage fee is not entirely clear)

Altitude believe that approximately 60% to 70% of the $1.2bn of purchase orders is addressable via preferred supplier partners in the long term.
If they were able to achieve this at 65% the revenues for ALT would look as follows:
$1.2b x 65%= $780m

Multiply by 4% (Altitude’s commission) = $31.2m

Allow for currency exchange @1.3 = £24m revenues for ALT

There is speculation that Altitude only need to pursue another 25-50 suppliers to gain geographic and product spread.

As a guestimate, prior to Covid, Altitude were potentially addressing 28% of the 65% addressable market. This breaks down as:

$1.2b x 28%= $336m

Multiply by 4% (Altitude’s commission) = $13m

Allow for currency exchange @1.3 = £10m revenues for Altitude

Obviously, these are just guestimates and, in reality, the revenues are lower due to Covid. However, I believe that this addresses the point you made about the transactional cut being fifth or one percent.

I would greatly appreciate if yourself and others put me straight if anything is incorrect.

Cheers,

TBSF

[kemche] 01/10/2020 13:11

Have they explained how the business works yet? I recall they had slight difficulties with that.

[john09] 01/10/2020 13:02

Hope? It’s hopeless. It’s a con