Bango Share Discussion Threads

[lentjes] 31/1/2017 06:24

India Vodafone & Idea Merger Talks

Looks like Vodafone India will be merged into Idea rather than the other way around which would be a win win situation for Bango irrespective of whether the recent launch of DCB between Vodafone and Google is with Bango

That would give a Bango DCB India subscriber base of approx 340m

Happy days

[aleman] 30/1/2017 20:42

Ray Anderson said that (mid?) September EUS (£167m) needed to double to see profitability (he cited Cenkos numbers) and he expected that around the end of 2017.

Ht tp://www.proactiveinvestors.co.uk/companies/stocktube/6012/bango-plc-chief-says-pokemon-go-craze-making-significant-difference--6012.html

Growth to the end of December put that a bit tight but roughly on track. If anything has changed significantly, he should update the market accordingly.

Cashburn was only £1.6m in H2, which started at EUS £159m and ended at £195m. A similar linear rise in H1 would see cashburn of around £1.2m and £0.8m in H2. Anderson's projection indicates geometric growth of 23% per half year and cashburn of £1.1m and £0.6m before a marginal positive in H12018. Linear cashburn to break even is about £2.5m and geometric is about £1.8m. The balance sheet looks comfortable either way - unless there has been a slowdown that has a significant enough affect on profits that we should have been told about it. It was the CEO that told us breakeven should be around the end of 2017 so he should update us if that is significantly erroneous.

[gsbmba99] 30/1/2017 18:45

For the avoidance of doubt, the Progressive Equity forecasts in brackets are losses. Existing consensus (as near as I can tell), prior to today, was revenue of £5m in 2017 and £8.3m in 2018 and EPS of (3.0p) in 2017 and 2.2p in 2018. Progressive are waaay below existing consensus. I don't know enough about Progressive to know whether they are unusually conservative. I seem to recall they initiated coverage on Proactis with a forecast below the bottom of consensus. I guess the question is whether the company uses the Progressive forecast when establishing what "market consensus" is. If so, then expectations have just dropped very substantially.

[lentjes] 30/1/2017 18:45

The drop in the share price started just as the strategy meeting started at 3pm

Did anybody attend and if so any feed back as to what would cause the drop

[amt] 30/1/2017 17:44

Eus ahead of my expectation on those forecasts. Margins a touch lower. So breakeven half way 2018. No need for cash due to strong balance sheet but might perhaps raise say 2 million in 2018 to give a cushion. Looks like if it does become a multi billion end user spend we will have to settle fot say 1% margin. Share price will go to where investors think eus will go to in the future so difficult to call. Problem is if sell out may miss out on big future gains

[petewy] 30/1/2017 16:57

Gsbmba: Yes read the report. In on the strength of it.

[nimrod22] 30/1/2017 16:37

Bit of a wobble at the end of the day, but topped up another 4 grand.

[smithless] 30/1/2017 15:37

Annualised EUS 30 June 2016 £159m (£104m without acq) Exit 31 Dec 2016 £195m (£140m without acq) H2 EUS up on just organic growth = £36m - 35%. From a revenue basis, it difficult to know what the quality of revenues came from the acq and what came from existing Bango biz. Existing approx £1.8m and £0.8m from acq, which makes the acq a bargain against BGO.L current mkt cap. The balance sheet is weak and I'm sure its customers will want to see this strengthened to give them comfort. Re just on a straight cash basis, come Aug 2017 will be uncomfortable low. The combo of a weak BS and forward cash, would suggest a placing. With its current rating, with another poss acq to smooth things may be on the cards IMHO

[gsbmba99] 30/1/2017 08:34

Research note out from Progressive Equity this morning. They are introducing forecasts for the first time. They are projecting EUS of £266m in 2017 and £492m in 2018. However, at the revenue level they are forecasting £3.8m in 2017 and £6.5m in 2018 driven by a reduction in EUS margin from the 1.9% achieved in 2H16 to 1.43% in 2017 and 1.32% in 2018. "This reflects our expectation of increased volume in large markets where margins are typically lower. It is also consistent with management's view (re-stated in the 1H16 results release) that competitive transaction fees are important to sustain market leadership." They forecast PBT before exceptionals and AAG of (£4.0m) in 2017 and (£1.2m) in 2018 and EPS before exceptionals and AAG of (7.5p) in 2017 and (2.3p) in 2018.

[amt] 30/1/2017 08:07

Smithless with 5.6m of cash and usage of 1.5m over 6 months with no growth they will have at least 4.0m at interims. We dont need to worry about cash until next year. So unless they make an acquisition its not an issue. By 2018 we should have a clear idea if growth and margins are living up to expectations. If not then I will take s view on whether to continue to invest. If growth continues at current pace then the share price could go into orbit. Anyway cash is not an issue in the scheme of things.
Obviuosly if they dont grow cash will become an issue. If they dont grow then the model would be flawed so its all about growth not cash.

[j777j] 26/1/2017 15:33

Look forward to more of your comments at 150p.

[smithless] 26/1/2017 14:44

I got into Bango, when this sector was hot (remember Montise etc), so my much reduced holding is from then. I remember going to a seminar at Canaccord genuity a number of years ago and Ray A was presenting along with many others. I remember, quite a heated discussion between a guy from Worldpay or one of the big ones and Ray that Bangos margins were too small and the number of billings would have to be massive to make any decent money and ongoing visibility wasn't very predicable. Needless to say, the particular individual wasn't sold on micro billing systems. Anyway Ray put up a good fight, but the general walk away feel was, what is the end game for Bango and what is it's true value?

Re raising more cash, one thing I have learnt is never believe anything one hears from small cap mgnt teams. I'm not saying this relates to Bango, but do the maths. It will be getting very short on cash come its interims and it would have to double its gross profit again in 2017 to breakeven. Debtor days over 600 days, by normal definitions, but must be wrong. It's capitalizing intangible (software dev) rather than expensing through P&L (prudent) may make ones profits look better, but free cash flow is where it shows up. Again all IMHO, just good to air things and as the stock is up no one cares.

[haozhen] 26/1/2017 14:22

Thak you for ALEMAN saying cash - GBP1.6 down in 6moths.
So if no progress then cash minus GBP3M but we know lot of progress an dwe know EUS already rose . So no short of cash . I must be very excited around the new opportunitys. Most company in China or USA of this style is very high unikorn style value. Why Bango not 1billion already???

[smallcapinvestor1] 26/1/2017 13:45

I don't disagree that there may be a placing at some point but if there is it will be from a position of strength and to fuel growth. May not be such a bad thing.

[aleman] 26/1/2017 13:28

Has the CEO said the company has enough cash to see it to profitability before? Has there been a prevous half where the cash balance fell by only £1.6m? (Not rhetorical questions.)

I understood the significance of Pokemon Go was it brought loads of new consumers to direct carrier billing for the first time. Most of their purchases will have been small - so not a massive boost overall - but they were first purchases that will often the be followed by multiple and larger purchases which might lead to a sustained longer term boost.

[smithless] 26/1/2017 13:28

I have always thought the EUS numbers very misleading, as you will see if you go back in the accounts. I use gross profit as a benchmark. FY2013 £1.6m, FY2014 £2m (then changed in subsequent accounts to £1.34m), FY2015 £1.28m FY2016 ? say max £2.6m (although i suspect the cost to payment providers has shifted below gross profit, as the number keeps changing (look through the accounts)

At H12016 it had net tangible assets of £7.9m. Depending on how much is capitalized, I think this figure is nearer £4.5m at 31 Dec 2016. Not sure the auditors will be happy with that.

I think a placing is on the cards soon, thus the hype to get the share price up. Been here before, so use to it.

£77m mkt cap for such a week balance sheet - well that's the power of BANGO. And £33m accumulated losses to show for it.

This is all IHMO of course and as usual time will tell if i'm right or not

[smallcapinvestor1] 26/1/2017 13:23

There are plenty of payment processing companies that would buy bango. Worldpay, paysafe, paypoint etc and that's just uk quoted ones

[smallcapinvestor1] 26/1/2017 13:22

Pokemon go was significant on the payment routes it was activated on, but it was insignificant to bango overall eus.

[aleman] 26/1/2017 13:01

The cash balance fell by only £1.6m in H2, Cashburn should soon be cash generation on current growth rates.

[haozhen] 26/1/2017 12:09

ON thet cash - I think you got remmbrer the billtomobile was costing about GBP2.5million of cash if included is the cash of buying and the cash of maybe extra costs to lowyers and so on. So maybe burn not so bad as that more like maybe down to 2 or 3 million GBP a year and will not be much in future time as BANGO growing very fast.

[smithless] 26/1/2017 12:03

Lets hope Ray pulls something out the hat. One question i would ask on the EUS numbers: in H1 2016 it was £46.2m and in H2 £86m. How much of this was down to Billtomobile acquisition and Pokemon Go (it said this was significant in its interim post event statement). How much has it capitalised for software? £1m FY? FREE CASH FLOW or lack of it. It went through £6.5m cash to realize £2.6m in revenue for FY2016!! and who's going to buy Bango? The Banks have been burnt big time in this sector. Paypal, no as Bango customer base won't allow it.

Anyway as you see I have just convinced myself to sell a few more today into this latest spike. Best of luck

[j777j] 26/1/2017 11:21

Almost here.....Strategy DayBango will host a Strategy Day in London for investors on 30 January 2017. It will provide the opportunity to meet Bango's management team and to learn how Bango is capitalizing on its investment in payment technology to grow market share for its customers through the power of the Bango Payment Platform. To register your attendance for this event please email [em

[amt] 26/1/2017 11:07

Share price is rising on back of earlier strong growth in eus and also improved gross margin. Everything pointing in right direction and pitential is enormous.

[j777j] 26/1/2017 10:35

Chartwise could be about to head towards the 143p/150p level.


Gla

[smithless] 26/1/2017 10:33

I have been a shareholder for the last 7 years and yes I have top slice along the way. The analytics software has been available ever since Bango came to market ie trends, customer behavior and i personally don't think the current update is much more, if anything. As for breakeven, I have lost count how many times we were going to get to that point.

My problem with the company is the constant fund raises it has made and failed promises. Another fund raise will be on the way - guarantee that.

Sorry to sound so bit and twisted, but the RNS today annoyed me, but I live in hope by 2020 it may start making a profit.