Bango Share Discussion Threads

[simonsaid1] 08/1/2018 17:36

Simon Thompson just commented on Bango in the comments section below his latest article:


'The company has already said that it hit cash profit break even on a monthly basis in November, and analysts at Cenkos have not changed their forecasts which point to a gross profit of £4.5m and cash loss of £700,000 for 2017. Analyst Ian McInally is "comfortable with our 2017 closing end user spend (EUS) run rate in excess of £450m" which is worth noting as this implies significant upside on the £400m plus figure mentioned in today's trading update. He also notes that Bango's closing net funds of £4.8m is 33 per cent ahead of his previously upgraded forecast of £3.6m and remains comfortable with his £5.2m 2018 year-end cash forecast.

He expects EUS to double to £913m by the end of 2018 to lift this year's gross profit to £8.5m and deliver a cash profit of £3m. The Netflix agreement announced this morning can only be supportive of achieving these forecasts. It's also a clear validation of Bango's platform, following on from the agreement with Amazon Japan.

I have no reason to change the positive view I outlined in my article of 27 November.

Regards

Simon'

[simonsaid1] 08/1/2018 16:55

The momentum is obviously with Bango, with a huge client like Netflix coming aboard. I agree on the 'implied rollout', this is how these deals go, they never sign up globally at once - a toe is dipped in the water before submerging fully.

A look back at Google Play and Amazon related RNS's in Bango's history is instructive in this!

This company is at the top table now for all big tech firms looking at DCB, which itself is exploding in the developing world.

Remains a hold and accumulate for me. Sniped many from the panickers today.

[chimers] 08/1/2018 16:36

BANGO , signed up Netflix and the implied roll out with them is obvious.

They didnt announce that they had "Lost Netflix"....thats something Boku can ponder over to coming empty months for them.

[simonsaid1] 08/1/2018 16:26

Something to think about. A very high exit run-rate would not necessarily be something they'd want to boast about. I know it sounds counter-intuitive, but think about it.

They had a load of new contracts as well as the seasonal uplift toward the end of last year. That number may have been very large as a result. This means that come January/Febuary, even the general increase of Bango routes may not be enough to sustain EUS growth every single month - most businesses see seasonal revenue fluctuations and the January blues are hardly a secret. But if they'd reported giant exit run-rate figures for the end of the year (which are projections, not mandatory real-number reporting) then people would compare them with the early 2018 months and may perceive a 'fall' or 'stagnation' in demand.

Instead a comparison with the exit run-rate EUS of the equivalent month in the prior year may give a more accurate picture of growth, and I hope that's how Bango will frame their future reporting.

[chimers] 08/1/2018 16:24

Bango, the AIM-listed mobile payments company specialising in Direct Carrier Billing, has developed another powerful route to market with the signing of an agreement with Netflix (although this deal is so far limited to Mexico). Netflix subscribers will be able to pay their subscriptions via their mobile phone bill and this option may prove useful to those without bank accounts or credit cards.

This deal adds to the momentum that Bango seems to be enjoying (see Bango accelerating and work back). In a brief trading update today they signal that End-User-Spend over their platform had doubled over 2017, to £271m, with the year-end run rate also doubling year on year, to over £400m. Shareholders who kept the faith through three years of decline to mid-2017 will feel their patience has been justified somewhat as the shares have trebled from their low. However, they will be looking for them to kick on as the business returns high levels of growth and continues to sign up new routes to market and extend its global reach.

The Bango management have consistently maintained that its infrastructure can support substantially higher volumes and the presence of nearly £5m of cash at its December year end is testament to Bango’s operational gearing.

Investors and analysts will learn more at the company’s Strategy Day on 24th January and the full results publication on 13th March.

[egrid1] 08/1/2018 15:59

amt8 Jan '18 - 10:05 - 274 of 289

"I cannot see that it could be described as a good update. EUS same as at end of August. That needs explaining. It should have been 450m plus"

According to Simon Thompson - IC...
"Analyst Ian McInally is "comfortable with our 2017 closing end user spend (EUS) run rate in excess of £450m"

So it appears to be in excess of £450m

[egrid1] 08/1/2018 15:57

Simon Thompson, in reply to some questions about Bangos statement today, has said the following:

"The company has already said that it hit cash profit break even on a monthly basis in November, and analysts at Cenkos have not changed their forecasts which point to a gross profit of £4.5m and cash loss of £700,000 for 2017. Analyst Ian McInally is "comfortable with our 2017 closing end user spend (EUS) run rate in excess of £450m" which is worth noting as this implies significant upside on the £400m plus figure mentioned in today's trading update. He also notes that Bango's closing net funds of £4.8m is 33 per cent ahead of his previously upgraded forecast of £3.6m and remains comfortable with his £5.2m 2018 year-end cash forecast.

He expects EUS to double to £913m by the end of 2018 to lift this year's gross profit to £8.5m and deliver a cash profit of £3m. The Netflix agreement announced this morning can only be supportive of achieving these forecasts. It's also a clear validation of Bango's platform, following on from the agreement with Amazon Japan."

[lentjes] 08/1/2018 15:37

and added Netflix, the world’s leading internet entertainment service to their Client portfolio

What's not to like

[simonsaid1] 08/1/2018 15:25

Crazy isn't it - people selling a thriving profitable company that just doubled it's largest ever revenue year. Because the highest ever monthly run rate may or may not have increased in the last few months of the same year in which they doubled.

AIM is a bizarre place. I added today. Thank you for your shares.

[lentjes] 08/1/2018 15:21

How many PIs have been shaken out of the tree this morning ???

[moneybags] 08/1/2018 15:04

The news they brought out today.
Is it 'good news' or 'bad news'

Reading tells me it's good news, share price tells me it's bad news.

Regards , MoneyConfusedBags

[simonsaid1] 08/1/2018 14:54

Why are you surprised? It was already RNS'd and discussed plenty in the IC et al. A re-iteration would have been nice to have but not really essential.

[kazoom] 08/1/2018 14:40

The "breakeven" statement was in the 1st November rns. In fact though it only referred to being EBITDA positive (going into November).

Given that is an important milestone on the path to profitability, I'm surprised there was no mention today.

[milly17] 08/1/2018 12:26

IC News and Tips by Graeme Davies rates BGO a buy today

[simonsaid1] 08/1/2018 12:18

I noticed that too Lentjes, gives me the impression the deal is structured differently to the usual kind. Well worth asking them about this actually. I don't understand how this would work as they have to work with the MNO to create the route, not sure how they can sign up to support 'any'. Perhaps Netflix whole system works differently.

[lentjes] 08/1/2018 12:16

On the Netfix deal they don't mention which MNO's are activated. Are Bango taking a back seat with the MNO's and letting Netfix do the deals

Any thoughts ?

[simonsaid1] 08/1/2018 11:12

Why does the current share price require doubling of revenue 'into the future'? The share trades at a premium because of the company's overall future potential (not 'in x years must make Y progress) and also because all shares in successful companies trade at premium to book - have you looked at average P/E in the FTSE? This is just the nature of the game. Most of those companies will never make their market cap in pure book value - that's a really simplistic view of the stock market.

Bango trades as a premium because they continue expanding, signing deals with the largest tech companies and telcos in the world, and despite the opinion of some extremely ignorant people on here, Direct Carrier Billing continues to explode in the developing world (had to laugh at the idiot above going on about ATMs!). The market is right in the midst of its growth, as mobile phone use in countries with low credit card and bank account penetration proliferates.

It is not realistic to expect doubling of EUS infinitely, as exponential growth is pretty extreme and more characteristic of early-stage companies. As they mature, a doubling becomes more and more dramatic an achievement (wasn't hard when EUS was tiny in a nascent Bango). The fact that they doubled it again this year is, by definition, their greatest achievement to date (thus the nature of exponential growth). The important thing to watch is the overall size of the pie, and the profit that now starts to build since passing the inflection point last autumn.

On that note may I issue a special thanks to those classless individuals who decided not just to sell their shares here, but to come and explain why they did afterwards and trash the stock, just to kick in the teeth those of us still here who have conversed and shared research with you over time. Real classy move. Many 'volunteer journalists' here who love the sound of their own voice. I presume their response will be some tosh about freedom of speech. Pull the other one!

Looking forward to Simon Thompson's column covering this Trading Update later this week.

[amt] 08/1/2018 10:58

Very brave as current share price needs doubling of revenue year on year into the future to justify it. I have sold half and will be going 50 50 with Boku which appears to have a bigger market share but we will have to wait for next results from Boku to see if I have made the right decision.

[simonsaid1] 08/1/2018 10:57

To 'amt' above - breakeven was confirmed in a previous RNS, one of the ones with new deals in the last few months included it. Bango are now generating a profit.

Today's results are excellent, and Netflix now joins Amazon and Google in Bango's books. Amazon and Google both started with small territorial deals which expanded out, and I've no doubt Netflix will be the same. These big firms trial one territory then expand outwards.

Similarly, expect to see Amazon expanding physical goods DCB to more territories soon.

Strategy Day is well worth paying attention to (the slides are released publicly afterwards) as it shows us not just strategy, but also data. Last year's strategy day presentation was full of useful tidbits that had not been previously revealed.

I have topped up this morning on the profit taking dip. Sad to see the rise wasn't sustained for long, but the small cap share market is strange right now (the 'crypto effect'), so quiet accumulation is all we can do. This company continues to perform.

[amt] 08/1/2018 10:54

Yes but we already knew it was double. Its going forward thats the problem. The EUS at a point in time has too date given a good indication. I suspect that todays update is a gentle warning that we might not get a doubling next year but there us still plenty to go for but dont expect exponential growth.

[mjcrockett] 08/1/2018 10:45

The EXIT run rate that was quoted is based on just one week's revenue so is not reliable. I am not sure why Bango publish the EXIT figure as most people do not understand this. So all we know is that one week's worth of EUS at the end of June 2017 was similar to one week's EUS at the end of December.

A more reliable figure is that full year 2017 EUS was more than double that in 2016. That's pretty good.

[amt] 08/1/2018 10:05

I cannot see that it could be described as a good update. EUS same as at end of August. That needs explaining. It should have been 450m plus

[mobtheplod] 08/1/2018 09:43

Well I am still holding as I don’t think it was a bad update at all, appreciate I am in the minority.