Bango Share Discussion Threads

[lentjes] 11/1/2018 08:31

Hopefully Crispin's 500k shares have worked there way through the system and we can now get back to business

[melody9999] 11/1/2018 00:43

Did not get the impression cash was an issue with just under £5M in bank and suggestion that cash generation was getting close as EUS increases.

[lentjes] 10/1/2018 23:18

also we've gone big in Japan but in Korea next door we haven't even scratched the surface !

If ever there was a hint !

[lentjes] 10/1/2018 23:08

Amt

If you listen Raymondo states doubling EUS last year is amazing but he expects significant increase in EUS going forward

Only an observation

[lentjes] 10/1/2018 22:23

Yep very positive and thanks for the link

[amt] 10/1/2018 22:23

Interesting interview but he didnt mention expectation to double EUS if I heard correctly. He said expected to grow in due course and sounded like lots of opportunities ahead. Didnt give the impression that they are generating cash now but getting close.

[whichwaynow] 10/1/2018 21:25

Very positive interview by Ray Anderson on Proactive. Emphasises expectation for continued doubling of EUS. And emphasises 'EBITDA positive'.

hxxp://www.proactiveinvestors.co.uk/companies/stocktube/8601/bango-launches-carrier-billing-for-netflix-in-mexico-8601.html

[lentjes] 10/1/2018 18:26

A further point to note is that yes maybe we have had a spike caused by seasonal shopping much of which will have been virgin first timers with physical goods shopping via DCB but history shows once a subscriber has experienced the simplicity of DCB you can expect many repeat visits so all looks good for this year

[egrid1] 10/1/2018 16:52

Thanks Lentjes for that information on the cash.

[lentjes] 10/1/2018 16:18

The comfort I take is that if Bango did not think they were going to start raking in the cash anytime soon they would have taken advantage of the increased share price over the last 6 months and raised buckets of cash with a placing which they have chosen not to do.

My opinion

[slaccs] 10/1/2018 15:41

Lentjes - Agreed

[lentjes] 10/1/2018 14:48

Slaccs

Everybody to their own opinion, same goes for Google, Amazon, Samsung, Microsoft & Netflix not to mention nearly all the MNO's around the world

[slaccs] 10/1/2018 14:42

I personally, can not make head nor tail of this company. Too much smoke an mirrors and not enough hard facts, which is why I sold my entire holding the day of the update. Good luck to you all but I would not be surprised to see this company fail.

[lentjes] 10/1/2018 12:46

Egrid

The H1 cash burn was helped by the following statement contained in the H1 results

The stability of the Bango cash position was a result of improvements to the operating cash flow of £0.2m (1h2016: -£1.75m) in the half year, the receipt of £0.4m from HMRC for R&D tax credits and £0.5m from the exercise of share options. This strong cash position reaffirms the management expectations that Bango has sufficient cash to fund it through to net profitability, while continuing to invest in R&D.

The cash burn has improved although so did the EUS for the 6 months so it looks like the % margin has dropped which was also to be expected as per analyst forecast last February so this should be no surprise to the market (maybe to unwitting PIs)

From my view the results demonstrate great progress for Bango

[gsbmba99] 10/1/2018 11:18

It would be helpful if Bango would clarify what the payment arrangements look like for physical goods. My concern is there has to be a risk that sales of physical products yield a significantly lower proportion of EUS to Bango than sales of virtual products and that revenue could grow at a much lower rate than EUS. Bangos goal of 2% revenue from EUS is based on sales of virtual products. The company's example suggests that the vendor gets 70% of EUS with the remaining 30% split between the store operator (13%), mobile operator (15%) and Bango (2%). For physical products, there's unlikely to be 30% of product cost to give away. Zooplus is a German company that is the largest European seller of animal care products. I think I'm right in saying that all of their sales are online. Their 9 mos numbers contain the following statement: "Total payment transaction expenses in the first nine months of 2017 totaled EUR 8.0 m compared to EUR 6.9 m in the same period of the prior year. As a result, the percentage of sales ratio remained at the prior year’s level of 1.0%." So, Zooplus pays 1%, on average, of EUS. I assume there are debit card, credit card and other types of transactions in there. Assume for a moment that the store operator (Zooplus) gets cut out of the revenue sharing arrangement but that it is otherwise consistent with sales of virtual products. That suggests that the mobile operator gets 88.2% of the revenue share (15%/15%+2%) and Bango gets 11.8% (2%/15%+2%). My question is: how do you get to 2% EUS if there's only, on average, 1% that gets paid away and Bango might only be entitled to a share of that?

[egrid1] 10/1/2018 10:05

"The lack of mention of positive EBITDA which they had got to at the beginning of November. Yes the point has been made that they said that already so why repeat it. For one thing that could have gone backwards with costs associated with new partners (doesn't make it bad new necessarily though) and for another, it's fine to have this as a throw away line in an RNS about something else, but it is certainly something I would expect to see mentioned in a TU."

That may well be true. Take a look at cash held at end of 2016, and at half year 2017 - a fall of 0.1m in H1 2017

Now at year end the fall is 0.9m for the year, so 0.8m for H2

I suspect that is due to increased costs with new hires and new partners. How long does the money take to come into the coffers of Bango, once the transaction has been made by the end user? Could the high expected volumes of December not yet be reflected in the cash figure?

[amt] 09/1/2018 23:37

Well if all is well and the share price goes up then good as I still have a significant amount. If it goes pear shape I have made 400% on the shares sold so thankyou Bango.

[whichwaynow] 09/1/2018 22:20

Compared to the H1 trading update, BGO provides exactly the same information. No mention of margin or EBITDA - they are obviously of interest, but we'll only be told in March. So there should be no surprises in what has been included in the TU.

The 'run rate' is volatile because of the way it is calculated, 300m at the last TU, 400m only 2 months later. It is not a figure to be trusted, total EUS are a better guide now that BGO is increasing in scale.

To me the TU is positive, though the reaction is no surprise given the run rate figure. Any further drop undoubtedly offers an opportunity to gain entry to a very good company.

[amt] 09/1/2018 20:19

Kazoom excellent post which is a very fair observation of the state of affairs.
I still have half my shares but have been tempted to sell out completely. There is doubt there now which I didnt have before. A slowdown in growth at this stage would be a big negative.

[kazoom] 09/1/2018 19:06

Not trying to create an arguement, just pointing some points up for people to consider and either dismiss, decide they don't apply to them or give consideration to.

It's very easy to fill in the gaps in a statement with what you want to think is the case and for me (with no position currently) these would be :

1. The lack of mention of positive EBITDA which they had got to at the beginning of November. Yes the point has been made that they said that already so why repeat it. For one thing that could have gone backwards with costs associated with new partners (doesn't make it bad new necessarily though) and for another, it's fine to have this as a throw away line in an RNS about something else, but it is certainly something I would expect to see mentioned in a TU.

2. In fact back in August they said that they were on track to generate "monthly operating profit at the end of 2017."
No mention of that, so I think we can assume that to be a miss.

3. Runrate EUS at the end of August of "over £400m", compared to "exceeded £400m" at the end of the new - implying no outturn growth in the last 4 months. It looks to me as though people are deluding themselves with some of the observations on this :

> Certainly £450 would fit in the definition of "exceeded £400m" but if it was at or close to £450m they would have said so.

> Now they have a more seasonable business, "run rate" is a less useful measure so they are steering away from it - No, no, no they are not - if they were steering away from using run rate then they would not have quoted that figure.

> As December is the seasonal high it would give an unrealistic expectation if they quoted run rate as December x 12. If that is the case then what exactly is the £400m+ they cite? The fact is that even if it your first time dealing with seasonality, it is not that hard to separate the underyling and seasonal elements - "run rate" then becomes underlying x 12 + seasonal peak - it's not rocket science. (In fact on this basis, and it is not the argument I was trying to forward, an unchanged run rate despite having achieved a first seasonal peak - not therefore in the August number - is pretty negative.

4. When mf refers to a possible "margin squeeze" - I don't think that's quite the right terminology (we're talking about how much on the total sales price - not BGO turnover - they can demand). Certainly there is some risk to that in the longer term and the lack of mention of profitability just creates the doubt of that biting already.

In any case this has always been a known and if you look at the markets they are addressing, I don't see it as being a near term risk.

For me, I think that there is sufficient doubt over points 1-3 for it to be clear why market sentiment didn't transform on the back of this announcement.

You can dismiss the arguments if you like (and I agree they could be specious) but I think this is why rather than skyrocketing on the fantastic Netflix news the shareprice has fallen c. 10%.

If the story remains intact you just need a bit of patience and the truth will out. Some of you need to patient shareholders, I'm a patient potential shareholder.

Anyway, as I say, no wish to enter into an argument/slanging match on the subject - just providing food for thought!

[mad foetus] 09/1/2018 18:25

The issue is all about margin. Given that the EU has just introduced laws to prevent credit cards charging excess fees to make payments, I just wonder how resilient Bango's margins will be. And I also wonder whether the deals with Amazon and Netflix are profitable at all. Given that Amazon's profits are wafer thin I can't imagine them giving 1% to Bango for simply processing a payment. But who really knows?

[spawny100] 09/1/2018 17:52

Yes sure EUS and turnover are not precisely the same but, since the business is predicated on EUS, they are surely quite closely related and in absence of one the other can be used as an indicator of sorts? I.e revenue will surely scale fairly linearly with payment volume?

[mad foetus] 09/1/2018 17:33

I don't think you can describe processing payments as turnover. Turnover must mean how much people pay you for the service you provide. The problem with the update is that it said nothing about turnover.

[spawny100] 09/1/2018 17:27

No it was a fair point Simon. Chimers was implying a turnover equivalent to the EUS for Bango is exceptional for AIM. Bango may well prove to be a very successful company on AIM making millions of profit. It's profit rather than EUS the market wants. I agree it's an interesting company. I'm not in any way desperate....

[simonsaid1] 09/1/2018 16:45

You know people are getting desperate when they resort to putting down a share using pointless generalisations like that. What a vacuous little comment.

Bango have revenues rocketing yet a stable cost base. What does that say to you about where this is going?

This conversation has gotten very puerile.