Bango Share Discussion Threads

[fitton] 27/5/2015 08:30

Buyers piling in this morning!!

[fitton] 21/5/2015 20:09

Its amazing, there's life in Bango yet. I wonder if the buying is on the back of the Microsoft news a couple of weeks ago. Maybe Microsoft are going to buy out Bango for there advanced technology.Either way, very likely to be some news on the way

[fitton] 12/3/2015 13:06

Just a an example of how the market can value internet and tech related stocks.The biggest investment failing of my life going back maybe 7-8 years.I bought 10,000 shares at 10p in a small internet clothes retailer called ASOS. After reading a bit of negative comment on the company I sold the shares at 11p. Just a after there results in August 2013 the shares were trading at an all time high of £72.00 valuing the company at about £6 Billion.The turnover at that stage was £769m and a pre tax profit of £54m.Its just an example of how some companies can be valued. If Bango can achieve an end user spend of £650m a few years down the line with a pre tax profit of say £10m. If the shares in issue are still only about 52m then it is feasible that you could be looking at a company valuation of in excess of £500m. It all wild guess work at the moment but you never know.

[hastings] 12/3/2015 12:04

I think the fact that the CEO has been pretty conclusive on no need for further funds, perhaps speaks a lot more as to where the business now sits and to future prospects.

[fitton] 12/3/2015 10:18

Had a look at Bango Grid this morning.Looks like an impressive addition piece of software.I would agree with comments about the level of end user spend required to break even.I think the critical point here is that Bango are creating a market leading position in a very competitive world.The very low margins keep the competition away and with only 52m shares in issue and only about 25% in private hands the potential upside is very good.

[amt] 11/3/2015 19:29

Well if they go positive in 2017 then perhaps a profit of 20 or 30m in 2020 is possible. share price of 5 to 10 quid by then. So high risk but upside enormous.

[mega_trader] 11/3/2015 15:13

So what their saying is effectively no competition! Mob spend going to increase yoy.

[aishah] 11/3/2015 13:46

Bango – testing shareholder patience a while longer?

A HotView after Bango’s interim results quoted a reader that “it’s always jam tomorrow with Bango”. He probably still needs to be patient as Bango has yet to deliver on the significant promise inherent in its business model and market position.

End User spend via Bango’s Direct Carrier Billing engine, a key metric for Bango increased by 62% in 2014, to £25.2m. Gross profit on end-user spend grew 71% to £0.6m with a small increase in Bango’s margin to 2.4%.

“Conventional” revenue fell 42% to £5.1m with a dramatic shift from principal to agency business and the deferral of revenue as Bango moved to a transaction-based model from taking a significant portion up-front revenue on user activations (similar to Monitise and Proxama). Pre-tax losses increased by 10% to £5.4m.

However, Bango seems to have cornered the market for Direct Carrier Billing (where payment for digital content is collected by MNOs through the subscriber’s bill) and all major App Stores (with the notable exception of Apple’s) are connected to Bango’s network. Bango has 30 new MNO activations scheduled for 2015 and a much larger pipeline of opportunities. Spend through Bango’s platform in 2015 will benefit from the significant increase in connected subscriber numbers made in 2014. Management, backed by Bango’s Analytics capability, predicts a 100%+ increase in end-user spend in 2015. With tight cost control and infrastructure which should not require much additional spend until volumes rise massively, this should result in improved margins.

So the direction is positive and Bango’s competitive position is strong in a growing market. Brokers are forecasting improved EBITDA, turning positive in 2017, after assuming near 100% growth in spend for the next two years. When the share responds to such positive expectations is difficult to estimate.

[eezymunny] 11/3/2015 13:41

Sounds about right hastings. 3 years of 100% end user spend growth from here should nudge them into profit. Suspect a tough target and perhaps one more fundraise needed but perhaps one to tuck away for a few years.

[fitton] 11/3/2015 13:35

The current processing system has been tested to handle transactions up to £650m in transaction value. With end user spend up to the end of 2014 at £26m it does seem a way off.I guess the company would also be looking at transactions outside the app stores etc over the next few years also.

[hastings] 11/3/2015 13:32

Break even in 2017 according to the Broker note yesterday and plenty of news to come through this year according to the CEO.http://m.cambridge-news.co.uk/Bango-8217-s-end-year-results-reveal-end-user/story-26146826-detail/story.html

[eezymunny] 11/3/2015 13:23

Indeed fitton - I'm sure they couldn't expect to charge much more. Just trying to get a handle of the prospects v valuation. If revenues increased by 100% for the next four years gm would be c. £13m and profits c. £8m. The share price presumably would be a multiple of current (£4+?).

ONly time will tell if they can do those sorts of numbers.

[fitton] 11/3/2015 13:14

The very low operating margin is the key to success.This makes it much less likely
that Google,Samsung etc will decide to process there own transactions.Thus adding significant value to the company in the long term.Its every companies dream to add large increases in turnover without large increases in operating costs.

[eezymunny] 11/3/2015 13:11

Looks like they are charging ave 2.5% of end user spend. So to get to £5m gm for breakeven(ish) need end user spend of £200m vs target £65m target this year. So would need to double again in 2016 and then double again 2017 to start making some money. After that a wonderful cash cow...if they get there?!

[eezymunny] 11/3/2015 13:06

Sorry it's not as good as that. Gross margin on end user spend was only 600k vs total gm of £1.3m (not sure what else is included - activation fees of some sort?).

They will need a couple of years of very high growth before profitable. Nevertheless, as I say, interesting.

[eezymunny] 11/3/2015 13:00

With due respect if gross margin% is same going forwards as 2014 then 2015 gross margin on £65m user spend would be c. £3.3m. With cost base fairly fixed at £5m they would still be loss-making this year, BGO quite interesting tho if these revenues keep ramping at these rates.

[fitton] 11/3/2015 12:47

I would now expect the Bango share price to move up past the recent highs of about £1.40.All the main ground work has been completed over the last few years.Its now time to start reaping the rewards of superior technology and world class contracts that are in place and being developed.The very low margins were a concern to me but the size of the potential market is massive.By keeping the margins low they make it very difficult for anyone to jump on the band wagon.The company has been making a loss in the last few years but positioning themselves to allow for the break even point on the huge potential increase in turnover.Hopefully 2015 should see at least break even and 2016 into profit.

[hastings] 10/3/2015 10:59

Comment may also be of interest.

[fitton] 10/3/2015 08:40

Forward guidance at last.Very positive news.The results may be slow to sink in,but share price should make some real progress from here

[fitton] 13/2/2015 10:06

charlieejee. I agree with your post.However, due to the continued downward pressure I am making the assumption that some news is being leaked about turnover figures etc.The shares are now 45% lower than recent highs and over 20% below the recent fund raising.Either way for what should be a growth company its not looking very good at the moment

[hastings] 04/2/2015 12:34

Similar thoughts charliejeehttp://www.privatepunter.co.uk/Companies/another-cambridge-play-3-february-2015

[charlieej] 03/2/2015 13:15

Fitton, potential is not always reflected in short term price movements that is sentiment. This is a big punt but has the potential to be rise rapidly on good news.