Hmm, is this further share price weakness just the AIM IHT depression or something more? |
Google; A technology play for the digital era Simon Thompson |
@wad with irregular contracts and the illiquidity, timing difficult and I have concluded pointlesss. It is all about the direction of travel, ensurung quality of tthe offering and visibility on avoiding the need further capital.
Any chance you could summarise ST's reasons for liking it ? |
Simon Thompson tipping in IC this week at 20.5p , pointing out that it forecasting to stop burning cash by Jan 26 and then will finally make some money in FY27.
Then it will seem cheap.
Mind you , he was also tipping it in March and dropped 10% since then. |
Total shares traded today....zero! Not noticed that before. |
New contract RNS for recurring £250k. Maybe CKT is going to fly after all.... |
Yesterday's news was the abandonment of the Crimson Tide attempted takeover. Today's news is that HMRC has accepted that a previous VAT reclaim was valid. Must confess hadn't noticed that possibility in the Annual Report. Hopefully the latter will pay for the former? |
I see I missed a contract win last week. Not huge but might buy some new windscreen wipers for the company's cars...
The Group announces a significant expansion with Octaphama Plasma in the United States worth c.£718,000 over three years. |
There is clear rationale for this takeover with likely £3m+ of central costs, listing costs and synergies that CKT would benefit from. Arguably this would accelerate CKT to cash neutrality in the year. There are, however, 2 substantial risks:
1) Very weak management with no track record of delivery
2) Somewhat related, high execution risk.
CKT has spent c£10m on acqusitions in the last few years and burned through an additional c£20m+ of cash. All for a market cap of £25m which will take into account the £8-9m of cash on the BS.
I expect £2.50 all cash would be the minimum level acceptable to TIDE. Why TIDE investors would be excited by a potential 10-11:1 share exchange is a question to ponder. |
 I see that TIDE statement gives a different version of events leading up to yesterdays RNS, but bottom line is NO THANKS.
"The Board confirms that only one formal written proposal has been made by Checkit in relation to a possible combination of the two businesses with a number of informal proposals also made. The Board has engaged with all serious and considered proposals and objects strongly to the suggestion that they have refused to do so. The Board are disappointed that the Announcement was made without any prior notification to the Board or Crimson Tide's advisers.
A written indicative proposal was received by the Board from Checkit on 12 January 2024 (the "January 2024 Proposal") which set out a possible all-share merger of the two companies at a price that implied a minimal premium to the then Crimson Tide share price, together with an expectation that Checkit directors should represent a majority of the enlarged board. The Board noted the potential commercial and strategic logic to such a combination but considered that the terms of this proposal were neither adequate nor attractive. This conclusion was supported by those directors of Crimson Tide and their connected parties who were shareholders (holding in aggregate approximately 11.0 per cent of the Company's total voting rights).
No revised proposals capable of consideration by the Board have been received until the Announcement. In the absence of any substantive or improved proposal which addressed the Board's previous response, the Board did not engage with Checkit in April 2024.
The Board notes that the headline terms set out in the Announcement do not represent a material improvement in the terms previously proposed and therefore the Board continues to believe that the Possible Offer significantly undervalues the Company and its prospects and does not address the wider concerns raised by the Board (including as to governance and management of the enlarged group)." |
So an attempted takeover of Crimson Tide has been rejected. The drop in CKT share price is not surprising as either nothing will happen and cost of the bid is wasted, or a higher offer follows. As it is an all-share offer, hardly surprising that TIDE would rather do their own thing than gamble with a CKT holding. |
Some buys this am have taken the share price to a 6 month high ; maybe there is hope... |
Keith Daley bought another 200k shares just after the results making 600k in the last 2 months, though small fry as he has about 20 Million. However it is the first time he has bought any for almost 3 yrs .
He presumably does not think he is going to lose the lot. Mind you that buy in 2021 was 6 million that he paid 46p each for , so you could argue that he is not a good judge of future share price performance. |
IC article today by ST positive FWIW, pointing out that Edison reckons loss will fall to 2.3M this year then 0.9M next year and profit the year after. They think the rising market stateside and the source of data for AI by their monitors will be its saviour.
Mind you they also said BUY last year and has fallen from 26p to 23p since then.
CKT to me appears to be an airliner that is losing height and will crash unless it mends its engine in time. Will it avoid that and soar to the heavens or turn into a fireball and burn our money? |
And jam pushed out another year (per xxx’s point). A further year out before EBITDA neutrality. |
xxx
The words paint a picture that the cash flow doesn’t support. To pick up on your point: inflation peaked at >10% growth, so net rev 6% growth on the assumption pricing was increased to compensate. No mention of new customer contribution but Kyte referenced 300k on previous investor call.
Now the cash flow… the burn was £6.6m vs £8.6m last year BUT benefited from additional £0.4m interest with increased £0.2m of capitalised R&D. The interest will significantly reduce this year as cash burns down so growth would have to ramp up significantly this year (30%+?) to have a hope of not requiring further funding next year or year after.
More alarming for shareholders is the cash burn is INCREASING. Cash burn in H1 £2.8m (£15.6m to £12.8m); cash burn H2 £3.8m (£12.8m to £9m). An extra £1m. Presumably a large chunk of that £1m relates to bonus payments for the stellar performance. Quack quack. |
To my mind the results are disappointing. They have pushed breakeven out a year and ARR growth of 16% is disappointing bearing in mind the rate of inflation.
This change in the forecast has come in the last 6 months , so implies decelerating growth.
The market values the company lowly relative to the sector and perhaps they sniffed this out.
KK's repriced options in the last 2 months point to greed over competence.
I will vote against all motions at the AGM. |
Trev
You seem to completely have overlooked that the continual investment in new product development has, and continues to, deliver nothing. A pivot towards cash generation is welcome but this needs to come through the conversion of new customers. In an era of low productivity, rampant wage inflation, significant workforce shortages etc, this business has failed on every metric. This should not be a difficult business environment for competent management with the technology they've inherited. As a longer term holder, having canvassed the views of larger shareholders, i have a contrary perspective. The vultures are circling and the Kyte, rather than blowing high in the sky, is a lame duck. Quack quack. |
KK has been with CKT barely 3 years, 3 months less than that as CEO. The business model had to change from the previous no-holds-barred expenditure on everything in the free money era (largely before his time) to something that assumed no support from the capital markets. This has reduced the new product development activity temporarily (no bad thing really) and focussed sales activity on existing customers (the expand bit of "Land and expand") where sales cycles are probably shorter and business development costs lower, again no bad thing really.
I am a small shareholder sitting on a paper loss (bought at average 40p) and hoping to buy some more a little lower down. I am relatively happy with progress in the past 3 years during a particularly difficult business environment.
However, I am neutral on KK, whereas Porous Lover appears to have an axe to grind in that direction. Are you a casualty of the company's need to move towards a more sustainable model? |
Yes it does rather smack of desperation. Bit like saying a customer has renewed his library books. |
It is a sad state of affairs when additional aggregated contracts with existing customers (presumably BP and Compass) worth £139k per year are deemed RNS worthy.
Results due soon. No doubt full of shyte Kyte will have been richly rewarded for his continuing failure. Interesting that he is yet to put shareholders money where his mouth is and buy a material amount of stock. |
I think one needs to reflect on the context here. In an era of low productivity, high attrition of low paid workers and high wage inflation, a business that presents itself as solving these crises should be flourishing. Instead we have had forecast slashed, management waxing lyrical for achieving these slashed forecasts, very limited new customer growth (c£300k last year for a £4-5m+ sales/marketing and product spend), a 2/3rds reduction in share price and massively repriced options to reward this failure. If it isn’t the CEO’s fault, then to whom should the finger of blame be pointed? This was a business with potential before Kyte began to spout his rhetorical shyte. |
I don't think the CEO can be blamed for the end of the "free money" era, which had allowed the valuation to rise to unsustainable levels and had to return to something more realistic. In fact, it's hard to criticise the execution of the business plan IMO. |
Not too concerned about the new grant of options, but am surprised that he surrendered the previous ones with an exercise price of 55.5p, when he had until Feb 2031 for the shares to get above that price. Maybe there was some tax benefit? |
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