Cyanconnode Share Discussion Threads

[derek ten bag] 19/12/2023 17:42

Yes, well. Anyone got any thoughts on those two late reported trades? Buys?

[tightfist] 19/12/2023 13:30

Hi MC; yes, the Maintenance revenue should ultimately be attractive, but (from my sums) is unlikely to be material until FY2029. .Not many PI's currently have the patience to wait until then - someone looking for annuity-style income, will have more foresight. Hence the buy-out valuations of Calisen and SMS?

[derek ten bag] 19/12/2023 13:03

I'm no expert, but I think the gross profit of £1.8m is more significant than is being given credit for this morning. The operating loss is driven, as far as I can see, by the expansion costs as we scale up the company to meet the expected increase in demand. There is an inevitable element of 'speculate to accumulate' involved. Once these 'bridgehead' costs are met the recurring revenue stream should be at much higher margin as I understand and as more installations become established the impact of these should start to kick in (may already have done so).

[bscuit] 19/12/2023 12:50

DPL is on tte ball. It is hard to see what is going to drive the share price up significantly. CC now a boring utility but worse one that doesn't pay a dividend. I am still in profit, but only because my core holding of 500K was @2p though subsequent purchases are well out of the money.

[inthetin] 19/12/2023 12:02

I'm amazed that the share price hasn't totally collapsed (yet). The only thing just about propping it up is the latest fundraise at 10p but even that's not a true reflection of what investors thought it was worth.

They thought that it was worth a punt at 7p (after EIS tax reducer), provided that there was a warrant chucked in for good measure.

7p by the end of the year?

'Exponentially' - that's a word that's been thrown around here for years and years.

[amt] 19/12/2023 11:55

Hi Inthetin. I only have peanuts invested at 10p so doubt I will loose much if you are correct. I haven't done a lot of research into it but it looks like once the fixed overhead base is covered profit will go up exponentially.
I doubt there will be much more of an increase in fixed overhead.

[major courtenay] 19/12/2023 11:47

Thoughts on the higher margin service aspect of the contracts?

[inthetin] 19/12/2023 11:23

Hi amt

I make it a 346% increase not 450% but, either way, 346% or 450% of eff all is still eff all.

JC & HP will never make money in India. They can turnover £16M, they can turnover £35M but they'll never make a profit - the Indians are way too canny for them.

[tightfist] 19/12/2023 11:15

A good post DPI, thanks. Similarly I think we should be given some FACTS on GM dilution for hardware supply/MENA. IIRC a statement last August that this factor was non-recurring......In fairness I recall a statement they were making good progress on leveraging purchasing volume at suppliers, so hopefully that will mitigate impact..Above all CC need to acquire volume......please!

[duckplaudits] 19/12/2023 10:54

no they were not. much to the chagrin of some/many private investor holders.

Tinker (above prev page) makes the most pertinent point I think. Gross profit margins have absolutely collapsed despite the very strong improvement in Indian shipments. The company suggests this as being largely down to lower margin non-India sales but one feels sure (?) CC has had to compromise on pricing to get the orders from these large Indian contractors.
A 31% gross margin for a subcontractor just is not enough.From memory CC doesn't manufacture. It also subcontracts so they are perhaps getting squeezed between their clients and suppliers. They are having to discount invoices but still carry a hefty receivables burden even after the post-period cash receipts. Tricky.
Feel free to correct me - this is not a large holding so I am often behind the curve.

[amt] 19/12/2023 10:48

Inthetim. Sorry that a 450% increase in turnover is as dull as dishwater.

[tightfist] 19/12/2023 10:46

Patience Estienne? The reiterated FY2024 guidance is IIRC £15.1m (and substantial forecast revenue growth in FY2025)

[tightfist] 19/12/2023 10:42

Not as far as I am aware, unless you were pre-registered; a poor show IMO

[inthetin] 19/12/2023 10:41

No.

The the warrants are a red herring anyway (IMO). No way will the share price at a level in 17 months that anyone will bother/feel safe to exercise them.

[v6syncro] 19/12/2023 10:36

Apologies if this has already been discussed, but just looking through the latest announcement today, there was a placing and subscription offer with warrants at 15p.
Were normal shareholders entitled to participate in this offering?

[estienne] 19/12/2023 10:11

£31m market value on revenue of only £5.8m and operating loss of £2.2m. No wonder the shares are falling back. Doesn't look as though I'm going to recover my money in the near future

[tightfist] 19/12/2023 09:42

The ultra-high GM days are when Maintenance income will prevail, a long way into the future..In the meantime the CC Indian beach-head needs time to mature - the Generals and the Privates (aka IT Workers) have all landed.....

[inthetin] 19/12/2023 08:53

Remember JC's 95% GP days.

Cyan's 'business model' morphs into whatever shape the customer wants, regardless of whether or not any money can be made. It will implode one of these days.

Zeus are busily counting chickens as usual. Not very convincing.

[tinker10] 19/12/2023 08:40

Assuming the same gross margin and no increase in operating costs, they would have needed c. £12.7m revenue just to break even - an increase of 120%.

Unfortunately gross margin has fallen from 49% to 31% since the last H1 results and operating costs have increased. Lots of assumptions required to extrapolate further, but likely that revenues of closer to £15m would have been required to get into the black.

[inthetin] 19/12/2023 08:30

I didn't even read the RNS until it was the last one left in my inbox, knowing that it would be something boring.

Results are as expected - i.e. as dull as dishwater.

The market is unimpressed as am I. I honestly believe that we are trading without a clear business model. I'm not sure that they actually know how to make money business-wise. We've got loads of employees but nobody with any entrepreneurial flair.

The company is going to be skint again in no time, regardless of orders.

Hopeless.

[tightfist] 19/12/2023 08:06

Recall the concept of "eco-partners", which is alive and kicking, as far as I am concerned. The expensive leaders are in place and networking the extending range of Indian smart meters must be maturing. .Looks like operating leverage is CC strong suit - we just need those AMISP contracts......

[molatovkid] 19/12/2023 07:33

Yes, pike you are not so stupid. They do say 'The increase in operating costs was largely due to increased headcount to meet the growth of the business.'

So I agree with you, volume is all important given the largely fixed staff costs. However, will they need to keep increasing staff costs as demand grows or do the economies of scale you mention eventually kick in? Essential they do I would say.

[stupidboypike] 19/12/2023 07:30

molatovkid, this is a volume business, a lot of costs are fixed but do not increase as orders increase. If we get a decent % win of the huge Indian smart meter rollout this will come good. Let's hope we do. Best regards SBP

[molatovkid] 19/12/2023 07:27

Shipped 503,000 modules in H1 2024. Made an operating loss of £2.2m. Losing £4.37 per unit shipped. Great business.

Had high hopes for this with the contracts they were winning but looking a little dubious.

[skinny] 19/12/2023 07:02

We can confirm that revenue is expected to meet market expectations and look forward to updating on further progress in due course."

Financial Highlights

-- Revenue of GBP5.8m (H1 FY 2023: GBP1.3m) which is in line with management's expectations
-- Gross profit of GBP1.8m (H1 FY 2023: GBP0.7m)
-- Operating loss of GBP2.2m (H1 FY 2023: GBP2.4m)
-- Cash received from customers of GBP7.4m (H1 FY 2023: GBP4.5m)
-- Cash and cash equivalents at end of period GBP0.9m (FY 2023: GBP4.1m)

more.....