D4t4 Solutions Share Discussion Threads

[trident5] 24/1/2020 15:44

I wouldn't read too much into these awards.

I remember attending one function where the same organisation pretty much won or was placed in each category with much whooping and back slapping. But given the resource required to submit for an award it was only rational to conclude that they didn't have enough to do and their stakeholders would have been better served if they had instead let a few people go.

Games Workshop won "small company of the year" award a few years ago - and declined to pick it up as they were too busy working for their shareholders. Now that was a Buy signal.

[dave2608] 24/1/2020 14:23

Rated 2 places higher than Kainos Group which trades on an historic p/e of 61.

[trident5] 24/1/2020 08:41

NC - was it their turn?

[norbert colon] 24/1/2020 08:07

D4T4 wins best performing Company (IT Consulting) at the Megabuyte awards last night:http://megabuyte-awards.com/quoted-25/winning-companies

[nitbhav06] 16/1/2020 08:17

Oh and Celebrus is getting better every year. My biggest concern (raised a few times) with d4t4 is that they will be acquired. Just look at the margins they are operating on and cash reserves will increase yoy. I hope this doesn't happen. Gl atb.

[nitbhav06] 16/1/2020 08:14

Several reasons:- Data analytics market growth rate (refer to annual report)- Potential influx of new customers moving Celebrus platform- couple of acquisitions resulting in access to new revenue streams- US, EU, UK market opportunities. Much more emphasis on retail customers who have a plethora of customers. - To get to a market cap of billion we only need profits of 40m assuming p/e of 25 (conservative). I think we will easily do that in 10 years (maybe even sooner). All imo please dyor. I'm super bullish over the long term on D4t4. I'm not saying revenues and profit will be up yoy but I do see a huge uplift in revenues as organisations have more sophisticated data platforms.

[alotto] 16/1/2020 05:46

Nitbhav06, how did you work out the figure of 1.5B market cap?

[tudes100] 16/1/2020 02:26

Couldn't agree more Nitb, Co's growth over last 10 yrs has been spectacular. Shareholder equity (NAV) has grown 7x, 10 yr EPS CAGR over 20%. Will definitely be bumps in the road but if you can be patient think that the potential for future growth is extremely strong. If you are after a 6 mth return then this probably isn't the share for you.

[nitbhav06] 15/1/2020 08:13

I think a lot of people are thinking too short term with D4t4. I'm looking at a 10 year horizon at which point, I think they'll be a £1-1.5bn market cap company. The market opportunity for data analytics in the long term is outstanding (per last annual report). If D4t4 can make acquisitions in the interim, this horizon could be 5 years.

[trident5] 14/1/2020 21:47

Thanks SST - but we all got that several hours ago

[valhamos] 14/1/2020 17:58

That we are being readied for a downgrade as Rivaldo alleges runs counter to the optimism in today's RNS - as dave2608 highlights "We look forward to providing further updates as the year progresses" - also the comment from the RNS " These wins evidence strong trading in the final months of the financial year and bear out the Board's confidence at the interim stage in D4T4's significant pipeline of new business opportunities with new and existing clients alike."

And if Finncap are preparing the ground for a downgrade then the reassuring comment I quoted previously in today's note is hardly the right way to go about it - ("These contracts represent strong trading through H2 and should greatly reassure any investors nervous of the notable H2-weighting seen in the Interims.") So in one sentence we being reassured then in the next we are getting ready for a downgrade!

[vprt] 14/1/2020 17:03

Rivaldo: You are being a bit sloppy when you say "Finncap would seem to be readying the market for a downgrade, however small or large":

Yes, the revenue and earnings numbers for the next couple of years are likely to come down if D4T4 do more of their business on a SaaS basis - but that is NOT the same as a "downgrade" - as it does NOT follow automatically that the target price, the recommendation and most importantly the underlying value of the company goes down in this case! Only simplistic fools who do not understand value creation and software would apply an unchanged lowish P/E multiple to this (temporarily reduced) earnings stream. Have a look at how some pure play SaaS companies trade vs. old school lumpy software. I expect the numbers to go down (at least relative to what they would have been with a fully lumpy model) and the rating and overall valuation to go UP.

If customers can be retained long term (low churn) and the SaaS pricing level is OK, layer upon layer of high margin revenues build over time, increasing long term value by getting paid continuously by the entire (SaaS) installed base - beautiful!

[dave2608] 14/1/2020 16:05

Today's RNS fills me with so much optimism.


Interesting comment from Peter Kear "We look forward to providing further updates as the year progresses." There's no ifs, buts or maybes. We are to be provided with further updates. To me the strong pipeline looks like it's being converted to contracts albeit a SAAS/perpetual licence model.

Newly won contracts comprise:
· A new multi-year contract for our Celebrus data collection software with a major UK high street bank.
· An extension of a contract with a major US bank using our Celebrus data collection software.
· A capacity extension and a new data collection channel contract for our Celebrus data collection software with a major financial services customer in the US.

What's worth noting here is the last 2. Am I right in my thinking that currently D4t4's products sold into the U.S. will be subject to tariffs and that post-Brexit and a trade deal secured with the U.S. tariffs will be removed? If so this will make D4t4's product offering even more compelling.

[rivaldo] 14/1/2020 15:20

Completely agreed about the long-term shift to higher quality earnings.

Finncap say straightforwardly that the trade in short term results for that long term quality might require then to "adjust expectations". Which shouldn't be a surprise to any investor in tech companies undertaking this well-known shift to the right in earnings terms.

So whilst a very, very good H2 with less SaaS contracts is possible, Finncap would seem to be readying the market for a downgrade, however small or large.

[valhamos] 14/1/2020 14:36

Absolutely agree and higher quality of earnings will lead to a higher rating. And it is worth pointing out we got the caveat from Finncap extract but not the full quote.

Finncap state just before the caveat "These contracts represent strong trading through H2 and should greatly reassure any investors nervous of the notable H2-weighting seen in the Interims. Management has confidence in a strong pipeline with new and existing clients, and this is being converted to meet forecasts; D4T4 is building a track record of delivering on its H2-weighting."

Their caveat is nothing new and it was there in their 25 November note (and as recent as that date D4T4 were confident in meeting expectations for the year). So it is somewhat mischievous to suggest "So it looks like a downgrade is coming to the forecasts"

[alotto] 14/1/2020 12:46

Tradeing short-term results for greater long term security and quality of earnings sounds like a positive...

[rivaldo] 14/1/2020 11:34

Been keeping an eye on this for ages, but never bought.

It's worth noting Finncap's update this morning. They note the H2 contract wins, but state:

"We caveat this by highlighting a shift to SaaS contracts which might require us to
adjust expectations as the company trades short-term results for greater long
term security and quality of earnings."

They conclude by saying that they may need to adjust to the shift in SaaS later this quarter. So it looks like a downgrade is coming to the forecasts of 14.2p EPS this year and 14.7p EPS next year.

I'll keep the company on my watch list as I do like Celebrus, but won't be investing until at least the revised forecasts are out, given that these may leave D4T4 on a P/E of say 18-20 with minimal forecast year on year EPS growth.

[revoman] 14/1/2020 10:10

Director buys coming?

[ssahoy18] 14/1/2020 09:48

looks good.. just need to break out of the habit of big contracts and year end being needed to make numbers. market will give a better rating when thats no longer the case

[its the oxman] 14/1/2020 08:18

Strong trading underpins forecasts. Scope for a nice bounce and suggests more deals in the pipeline.

[nimbo1] 14/1/2020 07:23

only one contract win is from a new client though - that's disappointing to me personally.

[amt] 14/1/2020 07:21

Plenty of new contract wins there. Surely worth 3 quid plus now.

[napoleon 14th] 13/1/2020 11:05

Keeping mu EYE on it, which is what I prefer for now....

[alotto] 09/1/2020 12:12

FY results in June. It seems struggling to retrace to the levels on the pre-HY reporting date. No many news out there either. Frustrating