D4t4 Solutions Share Discussion Threads

[revoman] 05/11/2020 08:29

Thanks AdamB. Your final line explains your negativity - you've sold, so you're upset...

[adamb1978] 05/11/2020 08:22

Nice headline announcement - will need to update my figures and think about how it changes the case.

My main concern from their announcement is that they talk about "adding" c£5.5 million to revenue during the current financial year however 3 of the 4 contracts are "extensions".

So I dont think its as simple as taking your expectations of revenue before and adding 5.5m.

It might be that those 3 are moving from the traditional software licensing model to the new model, or alternatively that the reason that they say that these are 'adding' £5.5m is that because they assumed they were going to terminate and therefore they've been re-signed and hence able to framed as 'extensions'

Good that they talk about confidence for H2 - would have been nice had that been framed in the context of market expectations so that it was clearer. I'm always sceptical about D4T4's market communication given that it used to be so opaque. I then previously bought in (holding my nose) before selling 2-3 months ago.

[dave2608] 05/11/2020 08:13

I've noticed this about D4t4. When they announce contract wins they annouce them in blocks.

[dave2608] 05/11/2020 08:08

"We are delighted with these contract successes; adding c£5.5 million to revenue during the current financial year they provide further confirmation of the strength of the business."

Not to be sneezed at.

[boadicea] 05/11/2020 07:47

Nice rns this morning which, if it explains yesterday's bounce, implies that the company is leaky. However, a return to recent highs is possibly on the cards.

I hope you capitalised on your recent insight, Filipe.

[boadicea] 04/11/2020 13:54

A good bounce this morning but it was from a lower low and we don't want too many of those. This share ticks most of the boxes for me, the exception being cash conversion which can arise from capitalised expenditure or aggresive revenue recognition which I need to check for.
Figures, due on 23rd, will give fresh evidence to analyse.

[fillipe] 28/10/2020 16:35

D4t4 - starting to look a bit on cheap side, my feelings ....at 177p to buy, today.

f

[gerihatrick] 27/10/2020 12:37

richjp...they have done a capital markets day presentation last week. It is available on their web site now. If you want a better understanding of the business it is worth watching. Investors Champion has also done a summary on it

[richjp] 27/10/2020 10:31

Well talk about irony.

I mentioned yesterday that I found out about D4t4 because of my holding in GHT. I then queried their the fact that roughly 50% of revenue comes via one client or channel.

Lo and behold GHT issued a very positive trading update this morning and revealed that almost 50% of their contracted revenue for 2021 will come via one channel.

Maybe it's a sign.

[richjp] 26/10/2020 17:44

gdjs, thank you for your reply.

Assuming you are correct it is more reassuring, however I still think it is bit of a concern as partnerships can go wrong. If that were to happen then hopefully with the SaaS model there will still be recurring revenues as long as their service is reasonably sticky.

It might be a question to ask when they next do an investor presentation.

[gdjs100] 26/10/2020 13:07

It's not a single customer, it's one of their partners, SAS I think in this case. There are a multitude of separate end customers hiding behind this one partner. There are also significant partnerships with Pega and Teradata.

[richjp] 26/10/2020 12:48

I am not a shareholder at present, but I started following the company recently because the chairman Peter Simmonds, in August also became the chairman of GHT where I have a significant holding. In fact I spotted another poster from GHT here recently.

I think there are similarities in the two companies profiles. The revenues are roughly similar, both are transitioning to an SaaS model and both have share prices that are currently somewhat unloved.

One concern I do have, which was mentioned on another board, is that about 50% of the revenue comes from one customer. If you go to page 84 of the last year end results, you will see that customer 1 as it is referred to, does indeed account for £11,357M. Does anyone know who the customer is and therefore how stable they are likely to be?

[ali47fish] 26/10/2020 09:06

26 oct 20-finncap note /cap markets-tp 310 very impreesed
Celebrating CelebrusThe group’s capital markets day presentation is now available online hereand we strongly recommend that investors take a look. It shows that D4t4Solutions enables its users to provide world-class customer experience through personalisation across a wide range of channels, in real time and while being ethically compliant in safeguarding privacy. Sold through major channel partners, the Celebrussoftware has a blue chip customer base stretching from banking and financial services to retail, travel and healthcare. Five key takeaways for us were: the confidence, experience and professionalism of the executive team; the excellence of Celebrus(CDP and CDM); D4t4’s close ties with enterprise-class channel partners; the increasingly global nature of its operations; and the quality of a client base being transitioned to a secure annual recurring business model.

[ali47fish] 25/10/2020 22:15

i have no idea why they diid'nt include them but they said in the course of the presentation if people leave their names, they will recieve individual replies!

[owenski] 25/10/2020 20:21

So what happened to the Q&A part. That's often a fairly insightful component of knowing the company.

[ali47fish] 25/10/2020 18:19

has anyone seen the presentation for the capita lmarket day-thouht it was impeccable style and content wise any opinions welcome!

hxxp://www.d4t4solutions.com/company-information/investor-relations/capital-markets-day-2020/

[amt] 22/10/2020 08:54

Boozey. I think you must be looking at a different company. D4t4 was 70p 5 years ago at an average price, now its 2 quid. It was 10p in 2002. If that's sideways movement then your expectation is much higher than mine. You could say that about the ft index over the last 20 years but not D4T4

[boozey] 21/10/2020 21:57

Have been in this stock with a small holding in the bottom drawer since the ISL dinosaur era. It once went past £12 in the dotcom boom I recall, but otherwise has gone more or less sideways for the past 20 years. So not a stock to hold for capital growth, nor indeed for a good dividend yield. It has been managed like a lifestyle business rather than one that is progressive and driving shareholder value. But we are where we are. D4T4 was founded by Lythall and Kear in the early 1980s. They came from a car distribution background at Lex Service (taken over by the RAC in the late 1990s from memory). But they are 72 and 65 respectively, and lack real drive. So given their age and the fact that D4T4 has some fantastic capability (with new enhancements), I wonder if they are considering an exit strategy. Given history this is probably a better reason to hold for realising shareholder value than growth prospects which in themselves, and as debated on this excellent thread today, are unlikely to set the world alight especially given the track record.

[rp19] 21/10/2020 18:52

Snippets from the fincap note - "Of the £16.6m required in H2 to hit FY expectations and match FY 2020, we calculate c.£8m is already secured leaving less than £9m needed from new business and a substantial tranche of this is in negotiation, with contracts to be signed in Q3... Sales of £16.6m in H2 2021 would see a H1/H2 split of 23/77, very similar to the 24/76 delivered in meeting FY 2018 forecasts".

Will be looking out for new contract RNS' over the next few months to meet what looks like a tall order. I hold, like the company and the area they operate in, particularly with winning business in new sectors (large addressable market). However, I think in the short term there is likely be an opportunity to buy cheaper.

[energeticbacker] 21/10/2020 16:21

According to Investor's Champion yhe growth potential of D4T4 seems considerable as it expands around the world adding new technology and service partners. Their updated research highlights the appeal.

[geraldus] 21/10/2020 16:07

If their solution is as good as they say I am surprised there is nobody sniffing around.Companies in this sector being bought on high valuations.

[valhamos] 21/10/2020 13:14

Agreed - value of perpetual contracts going back a few years would be very useful and help clear up a lot of uncertainty.

[mauricemonkey] 21/10/2020 13:06

Agreed, the reporting here is causing all kinds of confusions and misunderstandings.

We really need to know the run rates of the perpetual contracts over the last 3-4 years to see what the actual growth has been.

For example, really rough figures, don't shoot me.

£8m H1 20. If one third of that is assumed arr, that's ~£2.64m arr but £5.3m perpetual which would, assuming a 5 year contract amortise to roughly £3.64m arr (2.64 + (5.3/5 years)).

Now H1 20, we have £5.09 x 55% = £2.8m arr (6% increase) but, again assuming a 5 year contract that works to £3.2m arr (£2.8 + (2.29/5 years)) for just this year but over £4m if added to the assumed arr from H1 20 (£3.64M) which would be around 10% growth whilst missing a load of contracts that are deferring into H2.

It's just so opaque and difficult to work out what's going on with two measures of revenue being used side by side.

[valhamos] 21/10/2020 12:49

"26% to 55% is more than double." Yes but you cannot conclude that recurring revenue in absolute terms has doubled if total revenue is declining. Even after selling a few earlier I have a 5% portfolio stake but what I'm interested in is growth in the business - sales and profits - and I need more evidence than was provided by this update.

[gdjs100] 21/10/2020 12:43

6gr it is worth noting that new SaaS contracts are billed annually. They are still recurring, but billed once a year, and most of them fall into H2.I agree it would be better for them to recognise this revenue in a straight line over a 12 month period to smooth the H1/H2 split.