D4t4 Solutions Share Discussion Threads

[trident5] 02/12/2020 10:53

I think the issue is more that they seem to be rolling existing contracts into the SaaS model and referencing them as new contact wins whilst not winning new contracts.

[tightfist] 02/12/2020 09:21

I haven't followed D4t4 over the medium term to sense whether PK is prone to BS, or if the changing nature of the business and its individual customer relationships is genuinely difficult to describe..Hence my question! tightfist

[tightfist] 02/12/2020 08:47

I am not usually sceptical but it is notable (particularly this morning) how many different adjectives they use to describe the same contracts acquisition. Trying to sense realgrowth (both share-of-wallet with existing [sticky?] customers and new customers) seems challenging. Is there a genuine issue as they progressively transition to SaaS? Or are they being opaque?. Thoughts? tightfist

[chezt] 02/12/2020 07:51

I note Peter Kear is stressing a VERY strong finish to the year now, bodes well!

[trident5] 02/12/2020 07:31

Good news (unless you're wary of the bounce) - but describing them as new contracts wins seems a little misleading.
Also - judging by the share price over the last couple of days - leaky?

[deanowls] 02/12/2020 07:29

Another 3.5m in the bag and a strong finish expected. With the recurring revenue where does that put us against last year?

[trident5] 27/11/2020 12:23

1/2p - isn't it you who should be wary of the bounce?

[halfpenny] 27/11/2020 11:53

Be aware of a Dead cat Bounce. Brokers always over value and under deliver as i see support £1.80 being tested after a DCB...Risky

[amt] 26/11/2020 07:14

Great analysis.
Seems fairly valued providing strong future growth continues.
I suspect the market won't like year end results when they come in comparison to prior year though.

[mauricemonkey] 25/11/2020 22:30

Yeah, they need to pick one measure of revenue - either annual. They should amortise the contract win value over the life of the contract so we can measure what is going on.
We could probably do we some stats about customer acquisition costs and expected lifetime value too but that might too much to ask for given where we are.

[gdjs100] 25/11/2020 16:45

House broker forecasts are for 21.7m revenue/6.6p EPS. Considering their history of being ultra conservative with guidance, and their current bullishness, I feel safe to say these should be used as a bare minimum.

[deanowls] 25/11/2020 16:31

That’s the rub isn’t it. They could be a bit clearer on the figures.

[adamb1978] 25/11/2020 16:09

So what are people's guesses for H2 revenue? Half of the £10m ARR (logically!) plus the £5.5m post period end contracts mentioned in the results, plus in H1 about half the revenue was non-recurring to assume the same in H2, so that's another £2.5m and gets you to £13m. Add a few more wins between now and 31 March.....so perhaps £15m in H2 and £20m for the year?

Therefore £20m revenue for the year @ 50% gross margin gives around £10m gross profit. Opex of perhaps £8m based on £3.8m in H1 gives £2m EBIT. Assume zero tax so EPS of around 4p.

But given where we are and the transition which they're on, I'd say that this year is less important and far more important is the growth which they can deliver to the top-line for next year. This is particularly important given that the business model transition is now a long way delivered so true growth needs to come through.

For that FY22 growth estimation, I'd love to know how much of those new contracts post period end and which are going to deliver £5.5m before March are recurring in nature. It would take their £10m ARR up materially and would be a game changer.

Any views on FY22 revenue?

[gdjs100] 25/11/2020 14:28

It does. It's just being masked by the transition to SaaS where multi-year lumpy licences are being replaced by annually recurring ones.

[eagle eye] 25/11/2020 13:58

amt,
The current PER is more than 20.

6.6p / 12 x 6 = 3.3p
8.0p / 12 x 6 = 4.0p

7.3p / 220p = 12 month rolling forward PER = x 30.1
In 6 months time the prospective PER will come down to 24 based on EPS of 8p in FY22.

D4T4 needs more top line revenue growth to justify the current rating IMHO.

[trident5] 25/11/2020 12:07

Eb: Just to be clear in the 1H no cash was generated, quite the reverse, the operating margin was negative as was the ROCE.

[energeticbacker] 25/11/2020 11:50

Investor's Champion comments that while it has taken a long time coming, D4T4 appears to have an extremely exciting future in a rapidly growing sector.

Although investor focus should remain on the top line growth and recurring revenue, there is already a lot to like about a business generating plenty of cash and an operating margin and return on equity of 20%+.

Updated commentary on their website.

[deanowls] 25/11/2020 08:57

Stop it halfpenny. You’re turning me on with that tone.

[halfpenny] 25/11/2020 08:52

D4T4 poor results and will test £1.80p support level. Risky not looking good..test support level...looks like many issues to come. RISKY!!

[trident5] 25/11/2020 08:42

AMT - it lost £1m, - so it's not being paid from the business done in the 1H.

[norbert colon] 25/11/2020 08:39

6.6p with 8p fc for 2021

[amt] 25/11/2020 08:36

Why dividend only raised 5% down from 10% last year. Plenty of cash so still caution there.
Any idea on what is expected for year in terms of EPS.

[vprt] 25/11/2020 08:14

With the (already known) covid-related signature delays they are gathering and recognising all license fee sales and renewals in H2 - they might as well skip H1 reporting... It used to look very seasonal & skewed, and now it is extremely so!

With credible and confident management, no debt and £12m cash, increased dividend, a valuable product used by a large & top notch customer base and plenty of leads in a hot market, this steady ship sails on. The full year should be fine, again...

[norbert colon] 25/11/2020 08:04

FinnCap note today as a nicely confident narrative re: FY expectations and growing demand from APAC region etc. Divi raised confirms mgt confidence. TP reiterated at 310p