Earthport Share Discussion Threads

[madmonkflin] 02/2/2017 12:54

The last news note where they started off talking about Bank of America new business and then halfway through India somehow came into the conversation. Copy paste error.

[silkstag] 02/2/2017 11:13

The promises the ceo broke in 2010-14 were repeated in 2015-17 and broken again. Brigadier Breakeven knows lying about breakeven gets him the support he needs.
Adding loss making revenue puffs up the top line but reduces not increases value.
EPO seems to be dishonest and flawed.
Investors will get wiped out (>75% losses), again!
MANDATORY SELL
Al Imho. Dyor

[isaready] 02/2/2017 09:51

easy, don't bother.

Chads, I will take a more detailed look when I have a sec, but results if all go well, should be upwards of 30 million or maybe 33 million, depending how these new clients and existing ones ramp up their services. It's possible they could be 20% up on their projections, but, no point overstating it.

If, I say if that happens by year end, then its highly likely thy will break even later on this year, Q3 or Q4 on a monthly basis, so their earnings would eventually hit towards the 40 million plus for year ending 2018. I say this with a pinch of salt though, this is reliant on their clients to continue using their service ramping up, but also new clients coming on board too.

I think if they can get these longer-term clients, it will create a solid future where they become backbone, the network of corporate money transfers.

[easyhaveitdude] 01/2/2017 16:49

Chadders, baskets are full of rubbish normally.

[easyhaveitdude] 01/2/2017 16:49

SilkStag,

The drink was waiting. No problems, but all I am highlighting is, yes there could have been broken promises, I agree with that, but once the company changed strategy, as discussed in the public domain, invest more into Blockchain, removed non-strategic clients which the larger clients deemed not right for the companies profile, yes, then, when this happened, their revenue went down and the promise was broken.

However, what came in place of this was further investments to automate their model for future scalability. I am pretty certain, the investments they have made were in response to larger corporate clients needs and the vision of seeing $$$$ coming through their service.

All in all, fair enough that's how you feel, but it's not right to still tarnish the company in the same manner when you know and so do others know, they have been on a real journey, changed strategy for the better and now, are starting to see the fruits of this.

As I mentioned, do you think 7.8 billion in payments is a sign they have now business. You can't really keep going over old information and looking back. That was then, this is now. They are improving, you know that and one day, their investments no doubt will reduce to a different level. The suggestion that FX epo is generating revenue, well, so what if it was. This confirms the purchase of that business was a good fit, especially if it generics internal revenue while transacting for clients. Reduce the supply chain and more is yours.

I think turnover being up is good. It's a sign of a business growing. The fact its not closer to breakeven, well, lets just wait and see. If its close, but not hit, so what. Why dos it matter. Invest today and get returns tomorrow.

Misleading the market with false expectations is ones interpretation don't you agree. You see it as X and I see it as Y. We could be both wrong, right, who knows. That's why there are laws, these laws can be tested because even in the eye of the law, the interpretation of one could be wrong, but they think its right. So for you, they are wrong, OK, but you may be wrong. Personally, if you think it's so black and white, why have you not reported these filthy directors who are mugging everyone? Have you? and what was the response?

Was it Ok to buy at 11p? and sell at 27p?

If you change your mind on the drink, send me a message, life is too short.

[isaready] 01/2/2017 16:41

psychotic lol.

Chadders, looking good, I would though like to look into the accounts, have you on costs and where they are being applied. I am just interested in why say they need to earn 33 million before they make a profit.

It may be they have in this instance, invested a lot of money into projects for longer term return, though normally, clients, serious ones would pay some service fees upfront rather than having the client take all the risk. We are talking 2 million a month if we use the old figures plus cash from reserves.

I am not doubting their future, but want to know more on this front.

[chadders] 01/2/2017 15:00

She's a basket case. Isa, you enjoying the ride as much as me?

Easy, misplaced sympathy my friend. It's bordering on psychotic.

Potential multi bagger, massive growth and running at breakeven in the next six months.

[chadders] 01/2/2017 09:53

Isa, we'll reasoned fella but the troll is just a troll so wasted effort my friend. Unfortunately the constant scaremongering does have a negative effect. The mandatory sell shout since this was 11p has meant a missed opportunity for those with a half empty mentality.

Imagine the share price action when this hits break even and cash and profits start to ratchet.

It's a potential multi bagger from here.

Any sign of broker notes yet? The impressive growth could trigger upgrades.

[isaready] 01/2/2017 09:05

Looking good.

[silkstag] 31/1/2017 19:39

However much turnover grows, EPO losses and cash in the bin stay the same or worsen from 2010-17. That points to operational flaws and profligacy.
Management and directors keep resigning. Something is not right about EPO. Something insiders seem to know about.
When will they admit no breakeven in fy17?
All IMHO. Dyor

[chadders] 31/1/2017 15:14

Q1,2017 transactions 2.3 million, Q2,2017 transactions 2.7 million a 17% increase in a single quarter that ended with a record December.

The power of scale. Watch this space.

[chadders] 31/1/2017 15:04

Isa, the only financial numbers regarding cash are FY2016 £14.4m plus £700k from escrow which has been pointed out. FY2017 expected to be £11.4m ie cash depleted by £3.7m in the six month period. Now if sales stagnated and the current level of costs and discretionary spend remained the same EPO would have enough cash for 18 months. Fortunately sales are rapidly increasing which adds in piles of margin at 70%. QED no cash call other than maybe an acquisition.

Epo now vulnerable to an unwanted takeover. That's all I'm concerned about.

[isaready] 31/1/2017 14:36

Earthport (LON:EPO) 23.25p £113.4m

HY Dec17 trading update from the payment network for cross-border payments. Revenues expected to be approximately £14.3m, an increase of 35%. Transactional revenues comprised more than 95% of total revenue. Gross margin at approximately 70%. Cash balance at period end was approximately £11.4m. Payment volume reached $7.8 billion, an increase of more than 96% from H1 FY16. FY Dec16E rev of £337.39m and PBT of £11.1m.

Though I'd love 337.39 million turnover it's a typo.

[isaready] 31/1/2017 12:30

Chads, thanks for this, Yes I understand what you are saying. I guess if they need to continue spending the 600K a month, so be it. If that means its consistent, i.e t run the business, so what, as you say, it's nothing. You will always need to spend and invest, I appreciate that

My other point was touching on the 15 million revenue plus 3.6 million they draw on. So my question is, where is the 18 million going. That's what I'd like to read more about. I do not doubt their potential one bit. I am more aligned to thinking they are now on the cusp of something big, but I'd like to understand what costs are fixed, what are not and are operational gearing to get there.

Is that right, 18 million has been spent, so they are earning, spending the money since they are drawing on their cash reserves.

[easyhaveitdude] 31/1/2017 12:29

homerdude is a true dude. Yes

[chadders] 31/1/2017 12:08

isa, don't confuse cash burn and strategic investment. The question you should be asking yourself is, if you strip out the Capex what level of business is required to breakeven. Capex is discretionary spend and once EPO are satisfied that they have invested enough in infrastructure that will stop.

In a rapidly growing business it is nonsense to say monthly cash burn is £600K. It averaged out at £600k which means it may have been £750K in month 1 and it may be £300K in month 6.

From memory, in 2016 they spent close on £300k a month in the infrastructure. This could be an indicator of the current level of discretionary spend.

easyhaveitdude (any relation to homerdude?), I expect them to be cash breakeven by the end of 2017 as Hank has quite clearly stated (sometime H2 2017). That doesn't mean breakeven for FY2017 but I reckon the rapid increase in business is ahead of expectations expressed April 2016, so it's nailed on for me.

Looking forward is the secret here. Their margin is 70%, it's a volume business, business is growing at an unprecedented rate.........potential multi bagger from here.

[isaready] 31/1/2017 11:44

Chads, you are right, but I have been looking at the numbers and wondering, why are they needing 600K a month still when they are turning over 15 million in 6 months. This suggests they need to turn over 37 million to breakeven?

I may be wrong, its just a thought.

If they do need 37 million to break even, my question is, where are they spending 3 million a month on?

Either way, its looking great, better than ever and the work is only just starting. They need serious volume to make some serious money and with the last month a record month, its possible, they could hit above their expectations in this year.

They are on their way to becoming an automated clearing house.

[easyhaveitdude] 31/1/2017 11:39

SilkStag

95% increase in transactional revenue
Gross margin remained 70%, proves a scalable business
Cash Balance 11.4m
Transaction numbers 5 million, up 80%
December 2016 set a record month in the companies history.


All of this and all you can say, they are doomed. Sorry, you can't ignore the facts. December was a record month, January onwards will be record months, as revenue increases more and more.

This means they should earn at least 15 million during the next 6 months, so 30 million total revenue, which is their target, however, if they have had a record month, its possible the material change could be 20% more, so may be 18 million for the next 6 months, which suggests, the 600K a month reduction in their cash balance is no more.

It's possible they will be earning 3 million a month from now on, which suggests 33 million revenue, similar cash balance and road to recovery.

They may need 37 million to break even time will tell.
With all these postives, come on SilkStag, how can you see this as negetaive. Biggest transaction revenue in its history. This is huge.


-- Revenues expected to be approximately GBP14.3 million (H1 FY16: GBP10.6 million), an increase of 35%

-- Transactional revenues comprised more than 95% of total revenue
-- Gross margin at approximately 70%
-- Cash balance at period end was approximately GBP11.4 million
-- Number of transactions in the period increased to 5 million, an 80% increase from H1 FY16
o December 2016 set a record month for the number of transactions in the Company's history

-- Payment volume reached $7.8 billion, an increase of more than 96% from H1 FY16