Freeagent Hdg Share Discussion Threads

[n0rbie] 08/6/2017 15:42

In Shares mag today:

Solid start for FreeAgent
Micro business digital accounting firm building solid growth base
Thursday 08 Jun 2017 Author: Steven Frazer

FreeAgent (FREE:AIM) 110p

Loss to date: 5.2%

Original entry point: Buy at 116p, 16 February 2017

We largely knew what to expect from full year results to 31 March 2017, FreeAgent’s (FREE:AIM) first since its November 2016 IPO at 84p per share. Revenues of £8m, up 41%, and marginally better-than-expected losses on the earnings before interest, tax, depreciation and amortisation (EBITDA) line is very solid progress given stage in the company’s growth profile.

Of particular note is the stunning progress made through its accountancy practice channel, where user numbers nearly doubled from 16,705 to 33,147. That compares to just 11% growth from micro business customers signing up through is direct channel, the FreeAgent website in other words.

There’s also been little impact from big TV ad campaigns of rivals (Quickbooks has been especially visible lately), largely because of FreeAgent’s deeper feature quality versus peers.

A partnership with Royal Bank of Scotland (RBS) remains in its early phase but FreeAgent anticipates having more to say in an update in September. Recently clarity from HMRC on its ‘making tax digital’ programme designed to get all business online by 2020 should be a big driver as sole traders and micro businesses adapt, with early migrations from April 2018.

An encouraging start for this exciting growth company. Still a buy. (SF)

[redlee] 08/6/2017 13:27

Agree loobrush. I'm holding for the long term but am hopeful we may see some upwards movement after the election - buying so close to it may have put some people off following the great results.

Also featured in Paul Scott's daily report yesterday and the write up was very positive: hxxp://www.stockopedia.com/content/small-cap-value-report-wed-7-jun-2017-free-shoe-srt-191919/

[loobrush] 06/6/2017 11:53

Yep looking good and still early days if it keeps increasing users at a good rate could be a great share to hold as lots of potential.

[redlee] 06/6/2017 08:15

I'm really pleased with the results considering that none of the RBS growth has come through yet and net cash position good.

[croasdalelfc] 06/6/2017 08:06

I can see it going red as a there are a lot of other stocks out there with higher growth and are in profit

[n0rbie] 06/6/2017 07:27

Great set of results!

[redlee] 01/6/2017 09:34

Results next Tuesday - interested to see how cash position and EBITDA loss has changed

[n0rbie] 13/4/2017 11:42

Article in Shares magazine today.

FreeAgent impresses with latest results
Micro business accounts techy passes first public company test

Freeagent (FREE:AIM) 117.5p

Gain to date: 1.3%

Original entry point: Buy at 116p, 16 February 2017

Considering first half results had been signed-off before FreeAgent’s (FREE:AIM) November 2016 IPO, the second half is the company’s first real test as a public company, and it has impressed.

Both earnings before interest, tax, depreciation and amortisation (EBITDA) losses and cash will be ‘comfortably better than current market expectations’ that were down for a loss of £0.9m and a balance of £3.1m respectively.

ven revenue of £8m, said to be ‘in line’ with estimates, look better to us versus the sole £7.6m forecast of N+1 Singer.

What stands out is that costs have been kept in check despite the temptation to ramp spending after raising £8m. That is different to many other AIM IPOs in recent years.

With £8.6m of contracted revenue in the bag for this year (to 31 March 2018), N+1 Singer’s £10.3m estimate looks well within reach. The trajectory for both company and share price looks very positive.

An encouraging start for this exciting growth company. Still a buy. (SF)

[redlee] 13/4/2017 08:40

Thinking of topping up - such a great product. Does anyone have any idea when we will next get news/the reporting schedule?

[n0rbie] 06/4/2017 10:08

Bullish comments from CEO, great to see.

[redlee] 06/4/2017 08:15

Yep, great about net cash position. Quiet board this though. Hopefully more discussion as Free gets going

[18bt] 06/4/2017 07:25

Good stuff - steady start as a listed co.

[battlebus2] 06/4/2017 07:15

Inline update from FREE, adjusted EBITDA loss and net cash comfortably better than market expectations

[apad] 15/3/2017 19:58

email to FREE.

"In Operational Hilites (Interim results for the six months ended 30 September 2016)
Business customers are given as:

"· Accounting Practice clients significantly increased to 27,137 (H1 2015: 12,611).

· Direct Clients increased to 16,724 (H1 2015: 14,582)."

This makes totals of 43,861 for H1 2016 and 27,193 for H1 2015.


The Chief Executive’s Statement says:

"As at 30 September 2016, the Group had a total of 51,865 subscribers, an increase of 18% over H1 2015 (30 September 2015: 43,811 subscribers)"


The website says “Over 50,000 business accounts”

It would seem that CE statement is comparing current business accounts with H1 2016, not H1 2015.
A much more impressive performance increase.

If I am correct you will need to issue an rns correction.

Apologies if I have made an error."


FREE reply to email (nuff said):

"Hi Adrian

Thank you for getting in touch.

We have a number of legacy channels which you can read about in our Admission document. These collectively contained a total of about 8,000 subscribers at 30 September. We don't pull these channels out separately in the highlights as they are not a growth opportunity for the business but we include them in the overall subscriber total.

Hopefully that answers your question but if not, please let me know.

Kind regards
Katherine"

My reply:
"Not at all!

I am pointing out an error in your current rns on the LSE, and it’s a stamant by your CEO, who needs to know about it.

It is in your Interim Results.

This is nothing to do with your legacy documents it is your current interim results.

Please pass to your accounts department."

apad

[battlebus2] 21/2/2017 10:52

Bit surprised myself at the above link by Investors Champion.

[n0rbie] 21/2/2017 10:49

What has video-conferencing got to do with accountancy software?

[n0rbie] 16/2/2017 07:56

FreeAgent could be the next big disruptive firm
Discover why we think now is an ideal time to buy this fast-growth business
Thursday 16 Feb 2017 Author: Steven Frazer
Great Ideas

Now is the perfect time to buy accounting software supplier FreeAgent (FREE:AIM) as we believe a rotation is underway from short-term traders to more committed longer-term shareholders.

Many investors buy companies as soon as they join the stock market in the hope of making a quick 10%+ return. A lot of floats are priced below intrinsic value, so there is an opportunity to profit once they join the market as the price moves towards fair value (or beyond).

The rally and subsequent pullback in FreeAgent’s share price since its IPO (initial public offering) in November 2016 is a textbook performance. We believe the next phase for the share price is more a sustained, albeit slower upwards rally.

WHY WE LIKE THE STORY

FreeAgent has the potential to significantly disrupt the small business accounting market.

Most of the big accounting software firms largely serve businesses with at least 20 employees. FreeAgent is focused on sole traders or firms with only a handful of staff.

An estimated 90% of small businesses still use basic spreadsheets to add up their sales. The taxman wants all businesses to comply with digital accounting by 2020. That presents a large opportunity for FreeAgent to sell its accounting tool kit.

GI FREEAGENT 160217

The £47m cap’s system provides ‘real-timeR17; tax liability tracking, invoicing and automated chasing, all seamlessly linked to a business’ bank account. Its platform is easy to use but advanced enough to charge premium fees.

In addition to direct sales, the company has successfully partnered with accountants who act as resellers. This helped customer numbers more than double to 27,137 in the six months to 30 September 2016 year on year, compared to 15% growth to 16,724 customers in the direct channel.

Average revenue per user was £17.63 on average in the period for direct sales and £10.86 from the reseller channel.

Royal Bank of Scotland (RBS) has signed up to offer FreeAgent’s software to its business bank account clients for free, paying the software firm an undisclosed licence fee.

Investors shouldn’t get carried away with this recent deal. Barclays (BARC) signed a similar partnership seven years ago which helped FreeAgent when still in its infancy. However Barclays’ importance as a source of revenue stream has ‘diminished217; in recent years, according to FreeAgent’s AIM admission document.

THE PATH TO PROFIT

FreeAgent’s average customer lifetime runs at 66 months (direct) to 96 (channel) versus customer acquisition costs (CSC) of 14 to 17 months.

Its software-as-a-service model means revenues are virtually 100% profit beyond the CSC, or between £800 and £950 per account over the contract lifetime.

Analysts forecast maiden profit in the financial year to March 2019.

[n0rbie] 16/2/2017 07:54

Article from Shares magazine free to read if you're with AJ Bell Youinvest: hxxps://www.youinvest.co.uk/sharesmagazine/2017-02-16/freeagent-could-be-the-next-big-disruptive-business

[battlebus2] 16/2/2017 07:12

Great news, thanks Mirabeau.

[mirabeau] 16/2/2017 06:23

Tipped in Shares Magazine today

Forecast to make maiden profit y/e March 2019

BUY

[nallen1] 07/2/2017 17:12

But if a drop of late, don't see what's changed though, tree Shake?

[discodave4] 27/1/2017 16:27

Something afoot!

[paulypilot] 24/1/2017 22:42

Try the FreeAgent software, if you want to discover the competitive advantage.

I did, and a free trial turned into a sticky recurring revenue customer within a few days. The reasons being that it's very easy to set up, and a delight to use, for non-financial people.

OK, I'm a financial person, so it was a doddle to set up, but FreeAgent is so obviously brilliant for the self-employed, I can see why the more people who are introduced to it, will become long-term customers.

My tax accountant just did the sums, and posted the journals, all done via the cloud, it made this year's accounts filing an absolute dream.

Sure there are other products, but FreeAgent is the best for micro businesses.

Give it away with new bank accounts, great! Then the revenue could pour in, in future years, as people want to keep using it. That is what I see as the opportunity here.

In the meantime, the stock is VERY EXPENSIVE. No denying that. If things go wrong, we'll lose most of our money!

Got to balance up +ve and -ve.

Regards, Paul.