Iqgeo Share Discussion Threads

[p1nkfish] 28/8/2020 07:17

Major shareholder list updated.

[p1nkfish] 18/8/2020 07:05

Worth a read. What to look for in a SaaS company.

[p1nkfish] 17/8/2020 00:32

Castleton were sold for about £82.8M with net debt of about £4M and revenue of about £23.5M and maiden 1p divi on about 81.79M shares. About 66% of revenue was recurring. Gross margin about 59%.

[horseyphil] 16/8/2020 13:59

Yes, agree - around £100M market cap is what I am hoping for, and I think it’s definitely achievable over the next 2-3 years. I’m in for the long haul and certainly won’t be selling. Just don’t want to see it getting taken out prematurely for something like £1.20. Shares like this are hard to find!

[p1nkfish] 16/8/2020 13:35

I can see £100M market cap as very possible.
Castleton was sold for about £85M from whom the new CFO arrives. Castleton did have a number of acquisitions to get there but was in a very boring end of the market - social hosuing software. Kestrel was a large shareholder.

If they get to £100M at the currently float its £2.

Castleton was sold for 4x original investee money, say the reset on Ubisense was 46p, thats 184p at the current float.

What float will be TBD depending on chance of acquisitions requiring issuance, if acquisitions happen.

Not a share to trade. Buy, hold and watch. Join in if there is issuance to avoid dilution.

[p1nkfish] 16/8/2020 13:28

Vodafone would set the share price alight, National Grid, something like that. Vodafone rolling out German fibre.

Agree about the confidence a customer would have seeing Iqgeo holding that level of cash. That does have value probably in excess of the erosion due to inflation. So yes, good to have high cash at hand and breakeven.

[horseyphil] 16/8/2020 11:41

One benefit of having a decent cash level is the security and comfort it gives to prospective clients, though that becomes less of an issue as their reputation builds. Suspect that Kestrel is eyeing an exit within the next 2-3 years so a large acquisition is unlikely as it would probably delay that. I think there’s huge potential for organic growth and growth through partnerships, and acquisitions would just be an unwelcome diversion. Would love to see them land another couple of big telcos as clients - we saw the difference that landing the Lockheed Martin F-35 contract made to the value of the old Ubisense, and a decent-sized contract with the likes of AT&T, BT or Verizon could be transformational.

[p1nkfish] 16/8/2020 10:07

There is the possibility of them raising cash for a larger acquisition and in the process increasing liquidity of the stock.

I'm not sure that would be a good move overall due to execution risk and having to manage a larger entity with current leaders not used to handling such. It might require changes at the top which would be a shame as they appear competent as is.

Small acquisitions (if any) and driving organic growth is the way I would prefer to see it go, with a decent (not excessive) cash buffer.

[p1nkfish] 16/8/2020 09:59

Once reliable breakeven achieved the large shareholders will probably be keen to see the cash on the balance sheet used.

Currently its eroding at 3% or more per year. A good comfort blanket but it needs allocating else its dying money.

It makes sense to do some or all of the below:

1) Return some or all to shareholders so they get to choose what to do with it to get a return.

2) Leave some (not all) on the balance sheet to offer optionality and some buffer in case of the untoward happening.

3) Use some to buy something value enhancing or expanding the core.

By breakeven they are likely to still have about £10M cash on hand, 60%-100% of revenue, that is being eaten away by inflation.

[p1nkfish] 15/8/2020 10:25

There must be new signings in the pipe in addition to driving deeper into existing.

I think the future is very bright here.

[p1nkfish] 15/8/2020 10:19

I tbink it will surprise substantially.
Good to know others are here too.
Good luck. 90p++ imho, no problem now.

[horseyphil] 15/8/2020 09:58

First-time poster, but long-term (and long-suffering!) Ubisense/IQGeo holder. Thanks btw to p1nkfish for your regular updates. Like you I am extremely encouraged and excited by the turnaround under the CEO Richard Petti - he and the technical team at IQGeo inspire a great deal of confidence. The quality of IQGeo’s website and information materials, the scalability and global reach of its products and services, its mobile-based technology and successful SaaS business model, its solid financial position, and its blue-chip clients and partners all point to a company with huge potential. I expect the market or a future buyer to recognise that soon, especially if IQGeo can achieve positive cash flow by say the first half of 2021, which would seem very possible. Since IQGeo already has a PE-like ownership structure, a buyout by a major partner (Oracle?) or by a traditional GIS player (ESRI?) would seem the likely outcome here. I have worked extensively with GIS and know that it is a very fast-growing, complex field that is ripe for disruption, and IQGeo looks to me like it could be that disruptor. While I have averaged down from the Ubisense days my average share price is still 90p+, but I’m confident of ending up with a decent profit - in fact my biggest fear is that Kestrel/Columbia accept an offer too soon. I would much rather see the current management given 2-3 years to really build on the springboard they’ve created and realise the true underlying value of this company. That value, and the eventual level of a takeout, could surprise us all. Good luck to all holders.

[p1nkfish] 06/8/2020 16:57

Product status released today and note towards end mention of new products due during rest of 2020 -

"With further product releases to be announced soon, 2020........"

How much of new product sales will push up the bottom line and is not yet in the equation?

[p1nkfish] 06/8/2020 09:05

Time will tell and there can always be turbulence but I do sincerely believe this has higher to go over next 2-3 years.

Good luck.

[red ninja] 06/8/2020 08:40

In at an average of 72p, on the high side I know, but the RNSes do read very well.

If they can keep up the growth (I cannot see why they shouldn't) then hopefully that average will not look so high for long. Also like the fact that this company should not be impacted too much from Covid-19.

[p1nkfish] 05/8/2020 21:00

I'm a stuck record.

IQG will reach breakeven on the back of North America (early adoptors) and TEPCO.

The rest of the world will follow and is pure upside, profit adder. Lots to play for. I do think this is still early innings and its under valued.

We are bound to see new business in other parts of the world as they follow the lead of the Americas and Tepco.

When?

[red ninja] 05/8/2020 11:44

P1nkfish, in the short term it does no harm to hold cash in a Covid-19 world. There may be some distressed good value acquisitions. On the other hand acquisitions can be risky given the fact that 2/3 do not really succeed. However, with the new CFO they have a guy who has made many acquisitions so maybe not a problem.

I agree whatever they do hopefully they won't squander the cash.

[p1nkfish] 05/8/2020 10:36

High cash levels and no debt is great but can be a comfort blanket that keeps management a bit relaxed and can encourage risk taking. Not always good.

[p1nkfish] 05/8/2020 10:34

Red Ninja, not impossible they could return more cash to holders.
When cashflow positive a full £11M is a bit high as a cash balance. 5p per share would only be about £2.5M. I could imagine 10p/share leaving about £5M on the books and a profitable company.

The alternative is probably using it for acquisitions.

[p1nkfish] 04/8/2020 15:57

Good luck.

[red ninja] 04/8/2020 15:33

Mmm we've all been wrong before.
I didn't just buy in on your word.

[p1nkfish] 04/8/2020 12:05

I have been wrong before so dyor but on a number of points on my checklist this looks a good one.

[red ninja] 04/8/2020 11:44

Good to hear you are so ebullient about IQG.

It sure is a difficult share to buy and looking to tuck it away on at least a 3-5 year time span assuming they are not acquired sooner.

[p1nkfish] 04/8/2020 10:57

A very desirable bolt-on to others too.

No way should a current holder consider selling imho. Note volumes low, no one with sense selling.

[p1nkfish] 04/8/2020 10:55

Take the cash off the market cap.

Decent margin SaaS, soon cash generative.

Looking at what can be growth rate - its no way fully valued now and I expect some period of explosion.

Quite a unique situation at the mo if they don't screw up.