Mopowered Grp Share Discussion Threads

[yump] 21/4/2014 11:27

News:

ADVFN posts sink to all time low quality:

[junglist] 19/4/2014 22:58

Is that an anagram of some of your predictions dewy!

[dewtrader] 19/4/2014 18:24

Look at the historical record. Its carp.

[yump] 19/4/2014 17:43

Could so easily double on results. See Blur as example.

[dewtrader] 19/4/2014 13:17

Could so easily halve on results. See Blur as example.

[yump] 19/4/2014 12:38

The powers of analysis from ADVFN posters never cease to amaze.

[dewtrader] 19/4/2014 08:33

open shorts ahead as rev likely to be p1ss poor

[jon9911] 18/4/2014 17:45

Final results announcement will be 13th May

[sagarn] 27/3/2014 11:35

Thanks montynj!

[yump] 26/3/2014 23:51

When MPow release results, the key think imo is what level the fixed costs are running at compared to previously. We'll see if they really are more or less fixed or not and therefore how much increases in revenue will drop through to the bottom line.

[montynj] 26/3/2014 22:46

This is what Red hot Penny share guide wrote: " MPOW was set up in 2008, at the same time as the first consumer smartphones were coming onto the market. Founder Dominic Keen has a strong background in e-commerce: he used to be the online banking product manager at Egg, the internet-only financial services business originally set up by the Prudential. It was partially floated and then sold to Citigroup in 2007. At that time, Mr Keen left to form MoPowered. Originally, his idea was to develop mobile personal financial services. But then the mobile commerce element captured his imagination. MPOW began working on mobile IT projects for big retailers like Next, Superdry and Waterstones. It's quite impressive that Next, which makes over £300m annual operating profit from its online Directory business, has outsourced its m-commerce to MoPowered. MPOW developed its first application for Next in 2009 and is now its sole supplier for mobile websites and apps. Having such blue-chip clients certainly lends a lot of credibility to MPOW. But unfortunately it doesn't result in a scaleable business. The relationship with Next is mainly project-based. To do a lot more of this bespoke work for very large clients would be labour intensive, and MPOW would have to keep hiring software engineers to service new customers. So instead, they've used the knowledge and expertise accumulated from this m-commerce project work to develop a product that can be sold to lots of customers. No IT bod requiredMPOW has invested heavily in building an m-commerce platform, on which they spent over six years and in excess of £5m. It's been the focus for MPOW's future growth since it was launched almost two years ago. The big message here is that this is a scaleable business with a high proportion of fixed costs. That means that as revenues grow and the company becomes profitable, high margins and strong cash generation should follow.The MoPowered platform is multi-tenanted. That means hundreds of separate retailers share the same system. The process of bringing on-board new SME clients is quick and highly automated. A software tool translates the client's existing desktop website code into a mobile-friendly format. This is designed so it doesn't require IT specialists to carry it out. There is flexibility for some customisation, so the branding and look of the mobile site is consistent with the client's main desktop website. But a high degree of standardisation means new SME clients can be set up quickly and at little incremental cost. A new customer can be up and running in a matter of days.The client's desktop site also relays any changes in product or pricing to the MoPowered platform to keep the mobile site up to date. The system also handles large volumes of payments so MPOW has ensured it is compliant with Payment Card Industry standards (PCI-DSS). This allows small retailers to receive mobile payments through a range of partners including PayPal and the major card companies.MoPowered has "skin in the game"MPOW hosts these mobile sites on its cloud-based platform. That means everything is done remotely from the client's premises. It's an approach that also lends itself to the increasingly popular Software-as-a-Service model (SaaS). Clients rent the software rather than paying a big upfront licence fee. It makes it more affordable. And because the platform is shared, all clients benefit from improvements and updates immediately. Although MPOW's revenue will build more slowly under this SaaS model, I think its steady, repeat nature leads to a higher quality stream of profits. Clients pay a small set-up fee, but most of the MPOW's revenue comes from a monthly rental charge plus a small share of the sales generated from the ensuing m-commerce. This cut MPOW receives from a client's m-commerce sales helps align both parties' interests. MoPowered's proposition is that a well-designed mobile website will have a measurable impact on customer conversion. So it's directly incentivised to help their clients grow sales from their m-commerce activities. For example, Price Right Home is a family-owned e-commerce retailer selling a range of over 3,000 children's home and decor products. Moving to MoPowered's mobile platform has had a clear impact on the company's performance. The proportion of people visiting the site who made a purchase (the conversion rate) improved by 58%. People stayed on the site 20% longer than before and pages viewed per visit rose by 64%. PIt's eyeing up the European marketAt the time of the IPO in December, MoPowered had 120 clients. Of these, 99 were SME specialist retailers like Price Right Home. It's estimated there are 25,000 potential UK clients in this segment, so there is a huge opportunity. The revenue model has flexibility to accommodate different client profiles. For small clients a set-up charge of £1,000 followed by monthly rental charges of £150 for the hosting and maintenance plus 2.5% of transactions might be typical. Over a standard two-year contract these clients might be worth around £8,000. Thirteen clients back in December were mid-tier merchants like the BBC Shop and the homeware company Denby. These businesses will have online sales in the £5m-50m range. Their greater sophistication means they might require a little more hand-holding and customisation than the SME segment. This results in a bigger set-up charge and monthly rents in the £400 region; but higher volumes might mean the revenue share is only 1%. MPOW estimates there are 3,000 UK retailers who fall into this category. These clients are clearly more valuable, with a two-year contract worth maybe £40,000 to MPOW. The smallest segment of the customer base is the large enterprise category. Revenues here can be into six figures (Next currently accounts for over £250,000), but this work is more project-driven and one-off in nature. Work for the likes of Next and Waterstones does have other benefits though. Aside from adding to the company's credibility, the software development for these customers can also provide ideas for improving the core SaaS platform. While the UK market for potential SME and mid-tier clients is clearly large and valuable, MPOW is also starting to think about the opportunity in Europe. Smartphone adoption in the UK is ahead of many European countries, which has given MPOW a lead in the m-commerce space. But the major Western European online retail market is around twice the size of the UK so it's important to get a presence, even at an early stage of MoPowered's development. This has now started to happen: the Austrian tights company Wolford is already a customer, and we should see more resources applied to growth in Europe as 2014 progresses. MoPowered can dominate mobile commerceThe company has focused on investing in its technology base up to now, but the IPO proceeds will allow it to push on with sales and marketing to grow the client base. The sales team was eight strong at the end of 2013 but will grow to around 20 this year, including some foreign language speakers for Europe. An important source of new business referrals comes from "channel partners" like payment companies and other suppliers of e-commerce IT to retailers. Relationships are in place with WorldPay, SagePay and PayPal among others. CEO Dominic Keen is a bright and enthusiastic leader of the company who retains a significant shareholding. He holds a Business and Engineering degree from Cambridge, and being well over six feet tall and a former member of the Great Britain judo team, he's someone you take seriously! He is supported by an experienced chairman in 68-year-old Mike Hughes. Mr Hughes has a background at General Electric Company and more recently was CEO of Midlands Electricity, as well being a board member of Oxford Instruments and South Staffs Water. Finance Director Ben Carswell also has an impressive CV which includes an MBA from Oxford and experience with PwC and RBS. This management experience is reassuring and post-IPO the company's balance sheet is sound, with net cash estimated at £2.8m at the end of 2013. The shareholder register includes Artemis and Hargreave Hale, both well-regarded institutional small-cap investors. But this is still a young company and there are several risks to take into consideration. The most obvious risk is that the company has yet to make a profit. This makes valuation more difficult to gauge. Profits will depend on growing the number of customers on the platform, which means hiring effective salespeople and working with the right channel partners will be crucial. So far the evidence is good with client numbers growing from 64 to 127 over the last six months of 2013. But this is early days in a fast-moving industry . The main competition is from in-house technology ...continued on next page......continued on next page...10teams or consultants providing bespoke solutions. MPOW offers a different SaaS model, which should be a more attractive approach to many clients; but there is a risk that other e-commerce suppliers come up with competing mobile platforms. Ultimately, we are in a land-grab phase and MoPowered has to make the most of its focus on mobile before the competition wakes up.So what are the shares worth? Broker N+1 Singer has MoPowered moving into profit in 2015 with revenues of £8.1m and a small net profit of £0.1m. Gross margins are forecast at 86%, reflecting the SaaS model, so a further rise in revenues to £13.4m in 2016 gives net income of £3.2m – most of the sales growth drops to the bottom line. Verdict: If we put this net income on a multiple of 25 times, which is perfectly reasonable for an internet business of this type, we get a market cap of £80m or 506p per share. So if all goes according to plan that could be our price target, for a 406% gain. But we should apply a healthy discount to this to reflect the risks in a small growth company so we can have 250p as an initial two-year target. We should expect losses this year so the news to focus on will be growth in client numbers, sales partnerships and large enterprise client wins. Another high risk idea; given the exciting long-term prospects for m-commerce the shares are a Buy"

[yump] 26/3/2014 20:47

Had a quick look. Very crowded and competitive marketplace, couldn't see any USP. For me, its no USP, no investment.

[montynj] 26/3/2014 20:13

@ yump I'm a great believer in MPOWER but take a look at DAIP too

[sagarn] 26/3/2014 14:09

Thanks for putting the contract wins into perspective yump! Nice tick up today. I believe the company will become more and more recognised with its contract announcements etc as its under the radar at present. Not that I'm complaining. The share price is still great value and this board is good and informative. Over popularity has the unfortunate affect of attracting many a undesirable..

[yump] 25/3/2014 08:22

Just to reiterate what has been said since float.

They floated with around 100 clients.
Added 27 more up to Christmas.
Another 20 in the first 2 months this year (including a few 'significant' ones).

So that's almost 50% more clients in 4 months.

I think demand is established !!

What will be interesting is the effect on revenue.

[yump] 24/3/2014 19:43

Good to know your around to confirm difficulties with retailers doing it themselves. By the look of it another advantage of this process is that MPOW will automatically upgrade and work on generic conversions on their system, which will then just flow out to all the merchants that are using it. Which removes them from the likely repeated revamps of their mobile sites and the attendant fees from going back to their web designers. (Like most SaaS and subscription based / cloud service type arrangements for software).

I guess as always, the barrier here will be convincing merchants that the process is going to be fairly painless and not cost much upfront. Most switched on retailers will presumably be quite happy with parting with a % of their mobile revenue as a fee, if their conversion rate jumps.

From the increase in clients since November, I'm quite optimistic, particularly with the addition of the Affiliate Window network.

I gather the aim is not just to improve conversion from a very poor rate, but to actually try to get to approach the same rate as from tablets and desktops, over a period.

[phil_curley] 24/3/2014 17:19

Hi Yump - I used to work in this sector, which is why MPOW caught my eye. Companies can't really go it alone & convert existing web sites for mobile/tablet. There is no standard for screen size, resolution etc. The D/B of devices is 3-4,000, which makes initial investment & maintenence & testing a knightmare (that's without adding the ecommerce offerings which MPOW have). Almost everyone has to outsource, making this is a huge growth potential.

[yump] 24/3/2014 13:10

From what I can see, the time from getting a client to having a mobile site up and running is way, way shorter than getting web developers to do it. Mainly because the tech. is already built to interface quickly with existing ecommerce shops.

So, presumably, if there are announcements of new clients, it won't be long before the resulting revenue appears. Perhaps a couple of months.

[sagarn] 24/3/2014 11:19

Totally agreed yump and montynj!

[montynj] 22/3/2014 15:01

@yump. Totally agree. This stock is still below investors' radars and hence is a great opportunity to accumulate whilst this is still the case

[yump] 21/3/2014 16:38

Well its certainly not flashing bright on the radar !
Today's announcement was worth a deal more than 1p on the price.

[yump] 21/3/2014 14:29

Full year results will be imminent as year end was Dec. Forward statement is the key, there won't be any profit for some time.

I don't usually invest in loss makers at float, but think this one has a good chance of delivering exponential revenue growth. Mainly because it will be adding customers more rapidly than previously, plus mobile transactions are growing, plus MPOW will benefit from the increased retailer sales via mobile from the point the retailer signs up ... and the revenue is cumulative because its recurring.

Plus conversion rate isn't some fanciful world-changing idea. Improving it goes directly to bottom line ie. it reduces wasted marketing cost and lost customers.

'Conversion rate' should be 2014's buzzword phrase ! Its been an integral part of most larger retailers' online analysis for quite a few years, but never really hit the headlines. One of those behind the scenes issues that can make a massive difference to profitability.

We did a few changes on one of our sites a year or so ago, using different page versions to measure conversion rate. Then put them all together. 5 small lots of improvement doesn't sound much but it jumped conversion from around 1.8% to about 2.2%. That was 20%+ revenue increase.

[sagarn] 21/3/2014 13:17

Thanks again Yump! I've also been invested since the float. All the indications looking very positive to me for a bright future and contract win/partnership announcements bode very well for a re-rating imo. Looking to top up my holding. Any one know when the next update from the company is due?

[montynj] 21/3/2014 10:02

I just bought a chunk of stock. Mobile commerce is a huge growth area.

[yump] 21/3/2014 09:55

There are around 6 major networks that cover a large number of UK retailers, all of whom would have an interest in increasing conversion rates for mobile, so I wouldn't be surprised to find discussions are already in progress.

Some of these networks also cover EU retailers.
Then there are others in the EU.

Apart from actually increasing the conversion rate, both networks and affiliates are increasingly concerned about potential loss of commission when retailer sales do not register properly when made by mobile, if the mobile transactions are not set up properly.

Looks like a good route to market for MPOW.