Pelatro Share Discussion Threads

[rivaldo] 22/1/2020 10:56

Indeed - they see PTRO being in a "very strong position" with 2020 looking good:

"FY 2019 delivered and FY 2020 looks bright

The YE trading update reassures that FY 2019 revenue and adj. EBITDA will be in
line with the early December guidance. At that time, we revised expectations as
management pivoted away from large but unpredictable one-off licences, towards
the security of long-term recurring revenue/gain-share contracts through H2
2019. This also improves cashflow with regular payments replacing the long wait
for large, staged cash payments on completion and acceptance. Thus cash
collection improved in H2 and the YE net cash of $0.5m is comfortable and as we
expected. YE trade debt of $5.5m is also in line with our forecast (of $5.3m).

Looking ahead, that pivot to recurring revenue sees PTRO start the year with $4m
of the $8m revenue forecast already secured (actually a run-rate of $5m pa as
only half of that major contract’s $2m annual revenue is due this initial year).

This is a very strong position as it starts FY 2020 with repeating revenue covering its P&L cash costs and with a record deal pipeline grown to $16m (from $15m just
over a month ago) – $6m of that likely from existing customers. FY 2020 has a
head start and we expect a record year in sales and earnings."

[mfhmfh] 22/1/2020 09:35

FinnCap maintain 125p target price.

[rivaldo] 22/1/2020 08:48

You were saying? :o))

No need to fret about minute by minute movements bubloo, unless you're a trader. The company is moving in the right direction AFAICS. That's all that matters.

[bubloo] 22/1/2020 08:04

no movement on share price rivaldo ? why

[rivaldo] 22/1/2020 07:25

Today's update looks solid and optimistic:

- in line with expectations
- pipeline is up to $16m from $15m only last month
- there's $4m of recurring revenues which will increase given the SaaS sales
- "strong" cash collection
- has 19 customers compared to only 12 a year ago
- "strong commercial momentum"

[cordwainer] 03/1/2020 01:43

fair point

[rivaldo] 31/12/2019 11:42

This is a reaction to the contract wins and trading update.

PTRO regularly announce contract wins and have flagged (as above) that there will be more. So more RNS's certainly wouldn't be a surprise.

[cordwainer] 31/12/2019 11:03

Won't be suspicious at all if there's a positive announcement within the next few days.

[rivaldo] 31/12/2019 08:42

Impressive recovery. Seems like it's moving up on almost every buy now.

[rivaldo] 23/12/2019 11:57

Cheers scotty1 - this is an interesting comment:

"There are several other deals at various stages in the bid pipeline, some of which are said to be large."

[scotty1] 21/12/2019 08:41

scroll to page 17

[biteherbutt] 16/12/2019 15:53

''During the year the Group acquired motor vehicles for the benefit of two Directors at a cost of $270,000.''

[cordwainer] 11/12/2019 08:21

significant enough money tho versus last years revenue etc.

[rivaldo] 03/12/2019 12:02

Finncap summarise their views and 125p target as follows:

"Outstanding contract win and pivot to recurring

Pelatro has won a landmark contract with one of the biggest telcos in the world; a major global operator and household name – an outstanding achievement for a small
newcomer in the market. After careful deliberation, it has been taken as another recurring revenue/gain-share deal (a fourth this year) rather than a large upfront licence. As Pelatro matures and feels more established, management can afford to take a longer-term view, sacrificing short-term growth and profit for the stability of recurring, incremental revenue streams. A likely $7m of upfront licence has now been foregone in these deals this year and thus FY 2019 revenue guidance is cut to $6.5m (still up 6% YoY).

The impact of this pivot to much higher quality revenue should not hide remarkable performance this year.

For comparison, had these been taken as licences, FY 2019 sales would have been
$13.5m; 28% ahead of our $10.5m forecast set mid-2018, and 121% YoY growth on a
comparable basis. That follows 161% and 95% YoY growth in FY 2017 and 2018
respectively. This breakthrough win comes on top of consistently strong sales growth and the increasing quality of earnings, and we reiterate our 125p TP."

[sharw] 02/12/2019 15:01

cordwainer post 17: "85p target, eh? hope it's not too ambitious"...

Well, finnCap this morning did not change its target price of 125p

[mikeh30] 02/12/2019 14:05

Nice reversal. Well held.

[rivaldo] 02/12/2019 13:42

Too early stage to be a takeover target. A modest institutional placing isn't a bad idea, but let's see the share price back up to 80p-90p when that would be an even better idea.

[cordwainer] 02/12/2019 13:28

Surely lease finance is a bit rubbish though, and i certainly hope it won't include the software - i might even prefer a dilution from a modest institutional placing. Also, maybe PTRO is now a bit more of a takeover target now that sales are gaining traction ?

[rivaldo] 02/12/2019 13:16

Great to see ST so confident - thanks Paleje.

As already posted, the lease financing would be in order to take away any need for shareholder dilution given the change to a recurring income model, even though management are apparently confident in their forward cash estimates.

[outlawinvestor] 02/12/2019 12:17

Good for those who called the MMs bluff early in the morning, they are now sitting on near 50% profit! And good luck to those holding from higher prices!

[paleje] 02/12/2019 10:18

Trouble is, management seemed confident when they said they thought 2nd half contract wins would get them up to target, also when they spoke with ST. But it hasn't happened quite like that although more contract wins could still come in but more likely for 2020.

So how to rate them with that level of unreliability reqarding guidance is the question. Good that a placing seems less likely.

I daresay IC will comment later, if I see it I'll post it.

[rivaldo] 02/12/2019 09:53

Excellent recovery. I can see the share price actually rising quite nicely as investors realise the true picture here.

Finncap retain their 125p target price.

They now see 4.1c EPS for this year, rising to 5.6c, i.e 4.3p EPS for next year (2020).

They also note that "management seems confident that the finances can sustain the changing business model", and note "management will consider various lease financing or similar options to match costs with revenue over the >5 life of the contract and preserve cash reserves".

[stuart37] 02/12/2019 08:39

Kevph,
Not necessarily - most MM's will run flat books over the weekend so price doesn't affect them - they are just interested in creating a good 2 way market so they can take their spread often!

[kevph] 02/12/2019 08:33

Out of curiosity, if the MMs are making this down and no one is selling. I'm guessing they are the ones taking a bath at the moment? Couldn't happen to a nicer bunch....