Pelatro Share Discussion Threads

[rivaldo] 17/6/2020 08:20

Agreed. An encouraging update today, particularly the increasing revenue visibility, recurring income and certainty that they'll meet market expectations.

Management have certainly increased the bar nicely, with the aim of increasing ARR to over $10m in the next 2-3 years.

Cenkos this morning conclude as follows, with fair value being double or more the current share price:

"Re-rating. The $5.0m of revenue visibility covers 67% of our 2020E revenue forecast. The new ARR figure places the stock on an EV/recurring revenue multiple of c3.4x. Fair value in our view lies in a multiple range of 5-7x, ie a possible doubling or more of the share price. Buy."

[paleje] 17/6/2020 07:54

Yep increasing clarity ahead and outlook statement in line with expectations for FY so Finncap's target still be in tact.

[packman8] 17/6/2020 07:45

Positive trading update today. Unaffected by covid.

[mfhmfh] 04/6/2020 12:21

possible inverse H&S.

hopefully seller has cleared.

[gleach23] 01/6/2020 18:26

Disappointing last few sessions but should get an AGM trading update 2 weeks on Wednesday (17th June). Will hopefully give the share price a shot in the arm.

[t0pgrader] 01/6/2020 11:01

Interesting company but the share price graph continues to be v negative.

[mfhmfh] 21/5/2020 09:53

hopefully 60p next stop.

[rivaldo] 21/5/2020 09:33

..and being maintained it is :o))

[mfhmfh] 19/5/2020 16:27

Buyers starting to come in. Good to see. Hopefully upward momentum can be maintained.

[gleach23] 19/5/2020 15:58

I did manage to top up some yesterday in my SIPP after selling down another holding but was a bit miffed to miss out on 43p while I messed about trying to open the SB.

Good to see some strength again today though, amid the 2 curious lunchtime trades - an apparent 50k buy and 66k sell which preceeded this afternoon's rise.

[gleach23] 18/5/2020 15:40

Looking good here. Have been trying to get a spread bet (Buy) open this afternoon but both Spreadex (unusually) and IG (usual) are only allowing closure of existing bets.

I called Spreadex and they apparently have too many clients with sizeable Buy bets for them to take on any more (not that mine was going to to be sizeable in the grant scheme of things...)

[westofengland] 09/4/2020 12:39

Thanks, Rivaldo.

Great note and appreciate your helpful signals.

[rivaldo] 09/4/2020 12:04

The new Finncap note is 17 pages long and well worth a read.

A couple of nice extracts:

"Final thoughts The financial results do not truly reflect what a good year FY 2019 was for Pelatro. The switch from large upfront licences to smaller recurring-revenue contracts while scaling up for global sales and a managed services offering, has impacted the financials, but if we look beyond the headline numbers this is a company showing consistent growth in; customers, regions and offerings. By deepening its relationship with its customers, PTRO is building a secure base of recurring revenue and which made its name in developing regions but now beginning to challenge US market leaders in their own backyard."

"Valuation view From highs of near 100p, the share price has slipped steadily over the past 12 months as the company undertook its transition from selling upfront software licences over to recurring contracts. The lower revenue growth and the reduced earnings from the required investment made investors nervous. This has been exacerbated by the sudden impact of COVID-19 on the market leaving the stock deeply undervalued. The share price, along with the market in general, has rallied since mid-March lows.

The business currently trades on a forecast P/E of under 14x and an EV/EBITDA of under 6x both far too low for the growth and profitability the company has demonstrated. To that we can now add the security of starting the year with half of the expected revenue already secured under recurring revenue contracts. We continue to target 125p in the longer term as the stock and the market recovers."

The list of major shareholders is stellar:

Shareholders %

Bannix Management LLP* 39.9
Chelverton Asset Management 6.6
Rathbones Investment Management 5.4
Herald Investment Management 4.8
Artemis Fund Management 4.7
Killik & Co LLP 3.8
Hargreaves Hale Ltd 3.2
Maven Capital Partners 3.1

*Bannix is the investment vehicle of Kiran Menon, Varun Menon and Sudeesh Yezhuvath."

[rivaldo] 08/4/2020 15:18

Nice summary from the respected Techmarketview:



"Wednesday 08 April 2020
Pelatro remains confident for 2020

London-based AIM-listed precision marketing software minnow Pelatro, published its 2019 results this morning, that saw revenue expand 9% to $6.67m (2018: $6.12m). Adjusted EBITDA fell to $2.89m (2018: $3.75m).

Pelatro specialises in the telco space and serves a very international clientele with 19 customers spread across 18 different countries. It has also been moving towards a recurring revenue model which increased 63% to $2.96m (2018: $1.82m), now 44% of all revenue.

Expanding the customer base was the major focus for Pelatro in 2019, having its best year here adding 5 new customers, including a deal with “one of the largest global telcos in the world”. This has seen the business more than doubled the number of subscribers being processed by its solutions, up from 350m to 800m.

Whilst the focus on new logos has given the business a solid platform for the next twelve months – with current revenue visibility of $4.1m – it looks like the time and management resource spent securing new contracts took their toll on overall performance.

The flipside is that Pelatro looks better set than many to weather coming storms with a pipeline of c.$18m with major international Telcos, a sector that is seeing some growth in demand. The firm also has the luxury of not being dependent on generating new revenue for short-term cash flows – very important in the current climate."

[mfhmfh] 08/4/2020 12:15

from 22nd January trading update: Trade receivables $5.5m.

from today's results: Trade receivables at 29 February $4.4m.

[rivaldo] 08/4/2020 11:10

The MMs marked the share price straight down to around 47p even before a share had been traded. This would have been based completely and superficially on the fall in EBITDA/EPS and their scant knowledge of the company, without knowing the detail re the transition to SaaS etc when this was already known by investors - and in fact today's figures slightly beat the revised forecasts.

Since then the share price has only dropped a further 1p-1.5p or so. Hopefully this means the share price will stabilise around here, and at some point as the market values the recurring revenues and prospects the share price may bounce.

I note that Finncap have reiterated and left unchanged their 125p target price.

EDIT - mfhmfh, you beat me to it whilst I was writing!

[mfhmfh] 08/4/2020 11:07

Finncap retain buy rating and 125p target price.

[albert89] 08/4/2020 10:47

But then why is the share price going down...especially today?

[rivaldo] 08/4/2020 09:56

PTRO actually beat Finncap's 2019 forecasts slightly for both revenues and the 4.2c EPS.

Finncap have unsurprisingly reduced the current year forecast to 4.7c (from 5.6c).

PTRO have already secured almost 50% of current year forecast revenues, and with that big pipeline I'd have thought PTRO would make the remainder and potentially beat it given the current boom in telecoms revenues and the desire of telcos to utilise efficiency-boosting products like PTRO's.

I think cash is manageable if not exactly bountiful. The reassurance here imo is that the CEO has done it all before and knows the pitfalls. And the currency movements are helpful.

The negative is the Danateq consideration. This is only due in October, so there's plenty of time. Otherwise, there are options. Perhaps this could be renegotiated into part-shares, part-cash. Business may have been good enough to enable payment without problem. Or perhaps a short-term loan facility. And I wouldn't mind a small fundraise nearer the time if at a decent price.

I do like the sizeable and increasing recurring income and the nature of PTRO's services, plus the CEO's track record. With careful husbandry, a couple of contract wins from that pipeline could see things heat up nicely here.

[gary1966] 08/4/2020 09:14

Company have addressed that concern by stating that due to the size and quality of their customers as well as the services that they are supplying them being essential that they don’t perceive debt collection as being an issue. Currency movements are reducing cash costs by 7% as well with rates as they are.

[rimau1] 08/4/2020 08:49

Is cashflow a worry here Rivaldo? Must assume customers are going to take longer to pay and they only have $0.9m. Big fan of this company but do not currently hold, i would certainly invest back in if they announced a placing

[rivaldo] 07/4/2020 09:07

Recovering very strongly. With high recurring income, and telco service demand rising hugely due to COVID-19, PTRO should be nicely placed to do well in this environment.

[westofengland] 26/3/2020 18:14

Yes.Looks good; feels like Pelatro could be on its wsy again. Its important to the management to take the business forward and ,like IMO, data enhancing businesses should be big winners in todays lockdown world.Subhash has done it before and is really hungry to make it with Pelatro.

[stuart37] 26/3/2020 14:54

Yes, very encouraging. Great company - limited, if any, impact from CV19 - and at a bargain price and PEG of 0.23. Everything is to like!