Pelatro Share Discussion Threads

[joe say] 04/7/2021 08:59

Thank you Sidam - but I'm still not with it

For example, the note on license income in the accounts reports the IFRS 15 'interest' income as $44,000 - a very small amount with $0.2m recognised as revenue. Thus if you looked at this as just a pure sale it would only be $244,000 - not materially different

PCS then report minor adjustments in a similar vein

Finally there is a table of revenue for future years. For 2021 this shows $579k

Ergo in total potential revenue changes are of the order of some $522k ($44 - $101 + $579). There is also the fact that contract fulfilment costs have been carried forward to match this revenue - meaning little margin

Two other negatives for me are the debtor days (excluding unbilled revenue) and staff turnover.

Not one for me but good luck all

[sidam] 03/7/2021 17:20

I think you will find that the change arose through the company concentrating on long term contracts rather than licences.

[joe say] 03/7/2021 14:48

Been looking into this company but so far I have a few reservations.

For example in July 2020 they boldly say "Revenue visibility for the year is at $5m – up from $4m at the start of the year"

So right from the get-go I ask why did they only report $4,020 for the year ended 31 December 2020

Is that an easy one for someone to answer?

And I note that this was in the half year report issued in Sept 2020 - deep into the covid pandemic. Doesn't make sense to me even with a few deferrals

[1pencil] 01/7/2021 17:50

Thanks, I wondered what happened to the placing shares, bit unusual not to have a separate RNS for the fund raise.

[gleach23] 01/7/2021 17:37

Per today's RNS it would appear to be both days 1pencil -

"Accordingly, the Company will raise a total of approximately GBP3.35 million (before expenses) via the Fundraise and application has been made for the 1,692,835 EIS/VCT Placing Shares to be admitted to trading on AIM, which is expected to take place at 8.00 a.m. on 2 July 2021. A further application has been made for the 6,682,165 General Placing Shares and PrimaryBid Shares to be admitted to trading on AIM, which is expected to take place at 8.00 a.m. on 5 July 2021 (the "Second Admission")."

[1pencil] 01/7/2021 17:19

Is it not Monday for new shares admission and trading?

"Application will be made to the London Stock Exchange for these New Ordinary Shares, which rank pari passu with the Company's existing Ordinary Shares, to be admitted to trading on the London Stock Exchange's AIM market ("Admission ") . Dealings are expected to commence at 8.00 a.m. on 5 July 2021 "

[w1lbur01] 01/7/2021 10:52

Dropping back to nearer the placing price for tomorrow's new shares eligible to trade

[rivaldo] 25/6/2021 09:10

Cheers gleach23, appreciated.

[gleach23] 24/6/2021 17:39

hi rivaldo...I find searching for his tips a bit hit n miss but they often display eventually -

Marketing re-rating potential

Our small-cap stockpicking expert highlights a precision marketing software company that has been winning a raft of new contracts and could be on the cusp of an earnings upgrade cycle
June 21, 2021
By Simon Thompson

- Framework agreement with large Asian telco worth US$0.5m in revenue in 2022.
- Two new contracts for 2021 year worth US$0.5m.
- Over 97 per cent of analysts’ 2021 revenue forecasts already covered by order book.
- Placing and PrimaryBid Offer raises £3.35m.

Aim-traded Pelatro (PTRO:43p), a company that makes its money by providing 19 large telecoms operators with precision marketing software, has been awarded multiple contracts since I last highlighted the investment opportunity (‘Profit from big data analytics’, 19 April 2021). The company has also been increasing annual recurring revenue (ARR), thus de-risking the investment case and enabling investors to attribute a higher valuation to its growing income stream.

Pelatro uses 'big data' analytics (artificial intelligence, machine learning and other analytical techniques) to reveal patterns, trends, associations and behavioural traits of telecom subscribers. These insights enable mobile telecom operators to monetise their data, boost average revenue per user and their share of subscriber spend while also reducing churn rates.

Having rolled out its leading mViva software platform across 23 markets, handling data of 800m clients across Asia, the Middle East, Africa and Latin America, Pelatro is leveraging its position further by announcing a framework agreement with one of its large Asian telcos, which has 230m subscribers.

Pelatro's current engagement with the telco's operating companies includes annual maintenance support and ad-hoc change requests. These have been brought under the framework agreement, with a base level of man days for change requests forming part of the contract every year, thereby making them recurring in nature, along with an annual maintenance fee. Operating companies can also now access other products and services (on an agreed price list) from Pelatro without the need for price negotiation. Pelatro will be paid a fixed amount each quarter for all its base products, thus creating a valuable ARR stream. The incremental revenue for the 2021 financial year will be around US$100,000, and is expected to ramp up to US$500,000 from 2022 onwards.

In addition, Pelatro has announced two contracts with existing customers worth a total of US$500,000 in revenue, one for additional modules as the client moves parts of its activities onto the group’s mViva platform, the other is for change requests. The revenue will be delivered in 2021 and means that Pelatro has already secured US$7m of house broker Cenkos Securities’ US$7.2m revenue forecast, a high proportion of which is recurring in nature as the company transitions its business model away from lumpy licence fees.

The company is also raising £3.35m through a placing and PrimaryBid Offer of new shares, at 40p, subject to shareholder approval on 1 July. Around £1.5m of the proceeds will be used to leverage Pelatro's position in 'big data' analytics to enter the mobile advertising space, a market that is worth $100bn and projected to grow to $221bn by 2024. I highlighted the growth potential here in my last article. The balance of the fundraise will be used to strengthen the company's balance sheet.

The point is that Pelatro could very well exceed Cenkos’ revenue forecast, which factors in 80 per cent year-on-year growth, and move into a small operating profit, so reversing the 2020 loss of £1.9m. Furthermore, the building contract momentum and ARR stream means that Cenkos’ 2022 revenue estimate of US$8m is starting to look far too conservative, especially as the directors have US$16m of contracts in the pipeline.

Prospects of outperformance in 2022 is certainly not in the price. Based on Cenkos’ 2022 cash profit estimate of $3.5m (£2.53m), Pelatro’s enterprise valuation (post the placing and PrimaryBid Offer) of £16m equates to around six times forecast cash profit, hardly excessive for a company that is now generating operational cash flow and has a growing valuable ARR stream. In fact, Pelatro’s enterprise valuation to ARR multiple is less than half the average rating (eight to 10 times) for software companies operating Software-as-a-Service models.

Pelatro's share price is up 8 per cent since my April article, albeit the price pulled back sharply on news of the equity raise. Once the dust has settled, I fully expect the upward trajectory to resume maintain my 100p target price. Buy.

[rivaldo] 24/6/2021 14:39

I can't access ST's tip in the IC - since it's been a few days now, can someone post it please? TIA....

[p1nkfish] 22/6/2021 13:40

I think you are > 50% probably correct. Bounce today not as strong as might have expected imho.

[w1lbur01] 22/6/2021 11:01

Sold my shares into the rise this morning I have some primary bid ones when there issued. I think we will be back down to the placing price or thereabouts when people can trade there new shares

[toptomcat] 22/6/2021 07:01

Tipped again today by ST. Target price 100p. Lots of upside.

[hey50] 15/6/2021 21:01

I'm new here. My subscription through Primary Bid was reduced but happy with what I've got

[sidam] 15/6/2021 12:37

I missed the offer as my broker was not on the list, so I bought in the market at 41p. This company is either really cheap or not. I hope the former. I think the cash will reduce the risk and I do not think management would be spending so much on marketing their new Ad service if they were not confident it would succeed. Time will tell.

[bookbroker] 15/6/2021 12:29

If this drops below 40p then those shareholders who took up the Primary Offer are going to be baying for blood, the management here are a bloody disgrace, Day and Hellyer should be hung out to dry, the Indian blokes …….

[earwacks] 15/6/2021 10:10

Just over 12% dilution to pay off debt and strengthen balance sheet. pretty sound judgement to take advantage of strong share performance to do this. Only 37 million shares in issue currently.

[p1nkfish] 15/6/2021 09:27

When we finally get a market downdraught, buy. Possibly sub 40p then.

These are the good times only a matter of time before something bad happens somewhere and punters run for cover.

[masurenguy] 15/6/2021 09:25

p1nkfish - Simon Cawkwell apparently has 370,000 shares at an average price of 58.8p so he is currently down circa £70k on todays fall.



However, he is not the oracle. I remember when Homeserve had a misselling crisis 10 years ago. He posted the following on the Homeserve thread.

Simon Cawkwell 9 Nov '11 - 260: Gentlemen, I now reckon that HSV is a total bust. Clearly, HSV has sold vast numbers of policies to people of limited intelligence entirely deceitfully. Forget the collapse of HSV's current business - although that is rapidly in progress right now. The unfortunate customers are now entitled to have their money back. This will kill HSV several times over. Simon Cawkwell

Simon Cawkwell 9 Nov '11 - 274: I was late. I am short at 232.5p. I expect the sequence will be that an insolvency specialist will tell them to raise a lot of new capital, absent which the board will have to put the company into administration/liquidation. There will be nothing back for shareholders. Simon Cawkwell



The HSV price had fallen to circa 200p at that time. It subsequently reached 1300p last year and is currently circa 950p !

Therefore the old mantra of DYOR applies as usual rather than taking too much notice of someone else. I have no idea what his view is on todays events but I am holding on to all of my existing shares (I'm averaged in at circa 44p) since I believe this will rerate again in due courser. Most of the selling appears to be from mercurial PI's and there is no indication that the existing institutional shareholders (who were holding circa 30%) or management (who were holding circa 40%) are unloading.

[bookbroker] 15/6/2021 09:19

All the work done in creating those contracts undone in one day! They were supposed to give the company leverage, but instead they have weakened it!

[p1nkfish] 15/6/2021 07:28

bb, it's all relative under the sun. Some people don't sweat at committing £100K++. To them it's not existential, just a game of odds and reward/risk if it pays off. I heard his comments and it came across as a gamble. Throw some money on the table and spin the wheel.

[bookbroker] 15/6/2021 07:00

If he is here then he believes in the potential return, that post some time back supposedly by him suggested he paid nigh on 60p a share at the time, he would likely wish to cover that by buying more at the lower price.

[p1nkfish] 15/6/2021 06:50

Caulkwell might have enough capital to just see this as a gamble and be prepared not to win if that's the case.

When I see comments on capital employed by others I always ask if they are playing the same game as me to the same rules. Caulkwell is playing his own game to his rules that may mean little to other PIs so not necessarily a good signal.