Plasmon plc Share Discussion Threads

[timtom2] 18/2/2008 09:39

The first statement was enough - the second may be to just flush out holders not prepared to take-up the placing. They will have 220M shares in the market at the end of the excercise.

If they only capture a small % of the available market the market cap will respond. Do some maths - it looks like a reasonable proposition - but not without risk.

[mikey_b] 18/2/2008 08:56

would it be anything but low Tim? This is a dog, we know that really. the position will be worse with everyday as they get left behind.

[timtom2] 18/2/2008 08:54

No - I read it right the first time.

All I suspect is they want the share price below the placing price so there is no discount to the market price.

Perhaps they are concerned that take-up in PI's would be low.

[mikey_b] 18/2/2008 08:38

twice as bad as you first thought ?

[timtom2] 18/2/2008 08:34

Very peculiar they should have to state it twice. Any ideas why?

[cyberpost] 18/2/2008 07:53

Plasmon confirms deferring cash break-even target to H2 2009




LONDON (Thomson Financial) - Data storage group Plasmon PLC confirmed it has
deferred its cash break-even target to the second half of 2009 and said as part
of its growth strategy it will focus on gaining more reseller channel partners
and on operational restructuring to reduce overhead costs.
Plasmon said despite the softness in US IT markets, it expects the overall
archive storage market to grow from 9 bln usd in 2007 to 23 bln usd by 2010.
The company said it expects to send notices to shareholders by early March
seeking their approval for raising 10 mln stg via a placement of 100 mln new
shares at 10 pence each.

[cyberpost] 18/2/2008 07:51

Interim Management Statement



RNS Number:1735O
Plasmon PLC
18 February 2008


Plasmon Plc


Interim Management Statement


Plasmon Plc, a leader in professional archival solutions, has today issued its
second interim management statement for the year ending 31 March 2008.


As previously announced on 7 February 2008, the Company is proposing to issue
100,000,000 new ordinary shares by way of a Placing at 10p each to raise £10
million before expenses. The Placing is subject to shareholder approval. A
circular setting out further details of the Placing and including a notice
convening a general meeting of the Company, is expected to be dispatched to
shareholders in early March 2008.


Despite softness in US IT markets which, as previously reported, has had some
impact on legacy and hardware product sales, the overall archive storage market
is forecast to grow rapidly from $9bn in 2007 to $23bn by 2010. Our Archive
Appliance sales growth remains in excess of 50% in constant currency terms after
the first nine months of the current year, compared to the comparable period
last year. This is the focus of the Company's growth plans.


Plasmon has best-in-class solutions for customers in this fast growing archive
market, particularly those seeking to move essential, but rarely-accessed, data
archives from expensive hard disk (RAID) servers to a lower cost, more permanent
storage infrastructure tier. In order to fully capture this market opportunity,
Steven Murphy, the new CEO, is extending and accelerating the Company's growth
strategy. With the support of investors in the recent Placing, Murphy is now
building a customer-facing marketing, sales and service channel in order to win
major account business and support our Resellers. The Board believes this will
enable the Group to deliver significant future sales growth, and complete its
transformation from a "technology-led" to a "sales-led" business.


Recruitment of new senior sales executives (predominantly US-based) has been
underway since late 2007, and most have now been identified and are ready to
join the business. 9 of 14 of these senior executives have signed offer letters
and have had successful careers with industry storage leaders.


Primarily as a result of this investment in a faster growth strategy, the
Company has deferred its cash break-even target to second half of financial year
2009. The growth strategy builds on two successes achieved in 2007. Firstly,
the signing of 18 new reseller channel partners and secondly, a major programme
of operational restructuring, which has already reduced the overhead cost base
by 20 per cent when comparing the nine months ended 31 December 2007 with the
comparable prior year period. The Company expects to reduce headcount by 25 per
cent when the outsourcing of hardware manufacturing is concluded in June 2008.
Contribution margin on sales is now approaching management's target of 60 per
cent.

[timtom2] 12/2/2008 13:49

They haven't given the base from which 4x was measured too.

10M$ to 40M$ is one thing, 10K$ to 40K$ is another.

[mikey_b] 12/2/2008 13:24

of course but in the text a more useful figure could have been promoted. How much increase in sales is expected with a fourfold increase in pipeline? How long will it take the pipeline to be effective / trained...will Plasmon still exist then?

[timtom2] 12/2/2008 13:07

I think it means opportunities - not so impressive - but with out the opportunities you can't get the sales.

[mikey_b] 12/2/2008 13:01

"increased the sales pipeline fourfold" what does this mean? the pipeline is easy, its the sales that matter. Anyone can set up as a reseller of products but that doesn't always translate into sales.

Margin is great, sales figures maybe not.

Good luck

[timtom2] 07/2/2008 17:37

Interesting part, looks positive, except if you're losing your job in the restructure:

"........two successes achieved in 2007.

........grew Archive Appliance sales by c.50 per cent year-on-year and increased the sales pipeline fourfold.

........already reduced the overhead cost base by 17 per cent and, the Company expects, will have reduced headcount by 25 per cent when the outsourcing of hardware manufacturing is concluded in June 2008.

Contribution margin on sales is now approaching management's target of 60 per cent."

[mikey_b] 07/2/2008 16:39

thanks aquilla.

[aquilla] 07/2/2008 16:33

Not sure, mikey. This is a massive dilution, almost doubling the number of shares in issue. I guess the pending placement was one of the factors depressing the share price recently.

[mikey_b] 07/2/2008 16:08

it might actually be worth buying soon. Are the shares at a discount to NAV yet?

[aquilla] 07/2/2008 16:06

Looks like that break even position is going to have to wait a bit longer:

"Primarily as a result of this investment in a faster growth strategy, the
Company is now deferring its cash break-even target to 2H09."

But at least there seems to be some solid support for the company:

"29,420,211 new ordinaryshares have been conditionally placed with Invesco Perpetual"
"26,838,200new ordinary shares have been conditionally placed with Hanover Investors "
"In addition, the other directors of the Company intend to subscribe for
1,500,000 of the new ordinary shares to be issued under the Placing.
The other placees are primarily investment management firms and existing
shareholders in Plasmon."

[timtom2] 06/2/2008 21:11

Anything is possible, nothing guaranteed.
Interesting none of the funds have ditched it.
Will this be the company that marrs Hanovers reputation as turnaround masters?

[gnnmartin] 06/2/2008 12:53

hang, thanks for posting that. I do follow mikey's arguments, but they just don't feel right to me. Interesting to see the remarks on electricity usage.
Nigel Martin

[mikey_b] 06/2/2008 08:55

brando, recommend premium bonds mate ;-) Disks are so yesterday

[brando69] 06/2/2008 02:14

i am 75% down on my modest investment in this dog.

am going to forget about it and come back in 5 years and see if i have any money left...

[hang] 05/2/2008 23:46

This is from last November but gives a half decent picture of the future prospects if the sales figures come any where near projections/potential
Where is Plasmon going?
An optical automation niche or the large general archive market

For Plasmon UDO has been a hard field to plough. It has cost Plasmon a re-financing and a CEO change because development costs were high and sales haven't been high enough. One view of Plasmon is that it is stuck fast in a niche from which cost-cutting and a stronger sales discipline will extract a profit but not position the company for growth post-UDO.

Another view, that of the refreshed management team led by Stephen Murphy, is completely different. Their song is that the archive times are a-changing.

Data centre bosses driven to look for power-savings are looking afresh at moving inactive data off spinning disk drives and onto an archive, an archive which provides near line access, stores data immutably and has a very long life with economical cost of ownership. Because of this Plasmon's prospects have changed from document-managing departments and niche image stores to more general data centres and it believes its addressable market is growing.

The downbeat view
This view is based on the relatively high cost of UDO drives and a particular estimate of the addressable market for automated optical archive products. It goes like this, according to sources familiar with Plasmon's situation.

Plasmon's desktop single drive UDO system is priced at £1,700 in the UK and under $3,000 in the USA. One source said: "Assuming any reasonable manufacturer's trade margin puts the absolute minimum possible factory cost at $1000.00 US or more. My experienced estimate is $1300 - $1500.00."

That estimates Plasmon's single drive build cost is in the £700 area. The source said that, at this price: "there is virtually no chance for any stand alone/desktop drive market of any real substance ... At that level it is not possible that there will ever be a significant desktop drive market ... (and) a volume of 30 to 50K units per year is required to even make a price near $3000 work," based on volumetric factors affecting drive costs.

Plasmon has sold 600 drives to the Romanian government and several hundred non-networked Gatso speed cameras in the UK will have UDO drives fitted. The source said this: "exactly makes my point. (Regarding the Romania deal) the numbers are tens and hundreds, not thousands or tens of thousands."

The conclusion is that the real market for UDO lies in automation devices with multiple drives. The source believes that here too the drive cost and also the media costs have limited UDO's prospects as a multi-drive archive device. He says that, according to IDC numbers: "The (optical) autochanger market has declined from a high of around 20,000 units per year in the mid 1990's to fewer than 4,000 units in 2007." The autochanger market excludes CD and DVD jukeboxes and desktop single and dual drive units; it's a multiple drive market.

"If Plasmon today has 80 percent of the data disc jukebox market it may be selling 3 - 4,000 units per year. There is no possible way the drive market for UDO exceeds 20K drives per year." Because of the drive cost: "As a result, Plasmon loses money on every drive built and will continue to for the life of the program." Further; "There is no way that the realistic, accessible market available to Plasmon exceeds $100 million US world-wide.

A Plasmon partner view
In the past, according to a Plasmon partner, the company was technology led, and had, has, excellent technology. "The technology is great; the technology guys are great guys, but they've not been knocking socks off sales-wise." The company built two general customer bases: document management in the UK and mainland Europe with G-Series libraries; and PACS medical image stores in the USA.

But now things have changed: "It's becoming far more sales and marketing-led. Everybody in the UK reports to the US; all the top management is there. It has to be more of a sales and marketing company. Mike Koclanes (Plasmon's chief strategy officer) is far more of a sales animal. He's out there to make the business grow. Plasmon is an archiving company. The future is the Archive Appliance."

"The IDC archive and HSM market is $800 million now and will be $2.3 billion by 2011."

This fits in with IDC's Carla Arend who said that the archive software market grew by more than 30 percent from the first half of 2006 to the first half of 2007. It is the fastest-growing segment of the storage software market which IDC tracks.

The partner believed that the archive market perception has changed as people have understood that parking mountains of old data on hard-to-access tape and sticking it in a vault is not the be-all and end-all of archiving. "In the archive world you need random access and write-once and offline. These are the three things you need for an archive and compliance environment. I think the world is re-discovering archiving."

The arrival of compliance has meant that archive data has to be accessible, meaning you have to know what you have got; you have to be able to find it; you have to know it hasn't changed; and you have to be able to access it in a reasonable time.

He rules out tape for this, it being sequential access, and said: "We are enamoured with optical media. UDO is solid; it works; the media is cartridged; it lends itself to being taken out of the box." Bare media like Blue-ray is not.

Archive Appliance
The Archive Appliance is not just a UDO jukebox, with a few drives and a robot to move UDO cartridges between drives and slots. It has two storage tiers: a RAID disk cache up to 2TB in size; coupled, roughly speaking, with a UDO jukebox having up to six drives, 638 slots and 38TB raw capacity. These two tiers are managed by a software layer which represents the device as a network-attached storage (NAS) resource. This can be twinned with Nexsan Assureon software, forming an Enterprise Appliance, to meet compliance needs concerning retention periods, data access, data immutability and so forth.

Plasmon also sells data moving software; the Archive File Manager which integrates data and storage discovery, contextual classification, and automated data management into one intelligent file system archiving solution. It uses IT-defined policies to pull static data off NAS and storage area network (SAN)-based storage, and migrate or copy it to the Archive Appliance.

Plasmon's view of its market
Plasmon sources don't dispute the general drive cost figures nor the raw volumetric view of the interaction between drive volume and cost. But this is not the whole story by a, long, long chalk according to Plasmon.

Yes, the Archive Appliance is an optical automation system and so fits in the IDC optical automation market figures but it is not just an optical storage system. It is an archive system and plays in the enterprise archive market, one much bigger than the pure optical automation market.

Plasmon talks of three storage tiers: the first is Symmetrix and other high-end disk; tier 2 is Clariion-style drive arrays; and tier 3 is the data archive. ESG ascribes a 58 percent CAGR to 2010 to this tier 3 market. In data size terms it amounts to 6,000PB now and will grow to 27,000PB in 2010.

This archival data is largely unstructured with 82 percent of it comprising unchanging file objects and 10 percent e-mail data. The rest is database data, not best-suited for UDO. Murphy said: "Ninety two percent of it is addressable by our technology. It's our sweet spot."

Ninety two percent of 6,000PB is 5,520PB, and the same percentage of 27,000PB is 24,840PB. Even if the numbers are halved for the sake of caution, with removable media only being used for 50 percent of the data, they are still very large. Koclanes said: "The potential is huge." Murphy added: "We're just scratching the surface here."

Incoming CEO Steve Murphy said: "We're looking at a fully-blended market these days, not a drive-only marketplace." Koclanes said: "Our average Appliance deal comprises disk plus UDO plus software plus services." This has a much higher value-add than the UDO drives alone.

He says that if you use serial ATA (SATA) disk arrays for random access to long term retained data then you have to do backups and replication, adding to costs. With the Archive Appliance UDO is a much lower cost long term retention medium and is still random access, making it preferable to tape.

Also the apparently niche medical image market is in fact very large and Plasmon's total addressable market has expanded, because of the Archive Appliance, to general enterprise archiving.

Plasmon's TAM
Murphy thinks the idea of Plasmon's total addressable market (TAM) world-wide being limited to $100 million is plain wrong. Plasmon has signed up AVNET in the USA as a channel partner and, Murphy said, AVNET doesn't sign up to revenue opportunities smaller than $150 million a year.

Plasmon also has GE Healthcare as a PACS sales partner in the USA and it has more than $100 million a year of UDO system-based sales revenue.

Murphy wasn't able to present a dollarisation figure for Plasmon's TAM. We might come at it from the other direction, and add together GE Healthcare and AVNET and suppose that Plasmon could be playing in a half billion dollar market today.

Plasmon says it doesn't look at its market in terms of drive numbers. We could essay an attempt and say if we assume a ratio of one drive per 10TB of data then a 5,520PB market represents a 552,000 drive market and a 27,000PB market equals a 2.7 million drive market. So these crude numbers represent potential good news regarding the effect of volumetric efficiency on drive cost

Power Efficiency
Murphy says Plasmon has a very compelling story regarding green initiatives. He suggests that: "A 20TB Centera archive would cost $1 million in power consumption over ten years, more than our solution itself would cost. We're orders of magnitude less than that." Also as the vast majority of the media in an archive appliance is offline, parked in slots, it consumes no power, unlike Centera whose disks are constantly spinning.

Plasmon is not leading its marketing with a raised green flag. Murphy said: "We do think the green issue is increasing in importance, but we don't lead with a green message. We solve the business issues first. We're not jumping on the green bandwagon."

Putting the views together
The downbeat view of Plasmon implies that it is held fast in an optical automation market of limited size where its drive costs and drive volume preclude volume sales and limit its prospects.

The refreshed Plasmon management view is that it is not limited to such a market and is already selling archive products representing a solution and not a raw box, a system with software, service, RAID disk and UDO drive and media components that has a much higher gross margin that the drives alone. It has a fully-blended margin.

On top of that, due to the serendipity of data centre power and space constraints and the onrushing compliance forces impacting business the archive market is booming. Using tape slows down data access and having disk-only products puts up costs, both acquisition and running costs.

A combination RAID cache, UDO jukebox, archive software stack and service approach provides an attractive, even compelling product offer that can be targeted at a market growing from at least 3,000PB now to 13,500PB in 2010. To paraphrase a mobile phone company, the future's bright, the future's optical.

[timtom2] 31/1/2008 21:06

More than likely, perhaps, but there is life in the old dog in my opinion and the new US CEO is no mug. I'm not convinced with the backup using HDD alone (even multi-site) and think there is still a need for optical in the mix. The archiving area has lots of constituent parts and PLM are moving to service provision rather than just component - software, hardware etc.

It's going be a long haul.

[timtom2] 31/1/2008 17:44

They don't have to be the best to be profitable. "If" in this context is make money, not lead technically.