Proactis Share Discussion Threads

[p1nkfish] 28/4/2016 20:01

was redcentric in uk and someone else in usa

[oregano] 28/4/2016 17:50

Banukin - I met with the management team at the Sea Salt event. What struck me is that this is more a service than technology business. It is not a software platform you can just roll out, hence the reason why the new logo wins is a fairly constant number.

[lewis winthorpe] 28/4/2016 17:45

Just a theory Bakunin but simple and sensible approaches seem to be the reason and no major investment upfront letting the good designs lead to natural low fruit.

They know where they fit and don't try to be something they are not....yet.

Keeping their head and all that

[bakunin] 28/4/2016 17:37

Theory is that 2 types of complexity block technology uptake, adoption complexity and implementation complexity.
I think eclair has alluded to adoption complexity (not familiar/easy enough for users), but I thought device proliferation and the Cloud was supposed to be turning everybody into technophiles.
For the smaller suppliers, surely it's just a question of filling an invoice form in on the browser rather than typing it out. For the larger ones, it must surely be worth their while to adopt specific batch interfaces (easy capital investment analysis: spend £10k on the system/development, save £15k on the secretary doing it etc).
As for implementation complexity (integration to ERP etc systems), that is where we find if PHD's software is any good, I suppose.
One thing that has bugged me ever since jumping on board this PHD train is: how come PHD are any better at doing this B2B stuff than any of the legions of software companies that have come and gone since the dot-com bubbble, Ariba, Kewill etc?
Was it merely that adoption complexity has only just got solved thanks to the cloud/better browsers/mobile and so all the others burnt through piles of cash because they were too early to the party?
Anybody have any ideas about this?

[eagle eye] 28/4/2016 16:36

A couple of 100K buys late in the day at 135p, so looks like some institutional interest.
A good rebound after yesterday's fall. At close 130-136p +6p

[lewis winthorpe] 28/4/2016 14:44

moving back up with minimal buys

[eclair] 28/4/2016 10:06

Pink and Lewis,

I hope you're right and I'm wrong. I look forward to some news about levels of uptake from Screwfix and other early adopters. If those numbers are good, then the share price could fly, as there would be no reason why it couldn't be replicated across all Proactis customers.

[p1nkfish] 28/4/2016 07:34

As far as invoice entry is concererned I don't see a big problem. They could export or upload to the cloud and for all we know Intelligent Capture might have some involvement.

Concur allows smartphone snap shots to be used.

None of this need be too problematic unless I'm missing something.

The days of pure paper invoicing are on their last legs.

[p1nkfish] 28/4/2016 07:31

They could increase share count by about 25% and placed with institutions it would bolster the share register.

This is a classic small cap growth buy and hold and it would be no surprise to find institutions would want in but not at just any price.

My current floor would be 120p, possibly 125p, if this were to occur.

Have some cash ready to compensate for dilution?

Anyone else have an opinion?

[p1nkfish] 28/4/2016 07:25

With a relatively small float I woner if the market has got wind of some issuance to fund an acquisition?

I've seen a number where the share approaches a future share offer price before the wider market got wind of it.

They could take it to 50M shares with the extra 10.1M approx issued at 120p-125p and have a real war chest ready.

With the interim statement unequivocally positive some institutions would look to buy in else they don't stand a chance buying in the market without the price running away.

Broker has had 'corporate' on this for a while.

If they raised £10M (I think possible) they would be in a very strong balance sheet condition and no problems funding new services or an acquisition or 2.

I've been in this long enough to remember Rod Jones saying along the lines that the small cheaper targets are gone and deal size will increase.

[lewis winthorpe] 28/4/2016 01:13

The effort is here's your username, login at this address and get paid 2 weeks early.Hard graft.. Not

[eclair] 27/4/2016 23:25

Pink,

I hope you're right about the lack of complexity, but if you are a supplier currently posting or emailing your invoices to Screwfix, how do you suddenly get them into the web interface? Surely some kind of IT effort is needed on your part.

[lewis winthorpe] 27/4/2016 22:26

Don't forget the due north impact too. 300 public sector clients with up/cross sell opportunities.Can't see any negatives at this point

[p1nkfish] 27/4/2016 20:54

Henderson may have unloaded a few more.

I read today as being as expected (no fireworks) but was also taken aback about with the positivity and there being little doubt about what will happen.

Granted the increased revenue will be at a lower margin to the core business.

They will most likely split it out in future results so the core can be seen separately to the higher revenue, lower margin factoring type income.

I also take the sell down today as overdone.

What's not to like?
Big market to go for and the products ready to offer to it.

[lewis winthorpe] 27/4/2016 19:09

Why wouldn't a supplier adopt it with the fee paid by screw fix and the supplier gets paid quicker.Start doing the maths with the 1 million suppliers have across the client base and this gets scary. Even a small percentage.I've never heard such enthusiasm from a CEO before in an RNS which is very interesting.Almost a gift to all the faithful. The move today was overdone.

[p1nkfish] 27/4/2016 17:30

It doesn't stop people using Amazon services or different banks.

I fail to understand the complexity when it's a web interface and Screwfix are already using a system to manage their P2P, suppliers and catalogue.

The supplier surely just has to log in and the Proactis interface should be OK with the majority of ERP etc??

Please educate me as to the complexity.

[eclair] 27/4/2016 15:40

Bakunin,

The difficulty with the interface for suppliers is that whatever is provided by Proactis will only work where the suppliers customers use Proactis. So as a supplier what are you supposed to do - use a different interface for each different system that your customers use.

Clearly Proactis don't need all of Screwfix's suppliers to sign up for the service and as Screwfix will be paying Proactis £50 for each supplier that adopts it (I assume I have got it right that it is not the supplier who pays £50 for the privilege), I guess Screwfix will only target their bigger suppliers where they (Screwfix) will make savings.

The question really is what proportion of suppliers need to sign up in order for it to return a decent profit for Proactis from both Screwfix and all of Proactis' other customers.

I hope I'm not coming across as negative and like you I am reassured by the 'substantial contribution to revenues' statement.

[p1nkfish] 27/4/2016 10:38

absolutely Lewis.
Some money wants in.

[lewis winthorpe] 27/4/2016 09:55

The tree is being shook, watch for this to move back towards the start of e day so this afternoon

[bakunin] 27/4/2016 09:44

eclair
It is a breath of fresh air to read your interesting comments.
When you say "if all our customers offered us the same interface, we would consider it", is that not the substantial L-T opportunity for PHD if they manage to be the ones who get a ubiquitous interface adopted? Screwfix and now 300 public sector customers is a good base from which to attempt such a task?
It is unusual for a CEO to set themselves up for a fall, so the following comments might be significant:
"We look forward to announcing further early adopter commitments in the coming months along with a substantial contribution to revenues anticipated for the next financial year.

"I have many reasons to be confident in the growth opportunities that the Group has available to it and I am confident that the Group will deliver against its ambitious plans."

[p1nkfish] 27/4/2016 09:43

People are too short term and would rather trade.
This is solid and management with feet on the ground and a lot to go for.
Massive total available market.
Truth will out in the end.

[eclair] 27/4/2016 09:29

I wonder if the supplier payment facility (started with Screwfix) is not moving as fast as expected. I worked for a company that tried to get its suppliers to trade electronically by offering them accelerated payment of invoices.

It proved very difficult. The standard response was why should we invest in doing this just for you (the benefit doesn't justify the cost of setting it up) - if all our customers offered us the same interface, we would consider it.

In the end, we only succeeded with a handful of large suppliers who were submitting high numbers of invoices on a daily basis. We saved money by not employing people to key invoices into our system and in return we paid our suppliers quickly.

The benefit to our suppliers was a small one off cash flow improvement and a reduction in the number of invoices that were queried.

The key for Proactis is how many suppliers Screwfix can sign up. Lets hope its lots.

I notice that the acquired companies still seem to have been operating largely autonomously and that Proactis will now start to integrate product and technologies. From experience I think this is where substantial cost savings can be obtained, but it is also fraught with the risk of cost and time difficulties, so I will watch this with interest.

What I do particularly like is the increase in the order book (contracted revenue) of £4m.

Although there seems to be a bit of a sell off today, in my view this is a cast iron long term hold

[wjccghcc] 27/4/2016 08:12

hydrus, it's the way they account for their revenue (SaaS) meaning most is booked in later periods. The important figures are the initial contract value.

[p1nkfish] 27/4/2016 07:44

hydrus, it was expected.
in a period of foundation building.
was no surprise to me.
this is a buy and ignore.
give it 3 more years.
I'm just annoyed insc was bought by bentley park and taken private as that would have been a good partner hold too.