Proactis Share Discussion Threads

[pj0077] 23/8/2018 16:45

I think you need to re-take your accountancy exams, helm!

[pj0077] 23/8/2018 16:44

That's correct, the Proactis Cashflow Statement reveals allThe amortisation of intangibles is greater than the capitalisation of development expenditureSo if the company neither capitalised nor amortised, reported profits would go UP, not down

[ryesloan] 23/8/2018 15:54

Capitalisation of R&D is required under IFRS is it not? And the flip side will be the intangible asset amortisation reflected in the statement of income? So taking 2017 accounts you see £2.6m capitalised but £3.3m negative revenue for intangible amortisation...

[helm1] 23/8/2018 13:00

I would expect a software company to be capex'ing some of its dev spend, but the level here looks too high. As far as I can see, if all dev spend is charged, they are making no money, and will still be making no money even with some more customers. Has anyone got any figures to prove me wrong?

[p1nkfish] 22/8/2018 14:59

Look at the increased £ per deal this year = sales leverage. IMPORTANT.

64 new names with a total initial contract value of £8.7m (2017: 54; £4.1m). IMPROVED.

120 upsell deals with a total contract value of £3.6m (2017: 110; £2.8m).
IMPROVRD A LITTLE, right direction.

55 of the 64 new names (2017: 44 of the 54) were subscription deals with the remainder being perpetual licence deals.
IMPROVRD A LITTLE, right direction.

[pj0077] 22/8/2018 14:40

Nothing wrong with capitalising expenses if the revenue from such expenditure extends over multiple years.Have you forgotten the concept of 'matching' from your accountancy exams?

[rivaldo] 22/8/2018 10:51

Good to see no more negative surprises, projected savings achieved etc. I'm happy to hold given the large potential upside.

The respected Techmarketview are positive this morning:



"Wednesday 22 August 2018
Steady progress expected at Proactis

The shares of global spend management company Proactis Holdings almost halved in value in April as investors reacted to lower organic growth and the loss of several larger customers.

Management are now working hard to rebuild investor confidence and although this may take some time, there are several reasons for optimism. Firstly, the churn of customers has returned to more normal levels and the pipeline of new business is encouraging. It generally takes 6 months to bring convert a new customer contract to revenue and so the relatively poor performance re client intake in 2017 has now worked through the system. New client acquisition in the past year has been stronger with 64 new names and an ICV of £8.7m (compared with 54 and £4.1m in the year to July 2017).

“Upselling” is also a major current positive. 120 existing customers either signed up for more seats or took on more modules, thereby increasing average contract revenue. Here Proactis has built an extended portfolio of services, often by acquisition, for example with the latest deal to buy Netherlands-based Esize giving them a travel and expense management system. The large Perfect Commerce deal also provided a strategically important network solution linking buyers and sellers, thereby opening up further opportunities for supply chain management and finance solutions.

Proactis now has a top 5 position in its market, focusing on mid-market companies, on-boarding them relatively quickly and providing a development path of additional functionality to drive consistent value. Management will report £52m of revenue and c.£17m of EBITDA for the full year to July. They are anticipating a return to higher rates of growth in the year to July 2019.

The company has the strategy, market reach and the portfolio to regain its momentum, although this will not happen overnight."

[p1nkfish] 22/8/2018 10:12

Look at average deal size vs past. Do it yourself. Get the idea.

The 2 customer losses of H1 were expected to happen later than they actuslly occurred and both same sector & old & unfortunately relatively large. The surprise was timing, not the customer loss per se.

As Hamp Wall said, they can't be lost again and others are lower value, more diverse in segment & of higher #.

That means risk greatly reduced going forward.

Watch what happens when the payments side begins to show through. This will fly imho.

[mfhmfh] 22/8/2018 10:03

This from FinnCap who today reiterate 250p target price:

'Proactis has released a further trading update for the period ending July 2018 reiterating unchanged performance as described at 7 August, highlighting marginal improvement in underlying revenue 2H vs 1H, after accounting for the contract losses at interims. Client contract retention (expected at c90%) has returned to reasonable rates – leading to prospects for a return to net growth in FY19 and beyond given the momentum in new client wins. As the fifth-largest global operator in the pure-play spend control arena (a market growing at 11% per annum), yet trading at 5.9x EV/EBITDA, FY19 is expected to demonstrate the post integration execution of organic growth from a lower combined cost base to generate significant improvement in profitability and a track record in strong underlying cash generation.'

[pj0077] 22/8/2018 09:18

CorrectYour comments are pathetic, IMO

[eezymunny] 22/8/2018 08:23

This lot are IMO so bloody desperate to put a positive spin on things...

"Given that revenue" of £26.4m as reported in the interim results to 31 January 2018 announced on 24 April 2018 ("Interim Results") included approximately £1.0m which was non-continuing as a result of the loss of a small number of customers and also that it included the benefit of stronger US Dollar and Euro currencies, this suggests that the Group's revenue for H2 2018 was marginally ahead of underlying revenue1 for H1 2018"

Which in my book translates, in layman's terms, to "we'd have grown H2 if only some of our customers hadn't decided that a) they didn't need our software or b) they decided to dump our product and use a competitive one"

IMO it's a bit like Kodak saying they'd be the greatest company ever, if you ignored reduced revenue due to digital cameras...

FFS they lost customers. Revenue reduced. They didn't grow. Why try to say otherwise? It's just pathetic IMO.

[eclair] 20/8/2018 11:10

p1nkfish,Thanks for your ongoing comments. Much appreciated.

[eagle eye] 20/8/2018 10:27

Today's Business Wire announcement:

General Nutrition Centers Inc. has selected Proactis to plan and execute online sourcing events

[p1nkfish] 20/8/2018 08:55

No doubt further bumps in the road ahead but on a 3-5 yr timeframe I can see this flying.

DYOR.

GLA.

[p1nkfish] 20/8/2018 08:54

Here it is. INSC/Ultimate Finance with PHD.

[p1nkfish] 20/8/2018 08:48

Read - now I remember- long game plan.

Inspired Capital/ULTIMATE FINANCE signed collaboration agreement in 2015.
This has been on the starting blocks a long while. Wonder if collaboration is still intact as reads as 12 months.
I expect the recent weakness to blow over and a period of good growth to follow soon enough.

The new EVP man was probably already known to PHD.

[p1nkfish] 20/8/2018 08:30

It's a funny old world.
Made a very decent return out of INSC that was bought by Joe Lewis - Ultimate Finance - out of which PHD have take on the new vendor finance man. Held quite a decent amount.

I thought PHD might take someone from Tungsten or OPM and forgot old INSC.
See the old INSC thread.

Who will be the 3rd party to PHD?

[p1nkfish] 18/8/2018 00:01

Strategic Equity Cap end of year report is due. Interesting to see if they comment on PHD investment.

[p1nkfish] 17/8/2018 23:55

All change at mill. Spendmatters mention Simon Dadswell moving on and replaced by a Millstream manager.

"More people news and Simon Dadswell, marketing supremo at software solution provider Proactis, has left the firm after 9 years, during which time he played his part in their rapid and successful growth both organically and through acquisitions.  Many procurement professionals will know him as a regular (and sensible) speaker at conferences – what will eWorld do without him!? He has been replaced by Penny Godfrey who was previously a senior manager with Millstream, acquired by Proactis in 2016. We wish Simon all the best in whatever hoe decides to do next – and of course also wish Penny well."

[p1nkfish] 13/8/2018 21:33

The vendor finance hire is out of Ultimate Finance, Tavistock Group owned company.

Now they have a driver for that new offering we should start to see it show up 12 months from now,

[davebowler] 12/8/2018 17:09

Progressive :The announcement begins with an update on trading for the year to 31 July. Given that the year ended so recently, the statement is necessarily brief; revenue of c£52m is shy of our £56m estimate, but EBITDA is pleasingly ahead of our forecasts, at £17m vs our forecast £16.5m. Revenue for H1 was some £25.4m, which does not suggest material organic growth in H2. Nevertheless, new name client wins (64 for the year) imply that the Q3 "hiatus" previously described has in large part recovered, and the upsell deals (119 in FY18, up from 110 in the prior year) are also well ahead of the company's target of around 100 per year. We comment further overleaf. The group has concluded a moderately-sized acquisition, paying up to €15m for a Netherlands-based Cloud-native (SaaS) provider of spend management solutions. The acquired company, Esize, has a degree of overlap with PROACTIS, but also offers travel and expense management, and contract labour. The deal clearly brings added geographical focus in the Netherlands region where the roughly 60 customers and 50 employees are based. As detailed overleaf, we make a number of changes to our forecasts, to reflect the better granularity for 2018 (where we map to the stated figures) and to include Esize in our 2019 numbers. We will add 2020 forecasts once 2018 is reported. The group appears to be moving on from its recent difficulties – management admitted in April that Q3 had suffered from a number of largely one-off issues. New client and upsell metrics strongly suggest that the business is now returning to form – even if this is yet to show in revenue - and the acquisition should provide opportunities for up-sell and cross-sell over time. We are pleased to see that the recent challenges have not derailed the group's long-term strategic ambition, and as long as FY19 tracks to plan and client churn can be mitigated, the benefit of much of the recent and ongoing M&A will hopefully

[p1nkfish] 10/8/2018 09:51

Proactis can help. Look at public sector spend available. Get in both buy and vend ends and it's easy to see the potential in this single target sector alone.