Riverfort Global Opportu... Share Discussion Threads

[glasshalfull] 23/11/2009 20:18

Couple of further announcements.
Reading both (and between the lines) it appears that business is booming.

Roll on results :-)


17/11/09

2ergo Takes Australia by Storm Following Wapfly Acquisition




and

19/11/09

2ergo Announces Appointment of New Head of Media and Entertainment, James Macdonald



Snippets from 2nd announcement whetted my appetite

"appointment reflects 2ergo's success in this dynamic market and the scale of opportunity for content owners and marketing agencies to capitalise on the potential of mobile."

"...he was responsible for setting up O2's Media division and developing the Telefonica O2 Media proposition across the UK market..."

"2ergo is an ambitious company, which is increasing its global footprint almost daily after a succession of strategic acquisitions last year. The company has an unrivalled and prestigious product suite offering clients a world class, 360 degree mobile technology service. My aim is to develop 2ergo's already strong relationships and make the company the mobile partner of choice within the media and entertainment industry."

Regards,
GHF

[glasshalfull] 13/11/2009 13:31

Confirmation that results will be released on 24th Nov.



The fact that no trading statement has been issued since the interims were announced on 19th May indicates (to me) that they will meet forecasts of £3.5m PTP and 8.3p EPS...so PER for year ended approx. 15

Reminder of Outlook Stetement released with interims:-

Outlook


Despite the current global recession, industry commentators continue to predict significant worldwide growth for the mobile technology sector, a view that the Board shares and which is upheld by the Group's continued strong performance during the period. This natural sector growth coupled with planned increased investment in sales and marketing will support the Group's organic growth in its current territories. Further growth will be driven through the Group's global Business Partner Programme and acquisitions, both of which have considerable traction with an encouraging pipeline of opportunities.

I am hopeful that they will issue a bullish outlook with the Final Results and I would be concerned if broker forecasts for 2010 weren't raised significantly.

With growth of smartphone segment I'm convinced that RGO will be a beneficiary and I should add that I have also taken a position in VEL.

Regards,
GHF

[theo13] 04/11/2009 11:17

good to see they are doing something, even if the share price is languishing! thanks smell.

[shroder] 07/10/2009 13:44

steady as she goes, couple of large trades at the bid this am

[ltinvestor] 30/9/2009 17:22

......and much more to come.

[shroder] 29/9/2009 09:26

A little blue before the IMS

[glasshalfull] 23/9/2009 18:22

Nice pick up from lows...from charting perspective.

We know revenues will be lower given RGO's reduction in low margin work....here's hoping that the global expansion is paying dividends.

Regards,
GHF

[ltinvestor] 22/9/2009 14:31

According to last years calendar a post year end trading statement is due anytime.

[philtiggis] 20/9/2009 16:07

and China
1 June 2009

2ergo, which provides mobile enabling technology to some of the world's leading brands, is furthering its global expansion plans by today announcing a significant business development partnership in China.

The UK-based company, which provides the enabling technology behind major mobile marketing, customer relationship management and entertainment and media campaigns, has agreed the strategic partnership with telecommunications business development specialist, Intralink.

The agreement will enable 2ergo to extend both the reach of its mobile communications services to companies operating within the burgeoning Chinese markets and also strengthen its proposition to its existing worldwide clients, which include Microsoft, Proctor and Gamble, and Yahoo.

China alone has a massive 592 million* mobile phone users, which demonstrates the explosion in mobile and smart phone usage within the country and the market potential for blue-chip brands looking to engage with consumers via their handsets.

2ergo will leverage its partnership with Intralink to focus its business efforts primarily on forging relationships with major broadcasting companies and mobile network operators in China.

Chris Brassington, group managing director at 2ergo, commented: "This exciting partnership enables us to bolster our global expansion strategy and make significant moves into new, rapidly expanding markets, such as China. The mobile and smart phone is king amongst consumers in China, making 2ergo well placed to offer the technology platform to global brands looking to interact more fully with their customers via the mobile channel."

[philtiggis] 20/9/2009 16:02

I used to work for Neale Graham the CEO. I can assure you he is a very very shrewd businessman. They are developing in Africa and India where there is a great need for mobile banking. The mobile phone market growth in these 2 countries is phenominal. I am sure this company is going to go from strength to strength.

[essentialinvestor] 18/9/2009 20:46

Many thanks for the responce.
Technology is not usually a Sector that I consider,
like many I see Mobile as a huge growth area so I will look in more detail.

[glasshalfull] 18/9/2009 20:31

Thanks WJ.
Dipped a toe in as I concur with your thoughts that the scaling down of the low margin business may disguise the shift change in RGO's push into mobile applications and security.

EssentialInvestor - I've had a good look at the company both in terms of product and financial performance.

They describe themselves as :-

"a leading global provider of mobile enabling technology with a focus on mobile marketing, mobile customer relationship management, and mobile entertainment and media."

They have spent 10 years developing a technology platform known as "Multiserve" which contains the technology to integrate voice, data, text, email, video and mobile Internet.

Their Annual Report and web site further describe what they actually DO, namely develop a suite of products around the Multiserve Platform which assist clients (mobile operators, marketing businesses) develop marketing & advertising campaigns, provide media content and most importantly provides a platform which integrates a multitude of functions - one stop shop.

Page 12 of the 2008 Annual Report provides a better overview than I could describe here.



Is their offering unique?

No, there are other mobile enabling providers but as 2ergo spent 10 years (according to their releases) developing the platform and significant IP during this period I believe that the significant investment, time and costs to develop rival platforms would provide barriers of entry to those wishing to take advantage of the growth in mobile technology.

As WJ has alluded to, the management of the company has proven themselves more than capable of building a platform that counts O2, Yahoo, Fox News amongst its clients. We are now clearly observing the mobile content market exploding and I believe the RGO could be a significant beneficiary.
The recent acquisitions and notable management appointments suggest that the company is gearing up to take advantage of this growth by establishing a global footprint.

The fact that they are cash rich, exhibit strong cashflow, growing profitability and increasing margins was enough to tempt me in despite the fairly rich PER as I believe that they will demonstrate considerable growth during the next year and share price by then will have been left far behind.
I certainly haven't built what I would consider to be a full investment as the next results will indicate reduced turnover as they continue to cast off the low margin business, and I want to be sure before building a large stake in a fairly illiquid small cap.

Here are a few recent announcements which highlight the direction in which they are moving.

14th September 2009

2ergo, a leading global provider of mobile enabling technology, has appointed Mark Gilburt as Head of Telecommunications and Public Sector. This appointment fulfills a crucial component in 2ergo's global growth strategy and will enable 2ergo to further develop these sectors and expand across key regions.

Mark has more than 20 years experience in complex business-to-business technology environments and has held senior positions with Vodafone Group Plc, O2 Plc, and comes to 2ergo from THUS Plc where he was Head of Mobile Business Development.



15 September 2009

2ergo, a leading global provider of mobile enabling technology, has appointed Danny Jennings as Head of Retail and Finance.

Danny brings to the role a huge range of experience in the sector, having worked for 11 years in financial services and 10 years in the mobility solutions market for companies such as American Express and Carphone Warehouse. His experience spans a global scale, with stints in the UK and USA, as well as Ireland, France and the Netherlands.




I'd be interested on your own take. I do not have a background in this industry, merely an appreciation following the purchase of a smartphone and discovery of the improvements in mobile technology over the last couple of years.

I'm sure WJ would be able to provide a far technology update than I have managed.

Regards,
GHF

[wjccghcc] 18/9/2009 10:38

Welcome aboard GHF.

[essentialinvestor] 17/9/2009 15:19

Ghf


Do you have a clear understanding on exactly what RGO offer that makes
their offering unique? and can this not be developed independently by telco's themselves.?

Struggling to grasp the investment case here.


Many thanks in advance.

[glasshalfull] 17/9/2009 14:55

Hi WJ

Well having conducted my due diligence & I've been a buyer for the last week.
Responsible for increase today.

Have to say I agree entirely with your write-up. I'm always on the hunt for long term growth stories and believe that RGO are on the cusp of considerable growth over the next few years with provision of mobile data services more apparent to me since the purchase of an iPhone.
Certainly a look at the recent appointments (on web site) is a clear indication that they are gearing up for it.
Also like the strong B/S.

Caveat as before, they look fairly priced on a PER basis.
Given the significant growth potential of the business I'm not concerned, as by the time results demonstrate this the share price will in all probability reflect the growth.
Well I hope so anyway.

Regards,
GHF

O/T

I'd also looked at VELTI and have a few misgivings despite their sterling growth. WIN - not for me. Iknow of the irish company you mentioned....believe it or not, I've also forgotten it's name :-)

[ltinvestor] 03/9/2009 19:14

The company is buying back shares.

[essentialinvestor] 03/9/2009 17:08

Perhaps they might even buy a few shares then if the prospects are so great!!

[ltinvestor] 03/9/2009 16:56

My information is that this is a completely different business to the one that was floated.Trading is robust and the directors are extremely confident about the future.There is even chatter about a dividend being announced with the figures!!

[wjccghcc] 28/8/2009 10:28

Hi GHF,

Its a shame about the broker's note - they used to put them on the RGO website but I suppose the brokers complained.

I made a good turn out of these in 2006/7 selling at around 240p and have recently started buying back at 115p.

I believe there will be an exponential increase in mobile data services over the next 10 years as heralded by the iphone and so have been looking for what I consider the best risk/return play in the sector. IMHO that's RGO. I've looked at Velti and Win (and the Irish one whose name momentarily escapes me). Velti has lousy cashflow so I'm a bit sceptical on their profits and Win has always been behind the curve and never meets its forecasts for more than 2 periods in a row. RGO has good cashflow, a great client list and delivers on its forecasts. The only blemish is the Broca episode (although shareholders took most of the pain on that one) which they've recently bought back in house.

The downside is, as you say, that they're not particularly cheap on a PE basis. However, I think their progress is being disguised by them deliberately reducing the low margin business to free up capacity for the higher value services. This process probably has another 12 months to run so I don't expect the market to sit up and take notice in the short-term but I'm happy building up my stake at these price levels over that period.

Be interested to know your thoughts when you've done more research.

Best
WJ