Shearwater Share Discussion Threads

[drew lonmenob] 31/3/2023 19:52

Poor poor tongosti lost a packet here

[elsa7878] 31/3/2023 18:43

elsa787821 Jan '22 - 18:58 - 2581 of 2938 Edit
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Here's the issue: 2 customers make up for over 50% of total revenues. What happens when they lose one or both or the contracts come to an end? Ridiculous concentration and shows that outside of these they are incapable of growing revenues in a meaningful way.

Two customers within the Group each make up more than 10% of the Group’s revenue. These two customers contribute £13.3 million and £4.3 million respectively to the Group’s Services division. In the prior year, three customers made up more than 10% of the Group’s revenue, contributing £9.2 million, £4.3 million and £4.0 million respectively to the Group’s Services division.

[deanowls] 31/3/2023 17:20

I’m hoping it was like D4t4 a few years ago. Have those contracts gone elsewhere. The silence is deafening.

[igoe104] 31/3/2023 14:59

Depends if they get a cluster of contract announcements. Its certainly not worth selling now, not at this level

[northwards] 31/3/2023 14:45

Difficult to see this going anywhere now. Trade sale at best.

[earwacks] 31/3/2023 13:51

I heard it was’Underwater’. Cyber security in general seems vastly over inflated as a market. There is always the potential from Apple and Microsoft to render it totally pointless, and clearly companies are looking for savings over security. Wonder if they will be doing a presentation again. Just a vacant seat, gone to lunch

[kemche] 31/3/2023 12:54

Rumours doing the rounds that it will soon rename itself to Sheermadness.

[bdbd11] 31/3/2023 12:44

Well what a disaster, sitting on a huge loss. Interesting that it's the same day as ECSC is taken over at a 170% premium to the trading price. That was another big loss maker sadly, though with bottom fishing in the 20's i'll get out at circa break even at the 54p take out price. This does make SWG look cheap at these levels and also perhaps a takeover target. Weaver, I'm in the same position as you, made the money in property and should stick to that, thought the relentless attacks on landlords makes that more and more unattractive.

[2lb] 31/3/2023 09:59

Certainly viable that some March contracts have moved to April, however I fail to see how that can have anything like the magnitude of a £10m revenue hole and a £4.4m EBITDA miss.

I suspect that the high margin software decline has accelerated and the lower margin business elsewhere has been more exposed as a result.

Its disingenuous for them to say they didn't see it coming in time to update shareholders, because if that is really true then the CFO should be fired.

[igoe104] 31/3/2023 09:58

Cheers Lammy, for keeping us updated.

[chrisdgb] 31/3/2023 09:55

Cenkos going for £30m in excess of revenues and £2-2.5m EBITDA...target price 105p......

[lammylover] 31/3/2023 09:42

2LB - useful insight. Thanks.
I emailed the PR company yesterday suggesting the CFO stick his hands in his pockets, buy a load and show some confidence in the business.

This morning I dropped another email to PR criticising the Board for slow response in making the market aware of the lack of contract wins / renewals in Q4.

Their response is as follows:
"As mentioned in the statement, the contract weighting does fall heavily into Q4 and more so into late Q4, so March is a key month for them, with timing of contracts moving into April having the sort of impact we have seen this morning".

Hopefully we will see some contract renewals or better still, "wins" next month.

[2lb] 31/3/2023 09:33

Once core problem is their inflated payroll

Average salary in FY22 was £73k up from £66k in FY21 and they have a bloated senior team all on much higher levels and most running underperforming operations.

Higgins holding is irrelevant, he made all his millions selling Brookcourt to SWG so his 2m shares are just loose change left over from that deal. To be fair to him he also never signed up for the CEO job but stepped in when the £500k a year previous failed CEO left and was not replaced. I suspect he would rather just put his feet up at this stage and enjoy his retirement.

The CFO holding is now worth £800...make of what what you will.

Whole strategy needs rethinking. It was supposed to all be about M&A but that died two years ago and will now not return unless via some mass diluting approach as all cash is need to deal with the next six months and the bank will likely now review the RCF facility.

Parallels with NCC in respect of inflated salary base and bloated senior levels that unwind if sales plateau or decline.

Still likely worth more than the price it now sits at but a lot of work to be done, just not sure current management are the team to do it........

[watcher13] 31/3/2023 09:11

Looking back at the 6 month figures and comparing H1 and H2 - H1 adjusted ebitda of 0.1m on sales of 10.8m, H2 adj ebitda of -0.1m (assumed based on FY of 0) on sales of 16.2m? Don't get it, unless there are some very poorly performing contracts in there.

Market cap now less than 6 months sales, no contract wins since April 2022 (only a reported renewal) and share price now so low that it's useless as a currency in any acquisition.

Is there anyone out there to put us out of our misery?

[solarno lopez] 31/3/2023 08:55

Insider trading ?

[igoe104] 31/3/2023 08:50

Now we know why there was a flurry of sells yesterday. I'm seeing this happen far to often at the moment..

[farrugia] 31/3/2023 08:38

so UK security companies clobbered - how is that USA security stocks are still trading on fumes then? I'm referring to Palo Alto Networks for one.

[lammylover] 31/3/2023 08:25

Had a quick look at NCC RNS which gives more details of companies cutting back on cyber security. I'm finding this really hard to understand given the risk of Russian hackers etc. and the potential to break a business over night - either through taking customer details, credit card numbers or holding businesses to ransom or freezing up IT systems. Reputational damage etc.
I'm staggered by the short termism of so many customers.
No doubt their Directors will come screaming for help when they need it!!

[weaverbeever] 31/3/2023 08:22

I own NCC and Shearwater. I made my money in property. Think I'm going back to what I know best

[lammylover] 31/3/2023 08:14

finally can buy at 53.8p

[chrisdgb] 31/3/2023 08:13

Not alone look at NCC today........

[lammylover] 31/3/2023 08:09

MMs creating false market here - level 2 is 45p ask, 42p bid. I can sell at 45p and can't buy anymore shares

[northwards] 31/3/2023 07:55

Agree that this should have been flagged way earlier. Very poor indeed. And that's putting it mildly.