Sosandar Share Discussion Threads

[abarclay] 13/2/2020 20:18

~Chuffers are milking it

[abarclay] 13/2/2020 20:11

hxxp://www.sosandar-ir.com/archive/reports/Annual-Report-2019.pdf



OMG Reynolds salary £671,000


FFS

[abarclay] 13/2/2020 20:09

#SOS ..."Save our Salary's"

[abarclay] 13/2/2020 20:08

very bad twitter comment just seen



#SOS ..."Save our Salary's"

[abarclay] 13/2/2020 16:18

excessive boardroom remuneration for lossmaking carp

[abarclay] 13/2/2020 16:17

Looks like it will go under the 15p placing price in coming sessions

[eezymunny] 13/2/2020 12:37

Some laughable comments.

If you take BOO as an example - selling clothes online at c. 50% gross margin.

When you get to scale it's reasonable to expect perhaps 8% operating margins.

So if revenue is £10m this year and they grow 100%, 60%, 50%, 40%, 30% over next 5 years then revenue would be c. £87m. That might make a pbt of c. £7m at 8% op margin. Tax that at 20% at put it on a PE of 25 and you get a market cap of £140m. If they need another £20m equity to get there the market cap today effectively £55m.

So in that entirely, but IMO plausible scenario, you'd do pretty well with a long term hold. They may do a lot better or a lot worse of course. Nobody knows...

Change your growth rates, PE ratio, need for more equity capital etc and you get very different results. Plug in your own numbers. If they grow at 100%, 80%, 65%, 50%, 40% and stick it on a PE of 40 and you get a market cap of £320m for example. So a 10 bagger possible with good execution. Don't forget BOO could be bought for 25p 5 years ago :)

Will all depend on a multitude of unpredictable parameters...

[hotaimstocks] 13/2/2020 12:15

SHARE PRICE dropping now..
will wait for 13p or the next trading update before I risk anymore exposure

[jamesto2] 13/2/2020 12:12

they will blow the lot on TV adverts ? £5m down the pan & then what ? they will need more cash = dilution again and again ... its a real gamble now

[someuwin] 13/2/2020 12:09

You can see their latest (second?) TV ad here...



Filmed in Malta apparently. To me it seems to be just a few models wearing a few clothes. And a very dull voiceover at the end.

Nothing memorable. Nothing aspirational or desirable. No message. Surely if they're going to throw money at advertising they can come up with something better than this!

It's almost as bad as the ads produced by contestants on the Apprentice.

(Also note: after almost 4 years on twitter, total followers just 1,075)

[jamesto2] 13/2/2020 12:07

I sold out at 28p could be a good buying opportunity around 15p / 17p later this month or next month.

[dgbell7] 13/2/2020 11:56

The dash for customer growth makes sense to me. It’s trading at around 2 x annual sales at present, push the sales up and we may well see a decent rise in the share price There are some people who want to see a profit before they invest anything and that’s fair enough. I regard this as high risk but balance it with low risk elsewhere. Could be a major online player in 2 to 3 years time or could fail miserably but I’m staying put to see how the story develops.

[serratia] 13/2/2020 11:47

I don't hold but I'm watching for some tipping points.

First the ratio of admin to sales. Within the admin is the cost of customer acquisition via their marketing channels. In 2017 it was 280% of sales. In 2018 as sales grew it was 135% of sales. Sales growing but still less than admin costs. In the first half of 2019 calendar year they cut back on customer acquisition cost but sales growth rate dropped back and they reset their marketing spend at the end of June. The H1 financials showed a rise in the ratio to 152 % of sales. At that point admin was rising faster than sales.
To reach profitability they first need to see Gross profit exceeding admin. In 2017 GP was 18% of admin costs. In 2018 41% but in the H1 financials it had dropped back to 35%. Admin growth was exceeding GP growth. This led to the recent placing which contained this comment -

The net proceeds raised from the Placing are expected to be used to provide further support for the continuation of Company's recently accelerated and successful growth strategy.

At this stage of their growth customer acquisition costs are rising faster than profit growth. GP needs to triple to cover the rate of admin spend. I think the key here is the efficiency of their marketing spend.

I will continue to watch.

[nw99] 13/2/2020 11:33

Buying opportunity

[abarclay] 13/2/2020 11:14

oh deary me


APAD - 13 Feb 2020 - 10:34:03 - 2642 of 2647 Sosandar - SOS
Neary on Scott 😊

3 Nov 2017

“the company should have plenty of cash for 2+ years of cash burn.�;

11 Dec 2017

“SOS is well-funded for now… So it shouldnâ€͐2;t need to come back to the market for more cash for the foreseeable future.â€ʏ33;

May 2018

There should be enough cash in the bank to get the company through to maybe mid-2020… the fundraising to launch the company on AIM provided for several years’ anticipated cash burn.

July 2018

…thereâ̈́4;™s little doubt that the company has plenty of cash headroom for now. It might decide to do a top-up fundraising in 2019 or 2020, but that’s of no concern to me whatsoever, because it would be raising cash at a much higher share price than now…

October 2018 – RAISED £3 million at 32p

Nov 2018

I’m glad they did £3m placing now, as it removes any concerns about running out of cash.

Jan 2019

Broker forecast is for net cash to bottom out at £3.6m at end 03/2020, and then start rising… Therefore, on current forecasts, which look perfectly credible to me, the business has plenty of cash headroom. Bulletin board chatter to the contrary, is just the usual nonsense that can safely be ignored, because people haven’t done proper research.

3 July 2019

…my view is that there is clearly enough cash for the time being. It may need a top-up placing next year, in my opinion.

Therefore, being realistic, I think there’s probably an increased chance of the company needing a bit more cash next year.

…a £20m market cap, for the UK’s fastest-growing pure play online fashion business, with enough cash for at least 12 months, is probably not going to be far from the lows.

11 July 2019 – RAISED £7 million at 15p

If the company doesn’t generate the planned growth, then it could run out of money again in maybe 2 years’ time and get into a death spiral of increased dilution at lower & lower prices.

27 Nov 2019

There’s £6.9m in net cash, which is plenty for the next couple of years.

12 Feb 2020 – RAISED £5 million at 17p

I was a bit surprised that they’ve decided to raise again, but the reasons make sense…
APAD - 13 Feb 2020 - 10:32:54 - 31587 of 31594 ValueGrowth Investing - VLG
Neary on Scott 😊

3 Nov 2017

“the company should have plenty of cash for 2+ years of cash burn.�;

11 Dec 2017

“SOS is well-funded for now… So it shouldnâ€͐2;t need to come back to the market for more cash for the foreseeable future.â€ʏ33;

May 2018

There should be enough cash in the bank to get the company through to maybe mid-2020… the fundraising to launch the company on AIM provided for several years’ anticipated cash burn.

July 2018

…thereâ̈́4;™s little doubt that the company has plenty of cash headroom for now. It might decide to do a top-up fundraising in 2019 or 2020, but that’s of no concern to me whatsoever, because it would be raising cash at a much higher share price than now…

October 2018 – RAISED £3 million at 32p

Nov 2018

I’m glad they did £3m placing now, as it removes any concerns about running out of cash.

Jan 2019

Broker forecast is for net cash to bottom out at £3.6m at end 03/2020, and then start rising… Therefore, on current forecasts, which look perfectly credible to me, the business has plenty of cash headroom. Bulletin board chatter to the contrary, is just the usual nonsense that can safely be ignored, because people haven’t done proper research.

3 July 2019

…my view is that there is clearly enough cash for the time being. It may need a top-up placing next year, in my opinion.

Therefore, being realistic, I think there’s probably an increased chance of the company needing a bit more cash next year.

…a £20m market cap, for the UK’s fastest-growing pure play online fashion business, with enough cash for at least 12 months, is probably not going to be far from the lows.

11 July 2019 – RAISED £7 million at 15p

If the company doesn’t generate the planned growth, then it could run out of money again in maybe 2 years’ time and get into a death spiral of increased dilution at lower & lower prices.

27 Nov 2019

There’s £6.9m in net cash, which is plenty for the next couple of years.

12 Feb 2020 – RAISED £5 million at 17p

I was a bit surprised that they’ve decided to raise again, but the reasons make sense…

[abarclay] 13/2/2020 11:13

Will need more money in less than 9 months

This is the titanic and is leaking money

[the millipede] 13/2/2020 11:10

"I expect there will be some critics of this strategy, but they don't really matter as they're never going to buy any shares in this anyway."

[apad] 13/2/2020 10:34

Neary on Scott 😊

3 Nov 2017

“the company should have plenty of cash for 2+ years of cash burn.”

11 Dec 2017

“SOS is well-funded for now… So it shouldn’t need to come back to the market for more cash for the foreseeable future.”

May 2018

There should be enough cash in the bank to get the company through to maybe mid-2020… the fundraising to launch the company on AIM provided for several years’ anticipated cash burn.

July 2018

…there’s little doubt that the company has plenty of cash headroom for now. It might decide to do a top-up fundraising in 2019 or 2020, but that’s of no concern to me whatsoever, because it would be raising cash at a much higher share price than now…

October 2018 – RAISED £3 million at 32p

Nov 2018

I’m glad they did £3m placing now, as it removes any concerns about running out of cash.

Jan 2019

Broker forecast is for net cash to bottom out at £3.6m at end 03/2020, and then start rising… Therefore, on current forecasts, which look perfectly credible to me, the business has plenty of cash headroom. Bulletin board chatter to the contrary, is just the usual nonsense that can safely be ignored, because people haven’t done proper research.

3 July 2019

…my view is that there is clearly enough cash for the time being. It may need a top-up placing next year, in my opinion.

Therefore, being realistic, I think there’s probably an increased chance of the company needing a bit more cash next year.

…a £20m market cap, for the UK’s fastest-growing pure play online fashion business, with enough cash for at least 12 months, is probably not going to be far from the lows.

11 July 2019 – RAISED £7 million at 15p

If the company doesn’t generate the planned growth, then it could run out of money again in maybe 2 years’ time and get into a death spiral of increased dilution at lower & lower prices.

27 Nov 2019

There’s £6.9m in net cash, which is plenty for the next couple of years.

12 Feb 2020 – RAISED £5 million at 17p

I was a bit surprised that they’ve decided to raise again, but the reasons make sense…

[thelongandtheshortandthetall] 13/2/2020 10:29

Credit will come. One supplier at a time, I'm sure of that.

[ramridge] 13/2/2020 09:57

One of the key metrics used by financial analysts for small, fast-growing companies such as SOS, is the market cap to sales ratio (P/S ratio).
Broker consensus for sales for FY20 is 10m. I did some calculations a few weeks back and came to the conclusion that at a stretch they would make it. But certainly not a done deal.
Yesterday's fund raise now changes the picture. If they are going to ratchet up marketing spend, then the sales forecast IMO is at least 10m (bottom range), could end up 10% - 20% higher.
Over the last 12 months the P/S has been around 4.7. If we take the conservative value of £10m forecast sales, then the forecast market cap based on this multiple becomes £47m .
Market Cap today is £31m . That means the share price at the end of FY2020 - announcement in April - should be ((47.5/31 = )some 50% above today's price.

This number is very sensitive to the value of the multiplier and the sales forecast. But to me, it presents a good risk : reward ratio.
Went long yesterday @17.4.

[rndm355] 13/2/2020 09:55

Sosandar and the difficulty of forecasting