Sosandar Share Discussion Threads

[albanyvillas] 18/2/2020 09:07

Looks like it is dead money for months to a year, perhaps longer as they will not make a profit for seven or eight years
Plenty of good stuff around

[onjohn] 17/2/2020 20:43

no itys going to go to 12p

[hotaimstocks] 17/2/2020 18:50

looks like 17p will be the low before a rise back to 28p and expect above 44p next year.

[barnetpeter] 17/2/2020 00:15

I just wonder if people are buying though. Debt...personal... is already very high. 40 per cent on overdrafts from April, the virus, storms galore, special offers everywhere (do I get a lot of cruise mail at the moment.....those huge ships are very expensive and need punters. The sort of women who would look at this). I sense business is bad ....the wind is howling as I write and we are spending money on property maintenance not on holidays etc.

[swanvesta] 16/2/2020 15:08

The issue is how much it costs to attract each £1 of revenue. Obviously if you are spending 50p and you're never going to get it back via £1 additional revenue (@ 50% gross margin) then you're going bust. But the question is WHEN are you expecting that £1+ (suitably discounted over time)? The investment case here is that customers, once attracted, keep coming back. So over what timeframe do they need to come back to justify the investment? Unless you have some way of quantifying that, you're just guessing.

For the record I think the payback time is around 2 years. I've done a simplistic calculation from the Q3 trading update as follows:

Admin expenses £3.2m
Underlying operational costs (overheads, salaries etc) ~ £1m
=> Marketing ~ £2.2m

84k orders of which 51k repeat orders
=> 33k orders from new customers (assuming each new customer ordered once in the quarter.)
=> £2.2m/33k = £67 marketing spend to acquire each new customer

Average order size £100
=> £25 gross profit per order (@ 50% margin and 50% returns)

Repeat order rate 1.5 times per year
=> £37.50 gross profit per customer per year
=> £67 recouped in around 2 years.

[wton1] 16/2/2020 07:22

But you’re ignoring that they’re spending on marketing so they are spending £400 and only getting £100 in sales

Rather deciet ful that they exclude freight and delivery cost when working out gross margin too - go ask them!!!

Carp

[eezymunny] 15/2/2020 14:17

Indeed swanvesta. Tx for correction.

[swanvesta] 15/2/2020 12:17

Eezy, you're thinking of profit markup. Gross margin is % of revenue, so at 50% they're selling 50p for £1.

[daburd] 15/2/2020 10:14

The idea that institutions who subscribed to the latest fundraise are going to sell out is laughable and anyone who says this is clearly deranged or just stupid. No instis have sold anything since this company came to market, its the PI traders who contribute to the volatility, causing the 25-50% swings up or down.

[wton1] 15/2/2020 06:33

When the 15p shares start trading these will fall Due to selling pressure

I’d get out before 4th March

[apad] 14/2/2020 19:27

"And I do not think it is unreasonable to point out that positive commentators have, over the past few years, underestimated the funding this company would undertake."

I think the Neary list of Scott quotes produces a somewhat exaggerated bias. Scott has always said that the initial funding was too low.

I am now firmly of the opinion that they could only raise money in these chunks and that a roll out funding based on success is fine. It's just that they have to justify it every time 😊

The problem with the funding raise before this one was that it was after a dire period. Scott has always been very open and informative about this.
See posts on VLG board for more.

apad
ps
I realise I am agreeing with you.

[the millipede] 14/2/2020 18:42

"opposing views are great but only if a base of fact can be found in them."

This is a curious point because, in fact, the recent negative posts on here do seem to have a basis in fact.

The first potential negative are the continued rounds of fund raising. As it happens, I see this as a positive for a company at this stage of its development: the fact that Sosandar can raise money, from institutions rather than private investors is a real plus for me.

But in the long term, this will be positive only if the push for growth through higher marketing spend pays off. Otherwise they will just end up issuing shares forever or eventually run out of cash. I do not think it is unreasonable to be concerned about this, and the fund raising are, undeniably, a fact.

And I do not think it is unreasonable to point out that positive commentators have, over the past few years, underestimated the funding this company would undertake. I thought the original source of the information was a well balanced piece to be honest.

The second potential negative was the very high salaries paid to some directors in year one. I agree the poster rather exaggerated the point, and the high salaries are not ongoing. But it is hard to argue there is no basis in fact.

Anyway, as I have already written, I have recently gone long here, and the only reason I mention that is to conclude that despite all the potential negatives here, I think the risk/reward balance is a good one.

Anyway, off to cook dinner and take a break from the forums. Have a great weekend everyone.

[wton1] 14/2/2020 15:06

Expected to make a profit in 7 or 8 years
bigger loss this year



Nah fam

[tomboyb] 14/2/2020 11:59

I suspect the offer will fall back to around 17.5p again -

[eezymunny] 14/2/2020 08:40

The 2018 payments were in a year where SOS had been brought to market. A one off.

All that matters now is whether current salaries are sensible.

You might feel better about yourself if you made some sensible posts IMO.

[abarclay] 14/2/2020 07:48

check out what he took in 2018 while the business was in a perilous cash strapped state


Two women founders £153,000 each


Non execs

Reynolds £671,686
Metcalf £496,376
Booth £292,378


Thats a ridiculous amount of money to be paid for such a lossmaking pile of sheet


How many frocks to cover the salaries ?