Synety Grp Share Discussion Threads

[duncandisorderly] 19/11/2015 18:57

I suppose I am comparing it to what they earn Millipede and relate that to their faith in the future of the business.I agree,It's good news like I have said but we need a bigger show of commitment.How many stocks on Aim have you seen with token buys from the directors only to see the share price drop like a stone a month or so later.Personally I have seen dozens, so regardless of it being a good sign or bad I remain cautious.

[the millipede] 19/11/2015 17:55

"pathetic amounts"

I honestly don't know what you want here Duncan. Seems like good news to me.

[duncandisorderly] 19/11/2015 17:16

Don't like these small buys by the directors.Like I said before,I prefer them to buy then to sell but when they are such pathetic amounts it sometimes tells another story.I hope I am wrong.

[deltrotter] 19/11/2015 17:15

Better than him selling I guess!

[shaunstar] 19/11/2015 17:06

Why on Earth is he buying just under 6k of shares?
It equates to just under 1% of his share holding.

Generally small director purchases like this can be seen as a bit of a token effort.

[duncandisorderly] 19/11/2015 11:08

I have also just noticed that Cloudcall chrome has reached 2,144.I know this isn't the game changer we were led to believe but every month the numbers are slowly increasing.I think the company said that this was not an additional revenue adding item but it gives some form of indication in numbers being added so happy days!!!

[duncandisorderly] 19/11/2015 11:03

Yes,it's not a great deal of money but better that way than the other.

[phowdo] 19/11/2015 10:30

CEO splashing the cash again...

[deltrotter] 18/11/2015 08:06

Thanks 140661. Good points. I think they were previously announcing contracts in the £100-120k region, so that fits in well with the 10% of annual turnover.

[140661] 18/11/2015 07:44

Some good well balanced posts for a change. Some additional observations to throw into the mix:
1. Helium are close to Peter Simmonds and they have been regular ongoing buyers. It's unlikely they would have bought so many without some indication from Simmonds that the business has long term merit. In addition, if they thought a placing was likely they would surely wait and pick up stock in the placing, more cheaply.
2. as the company grows the target size of a new contract which is permitted to be announced under the AIM rules becomes more difficult to achieve as it needs to be 10% of annual turnover. Given Synety will announce turnover of £3-3.5m for the current year, a new contract would need to generate annual revenues of at least £300k which is probably unlikely at this stage.

[deltrotter] 17/11/2015 20:51

I hope, obviously, that you are right Shaun.

There were a number of KPIs 6-9 months ago that I thought would be good but weren't, and I could only surmise that they were really struggling to gain traction.

It really is a case of lets wait and see, but we shouldn't have too much longer to wait. I would be FAR more comfortable if they announced one or two nice contract wins....

[shaunstar] 17/11/2015 20:38

Gents, i think you're almost looking at this the right way.

This isn't a zero or hero. There are broadly 2 outcomes in my eyes.
Things stay as it they are and SNTY struggles on, raising more cash every so often as it attempts to slowly find and surpass breakeven due to slowing growth in ARR. But growth slows and revenue can't get much above costs.

The alternative is that SNTY continues to grow at a decent pace, hits breakeven and throws off cash due to operational gearing.

I think its very unlikely SNTY will go to zero.

As previously posted, i sold out at the last results as hitting breakeven will be tight. I'm very confident they will, but may just need another small placing on the way. This is what keeps me on the sidelines, for the placing (or just general market wider market meltdown) which will let me buy these again cheaply - i hope it comes, but it may not.

I am very confident that Synety will be much much higher in a couple of years time, just uncertain for the next 6 months. I will be buying back in when cash flow breakeven is assured - even if it means buying back at a higher share price than now.

AIMHO,
Shaun

[deltrotter] 17/11/2015 14:57

Great post - absolutely sums up my thinking as well.

If they can REALLY give a sniff of profitability then they will be able to raise a small amount extra with little problem.

My worry is though that they are just not gaining traction in the market place with their product/service.

You pays yer money and you takes yer chance.

GLAH!

[the millipede] 17/11/2015 14:24

I guess I have always seen this as a very long term investment but you are right I think about the choice: either the directors make a success of things and the share price soars; or there turns out not to be a sustainably profitable business here and the share price heads to zero.

My gut feeling now is that we should know one way or the other by late spring. By that time cash burn ought to be small enough that we can see and smell break even, even if it hasn't actually happened yet. In March, when the prelims are released and the losses are still fairly huge, I do not know if it will be clear enough..... things might actually look worse than they do now if the company do not release up to date cash burn figures.

On the business side of things I am actually fairly relaxed about contract wins (the revenue IS increasing so it isn't like nothing is going down) but am more concerned that it might turn out the numbers never really stack up because, for instance, the cost of extra sales people outweighs the extra profits they can generate. This might not be clear even to insiders yet.

Personally I have accepted that this might head to zero. It is part of the risk and, to be honest, no one gets multi baggers without taking the risk of outright failure anyway IMO. Better to be in with our eyes open?

[deltrotter] 17/11/2015 12:50

Yeah, that is the way I am thinking TM. I have posted a number of times that I can't help feel this is a binary bet. They make it or they don't and we do not have long to find out.

I have bet they will pull through, but part of that is because I can't get out of my current holding! Even if I starting chipping away with a few sells the MMs would drop the price.

Awful to say, but I have written it off, with the outside chance that in three months I may be VERY happy. A dreadful position to be in, but it is my own fault.

With regards to juicy contracts, which company does not announce big contract wins? Success breeds success. Please do email the co. and see what you can find out. I would wager they haven't announced any because they haven't won any.

[the millipede] 17/11/2015 11:58

Also I don't know what you think Del but my guess is the full year results will look dreadful. Loss for the first half was around £2.5m so I would have thought the full year loss will likely be around £4m.... if we are lucky..... which will leave them with around £1.5m cash.

The problem, from an investment perspective, is that this is all going to come together, or fall to pieces, at the last minute. Right now we can only plot an improving trajectory but the cash burn is still quite high. (We could do with an idea of monthly cash burn rates and churn but are not going to get them!)

[the millipede] 17/11/2015 11:42

I am not sure they are announcing individual contracts any more - but I guess I might email them to confirm. The last was announced in November last year!

Yet they wrote in the last interims: "we are seeing a positive financial impact from our more consultative sales and on-boarding approach and increased focus on larger customers."

I think the whole sales approach here is confusing. First they announced integrations which were not contracts per se but gave them the opportunity to sell their product to a certain market. The integrations were announced but they do not actually generate any revenue. On the other hand, we know the company is generating revenue because ARR is increasing, yet individual sales seem not to be announced.

I know which I would prefer!

[deltrotter] 17/11/2015 10:05

Yup, that is why I am still here TM. If they make it, great returns. If not, then its a wipeout IMO.

There has to be a helluva lot of nervousness though looking at the chart over the last 18 months. And remember that SNTY is a master of playing mood music no matter how they perform! (I don't blame them for that, they are battling for survival and if they ever let on how difficult they were finding things then it would be curtains for them).

I am concerned by the lack of contract news. They said they were going after the bigger contracts but haven't reported any.

Surely they would report even one to have some newsflow? Or maybe they just haven't been able to win that type of contract yet.

Cheers

Ray

[the millipede] 17/11/2015 09:59

I wonder. In fact they were pretty adamant in the interim results announcement that break even will come on current cash.... so perhaps I should just buy up shares at these prices instead?

At the end of the day all the mood music from Synety has been positive - pushing at an open door, cash to break even etc - and in addition of course the ARR in the interims painted a far better picture than the actual revenue during the period. So the next period should show a big improvement although still a loss.

[deltrotter] 17/11/2015 08:12

Please don't say that TM!!!

I really do not think they could get another placing away.

[the millipede] 16/11/2015 22:46

Well. I am beginning to wonder if we might get one more stonking buying opportunity before this plays out...... 50p anyone?

I am hoarding cash in preparation for another placing.

Sigh.

[deltrotter] 16/11/2015 16:52

Stops being hit here I reckon. Not massive volume though. Hopefully we will see Helium picking up some more (before I get stopped out!).

A lack of news maybe getting to the impatient, who then sell and this sets off those with a nervous disposition.

At least one decent contract announcement would be nice.