Syqic Share Discussion Threads

[muscletrade] 30/6/2015 11:40

Good news, that's a bit better.

[androyd] 30/6/2015 11:35

Back to 50p then, thanks for the info mike.

[mikeja] 30/6/2015 11:33

Money in transit has arrived

[masurenguy] 30/6/2015 08:38

muscletrade - 770: but it does not clarify "in transit"

Well, as previously stated, I think the terminology was rather idiosyncratic. It means that the payment by the 2 Indonesian Telcos has been made to PTNP, including amounts due to other service providers, who then reallocates and pays SYQ and the other service providers. This process can take longer to complete than settlement of an invoice directly from the customer to an individual supplier.

The outstanding receivable was accumulated during 2011 - 13 when for a period of time no payments were remitted by PTNP to SYQ due to an Indonesian government enquiry over regularity issues in relation to all mobile service contract providers. This resulted in an accumulation of debt to SYQ of £4m including 2013 invoices. The agreed rescheduled payments over a 3 year period has been consistently made but of course this debt is being added to by the increased ongoing business since then.

Clearly the risk resides in the balance of debt still due and that is reflected in the current low valuation since although all scheduled payments have been made to date there can be no guarantee that this pattern will continue in the future. The real answer here is to diversify the business, so that the Indonesian sales are diluted as a percentage of the overall sales/receivables and to continue to collect the legacy and ongoing balances from PTNP. The company is confident on achieving both of these objectives and if this occurs a substantial re-rating must occur in due course. Therefore, the issue for both existing and potential investors is whether they buy into that company confidence in achieving those twin objectives. Everyone has to make their own individual judgement call on this.

[muscletrade] 30/6/2015 07:49

Masurenguy, many thanks for your advice. Yes, I am aware of the payment process (Allenby describe it quite well in yesterdays report), but it does not clarify "in transit" as far as I can see.

The outlook for the company is good(as were the results). It's all about the cash flow, and if they can manage that(and be seen to manage it) then the future seems bright.
However i am not yet convinced. Of course the "Directors remain comfortable on the level of the Group's cash balances", what else could they say. Any perceived weakness in a statement about cash would have been a disaster for the share price

I think that the response to the results(and cash position) might have been better if they had not delayed the results by three weeks, which as androyd suggests may have been to allow time for the cash to arrive.The delay set up a feeling of doubt with investors which has still not been put to bed (at least with this investor).

Still watching, and good luck to holders.

[masurenguy] 30/6/2015 00:33

New brokers Note from Allenby projects a 26% increase in sales this year (£13.5m) and a 28% increase in eps (10.4p). This puts them on a current PER of just 3.8 !

[androyd] 29/6/2015 14:04

That's probably why they put back the results by 3 weeks, they were hoping they would be in receipt of the payment on the later results day.

[masurenguy] 29/6/2015 13:48

muscletrade - #765: As of last week this was incorrect (and may still be so) as company described it as "in Transit"., whatever that is supposed to mean. If it has actually arrived it might be helpful for investors if the Company actually said so. Just a thought, especially as this is the issue that seems to be holding the company share price back.

The "in transit" explanation is a bit idiosyncratic in this day and age. As I understand it, the payments are routed though PTNP via a third party and it is that form of extended payment processing that causes the delay in receipt by SyQic.

Last weeks results contained the comment "The Directors remain comfortable on the level of the Group's cash balances which are currently in excess of £650,000 (when factoring the receipt of a further payment from the Group's key Indonesian customerwhich is in transit and anticipated to be received in the coming few days)". That statement was issued last Tuesday so I would anticipate that "the coming few days" should see receipt of these funds rather imminently and due to its significance I would also expect the company to issue some official confirmation of this on arrival.

[yump] 29/6/2015 12:55

Late payment in that part of the world as an excuse, is only an excuse if there are plenty of other companies who somehow don't get late payment.

Otherwise its just a statement of fact and comparisons with other companies is irrelevant, whether they have succeeded in delivering or not.

I think the education system needs serious reform to include a GCSE on good and bad science, particularly cause and effect, how to assess surveys and statistics. It would have to start with increasing that 5% level of people who can work out a percentage.

[muscletrade] 29/6/2015 12:26

Have had a quick look at the allenby note(not all 11 pages),

They say under "cash generation" that year end cash is £650000. As of last week this was incorrect (and may still be so) as company described it as "in Transit"., whatever that is supposed to mean.
If it has actually arrived it might be helpful for investors if the Company actually said so. Just a thought,especially as this is the issue that seems to be holding the company share price back.

[jahl frezi] 29/6/2015 12:15

PE 3.6x. They note revenue of £4m to April well ahead of same period last year

[mikeja] 29/6/2015 12:07

Allenby note up on their site.Reiterates 10.4 eps for current year,expects year end cash at £2m +

[woodcutter] 25/6/2015 10:57

I hope this isn't seen as patronising it's not intended to be so i apologise if anyone thinks that way but i'd suggest a review of the history of GNG by investors who hold here, you may find it enlightening.

Pretty much every GNG investor extolled the virtues of their exceptional client list and the usual late payment terms were the norm in that part of the world.

Indeed the chart is behaving in very much the same manner.

dyor amiho etc

woody

[eric76] 24/6/2015 14:16

These say that when they receive the latest payment from PTNP (for the 3 months period M,J,J) they'll be £650K in the black. Given that their last payment from PTNP of £550k was for the 2 month period of March and April doesn't this logically mean they're waiting on c.£825k which is "in the post" so to speak and are actually several hundred K in the red at the mo?

[red_shed2000] 23/6/2015 21:50

As the article says, payment terms in the far east are notoriously long ( I know from 1st hand experience that my customers expect a minm of 6 months and most of them 9) so this position isn't unusual. Without stating the obvious as long as they manage this (which it appears they are) then the continuing diversification will give further confidence and I truly believe this will fly. I have 6k in here and it's staying put until the story changes.

Great set of results otherwise...

GLA

[the shuffle man] 23/6/2015 15:42

Pretty positive article.

We all know the position re debtors is holding the price back. If they can get this more under control and diversify their income away from the 2 main payers then we will be off to the races.

Chairman seems pretty confident of this happening.

[androyd] 23/6/2015 12:57

I wonder how many analysts were in attendance?

[gocanes] 23/6/2015 12:09

Adam - it means that if you place £500k in a deposit you can borrow £1.5m

[professor x] 23/6/2015 11:40

The results were pretty damn good imho. The market cap is hardly demanding at this stage of the growth story.

[snowydays] 23/6/2015 11:17

Adam, maybe this throws a little light on your query - not much though.

"The Facilities are secured by a fixed and floating debenture over the assets of SyQic Capital together with an assignment of the contact proceeds. In addition, the amounts capable of being drawn down on the facility at anyone time are dependent on certain coverage ratios on amounts placed in a fixed deposit account with the Bank."

[woodcutter] 23/6/2015 09:50

reviewed the results this morning and decided to avoid, it looks inexpensive but reminds me of GNG in the early days i'm afraid.

Receivables is clearly an issue and I don't have the confidence that they're going to be recovered even though they've been heavily discounted for one particular MCP.

Shame as it looked a bargain at intitial inspection.

wc

[androyd] 23/6/2015 09:04

Disappointed in market reaction, haven't even recovered yesterday's losses.

[adamb1978] 23/6/2015 08:19

Can someone translate this part of the going concern statement:

"In this regard the Directors do recognise that the facility can only be operated on a one for three basis and its contribution to the Group's working capital position is closely linked to the timing of payment from its major customers"

What is a 1 for 3 basis?

[adamb1978] 23/6/2015 08:17

Agree with the other comments above.

Debtors are flagged as a success up front but the overall balance is now £7m, up from £3.7m last year. That said, looking at debtor days, its declined from 289 to 239 days so am improvement but still taking about 8 months to get paid! Really need to get that down further.

However, despite the debtors issues, even if you were to write them down to zero the company is still trading profitably and the multiple is almost factoring in a large equity raising given the PE is around 5x