Trakm8 Share Discussion Threads

[woodcutter] 28/11/2016 21:04

exactly PJ.

woody

[pj 1] 28/11/2016 20:58

Which begs the question now, what is included in the pipeline? Phone enquiries? What an enigma it all is now......

[woodcutter] 28/11/2016 20:47

This has the potential to be a sound business but Watkins is the problem not the solution. The business is too central focused and he appears to have far too much authority over the overall control and direction of the business.

Acquisitions that are not delivering and more importantly continuing to be a drain on financial resorces, typicaly there appears to have been little or no overhead cost reductions as normal after a take over. The cost base is growing at a much faster rate than the revenue and i doubt that'll be curtailed if watkins stays in charge.

Watkins is delusional if he thinks they've any chance of meeting full year expectations. These results were for the end of Sept and there's been one RNS contract announcement since then, today for 6000 units ffs, in two months. And only two other major contract announcements since the start of H1. The increase in sales support supposedly started in the early months of H1, wtf are these guys doing!

I know the answer to that ......................creating the biggest pipeline of opportunity they've ever had...........well close some deals guys, we're 8 months in to the year! Isn't that what sales people do?

I only have a small holding but my hope for this business is Watkins moves on and they bring in a sales orientated business director who simplifies the product base, reduces the overhead costs and the amount of engineering complexity and gets on with selling and delivering units that feed the servers.

Watkins is an engineer with masters from Oxford he's a technocrat and I liken his approach to this business to a washing machine. There's a dozen programs to choose from but how many do you ever use, most likely two at most. That's exactly whats happening here, data for data's sake. They seem to be creating something far more complex than is ultimately necessary or useful.

Next up a revenue recognition issue as they load all the new engineering software on trial to the clients and they realise they don't need it as it's over the top.

The bottom line is Watkins is out of his depth and has to go.


woody

[loglorry1] 28/11/2016 17:42

Does anyone know who the equivalent US market leader is in this space. I'd be amazed if Silicon Valley doesn't have a similar company in the US. How could TRAK compete in the US against them?

Log

[michaelmouse] 28/11/2016 16:55

A few thoughts.

[columbarius] 28/11/2016 16:41

columbarius - 25 Oct 2016 - 13:38:49 - 968 of 1133
Trading at nearly seventeen times net tangible assets. That's asking a lot and perhaps explains the downtrend given currency concerns and fear that growth is slowing.

Revisiting my October post, the tangible asset backing is far worse despite the shares being significantly cheaper. It is currently trading at 46 times net tangible assets which is an absurdly generous multiple and a shorter's dream. The company seems to be busy converting tangible assets into intangibles and as such I wouldn't touch it with a bargepole.

[larva] 28/11/2016 15:35

is this one finished?

[alphapig] 28/11/2016 14:41

52 week lows abound all over aim, next expected news here 6 months away?

[phillis] 28/11/2016 13:32

Capitalised development costs at £1.5m - not gone through P&L
Up a million over same period last year

Sales penetration obviously a struggle
Not for me at the moment

[tomps2] 28/11/2016 13:02

Video: H1 results presentation by John Watkins, CEO

[vsp2] 28/11/2016 12:33

Had faith but that is fading quick and fast. Concerned returns may become lower than cost on investment.

[twistednik] 28/11/2016 11:56

This is tough as the key metrics: revenue, recurring income, stable gross margin are good and investment in the cost base (especially in sales or marketing), as long as this is not used solely to retain existing customers, will be a key lever to accelerate growth in the future.

It is a positive statement from management that they are willing to put this additional "cost" into the business to grow - "reflects the investment of over £0.6m with ten additional heads in the sales teams and an increase in marketing spend compared to the same period last year."

Short term operating margin impact is ok if this is the case (even if the message from the management team has not been conveyed previously and this has "surprised" the market).

Having a reasonably fixed cost, as the sales machine brings in additional revenue, we should see an acceleration in growth and improvement in bottom line margin come through in 6-12 months time.

"This investment largely took place in the early months of the half year and due to the lag between sales investments and revenues has had a negative impact on profitability. However, as a consequence, the pipeline of new substantial opportunities is considerably greater than ever before."

The additional overhead of £0.7m due to acquisitions is less clear. Usually acquiring businesses enables you to achieve "cost synergies" and reduce the overhead base improving margins.

Maybe this was investment to develop new products? "We implemented a change in engineering leadership during the period and invested in additional engineers and the subsequent progress on project delivery has been excellent". In which case, this should again result in solid future growth prospects.

I think the long-term prospects of the business remain largely unchanged, however, clearly there is some impact on short-term profitability, and the Company has really put pressure on itself to hit the year-end profit number (and will be punished by the markets if contracts slip).

The above is likely to weigh heavily on share price in the interim, however, I believe there will be some attractive entry points to get into TRAK in the next 6 months. When / if the sales team investment starts to translate to increased sales (& profitability), this will be the next catalyst for share price improvement.

dyor etc

[phillis] 28/11/2016 10:24

I have had this on my watchlist for a while

Sept 7
"Trakm8 is pleased to report that trading in the first five months of the current financial year commencing 1 April 2016 has started satisfactorily and is consistent with its expectations for the year as a whole."

Clearly the investment in Sales and Marketing has yet to pay off

Health warning

[davr0s] 28/11/2016 09:22

You are funny Larva - you on the wrong board/left some digits off? I will support the price well above that level - so will many others

[woodcutter] 28/11/2016 09:07

They need to close some of the prospective contract sales in the near future to give confidence that they can meet decent year end figures, if that happens i can see the share price rising fairly well and on this basis I've kept the small small holding I have left.

woody

[vsp2] 28/11/2016 09:07

Quite true. I think a case of gilding a lily.

[larva] 28/11/2016 08:59

target : 15p.

[sheep_herder] 28/11/2016 08:57

lol GWR7, "With trakm8 adding bells and whistles to their device I remain highly sceptical about their ability to keep on top of the data generated.", you do realise the data processing is done by software running on a server and not by Watkins himself, emailing the results to each customer in a text summary?