Trakm8 Share Discussion Threads

[lukead] 06/7/2017 15:48

I think the last capital raising was done at 65p. The directors I think went big , the bulls said at the time that was a show of confidence, the bears reckoned it was because no one else would give the cash.

[lukead] 06/7/2017 15:43

Well Michael fails to respond. Just to say this company could do with sacking the bod. With better Management, this could have been a winner.

[knowbodyyouno] 06/7/2017 15:32

Well this is pretty ugly to look at.

Some interesting contributions on this BB. What thoughts do people have about where this might bottom out, so to speak?

GLA

KYN

[emptycup] 06/7/2017 11:47

Nod - I agree with you on this - telematics for fleets is such a competitive market and the move to SaaS proves that - staying ahead is tricky and with the introduction of phone-based apps makes it hard to see this as the route for growth.

I've kept close to this market for quite a few years and have seen how users' expectations rise year-on-year and the threat of low-cost camera technology can dampen certain product streams - like DCS. Not saying that any of Trakm8's solutions are bad; they've a lot of capability and a good software team - but have now split into 4 business units and whilst from a sales perspective that seems sensible (because the verticals are SO different), I can see how that adds quite a bit to the overhead through duplication.

DCS/cameras etc seems design-led and that's not right. This particular segment is very crowded with all kinds of camera systems; the recent CV show awash with it (and Trak weren't there?)

Tracking or pure FM - crowded space, and the number of subscribers is flattering but needs to rise x% each year to stay still

Route optimisation - too specialist and whole heap of dev/PM - would like to see how that unit has traded (RouteMonkey that is)

So, that probably leaves integrated systems; taking data from the vehicle/driver and plugging into insurers/businesses to help provide the Direct Line product. And then there's the vehicle data that can help with maintenance; more so with HGV than personal. This is an interesting space and I sincerely hope Trakm8 are putting their development into open-systems that make it really simple to plug-in with minimal development and associated specialist post-sales support.


my view for what it's worth...

[woodcutter] 06/7/2017 11:24

we insured a vehicle for my son last year for his first year of driving and it's about to be renewed. after discussing with many of our friends we decided that black box technology wasn't for him despite the cost saving which if i recall correctly was around £100. The feed back from friends who had used this technology was very negative, constant intrusion and messages sent about the manner of their driving. I've no doubt for business purposes they're a very useful tool but i've big reservations for young driver insurance.

It needs to hold this level or it could fall back to the placing price.

2 year weekly chart

free stock charts from uk.advfn.com


aimho wc

[blondeamon] 05/7/2017 14:26

No one is happy to see red on his portfolio, especially when the business is thriving and it's all because of management actions that the shareholders are suffering.

Trakm8 could have played it safe and not buy any more companies after DCS, keep existing customers and not hire any people. We could have the same products as 2 years ago and the same customers but profits would probably go 50% up because of the nature of the industry. This is basically Quartix today. Reaping rewards of the past with nothing to show for the future, obsolote products and milking existing clients. And today they have the worst product on the market and they cannot compete, no new client would go for them when they have been out-teched massively.

Trakm8 instead went the other way, ploughed all the cash into the business and ramped up new technologies and hired more staff to promote them. At the same time turned to SaaS which everyone demands these days and won't even discuss lump payments. They made a single product that offers everything: telematics, camera, routing optimisation, diagnostics etc

We have kept all our customers and gained a few more but none of this is ground breaking. What is going to break us out of this downrange and back to 4£ is the partnership with AA for the Car Genie and with ANWB for their ANWB Connected.

We're talking 7.7m retail customers offered for the first time to buy the Car Genie product directly from us. Then the Austrian company also has a pilot to sell it as well within the year. In total that's 10m prospective customers.

Can you imagine what will happen even if 1% of them go for it? We have 66,000 Fleet devices at the moment. If the Car Genie is a success this number can easily double or triple by finacial year end.

My money were always on number of devices and as Car Genie and ANWB were launched in May, they are not in these results. The September trading update for me is crucial, I want to see what happens.

I also await to see the AA Black Box insurance offered later this year to users of the Car Genie. Win-win for the customer as he already has the device and gets a much cheaper insurance and for us as we charge double for the same product.

P.S In the meantime, our Fleet products are still top notch everywhere. Another happy customer:

[woodcutter] 05/7/2017 14:07

TRAK you have to laugh (or cry in despair and anger)

The results this week weren't very favourable, they've basically put up a red flag and set out the begging bowl for someone, anyone to buy them. The price fell on the day of the results and the following day, John Watkins CEO and chairman from recollection, awards all the PDMR's a shed load of options an exercise price equivalent to the share price on the day. I don't suppose these would be the same PDMR's who he persuaded to stump up their hard earned cash in the recent placing would they?

I'm not a fan of TW and when he first analysed TRAK i was a holder and thought his analysis off the mark but i've got to hand it to him he's been very accurate in his synopsis.

The growth in overheads has been astronomic by comparison to the growth in revenue. Watkins has been a consumate destroyer of value over the last year or so. The cash flow is dreadful and it seems most of the orders are repeat business with existing clients. I wonder what terms they're being offered just to stay with TRAK?

Rule number one of business growth, get the orders then we'll worry about how to recruit the staff to deliver them not the other way around................redundancies coming?....................you bet. Sadly one of them won't be Watkins.

Oh and for the chartists every time it hits down trend resistance it pulls back. TA is a good indicator of market sentiment.

There's a decent business here if they can get costs under control and stop over engineering a simple product. Sadly that wont happen while Watkins remains in charge and with him at the helm the share price trajectory is only going one way, frankly he's deluded.

wc

[elrico] 05/7/2017 03:04

To quote Michaelmouse - "dave2608 - I've been here a far longer time than most I'd guess, and during that time I saw the company grow from a very small revenue tiny market cap. company to the £27m revenue company they are today (and more than five times larger in market cap.). During that time they've generally outstripped expectations and the management team I have found to be very professional."

Uhm, several years of so called growing pains where organic growth has been NIL, instead TRAKM8 has chosen to acquire smaller players, over paid for them, proven to be a bad fit. I particularly love this gem..."During that time they've generally outstripped expectations and the management team I have found to be very professional." Indeed, that will explain why it had to restate accounts and have an emergency bailout placing.

This demonstrates the growing pains so well..."Our free cashflow as a percentage of adjusted operating profit was -228% (2016: +51%)." Outstanding. I can see this revisiting my 65p target again.

For more gems from Micahelmouse, see BST, OPTI NIPT CONC, just about any TW/SP tip and there you will find him trolling. It's about time someone manned up to his losses and stopped blaming a blogger for his woes.

By he way Michaelmouse - Facts please, facts. OPTI is not a "cash guzzler" as you well know. It's cash from the placing in Feb 2016 is still in place. R&D phase is over, No further placing is required. New cholesterol commercial launch just a month ago, with several deals in the pipeline, each worth £3-6m pa, with a visible and static PLC cost of just £1m pa will see OPTI profitable next year and generating free cash at a rapid pace. Did I mention TATA go live with Slimbiome later this year and HLH Biopharma will have their OPTI LP-LDL supplements on sale in less than 2 weeks!

Loved the TW rant. It's a real shame you seem unable to learn something. You need to get over the TW angst.

[nod] 04/7/2017 23:25

SaaS is popular with many large companies because they find it easier to get Opex than Capex. If you pay lump sums for technology you are supposed to capitalise it, and have to get it approved by Capex Committees. Whereas, monthly service payments are usually Opex and controlled by a business unit.The advantage to the supplier, in this case TRAK, is that revenue is levelled and continuous rather than lumpy and periodic e.g. Initial payment, annual renewals and periodic upgrades.The transition to SaaS will mean less lump payments. Over a year or two, the impact of listing lump payments should disappear.With SaaS it's easier to retain customers because there is no deadline date for change e.g. Annual renewal date. Inertia keeps customers.

[lukead] 04/7/2017 22:25

Now you have your choice, trust the poster or trust, as the poster puts it the "little weasel who talks Hypocritical b*ll*cks"

I make no comment, just on the question of even handedness, it is best to put 2 sides forward

[lukead] 04/7/2017 22:19

There is a poster here who is disgruntled with a share tipster, just on point of clarity, this is what was written today on TRAK and which has so upset the poster.


The dire decline in free cashflow was explained by Trakm8 as follows:

“Net cash generated from operating activities was £0.7m (2016: £4.5m). This decrease was largely due to the reduction in our earnings before depreciation and amortisation plus the funding of increases in our inventories, reduction in trade and other payables and our investment in engineering resources. In addition, we have experienced a net £1.9m working capital deterioration compared to 2016 due to our evolving business model, reflecting many customers' preference to sign SaaS (software as a service) type contracts which spreads the payments for hardware and software elements over the term of the contract.

Our free cashflow (operating cashflow less capex and capitalised development costs) was a net outflow of £3.0m (2016: inflow £2.0m) after our substantial investment in capex and capitalised development costs of £3.7m. Our free cashflow as a percentage of adjusted operating profit was -228% (2016: +51%). We anticipate improved cash flows in the new financial year as our profitability improves.”

A significant element of Trakm8’s net assets are now represented by intangible assets of £17,107,776 which need to be justified by reference to future positive cash flows so it is disappointing that group is still experiencing such significant cash outflows. The change in customer preferences to pay over the term of the contract will further hinder the delays in Trakm8 becoming cashflow positive..

At 94p - that would be c 140p below the point when a certain person (no, not the Mouse) filled his boots, after the shares crashed from well over 300p on my groundbreaking analysis, describing his buying opportunity as a "Winni-wobble" the market cap is £33 million. To be fair Paul did admit that his Winniwobble call was a bad one. Too right - don't mess with The Sheriff of AIM on what is now one of his specialist subjects!

No doubt, over at house broker FinnCap, the analyst Lorne Daniel - a good, honest, likeable and clever man - will be being ordered to justify a buy stance with reference to the low PE or EV/EBITDA multiple but what he should look at is the free cashflow multiple. You can always create profits by capitalising anything that moves and if you have repeatedly high capex bills just to keep going that is not what Buffett talks of as a good business.

The fact is that TrakMK8 is still not generating free cashflow and that makes the valuation absurd. Without a bailout placing at just 67p a few months ago this company would be deep in the merde. At this rate of cashburn it will be back on merde street before too long. The stance remains sell.

[michaelmouse] 04/7/2017 21:05

Hypocritical b*ll*cks at its best from a little weasel:-

[michaelmouse] 04/7/2017 18:06

dave2608 - I've been here a far longer time than most I'd guess, and during that time I saw the company grow from a very small revenue tiny market cap. company to the £27m revenue company they are today (and more than five times larger in market cap.). During that time they've generally outstripped expectations and the management team I have found to be very professional.

When rapid growth occurs then there is always the risk of the odd hiccup which I am hoping was the year just reported. It's a very difficult balance between managing finances prudently and going for the market opportunity.

In my opinion they simply got caught out by the significant ramp up in expenses for rapid growth and the speed at which major contracts were secured. As I said a difficult balance. I'd guess even management weren't expecting to have to secure a cash raise last year.

Personally, given their past record I'm prepared to give them the benefit of the doubt and believe that they can get back on track this year and beyond. Management have got a lot of skin in the game.

Investors should base their decisions on their own research.

[dave2608] 04/7/2017 17:11

Thanks michaelmouse. To be honest I've lost all faith in what the management at TrakM8 say.

[pj 1] 04/7/2017 16:38

Its not my cup of tea but I believe it's called contrarian investing?

I prefer to jump on board and (try to)follow an already established trend, but then you do often miss a lot more substantial gains.

Each to their own.

I admit I saw nothing in the figures that would prompt me to look further, yet anyway.

[michaelmouse] 04/7/2017 15:37

dave2608 - A little birdy informed me he has. However, more and more traders/investors are realising what a hypocritical and duplicitous pillock he is and hopefully Trakm8 will put in a stellar performance this year.

Some might consider him the paid b*tch of two plonkers called Adam Reynolds and Nigel Wray. I couldn't possibly comment on this situation.

Here's a blog to read though:-

[tsmith2] 04/7/2017 13:30

Cash is king and this ain't generating any. Last placing was at 65p, in meantime debt has materially increased. One to avoid

[nod] 03/7/2017 22:57

John Watkins family held shares in C21 and a merger looked possible. While I'm not currently a holder of either company I have been in the past. Mergers in this sector are essential if these small U.K. companies are to survive and grow into telematics leaders. C21 after 17 years in telematics remains a small company, a little larger than TRAKM8 by revenue.The sector is very fragmented with hundreds of players offering overlapping services. Margins are wafer thin due to competition. Customers can change suppliers without too much pain. No company has developed must-have technology that newcomers can't emulate and leap-frog, unencumbered by legacy technology.Top quality service is essential to retain customers. Winning new customers at the front end and losing existing customers at the back end is not a growth model. Mergers would give scale and enable higher levels of service management and customer retention; sharing of technology skills, resources and IP.

[wilmdav] 03/7/2017 20:45

As has been mentioned before, QTX expense all their R&D against profit. TRAK capitalised £3.2m of product development, which if expensed would have resulted in an operating loss of £2.4m in place of reported 0.8m profit.

Even so, H2-17 is better than H1 on all measures.



There is something skewiff about capex. The full year figure is less than that of H1 but not a significant issue.

[jamiemp] 03/7/2017 16:25

Not sure we'll see 80p off the back of this: I make the retrace from today's low as bouncing bang off an uptrend with previous lows end-March and end-April.

No fireworks in the results, but nothing untoward either. It seems like a decent buying opportunity.

I don't expect much to happen over the summer, which is a pity, but if I had more cash I would probably top this up and hold for a couple more years.