Trakm8 Share Discussion Threads

[blondeamon] 01/10/2017 20:50

Positive cover of Trakm8 at Uk Sharewatch today:






For those who missed it, this is my article on why I think 2018 will be Trakm8's best year yet:

[dc2] 29/9/2017 09:57

Totally agree, raw data fed into deep learning architecture is going to give the insurers a better insight. As for the OBD; I think that will help the AA etc primarily with diagnostics and associated resource management. 3G/4G cameras (with g-sensor and tracking) will be the future as many people will adopt them and young drivers will be forced to if they want affordable insurance (ok, they already have black boxes). Yes, not easy to install but someone will provide a cheap service (mine [not trakm8], when it is in the car, goes into the 12v supply as I do not have the skill to install it).

[emptycup] 28/9/2017 19:30

Dc2. Good comments - insurance is one string to the bow but no doubt its value to the insurer will start them thinking how to bring elements in house. After all, insurers have lots of smart people and may just ask for raw info from which to apply their own 'secret' big data analytics. A smart person there would specify the basic info needed and source the data from all sorts of devices whether hardware or by app. I do think the apps are probably not as accurate as a g-chip within the device but you have to consider the fulfilment of shipping a device, getting the driver to install it and then to receive reliable gps info from an obd dongle stuffed under the dash - surely there must be some issues with that. EC

[lukead] 28/9/2017 12:23

Is that your sell MichaelMouse 100 shares at 76p ?

[dc2] 28/9/2017 12:11

The phone app is a gimmick in my opinion. Unless you can prove it remained stationary and is calibrated then the data is worthless. Edit: Also the fact you have to pro-actively start the app suggests that your driving behaviour will be different.

Consistent data is the key. As I said before, I spoke with a market disruptor in the field and they employ the likes of Microsoft for big data analysis. It is certainly coming and I am sure nobody really cares about the hardware used, just the quality of the data. Queclink and others offer cheaper alternatives to Trakm8 and are therefore a worrying threat.

From experience of integrating these devices I would say that they are behind Trakm8's offering by a long way offering basic services but they will catch up. Trakm8's TEDS protocol is overly complicated but feature rich (Tacho, CANbus and driver feedback in the cab via their lightbar to name a few).

I see Trakm8's proposition as either a hardware provider with stiff competition but able to keep ahead of the curve or as something to do with vehicle big data especially with the new 802.11 standard coming out for geo-based vehicle communications and self-driving cars. With luck they are positioning themselves now to be a dominant player. All IMO.

[emptycup] 28/9/2017 10:25

I think the business has a some challenges in respect of insurance telematics:

- hardware-derived data (OBD connection) versus apps on the phone (Aviva)
- insurers wanting just the data and offering out the hardware/app to the market as volume increases, i.e., not all eggs in one basket

EC

[blondeamon] 27/9/2017 22:29

Thanks GB. AA and BT Fleet both have Trakm8's products to advertise on the show but none of the big telematics companies are there as it's not so significant.

[gb904150] 27/9/2017 20:54

I thought TRAK might have been at Fleet Management live- NEC next week:

hxxp://www.fleetmanagementlive.co.uk/exhibitors/current-exhibitors

Does the AA Drivetech use any TRAK tech? I see a few telematics companies there, so surprised it wouldn't justify the cost of a booth. Perhaps they've got plenty on without it....

blondeamon - your write up was excellent, thank you.

I finally got round to watching the videos from the open day. Some very enthused customers singing the virtues of TRAK there!

[michaelmouse] 27/9/2017 13:14

It's neither extraordinary or unusual for illiquid small and microcaps. In early Sept 2013 the share price was 17p (a couple of years prior to that it was around 10p).

It's worth looking at where revenues were in 2013 and where they are now.

Where will the share price be in the next 2/3 years is the big question?

[knowbodyyouno] 27/9/2017 09:54

Well, the drift down continues. It's almost extraordinary to think this was £4 a couple of years ago.

GLA

[lukead] 26/9/2017 14:32

Back to reality and blondy gets full marks from me for the time spent on here promoting this share, he deserves more, currently 79 to buy.

[pj 1] 26/9/2017 12:42

He'd have done a better Job..!!!

[michaelmouse] 26/9/2017 11:28

You shouldn't have let Bungle conduct the negotiations PJ1 :)

[pj 1] 26/9/2017 11:22

I once worked for a Franchised Company called Rainbow International. One of our key Customers was Aviva (Norwich Union) who Presented at our annual bash which was called ''the Reunion''. It was quite a coup as it had never been done before, by us or a Competitor. We were then the sole supplier due to our market leading KPI's.

Within 6 months they had slashed our pricing by 40%.

Beware of Greeks bearing false gifts.

[nod] 26/9/2017 11:14

My final sentence should have been"If they don't recoup ALL costs AND make a good profit they go out of business."TM8 may well succeed that's why I've been watching them for the past six months or more. It may be another year or two before we see whether the strategy is profitable.

[michaelmouse] 26/9/2017 10:30

Nod - I think we've established you're a bear. I'm bullish. We'll see in the medium to long term. Don't forget that several large companies have got a significant vested interest in seeing trakm8 succeed. The AA, Direct Line and Iceland to name just three who were all prepared to give up their time to present at trakm8's recent AGM. You don't often see that in my experience for such a small company.

We'll agree to disagree on the business model. Blondeamon and myself have outlined how we believe the SaaS model will eventually bear fruit.

[nod] 26/9/2017 09:25

"So let's say roughly it takes 1.5months to recoup all costs"You are apparently only taking into account some hardware components. When a company designs and manufactures products it has to recoup all costs, including R&D, manufacturing facilities, office overheads, shipping, people, etc.If they recoup ALL costs AND make a good profit they go out of business.

[lukead] 26/9/2017 08:27

MichaelMouse, maybe if you said £30 by Christmas and £50 by the Summer 2018, the current share price would react in a different way, perhaps you could edit your blog accordingly.

[blondeamon] 26/9/2017 08:05

No worries, looks like AA campaign going better than expected.

It would be amazing if they also upgraded their whole fleet to the Roadhawk 600 :)

[michaelmouse] 26/9/2017 07:55

Blondeamon - You beat me to it. LOL.

[michaelmouse] 26/9/2017 07:54

From AA half-year report this am:-

"We launched our connected car product, Car Genie, in August 2017, following the successful trial which indicated that we should be able to pre-empt up to one third of breakdowns.  Our email marketing campaign has had higher-than-expected take-up by members and we anticipate this take-up to increase following the TV advertising campaign launched in August.  We are encouraged that the opportunity to pre-empt breakdowns seen since the launch is in line with what we saw in the trial.  We believe increased engagement and connectivity with members is positive and feedback indicates that they value the additional benefits this offers, including locating lost cars, reducing fuel consumption and helping members with general car maintenance.  We are investigating many options for the future development of connectivity for personal members and business customers."

Also:-

"We are also encouraged by L Drive, our market-leading telematics-based app for learners which we recently launched.  This enables us to continue to improve the learning-to-drive experience for our pupils as well as building a platform for connected car.  Our longer term plans include offering more online self-serve options for pupils, and building on the success of L Drive to deepen the relationship our pupils have with the AA brand and increase their engagement with our broader service offering."

Very encouraging.

There may be more references but I haven't had the time to look yet.
 

[blondeamon] 26/9/2017 07:53

AA half year report out today, they had this to say :

" We launched our connected car product, Car Genie, in August 2017, following the successful trial which indicated that we should be able to pre-empt up to one third of breakdowns. Our email marketing campaign has had higher-than-expected take-up by members and we anticipate this take-up to increase following the TV advertising campaign launched in August. We are encouraged that the opportunity to pre-empt breakdowns seen since the launch is in line with what we saw in the trial. We believe increased engagement and connectivity with members is positive and feedback indicates that they value the additional benefits this offers, including locating lost cars, reducing fuel consumption and helping members with general car maintenance. We are investigating many options for the future development of connectivity for personal members and business customers."

[blondeamon] 25/9/2017 23:09

Nod, let me just give you an example from the Trakm8prime site which is the old, cheap style device.



Device costs less than 15£ for Trakm8(the brand new Car Genie one costs 25£ for comparison) to manufacture and is sold to the client for 312£ for 24 months. That's 12.99£ per month.

ebay:

So let's say roughly it takes 1.5months to recoup all costs and from that point on you're paying only for airtime and data storage so around 84% margin or £262 profit.

If you sold 100,000 of those you'd need to pay 15x100,000 = 1.5m cash from your own pocket to make them in the first month. That would hurt a lot that month. But after the second month and for the next 22 months you'd be getting a nice fee that's pure profit.

Now extrapolate that to our super expensive camera devices that are worth 150£ each and calculate how much it costs us to make 2500 of them for Iceland and Calor Gas. By the Interims we might only have broken even for 1-2 months but for the Full Year we'll have 8 months of pure profit. That's why the longer the contract runs the more profitable it is.

That's the best I can describe it. How do you think Quartix made 6m profit out of 23m sales? They have a product they built once 5 years ago and don't spend a dime more in R&D and engineers, just pocket all the fees and maximize profits. Problem is their product is now obsolete and will soon lose all their clients to the cool stuff rivals like Trakm8 sell.

Trakm8 on the other hand took the hit early, put it all in R&D and now has a superior product that will help them book 100s of thousands more devices. My optimism lies in the fact that they will stop to take a small breath this year and the profits/cash will grow.

That's the good and bad with telematics. If you stop your profits swell but competition steals your clients. You need a right mix of R&D and letting your profits run. IMO Trakm8 has seen all the worse now by taking the hit early and now it's time to reap the rewards for the next years.

[emptycup] 25/9/2017 22:35

Come on guys: "In each model the recurring revenues from monthly fees eventually begin to generate profit, cashflow and higher margins the longer they are installed."

"...once you break even and for the remainder of the contract it's free money. The more devices the more recurring revenue and so on"

get real - this is about cashflow and profit - doesn't matter how you package it - where is the proof that SaaS is better! If Trak can sell & despatch a manufactured OBD device for £30 then fine, the model might work, but, please, don't throw comments from the AR that that this is working. Michaelmouse/blondeamon! It isn't!

EC