Trakm8 Share Discussion Threads

[michaelmouse] 05/11/2020 07:44

"Capital expenditure will increase to around £700-750 million per year in the three years to March 2024 to support high returning investments in the transformation of our logistics platform and accelerated restructuring of the Argos store estate, before returning to around £600 million per year"

This is from Sainsburys half year report this morning. It would be nice to think that Trakm8 can access some of that expenditure to follow on from their Optimization contract (assuming the retailer they mention is Sainsburys?). In any instance it underlines the importance of acquiring these "blue-chip" clients. Their Iceland contract renewals and upgrades emphasise this alongside the many others they have secured.

[trakm8fan] 04/11/2020 11:09

I think the crux of all of this is that right now the company is not making a profit. The message has been clear from the bears that this company will go bust soon. The bears have been saying the same thing for at least 2 years now. If the company can start making a profit then will that prove them wrong or will they keep saying it will go bust.

Jacko likes to say I talk rubbish but at the same time tells us he knows exactly how much each deal sold for and exactly how much profit it will or won't make.

If anyone here is claiming to know more than everyone else it is Jacko. His close connections and inside information is apparently flawless and totally credible.

If the company starts making a profit then this will prove it has been cheap and a good bet. If it doesn't then it will go bust at some point.

The landscape seems clear to me. The facts and fictions have been explained several times.

I still believe that if this company can continue making deals with companies like they have been doing then their figures will improve and they will turn a profit.

Thats what I am betting on.

[andre] 03/11/2020 17:09

michaelmouse - it crystallizes the phrase about empty vessels, yes.

Sitting on a 90%+ loss is one thing you just admitted to. Steering others to invest with spurious logic and fabrications Trump would be proud of.....

Bye.

[michaelmouse] 03/11/2020 16:57

trakm8fan - The route optimization software is chiefly from their acquisition of Route Monkey in 2015. This was an expensive acquisition at the time and was disappointing (to say the least) when it initially failed to hit projected targets. The acquisition is fully integrated now of course, and (as far as I know) Trakm8 only outlined it's operating performance separately in their half-year report of 2016 where revenues were £630,000 for 6 months (in the first 3 months of acquisition Route Monkey contributed £860,000). However, even on that performance the operating profit was £200,000. Therefore the operating margin was around 32% which is very good (I think Apple is low 20s).

It certainly appears to have taken a while to land more big fish for this highly profitable, high margin optimization software. However, Sainsbury's is undoubtedly a very large fish and it'll be a very profitable contract of that there is no doubt whatsoever.

In the current environment and with Iceland and Sainsburys using this software to gain rapid returns on investment I'd be very surprised if other large clients don't follow. Further sales of this software will be great for Trakm8's bottom line and you'll see that they are marketing this product in earnest with at least two great reference clients.

Anyway, enough from me until more news is available but I hope that helps.

[trakm8fan] 03/11/2020 10:32

I can't understand how this sainsburys slot booking deal can be unprofitable until the 3rd year. Surely any work that needed to be done to make the software has been done now as it is in and operating. If they used in house staff to do this then these staff were on the payroll. Now they are hopefully doing other things with their time. So for the next 2 or however many remaining years it is used and paid for then this money now going forward is all or mostly profit. As the software will just tick away doing its thing. So even if there was a large expense to make this software then that expense has been in previous years or the current year. Now we also have some new fangled system to sell to other companies too. So even if it was only able to break even it has allowed us to develop our offering further and given us something to sell to more companies. I just dont understand how this can be bad news or busy fools. Its a great client to have on the books and hopefully they will remain for many more years to come. It shows trakm8 have come a long way from 3 or 4 years ago where we didn't even imagine they could sell this stuff to companies like sainsburys. It propels us from making trackers to really offering some great value adds.

[michaelmouse] 03/11/2020 07:44

Hi guys - great conversation yesterday. Jacko's comments about their clients never leaving was particularly helpful. They've got fantastic blue chip clients who will never leave. Marvelous. Thanks Jacko. Even dave made an attempt to answer the financial questions although a little scant on detail and without stating any future implications. Andre's overview of sales people was a most fascinating insight. No stereotyping whatsoever.

I'm more positive than ever about the future of Trakm8 now. Thanks guys.

I don't recall any profanity Andre? Blondeamon's turned up now though so I'm not sure if he'll bring the tone down? :-(.

Lovely though yesterday was, I'll await November update now. Tough times for all, but if Trakm8 continue to navigate the current Covid crisis it's a great recovery stock.

P.S. Blondeamon - "Amazing how you find the time to talk to that idiot who is down 90%+ on his purchases"

You keep telling yourself that and hopefully you'll feel better ;-). We all know that your bitter vitriol is because you're the one that has crystallized a 90% loss.

For anybody interested in the truth though here's my Trakm8 story (blog from 2018), and I'm hoping they'll reach the heights again:-



Good luck to all investors and the Trakm8 team during testing times for all.

[andre] 02/11/2020 21:37

dave2608 - It's easier to give it up mate. michaelmouse's mind is made up. You can't change people who resort to profanity when reason deserts their arguments. Let him lose his money. He isn't worth your time.

[6jacko] 02/11/2020 21:35

Michealmouse- Sainsbury’s vehicles are with Microlise and Masternaut. Trak don’t have any. They only won some bespoke middleware designed from route monkey less than £9 a month and won’t break even for 3 years. Great business!! The big players run them ragged and expect everything for nothing with single digit margins. Corporate sales we have always said is where the margins are. The bit they stopped doing as couldn’t compete.

Guess you haven’t been listening.

Hey are you the Watkins dog on the payroll?

[dave2608] 02/11/2020 20:55

I've suggested an answer to your question Micky. I'll repeat "Could it be that certain costs haven't been expensed through the p and l and instead parked on the balance sheet as intangibles?"

[dave2608] 02/11/2020 20:53

Lots of additional costs in bespoke services. I've heard the term busy fools used in connection with them.

[michaelmouse] 02/11/2020 20:51

You tell me Dave you're the expert. Perhaps after you've answered post 5295 though Dave? TIA.

[dave2608] 02/11/2020 20:49

But how much money are they making on these contracts Micky? Forget gross margins. What are the bottom line margins?

[michaelmouse] 02/11/2020 20:46

Hey up jacko's turned up.

"The big companies listed stay as the tech is cheap and they haven’t the budget to move or to stand down the vehicles or the cost of change suppliers, major inconvenience for someone with 1000+ units to swap out."

Well that's great for Trakm8 then Jacko. Very sticky customers forever upgrading and Trak earning 60% gross margin. Doesn't look like they warned Sainsbury's? either. Another 2000 vehicles from a major supermarket stuck with Trakm8 forever to join all the other blue chip clients. Fantastic news.

[dave2608] 02/11/2020 20:42

Actually Micky I went to Lidl. Poundshop is soooo tacky.

[dave2608] 02/11/2020 20:31

Thanks jacko

So it really is pound shop telematics? My earlier comment was said with a certain amount of tongue in cheek. Maybe it's time to remove tongue?

P.S. I wonder if Watkins has any pets on the payroll?

[6jacko] 02/11/2020 20:09

Guys

Trak manufacture cheap sub at £20 a unit and sell cheap around £50. Margins are good if tech works and churn not running at 30% plus, don’t forget the extortionate salaries taken out by Watkins family. They are all on the payroll even Mrs W. The big companies listed stay as the tech is cheap and they haven’t the budget to move or to stand down the vehicles or the cost of change suppliers, major inconvenience for someone with 1000+ units to swap out. Customers don’t stay with Trak for service or the mediocre product they are all often on rental deals and tied into long term contracts. Margins should be much higher with no sales team now but still can’t see it working IMHO.

[dave2608] 02/11/2020 19:18

Good advice about walking away Andre. I have however enjoyed the debate. It's been fun.

[dave2608] 02/11/2020 18:51

michaelmouse

Gross margin isn't the gold standard. You know there are other business expenses. What's more gross profit can be manipulated. I wouldn't for one minute suggest it has but it's certainly open for manipulation. Net margins would be a better metric but even they are open to manipulation. Free cash flow is probably the best metric.

Please explain to me Michael why the the intangibles figure on the balance sheet has been increasing these last few years. Could it be that certain costs haven't been expensed through the p and l and instead parked on the balance sheet as intangibles?

[michaelmouse] 02/11/2020 18:28

Dave is it possible you'll get around to answering post 5274 and 5275? Come on Dave they're not that lengthy or difficult are they?

It's a very simplistic model Dave to highlight possibilities only. Of course it's not that simple in reality otherwise their 18% drop in half year revenues wouldn't have produced a much reduced loss (75% less in fact).

Behave Dave.

[dave2608] 02/11/2020 18:25

Michael Mouse this has got to be one of the crudest pieces of modelling I've come across. Gross profit rises linearly with revenue and you arbitarily up overheads by a million every so many million rise in revenue. Neil Ferguson would be proud of you.