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Voted on a straw in ## Financial Outlook - Pointerr for Pointerra Limited by RobW
5 days ago
## Financial Outlook - Pointerr

Afternoon All

Herewith an extract following a bit of analysis on Pointerra (originally shared on HC), which may be of interest to some.

Whilst the market has regarded the latest ACV update as disappointing, there is IMO a lot to be excited about. Few will knock Pointerra as lacking 'growth' potential. The conversation is all about Valuation. I suspect had the ACV come in north of USD 8.5 m, all would have been good. Up until the end of January,  ACV was  'front and centre' in terms of depicting the growth, with quarterly cash receipts somewhat lagging. The recent quarterly showed somewhat of a reversal with a step-change in Receipts and a slower increase in ACV vs the previous quarters.

This analysis is based on ACV remaining the lead indicator.
Not sure how many are considering the likely Full Year 2021  result ( 30 th June FY close a mere 7 weeks away).I believe we now have enough information to extrapolate both the likely Income, likely Expenses and arrive at a rough estimate on EBITDA for FY21. 

Herewith some key ratios which to my mind support the fact that we are fast approaching a key inflection point which embraces growth in INCOME , growth in capability (with a corresponding expansion of SPEND) which should result in sustained investor confidence wrt financial performance.

Note : Period of Analysis spanning FY18, FY19, FY20, H1FY21 (see below)

Income (incl. R&D Rebates) : AUD 0.84m > AUD 0.936m > AUD 1.92m > AUD 1.594m (6 months)

Gross Profit : AUD 0.786m > AUD 0.907m > AUD 1.774m > AUD 1.463m (6 months)
. Note : Gross Margin consistently above 92%

Expenses : AUD 2.319m > AUD 2.749m > AUD 3.505m > AUD 2.472m (6 months)

EBITDA : - AUD 1.533 > - AUD 1.842m > - AUD 1.731m > - AUD 0.878m (6 months)

R&D Rebates/Grants as % of Income : 62.8% > 52.6% > 36.0 % > Not yet declared

Employee Expenses as a % of Total Expenses : 60.7% > 64.5% > 85.5% > 68.3% (6 months)

 

Deferred Revenue : AUD 0 > AUD 0.283m > AUD 0.811m > AUD 0.653m (6 months)

Note : Whilst not associated in any way with ACV or EBITDA near term, values becoming material for any longer term projections

*******

Time to get back on point. Together with the knowledge that the Company has and will continue to increase it's headcount in support of growing sales and that Employee Costs dwarf all other expense items, a casual look at the trajectories (see above) on Income & Spend would suggest reaching EBITDA neutrality is highly unlikely in the near term.

Companies all use different measures to provide confidence on Future growth in Financial Terms. Contracted ARR would be considered the 'holy grail'. Total Contract Value (TCV) provides contractual certainty but the waters are often muddied by variability on contract duration.

Pointerra have chosen to use Annual Contract Value (ACV) which is generally not backed by a contractual commitment, but rather Pointerra's assessment of customers who reliably present as continuous users of the platform (via agreement opposed to contract). I suggest you refer to Pointerra's response to the ASX query back in February. The Company provided a framework which reflects the discipline/s applied in determining what can be considered as true ACV. 

Now let's have a deeper look at the likely EBITDA number in the FY 2021 Financials.

The EXPENSES came in at AUD 2.472m for the HY. We know the Company are hiring, so let's apply a 50% increase to the H1 spend, that is for H2. Equates to a FY est. of AUD 6.18m (an increase of 76.3% over FY 2020).

Looking at the INCOME  side of the equation, we have already banked AUD 1.594 m at the HY, with a Gross Profit of AUD 1.463 m. Rather than think of the HY on HY growth as a % in order to arrive at FY est., let's go the 'FACT' route IRO announced ACV and relevant reporting in H2, which is material (and certain). All designed to be conservative. 

On the 26 Nov 2020, the Company declared the new ACV number as USD 5.82 m. On the 29 Jan 2021, they increased the ACV number to USD 6.88m. So, let's say USD 6 m at the HY. Using an ER of 0.75, translates to AUD 8 m. Let's apply half of a year equivalent for H2 ie AUD 4 m. At 93% Gross Margin, we have a gross profit of AUD 3.72 m.

Now add the H1 Gross Profit of AUD 1.463 m and our theoretical Gross Profit number as an estimate for the Full Year lifts to AUD 5.183 m.

Not finished. We know that PG&E have increased their spend from USD 35 K pcm to USD 80 K pcm, reported end Jan 2021. Assuming ramp up to new level took a while, let's only count 4 months in the Half Year. Therefore, USD 180 K ( translates to AUD 240 K). Equates a Gross Profit of AUD 223 K.

And the last addition. The Eversource paid 'Proof of Concept' trial would not have been counted in any ACV declarations (given the disciplines on ACV determination). Reported as USD 600 k spanning four months. Let's trim that to 3 months to again faciltate any delays. So, USD 450 K which converts to Income of AUD 600 K with a Gross Profit of AUD 558 K.

Now add up the Gross Profit and guess what, we are up at AUD 5.96 m

In theory AUD 220 K short of EBITDA neutrality, this essentially without counting the impact of any ACV updates released in H2 of this FY (except for the increase in Spend by PG&E). So,  no provision for the annual R &  D Rebates which will be claimed 30 June ( likely to be well north of AUD 700 K), any new business and/ or any expansion of use by existing customers.

Interestingly, if you have a look at the prior depreciation and amortization + the intangible asset balance entering FY21, the road to Profitability (before Tax ) may arrive sooner than we can imagine.

This is already a book, but I think it is important to realise that we wont necessarily have a cash cow from H2 CY 2021 and beyond. The hiring will continue with headcount likely to exceed 40 come Calendar year end. I trust that Pointerra will be measured in terms of beefing out the capability (Spend) ensuring that it produces a very satisfactory and timeous ROI via commensurate Gross Profit.

Based on the above, confident we will be EBITDA positive @ 30 June, that is for the Full Year FY2021. If not, I may be under-estimating the costs associated with increased hiring  OR would present a question on the integrity of the declared ACV. 

I invite / welcome comments on any flaws in the logic and of course, any other comments. Someone once said to me................

..." anchoring your thoughts on the prevailing share price is bad for your health". In light of the above, cannot think of a better time to ignore the market reaction. The spoils are IMO just around the corner. 

As always, please DYOR, Rokewa

 

Rob W

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Voted on a straw in #Q3 2021 Cashflow Report for Pointerra Limited by Rapstar
3 weeks ago
#Q3 2021 Cashflow Report

Poiterra released their Q3 cashflow report today/ key takeaways:

1) Record receipts of $1.374 M. 

2) Cashflow positive.  

3) Admin costs less than 15% of revenue - Volpara, that is where you need to be. 

4) Sales Growth & Business Development

Growth in revenue from existing customers, as well as new customer onboarding.  Pointerra report COVID-19 economic stimulus packages are a strong tailwind, and is accelerating innovation and the digital transformation of the AEC (Architecture, Engineering, & Construction)  sector. 

Reported pipeline in defence sector is building, with Pointerra engaging in 25 defence contract opportunities.  I imagine thsi will take a while to convert. 

3Dinsight.ai - Significant progress over the quarter, with a partnership with Here Technologies to share and access their massive LiDAR dataset.  Pointerra negotiating with other cusomers and partners to grow network.  Pointerrra seek to share revenue with Here Technologies (and customers & partners)  from subscription style revenue model.  Pointerra expect this business unit will become the largest and most vlauable part of the Pointerra platform.   IMHO, THE POTENTIAL FOR ESTABLISHING A POWERFUL NETWORK EFFECT IN THIS BUSINESS IS HUGE. 

5) Team growth - heacount increased from 23 to 27, mainly in sales.   Pointerra flagger further recruitment over the coming quarters. 

6) Product Development / R & D

A number of UI improvements, improvements in analytics in relation to rail and road infrastructure, brower based point cloud editing is now in beta mode, close to release.  Automation of LiDAR capture to point cloud processing si being tested and used by some customers.  

Strong pipeline of enhancements flagged.  

DISC - I HOLD.  

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Voted on a valuation for SelfWealth Limited by Rapstar
a month ago
Justification
Todays market update is tremendous. Given the impressive growth in customers, SWF has optionality to expand revenue per customer, firstly with international share trading, and then with other financial services. Using a discount of 12%, and a 2025 EPS of 6.2c at a PER of 25 (upgraded PER due to growth profile, and upgraded EPS estimate). The above valuation is based on the assumption that SWF can grow revenue to $79 M over 5 years (currently about $22.5 Million pa run rate). Given it has only about 6% market share, but is winning about 20-25% of new business, with further optionality offered via International broking, wholesale business, lending products, robo-advice, I believe this is a reasonable assumption.
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Voted on a straw in #Lulea Development article for Talga Group Ltd by Rapstar
a month ago
#Lulea Development article

Lulea Municipality article states:

"It is clear that the Australian-Swedish company Talga Resources, which manufactures battery components for, among other things, electric cars, will establish itself in the area."

Lets hope they are right....

Also found this article reporting the Industrial Development that will be the hoem of Talga has been approved here...The article refers to a company called "Talga Graphene" will be the anchor tenant.

Also, council have approved upgrade to access roads for development...

 

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Added a valuation for Renergen Limited of $5.00
a month ago
Justification
With cryo vacc news expected soon this stock should surpass $3. Further with PFS expected in late may it could see further growth.