Pinned straw:
Late Q3 review. Is Pointerra an opportunity for EOFY selling and a potential positive swing in Q4 and full year results?
The Good
- DoE Hurricane R&D program to start in Q4.This isn’t a significant amount and the payment schedule is unknown, but having ~$3m AUD in contracted work progressing assists in cash flows. The Q3 results highlighted that there is still a reliance on these government programs.
- Ongoing platform development and expanded regional hosting.
The Not So Good
- The roller coaster continues with a pretty poor quarter for cashflow following a solid Q2. Management has tried to put a positive spin on this by highlighting the YTD positive number of $0.1m and $4.5m of receivables but the result shows how lumpy the cashflow still is. With only $3m in the bank it’s still not a comfortable position.
- LAST CHANCE Alert - It is called out that Q4 receivables are expected to rebound to Q2 levels. This is a very different statement from the previous program delays. I would hope that with the history of disappointments and misses a statement like this wouldn’t be issued lightly. If they were to match Q2, it would put 3DP into a position for a positive cashflow year and a solid foundation for FY26.
- Some progress looks to be made on announced historical programs, but the quarterly updates tend to say alot without saying much. @Strawman Is there an opportunity to line Ian up again so that we can try to tease out some more details here? I know Pointerra is out of favour with the community but the last meeting was back in 2023.
Watch Status
No Change. - Negative Cashflow offset by new contracts and forecast.
Valuation Status
Review at Full Year - Half Year Position - Revenue - $6.9m EBITDA - $690,000 - Tracking toward previous bull case.
Sep 24 Valuation
What To Watch
- New Q3FY25
- Cash receipts expected at Q2 levels. ~$4m
- Contract Updates? Entergy Resilience Program / Enel Columbia /? Updates? Progress?
- Paid storm response assessment for new utility customer to be carried out in Q4
- WA miner hazard management pilot to commence.
- Multi year contract extension with East coast road/rail customers expected in Q4
- Post Quarter - Contract negotiations for GRIDS IV expected to take several months. First contract opportunities ~ Q3FY26?
- Previous Quarter
- Working with multiple energy utilities on upcoming DoE funding applications for digital twin development. ✅Teamed up with two utilities for JARVIS. Expected selection in Q4
- Engaging with European rail operator ❌ No Update
- US GRIDS IV program to be announced in March 25. ❌✅ Announced after end of quarter. One of eight consortia selected for the panel. Teamed up with Leidos. A positive signal for Pointerra's technology
https://www.leidos.com/company/who-we-are
- Oil and Gas exploration implementation to be completed in Q3. ???? Ongoing
- Indonesian national mapping program. No time frame provided.????Ongoing
- Older
- US electric utility vegetation management solution. Extended to Aus & NZ. Expected awards in FY25 - Q1FY25 ✅ Contract with Davey Resource Group. Estimated revenues of over $500m
- Commercial agreements being finalised with global engineering software provided for integration of Pointerras pole loading and analysis. Q1FY25 ❌ No Update
- Submission of pricing to two Australian electric utilities Q4FY24 ❌ No Update
- New sectors with global sporting companies - Q4FY24❌ No Update
- Rollout of Mill Module across 8 sites over the next 12 months - Q3FY24 ❌ No Update - 12 months old. To be removed
- Global rollout of Master Model with a global mining customer after completion of trials. Q3FY24 ❌ No Update - 12 months old. To be removed
- Final negotiations with global Miner for hazard management platform. Initial demonstration to be completed Q3FY25 ✅Paid pilot implementation underway.
- Pre-implementation review with an Oil and Gas operator for exploration activities. Contract award expected in FY25. ❌ No Update - 12 months old. To be removed
A comprehensive review of 3DP at this point in time @Bradbury and I note that you have included a bunch of their previous announcements (at the end) that they have failed to follow up on, i.e. collabs or new opps that never panned out into anything of substance so were not mentioned again.
I think you're correct to weight your Val 60% to your bear case to give a valuation that is even lower than their low share price yesterday, considering that their history is of sub-par management that overpromises and underdelivers and a company that lurches from one tiny capital raise to another just to keep the lights on.
There would be few members here who still hold 3DP IRL, and of the 27 members who still have 3DP on their Strawman.com scorecard, only 14 of those 27 (roughly half) have a positive scorecard (portfolio) return for their entire Strawman journey, suggesting some of the others may not be very active members or may not be actively managing their Strawman portfolios (scorecards).
3DP demonstrates NONE of the attributes that I look for in my investee companies, so they remain well off my radar, but it is interesting to see that some people still think they're going to come good, after all of this time, and all of these disapppointments that they have delivered.
On the other hand it's refreshing to see, @Bradbury that you are more realistic, and are factoring in past management behaviour and track record, resulting in the bull case being discounted as a probable eventuality, i.e. it could happen, but the bear case is more likely based on prior history.
All in all, a good summary of 3DP, the range of possible outcomes, and a well reasoned valuation that is lower than where the company last traded. I like it!