Pointerra Limited

ASX:3DP

Pointerra Limited

ASX:3DP
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$0.038 (0%)
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#41
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Reports (18) My Report Forum Investors
Forum Topics 3DP 3DP CEO Interview

Pinned straw:
Strawman
Added 6 months ago

Curious as to what others thought of the meeting today.

On one hand, I can totally take Ian at face value:

The company was growing rapidly, funded by extremely supportive capital markets and they had a monster opportunity ahead of them... and then, with the big deals concentrated in a specific geography/sector, their giant US counterparties pulled back on all CAPEX as they got whacked with higher rates and constrained by capped pricing.

So 3DP went from (arguably realistically) expecting $3-4m in quarterly cash flows, to finding that they didn't even have enough to fund costs and ongoing development. In short, the world changed on them before they could hit sustainable profitability and are now faced with the challenge of funding operations and growth, but with an ever shrinking balance sheet.

Importantly, according to Ian, these projects have not gone away, they were suspended instead of cancelled, and are expected to resume in the coming months. To such an extent that Ian seems to think they can deliver CF and EBITDA +'ve results for FY24.

If true, shares are probably extremely cheap. We'll see a confluence of revenue booked in one of these quarters which will prompt a material re-rate as the growth narrative is once again seen as realistic.

On the other hand...

Regardless of the external operating environment, the company has scored some big home goals in over-promising, cancelling a core reported metric and poorly executing a capital raise. Rightly or wrongly, that's done a lot to undermine trust. And trust is everything here.

Ian talks a good game, but until we see evidence of a turnaround, it's easy to take the assertions as wishful thinking. Even if the general nature of the situation is as Ian describes, there's still the potential for big clients to delay further, or renegotiate better terms. And there's not much spare cash left at this stage either..

I'd really like to give the company the benefit of the doubt, but cannot in good conscience add to my (now relatively tiny) position until we see more clarity and progress in the reported financials.
mikebrisy
6 months ago

@Strawman The narrative that general corporate spending on technology has contracted is not supported by the facts. Analysis below is not very high quality, but it indicates the general trend that other sources point to. (There are ample cases in my own portfolio that also show this is simply not the case ($WTC, $TNE, $ALU, etc.), particularly cohort analyses in $WTC and $ALU).

c8ab166088d4ce82a75245bae19f7fa675fc12.png

So we have to reframe the narrative,... why are corporate clients less willing to spend on $3DP technology? Several potential causes:

  • $3DP tech is valuable, however, customers have higher priorities for their constrained IT spend (security, core applications, etc.,...chasing AI-led business cases)
  • The value of $3DP technology isn't yet proven for scale deployment
  • There are alternative, established means of achieving enough of the use cases (e.g. digital twin platforms), such that the incremental investment for $3DP isn't yet justified
  • The tech is valuable to customers, however the niche of proven use cases is so narrow that it cannot support material revenues and positive margins for $3DP


By the way, these are all questions I have had to face myself in arriving at the decision to exit $IKE

Whatever, the answer(s), I believe the facts support the thesis that $3DP is a technology development idea and not a proven business. Generously, we might just be too early in the commercialisation cycle. Investors should be wise to the potential that they are invested in a technology development idea, and not a business.

I'm looking forward to catching up with the Meeting recording happy as ever to be proven wrong.

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Strawman
6 months ago

Some excellent points @mikebrisy

The next 12 months will be telling.

18
Duffshot38
6 months ago

One observation from the meeting and I dont mean to make this personal but Ian seems to be on a learning curve about how big business works / doesnt work, and I can only assume this is also true of the greater management / executive / board. I felt this way after the last strawman meeting but I have the same feeling again. They seem to be a small business struggling in these new markets and learning on the fly. I like his openness / honest approach, I can totally relate to what the company is going through working with big slow moving giants like utilities, but as shareholders we dont want an inexperienced team leading the way and learning on the fly. He acknowledges the changes needed in personnel and the differences between the markets etc but this is not rocket science and the concepts he is speaking of are well understood in B2B businesses marketing new technologies. Anyone else have similar thoughts? I do like the company, I do think they have a great opportunity, I do have doubts still that they have the right team.


I'm a shareholder.

26
Nnyck777
6 months ago

Great interview Andrew - jeez this is such a hard one to judge. Yes totally agree wit @mikebrisy numbers suck. Legitimate reasons? A lot of the same excuses yes but possibly legitimate.

The tone to move to mining and oil and gas not just power and ‘diversify’ was emphasized multiple times. Perhaps that will help feed the ARR business reporting strategy that slow US infrastructure is just not meeting.

Interesting that he reports no churn and all big contracts just paused. Is this true? Is he fibbing? The market is a mess right now things have changed dramatically since 2019. It’s definitely a red flag. I have to admit I stumped on what to do on this one.

Its a micro cap high risk. It could be a OMG can’t believe I didn’t sell everything share- It was so obvious. It could also be can’t believe I didn’t have more patience. We know US infrastructure is glacial and that the money is starting to role through from big Government investment and he could land in Pointerra’s account all of a sudden. As Ian said when it does come through it tends to be front end payment. Is it real? I’ll sleep on it?



21
Nnyck777
6 months ago

A very good point @Duffshot38 I too am wondering if lack of management team is the biggest problem here. Maybe a new CEO and I am to step into operations? Otherwise maybe M and A with bigger experienced player if the tech is so good.

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