Catapult CEO & Chairman Notes

Well as always - the one thing they always do well is address the market with clear goals and clear objectives. (for the short term or past 12 months). 

Both the notes from the CEO & Chairman marry up (always helps when they are pre-written and cross-checked) but they also have some really interesting comments in there. 

The first time the CEO has addressed the Prosumer section. With the only note being that they didn't lose as much money as they did last year - to which isn't necessarily meaningful without telling us any success in this section.  Going from a $6m loss to a $0.7m loss is better for cashflow but what were the revenues here? What is the growth here? (this is the only growth segment they have at the moment). 

The other notes where a reduction in the lifetime of a customer and an increase in churn. I wonder if this is going to be worse over the next 9 months (shorter FY as they are moving to US timelines). 

I still stand by my opinion that they have little growth in the elite space and they are struggling with integration in the elite space. That doesn't change for me. 

All in all - positive cash flow does help, but how much of that is down to the Payroll Protection Program, JobKeeper and the reduction in staff hours (and salaries). Lets put a 15% swing on those (which come to an end shortly) and maybe its mutten dressed as lamb. 

Or maybe there is finally a CEO in charge and not an executive chairman of 3 companies running it. 

Short term growth in stock price expected - all bets heading towards March 2021. 

The Catapult Roller Coaster steams on. 

Over the past 5 years,  I have held many positions in CAT. Started from the bottom now I'm here. 

I truely don't believe they have anywhere near the scope of growth in the elite level as represented. I would say less than 5% of 'elite' classified teams globally would not be using some form of GPS. This may be through their littler known northern hemisphere competitors or even their local cheaper alternates (Which is a big opportunity to poach clients with financial pressures potentially driving customers to alternates)

They essentially spent $250m to acquire their main business which is US video analysis (60+% of Rev). They have been integrating these two products (Being Wearable and Video) for over 12 months an I believe they have less than 10 clients using their entire stack. That's insignificantly against the number of teams they suggest they have. 

Their opportunity lies in the consumer (as they brand it the prosumer) space getting into the mass number of athletes globally. 

The biggest concern here is the global fragmentation of the industry and the significantly heavy lifting that needs to be done. They threw away $10m trying this 2 years ago to little return. This was when the business was at its cash splashing best. 

Whilst they have the red bull rag up showing all the bulls where to look, they don't have any more potential there. 

Their potential is in the lower level segments which has proven to be very very difficult for them to effectively and profitably get any return. 

I hold share as this is a 'sexy' business with all their brands - but the TAM for their current product has almost run its course for little to no return. 

Where to now

#holdon