Tribe Technology set to deliver healthy pipeline of orders from Tier-One miners. Watch the video here.
8% this morning and no shares traded. Wish it would go up lime that when there are no shares traded.... Had a great night shorting the Dow last night. Which was nice. God forbid what's going to come with Trump at the helm. Aaaaarrrggghhh....
Needs an injection of new information, gone a bit stale....
Picked up today maybe a big order to fill
Not sure, but not even high level of stock bit of an over kill unless something is on the cards..? Could just be a quick drop before moving to the next level?
Anyone heard anything, bit of a sudden drop?
Scandinavia and Poland that carries higher gross margins on higher capital commitments. Forecasts: No change to SAT forecasts, although the visit certainly raised the comfort level. A closing period update is expected in early December. 2015A: EBITDA (£0.8m), EPS (0.33p) 2016E: EBITDA £1.1m, EPS 0.12p (0.11p fully diluted) 2017E: EBITDA £5.5m, EPS 0.63p (0.51p fully diluted) Valuation: We have a price target of 12p per share, based on the presumption of £5.5m of EBITDA next year, and an expectation of continued growth beyond the 100,000 customer target.. Conclusion: A reassuring meeting on all fronts, with confirmation that the integration of acquisitions appears to be going well, that growth is robust in most markets outside the UK, and that the 100,000 customer target looks achievable on the back of organic growth and infill/in-country acquisitions. We reiterate our price target of 12.0p.
Arden Morning Comments Satellite Solutions Worldwide* (SAT LN) – Company update Buy CP 8.25p Key Points: A useful update session with the management team – producing no significant new information and no change to forecasts, but reassuring on a number of points. First, it is clear that the company is seeing very decent growth in many of its markets – Australia in particular, which is benefitting from a powerfully Government-supported scheme. Although no numbers were forthcoming, we suspect that the UK market is tracking sideways, with slow uptake of BDUK’s voucher scheme by satellite providers – but this is not a surprise, given the starting point of a combined SAT+Avonline market share of around 60%, and the inevitable growing competition from fibre and fixed wireless providers. The impression was clear that growth from other territories puts the UK market into the relative shade, and it was particularly reassuring to realise that the overall 100,000 customer target could realistically be achieved by the end of 2017 through organic growth and infill/in-country acquisitions that should not require recourse to new capital. Second, there appears to be good progress on integrating the three major acquisitions – Avonline, Breiband in Norway and SkyMesh in Australia. We were particularly struck by the fact that the integration process is much more about consolidating financial reporting processes than about overt intervention in what, in all cases, are well established, well functioning businesses in their respective markets. The focus therefore is less on specific cost and other overhead cost reduction, than on about driving for top-line synergy benefits, in particular through broadening the product set. Third, we met the senior management team of Breiband, the leading wireless and satellite provider in Norway, and were impressed by the opportunity they now face with the benefit of scale to expand across Scandinavia, as well as to develop their fixed wireless capability – two-thirds of their customer base – and to export it within the Nordics and into Poland. There is no doubt that Fixed Wireless represents a different business model with a higher capital commitment – owning their own networks rather than acting as resellers of others’ capacity, and requiring a deeper commitment on the ground to customer engagement and network planning – but also substantially expanding the addressable market. We were visiting the company on the first day of their annual budget-setting round, with all country managers assembled at HQ, and it will be interesting to hear how the debate resolves itself around where the greatest and most secure prospective return lay - £1 spent on advertising and marketing in Australia, to support a heavily supported but low gross margin business, versus £1 spent on building a terrestrial network business across Scandinavia and Poland
Nice to see it start positively this week - a nice gradual climb again would be good. Seems at the moment it is cementing 8p as strong floor. Excited to see what they are coming up with next....
Friday, 23 September 2016 Satellite Solutions Worldwide's directors are loading up on stock Dear Robert Like, Four directors of Satellite Solutions Worldwide (AIM:SAT), our rural broadband play, have bought extra stock. Led by the CEO Andrew Walwyn, they’ve bought up an extra 1.1 million shares. That’s 12% of the company. Obviously this is good news. The people closest to SAT are confident enough that they're backing it with their own money. But how much does director dealing matter? Well, it varies a lot depending on the circumstance. But there’s good evidence that yes, it really is a sign that the stock is on the up. A 2003 article in the Journal of Economics and Statistics by Jeng, Metrick and Zeckhauser looked into it. They found that insider sales had no effect on stock prices, but insider buying earned extra returns of 6% per year. SAT’s strategy is to buy up its competitors, integrate them into the system, and cut costs. I’m highly curious as to what deals are in the pipeline. SAT is a BUY. Best wishes, Sean Keyes Editor The Penny Share Letter
Absolutely Countback, for me that is very important and shows real commitment and encouragement for investors. Like you say A.W holds a very large amount so he is well and truly commiting himself which is good to see. The other thing I like is the stock is not being pumped and dumped like so many aim shares. It is growing steadily and slowly. All good
They will not let it go over 8p sell.. We're not clear of 8p yep Chesh..
Some big buys going through today one of £156k feel like it is being help back a little though.....??
Thanks for the update Countback
Skymesh has added 1,000 new customers taking its total to 18,500 and against the government target of 200,000 satellite users, Skymesh looks capable of doubling in size very fast. 85% of sales recurring As a result of these last two deals, the group is on the cusp of making serious money and has transformed into a growth share investment. Underpinned by robust recurring cash revenue from the subscriber base (more than 85% of sales is recurring), Arden’s forecast for the current year to end November is £0.5m pretax profit rising almost seven-fold to £3.4m next year when the acquisitions contribute for a full 12 months. Corresponding eps is 0.12p and 0.63p to drop the prospective PE to 10.4. Buy.
also opens up scope for a “contended service” as not everyone is going to be using the broadband at the same time so the link can be shared, paving the way for higher margins. Second, Avonline was a very well-run business and would recruit virtually all its customers online and via its own salesmen whereas SAT’s model has been to use partners (eg. IT firms and telcos) to resell the service, which results in a margin pay-away. This is reflected in Avonline having average revenues per user of £44 and a margin of 40% (vs. £40 and 28% for “old” SAT). The intention is to retain Avonline as a separate flanking brand in the UK. Third, the enlarged business instantly became cashflow positive. Game changing deals Until this point, it was probably fair to say that net of acquisitions the organic growth that SAT was capable of producing was modest. But this has all changed following the most recent two acquisitions of BreiBand (the Norwegian and Scandinavian satellite market leader with 13,000 customers) and Skymesh (a leading satellite market leader in Australia with a 17,500 customer base), both of which are organically fast growing. These two deals were funded by a placing of 201m new shares at 6p to raise £12.1m last month. Five directors each bought 416,666 shares at 6p as part of the placing, with Walwyn’s purchase taking his interest to 48.6m or 9.3%. The prize is that the acquisitions have made SAT the No.2 player in Europe behind rival Nordnet in France (50,000 subscribers) and also the No.1 in Australia. Two fast growing opportunities Despite the Nordic region, which comprises Finland, Norway, Sweden and Denmark, having the highest density of fibre-to-the-home in Europe, Walwyn says there are over 1.4 million households there with less than 2Mbps and BreiBand has only penetrated approximately 1% of the addressable market to date. BreiBand operated off the Eutelsat platform but has opted for a very different model to SAT in that it has a fixed wireless deployment alongside satellite, which it uses for the last mile of delivery. This means that customers require more simple hardware, which costs £50 as opposed to £300, whilst its gross margins are also impressively high at 56%. The plan now is to replicate BreiBand’s model into other Nordic countries. The other business is Skymesh, a business Walwyn says he has courted for three years. As he notes, the Australian government have spent AU$1 billion to put two satellites into space and appointed eight resellers but it is really only Skymesh and one other that do most of the business. The good thing with this work is that the government is responsible for the installation of the hardware and setting up the service so Skymesh only needs to find the customers. Margins are therefore lower at 24% but the business is growing like topsy. In the first month since acquisition, Skymesh has added 1,000 new customers taking its total t
Missing the rest sorry... nd back office expenses, in this way lifting the gross margin a few percentage points. Each customer might be paying £30 a month for their service and if you build into a model that 20% of customers will churn in any one year and a 30% gross margin, entering the cash flow values into Excel and using the Internal Rate of Return function for five years, you will determine that the IRR is 23%, making it a lucrative project. That is just a notional example, of course, as margins and average selling prices have varied with its deals but that said, for the first seven deals Walwyn never paid any more than £400 per customer acquired. Having acquired and consolidated seven resellers in its first seven months as a quoted company, it’s probably fair to say that all were mature businesses whereas the two most recent deals (which I will describe in more detail later) were not only sizeable businesses but are also growing quickly. One point to note speaking to Walwyn is that satellite broadband is niche and not the dog-eat-dog business that the fibre optic broadband market is where prices are constantly eroded. Another crucial difference is that customers only pay for the data they consume. Speeds of up to 30Mbps are now available and he says with visibility on what is on the industry drawing board, by 2020 this should be up to 100Mbps. But satellite broadband isn’t going to be for everyone. Each customer requires a dish and other kit and there are upfront installation costs, which in total amount to £300 although this can be offered as a lease over 24 months. But for a lot of people out of reach of fibreoptic and ADSL broadband or who are living with 2Mbps – and there are some 2m in the UK and 20m in Europe as a whole - satellite broadband is the only realistic, and currently available, solution. There is also the problem that there is latency of half a second (resulting from the 71,572 km round trip that the data has to travel), which rules it out for ardent online gamers. No. 1 in UK At the moment, there are an estimated 34,000 satellite broadband users in the UK. SAT’s share of this has risen from around 35% to over 60% following the acquisition in July of Avonline Broadband, which had been its principle rival in the UK. By his own admission, Walwyn notes that SAT paid a fairly rich looking £10m - equivalent to £1,050 per customer acquired. This was funded entirely by a new £12m loan from the Business Growth Fund priced at a 10% coupon – but the reasons for paying such a hefty price were threefold. First was scale. In a single move the deal propelled SAT to the No. 1 position in satellite broadband in the UK. This was a tipping point in being able to negotiate better terms with the satellite operators – the satellite owners now have little choice as there is no other route to market. The big jump in customer numbers also opens up scope for a “conte
Satellite Solutions - Buys 2 fast growing businesses in Nordics and Australia (Sharewatch) Most of us take for granted the fact that we have access to the internet at all times and are used to decent broadband speeds (in the UK it is now around 30Mbps) but for those who live in sparsely populated, difficult-to-reach rural areas they might still be labouring under broadband speeds of less than 2Mbps or at worse they have no service available. Think of Netflix, BBC iPlayer and HDTV and whatever else you might turn to during the day – and you wonder how people survive without fast broadband. Satellite Solutions is a satellite broadband service to help these disadvantaged people living and working in the so-called “Not Spots,” those outside the fibre optic and ADSL broadband footprint. The company was established as a consolidator of the very small companies operating in this space and has now built a large and very fast growing customer base in Europe and also in Australia. The most striking feature is that the company’s progress has been the growth in subscribers from zero in 1998 to 75,000 now and there is no sign of that growth slowing down. The share price trend has not recently matched the growth in subscriber numbers mainly because there is some indigestion caused by a recent share placing but once the loose stock settles down, I suspect the shares will take off. Simple model SAT was launched in 2008 by chief executive and co-founder Andrew Walwyn. The business model is pretty straightforward: the company buys capacity from the three commercial communications satellite owners with a European footprint – Eutelsat, SES Astra and Avanti – and then resells that capacity to end-users, plus a margin. Customers are acquired through direct channels – telesales and via the website – and through resellers, which share the margin. But the story to date hasn’t been about a landgrab of customers at any cost; instead Walwyn sets about to grow mainly by acquiring other distributors - essentially a "buy and build" strategy. As he notes, there are 300 such satellite service resellers around Europe, each with its own wholesale relationship with typically one satellite owner but most are sub-scale. Aurora helps drive scale driven efficiencies Since the company floated in 2014 by a reverse takeover of cash shell Cleeve Capital, Walwyn has completed 10 acquisitions and in the process annualised sales have grown from £7.4m in the year prior to float to an expected £38.1m next year with profits of £3.4m (when the three most recent and largest deals get included for a full year). As Walwyn points out, acquiring other satellite resellers is a good model. He might pay roughly £300 per acquired customer but by migrating them onto SAT’s own billing and business support platform known as ‘Aurora,’ Walwyn can eliminate duplicated costs and back office
Not much left of August so results must be out soon. Gone a bit flat this month. Really interested and can't wait to see what's been changing for the better.
Roll on H1 results, needs a little injection of positivity and a news boost. Something to start the climb to 10p.