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Same here picked up another 7.5k at 6.99 yesterday, to add to an already oversized egg. But long term nothing has changed.
It dropped to its lowest point after 340000 sells. Not exactly a sell off at 0.1% of stock. Something is going on behind the scenes, the drop has been quite sharp considering the amount of stock traded. Hey ho it's always very puzzling.
Sorry I missed your answer I put pretty much the same reply.
The share price has risen over 100% in a matter of a few weeks so there is going to be a little retrace as people who took a short term view take profits. Long term this could double again and more if they reach there target of 100000 customers in 2017 then this share is worth 20p plus.
Not much news is a bit unfair, their news flow has been impeccable compared to many. They have just announced government funding two enable another 2 acquisitions so I am sure there will be more news shortly. I am still thinking also under the impression from snippets I have read and heard that they are working on getting into Australia. This is pure speculation on my part but watch this space? There have been a few hints???
Best to click on the link and read the full article very interesting. It's basically a look at the economical outcome of Britain leaving the EU. For those who are concerned about it in regards to Sat's position. Shame to see a fall over the last few days, I can only imagine how the number if subscribers is growing behind the scenes. Especially with two more take overs on the horizon. 😁
This article may put your mind at rest https://woodfordfunds.com/economic-impact-brexit-report/ Trade and manufacturing Official trade statistics show that the European Union is the destination for about half of all British goods exports. The trading links are bigger if we include the countries that the United Kingdom trades freely with because they have a free trade agreement with the European Union. These agreements mean that 63% of Britain’s goods exports are linked to European Union membership. It is highly probable that a favourable trade agreement would be reached after Brexit as there are advantages for both sides in continuing a close commercial arrangement. But the worst-case scenario, in which Britain faces tariffs under ‘most-favoured nation’ rules, is certainly no disaster. Exporters would face some additional costs, such as complying with the European Union’s rules of origin, if they were outside the single market. However, these factors would be an inconvenience rather than a major barrier to trade. In addition, fears that exporters would be left high and dry the day after the Brexit vote are unfounded. Under the Lisbon Treaty, a country leaving the European Union has 2 years in which to negotiate a withdrawal agreement. In addition, falling tariffs, the decline in manufacturing and Europe’s diminishing importance in the global economy mean we doubt that even the absence of a trade deal with the European Union would hurt the United Kingdom’s overall exports materially. The benefits of being in the European Union are smaller than they were a few decades ago, when a Brexit would have been a far bigger deal. However, the effects will vary across sectors. Brexit would give Britain a crucial opportunity by allowing it to broker its own trade deals with non-European Union countries; indeed Britain could even have a unilateral free trade policy. Non-European Union countries may find negotiating with Britain easier and quicker than dealing with the European Union’s bureaucratic machine, as Switzerland has shown. The production sectors in the economy face a more uncertain outcome than services. The range of potential outcomes is more variable as production sectors are more dependent on whether or not the United Kingdom agrees a trading agreement with the European Union and the nature of any such agreement. The possibility of tariffs on goods exports to the European Union gives greater downside potential, while the opportunity to open up trade with other countries or to increase the sector’s competitiveness through greater competition or cheaper inputs gives it more upside potential. Contrary to the claims of many authors and commentators, it is probable that the impacts of Brexit on trade would be relatively small. Moreover, it is certainly possible that leaving the European Union would leave the external sector better off in the long run, if Britain could use its new fou
Thank you for taking the time to post that. Very informative and interesting. Looking forward to seeing this playout.
You've obviously been following this right from the off then.... Intrigued to hear more of your views along the way. Have you looked at Sat as well or is that not for you? Cheers
Be heard formerly known as Mithril Capital and Satellite Solutions world wide formerly known as Cleeve capital were bought to aim around the same time. My mistake but one of the same people Rodger Sargent is Director of Mithril and non exec of Cleeve he is also involved in Audioboom. Very well run companies with great boards and great backing. Sorry for an open statement before.
That's me in, I'm in Sat who are run by the same people. Great board doing a fantastic job there, so another opportunity here is a bonus. Nice
Just to make you all aware the 25k showing as a sell is actually a buy.
a mix of more broadband users in general, and more broadband users choosing satellite over cable. Extrapolating only the organic growth forward, we get to a 2017 estimate for EBIDTA of £1.5m. That’s a multiple of 10 times the current share price. But, this story isn’t about organic growth. It’s about SAT’s plan to aggressively grow the business by buying out its competitors. The company is targeting 100,000 customers by the end of 2017, which is a full 74,000more than it has at the moment. As I’ve shown above, every extra 10,000 customers adds around £1m to EBIDTA. If the company delivers on its target of 100,000 we’d be looking at an extra £6-7m EBIDTA, for a total of £8m. And acquiring those extra customers would add on roughly £20m in debt. And there’s another important element to this story, one I haven’t really touched on. I’ve talked about SAT acquiring its competitors and growing in scale. But another possibility is that one of the other big fish would acquire SAT. Obviously we can’t plan for that. But in a consolidating industry, it’s a live possibility. And obviously, the shareholders would do very well out of just such a deal. The potential upside is big. At the current rating of 10x EBITDA, 100,000 customers would give a share price of 25p, for a 257% profit by the end of next year. Even without the prospect of SAT gobbling up its competitors, it’s in a strong position. Its profit margins are widening due to the new Aurora system, its earnings are starting to turn positive, and it’s attracting customers at an accelerating rate. BUY Satellite Solutions Worldwide at 7p. Note: SAT is a small company. If the price spikes on Monday following TPSL publication, don’t chase the price up. Allow it to settle back down over the following week and before buying in. Not your typical TPSL pick I normally pick companies for The Penny Share Letterportfolio according to a particular strategy. I look for companies that are profitable, growing, run for their shareholders, and low in debt. SAT is different. It’s not profitable, so it fails the first of my tests. But I’m picking it anyway! Rules are there to be broken, right? SAT might not be profitable yet, but if it keeps doing what it’s doing profits won’t be long coming. In every other respect it has what I’m looking for: it’s growing quickly, it’s run for its shareholders, and without debt. And most importantly, it has the potential to more than triple in value. Basically when the opportunity presents itself, sometimes, you have to bend the rules
It’s the exactly same problem: broadband networks were designed to serve dense population centres, but 5-10% of the population of Europe doesn’t live in a dense population centre. According to the broadband industry consultancy PointTopic, there are 20 million households like this in Europe. That’s a huge addressable market. So that’s the opportunity for SAT. There are tens of millions of people in its markets which aren’t being served by the existing system. Satellite broadband is the best solution for many of them. Next, I want to show you a bit more detail about SAT’s business model, and why it’s well placed to become a big player in this market. A simple business SAT has a straightforward business model. It buys capacity from the three commercial satellite companies: Eutelsat, SES Astra and Avanti. It uses that capacity to create user-friendly satellite broadband products. And it sells those products to end-users on a subscription basis. (Not owning the satellites themselves makes everything a lot simpler. SAT doesn’t have to worry about launching them, building them, and all those other hard problems.) It markets to customers through its website, Google and through resellers. Customers pay about £29 per month for Europasat’s basic deal, compared to £30 for a BT cable broadband connection. Not much of a difference on price, but in remote areas BT’s cable broadband just doesn’t work well. Customers can expect 2mbps or less from BT, compared to 20mbps from Europasat. The UK is SAT’s biggest market, but it has a big presence right across Europe. It’s the second biggest satellite broadband provider in France and number one in Poland, Denmark and Ireland. The CEO is Michael Tobin OBE, an experienced technology executive with a great track record (and an OBE to boot). He’s previously served as CEO of TelecityGroup, a FTSE 250 technology business. He holds no less than 11 non-executive directorships. And the company is backed by Nick Candy, the London property tycoon. He has a 10.9% stake. It has 25,600 customers at the moment. But Michael Tobin and his team has come out with an audacious goal to serve 100,000 customers by 2017. Let me show you how it’s going to do it. The land grab So that’s the background: SAT buys satellite capacity and sells it on to people in rural areas who can’t get fast internet by standard means. The investment opportunity is all about SAT’s plan to consolidate the satellite broadband market, like John D Rockefeller’s Standard Oil, because the satellite broadband market in Europe is incredibly fragmented. There are around 300 satellite broadband resellers in the market. Most of them are so small that they’re barely eking out a profit. Just to give you a sense of how fragmented this market is: SAT is the biggest satellite broadband provider in the UK and the
The company’s name is Satellite Solutions Worldwide (LON: SAT) and the industry is satellite broadband. It’s buying up competitors at a furious rate, and it’s made huge investment in a backend technology system that can easily “slot in” newly acquired businesses. It’s a tiny little company, with a market cap of just £20m (see page 5 for a full explanation of market cap). That makes it half the size of the smallest company in The Penny Share Letter portfolio. So this is high-octane investing – not for widows or orphans! Why satellite broadband is a no-brainer Under its trading name Europasat, Satellite Solutions Worldwide sells subscription broadband directly to customers. I won’t waste time explaining that there’s a lot of demand for high speed broadband these days – I think that’s a given! The question then is, why would people choose satellite broadband instead of the more common cable-based broadband? It’s because of the so-called “last mile” problem. Basically, fast cable or fibre optics networks only make sense in dense towns or cities. The “last mile” of wire isn’t worth laying if it’s only going to one or two homes down a country lane. So in a lot of rural areas, high speed cable or fibre optic internet isn’t available at any price. The network just doesn’t exist. Satellite broadband solves the problem. All you need is a power source, a satellite dish and a modem and you’re away. That what SAT offers its customers. As it happens I’m writing this month’s issue from a cottage outside Fort William in rural Scotland. Yes, the internet is awful! There’s a shocking divide between the cities and the countryside when it comes to broadband. In the cities, 83% of people get fast broadband speeds of 30 megabytes per second (mbps). And in the cities, broadband connections keep getting faster. They’re up 500% in the last six years. But the countryside is stuck. Where city dwellers are getting 30 megabytes per second, rural folk are getting less than 1mbps. And in the last six years, that number has barely budged. The system which works in the cities just doesn’t work in the countryside because of the last mile problem. According to the British Infrastructure Group, 2.2 million households (or 5.7 million people) aren’t getting the minimum standard service. The government has made a lot of noise about connecting 95% of the population up to high speed broadband by 2017. But they’re no closer to solving the last mile problem. Broadband Delivery UK has essentially thrown its hands up in the air and given up on reaching the last 5%, saying its “open to new technological solutions” for reaching them. In other words, there’s no hope of connecting the last 5% using standard cable or fibre technologies. The numbers I’ve been using so fa
It’s hard to get your head around how filthy, stinking rich John D. Rockefeller was in his day. Our minds don’t do numbers that big! How about this: adjusted for inflation, Rockefeller was richer than Bill Gates, Warren Buffett, Jeff Bezos and Mark Zuckerberg and the entire Walton family combined. He’s the richest man of all time. Probably always will be. Rockefeller made his billions from consolidating the US oil industry. In other words, he combined hundreds of tiny oil businesses into one giant corporation: Standard Oil. Rockefeller’s story starts in 1847, when a chemist called James Young refined paraffin out of crude oil for the first time ever. That was the starting pistol for the oil industry. Soon you had every Tom, Dick and Harry building an oil refinery in their back garden, trying to get in on the act. It centred on the city of Cleveland, Ohio. Cleveland was near to oil fields in Western Pennsylvania, had good rail links, water, and cheap immigrant workers from Germany. By 1863 there were hundreds of independent oil refineries in Cleveland. Rockefeller owned one of them. He was 24 at the time. Looking back it seems crazy that the oil industry was so fragmented. That’s the way it goes though: a new technology comes along… lots of people simultaneously spot a way to make money out of it… which leaves lots of tiny businesses fighting it out, all doing the same thing. Out of the morass, John D Rockefeller stepped up. He started buying out his competitors one by one. Every acquisition made his business stronger and more profitable, because adding more capacity gave his company lower costs per barrel of oil. Within two years, Rockefeller was the biggest refiner in his region. By 1873 he owned 80% of the refining capacity in Cleveland. By 1878, 15 years after he started his tiny refinery, Rockefeller owned 90% of the oil refining capacity of the entire USA. Consolidating industries, like oil in the 1870s, are pretty rare. But if you can “back the right horse” in a consolidating industry, at the right moment, you’re onto something big. Waste Management PLC is another example – the entrepreneur Wayne Huizenga started out with one garbage truck and, by gobbling up his competitors, ended up with the biggest waste disposal company in the USA. Or think of the banking business in the UK prior to the 1970s, when every town and county had its own tiny bank. In a consolidating industry companies buy up their smaller competitors, cut costs and build economies of scale. By the time the industry is fully consolidated, a handful of companies end up controlling most of the market. Today I’m writing to you about one of those companies. The company’s name is Satellite Solutions Worldwide (LON: SAT) and the industry is satellite broadband. It’s buying up competitors at a furious rate, and it’s made huge investment in a backend technology syst
Welcome aboard buyholdsell, should hopefully be a pleasant ride. A very competent board and a very well run company with great backing.
through the 300 satellite service resellers who operate in Europe which share the margin. The company has also been acquiring distributors whose customers are then migrated onto its Europasat platform. SSW has been pretty active on the acquisition front, having made seven acquisitions of resellers since the shares listed including the purchase of two companies in France last year: Sat2Way SARL, one of the largest and most respected providers of satellite broadband, and Vertical Connect. These deals brought in over 9,000 customers at an average cost of £165 each. This means that SSW now has over 10,000 customers in France, making it the second largest satellite broadband provider, so is well positioned to target an addressable market of one million homes with broadband speeds of less than 2Mbps, or 3 per cent of the total market. It’s worth noting that the French government is also incentivising the roll-out of satellite broadband by offering subsidies across many areas via its "subvention" scheme with a stated commitment to enable 150,000 broadband subscribers on satellite by the end of 2018. SSW has signed agreements with 44 out of the 54 regional departments in France to sell its satellite broadband under the French government’s incentive scheme. Co-founder and chief executive Andrew Walwyn also sees opportunities in Poland. About 35 per cent of the 5m homes in Poland have broadband speeds below 2Mbps, so having acquired the customers of two providers of satellite broadband services at the end of last year SSW is well placed in this market. It’s also well positioned to exploit opportunities in Scandinavia as the largest operator in Denmark. SSW at an inflexion point Having built up scale, the business should turn profitable this year. Without factoring in any more acquisitions, but reflecting the full benefit of the seven made since May 2015, Arden Partners expects SSW to grow revenues from £7.4m to £13.5m in the 12 months to end November 2016 to produce operating profits of £300,000. This factors organic growth of 20 per cent in the current customer base of 25,600, a sensible prediction considering SSW generated underlying growth of 25 per cent last financial year. It’s the potential to scale the business by acquisition, combined with ongoing growth in the existing client base that really excites me. In fact, the target is to grow the customer base to 100,000 by the end of 2017, implying the acquisition of around 64,000 customers over the next 21 months at a cost of £20m based on a subscriber acquisition cost of £300. The profit implications of this growth could be huge. Factoring in average revenue per user (ARPU) of £30 per month, a conservative assumption given that SSW currently earns £41 per month albeit it does acknowledge lower ARPU earned in Europe, and a reseller margin of 30 per cent when these clients are ported onto Europasat’s plat
number of acquisitions made last year now has 13,000 customers in Europe, representing an 8 per cent share of the market there. My attention was sparked when SSW announced in mid-January a contract award with BT<http://markets.investorschronicle.co.uk/research/Markets/Companies/Summary?s=BT.A:LSE> (BT.A) to become one of the satellite broadband retail service providers under the UK Government scheme to offer subsidised satellite broadband to up to 300,000 homes and businesses with internet connections of less than 2 Mbps. Under the satellite scheme, the UK Government will provide funding for the capital cost of the dish and modem equipment, connection fees and professional installation for qualified participants, which could be worth up to £350 per end user. The scheme opened in December, and SSW is offering a number of packages ranging from a basic service of up to 10 Mbps download and 2 Mbps upload with a usage allowance of 10 GB, to 'super-fast' satellite broadband services of up to 30 Mbps download and 2 Mbps upload connections. The company is also involved in a similar scheme in Wales organised by the Welsh Government, where a variety of satellite tariffs are available and where any user that opts for its 30 Mbps service can claim subsidies of up to £800 to cover the cost of the equipment, installation and connection. The Welsh Government estimates that up to 42,000 homes and businesses may qualify for the subsidy across Wales. These initiatives could prove a game changer for the company as they remove the hefty barrier-to-entry cost for customers on the acquisition of the kit, while also increasing the addressable market in the UK. And Europasat’s ‘entry level’ tariff, S3 Promo, is pretty competitive for potential customers in remote rural premises: offering 20Mbps download, 2Mbps upload, with a 3GB data cap, but with unlimited off-peak downloads, the service costs a modest £28.98 per month with VoIP included. This compares with the BT standard monthly tariff of £30.49 for a package offering up to 17Mbps, including line rental and anytime calls. So for people struggling with sub-2Mbps speeds from BT, the satellite alternative is attractive both on cost grounds and availability. It can also be used as a backup to natural disaster or for corporate continuity planning, and has advantages for expats and second home owners who need to ‘port’ their broadband. SSW buys capacity from the three commercial communications satellite owners with a European footprint – Eutelsat, SES Astra, and Avanti Communications<http://markets.investorschronicle.co.uk/research/Markets/Companies/Summary?s=uk:AVN> (AVN) – and then resells that capacity to end-users, plus a margin, so is able to offer a two week connection on orders. Addressable market New customers are generally acquired by SSW through direct channels – telesales and via the website – and also through