TSK - TASK Group Holdings

[Schrodinger]

I wonder how big the loss will be for FY15 and how big the loss:revenue ratio will be. It was pretty big in the last report, like 3:1 or something.

VML chewing through capital, I wonder if an ASX listing will boost revenue.

Ryman have lots of retirement villages in Australia yet they are just considering an ASX listing because investors and residents are asking for it.

I can't find much evidence of anyone asking for VML to be listed on the ASX.

I think VML will surprise with how much money they spend. They spend money on a blog nobody even comments on.

At this stage revenue growth is far more important. They have enough external governance and pragmatism to keep the capital requirements sensible.

[axe]

SPP Record day today 5pm. Notice/Entitlement letters 5 June. Can't wait to get some shiny new shares, the FY15 results out, and this cap raising process out of the way. There should be the inevitable good news that will come along with it.

You surely want the FY15 results out before you apply for the SPP? When will the cap raising process be out of the way?

[robbo24]

At this stage revenue growth is far more important. They have enough external governance and pragmatism to keep the capital requirements sensible.

One read of the Vmob blog and you may reconsider that position Schroddo!

[Baa_Baa]

Let's have a look at this.

I wonder how big the loss will be for FY15 and how big the loss:revenue ratio will be. It was pretty big in the last report, like 3:1 or something.

I agree, a loss is a certainty, there's no secret in that, with expansion into international offices, investment in growing sales and marketing, growing staff numbers and product development. I see that as positive utilisation of investors capital. The loss FY15 is a closed book. It won’t be mitigated by the revenues of the past 2-3 months, or the recent alignment with Microsoft which will absorb a reasonable percentage of costs on the FY16 book. Think of Microsoft as an investor in VMob defraying expenses that otherwise we investors or revenue would be picking up.

The ratio of costs to revenue will be very interesting though, as revenue lags ACMR we don't yet know the revenue effect or lag-time to revenue of a 1600% ACMR growth ($3.2m up from $550k). I would expect the ratio to be fairly high, possibly above previous FY14 as expansion/growth draws on capital, however these should be one-off costs on a per country basis. Costs for staff expansion however are also going to emerge in the results, these could be ongoing costs expansion as they relate directly to implementations and servicing customers in new markets. Summary, good point, eyes on costs, revenue:costs ratio, revenue lag:ACMR, fixed costs carried forward:ongoing revenue.

VML chewing through capital, I wonder if an ASX listing will boost revenue.

I think that utilising investor capital and revenue for growth, at this point in in time, to achieve customer implementation and acquisitions and expansion into international markets is to be expected, is a good investment and is not surprising. There is no linkage to listing on the ASX and company revenue. I don’t think these thoughts could be connected.

Ryman have lots of retirement villages in Australia yet they are just considering an ASX listing because investors and residents are asking for it. I can't find much evidence of anyone asking for VML to be listed on the ASX.

I guess this has come from reading the RYM thread today where on NBR the point was made that RYM enjoy residents taking up shareholdings in the company. It's a long bow to draw, or more to the point irrelevant, to compare RYM to VML. I think the supposition trying to be made although put in an odd way, is what motivates VMob to list on the ASX?

I think it's pretty simple really, the ASX taps into a much larger base of investment capital which will be required for funding the bridge between now and profitability, much more efficiently than an NZAX listing or ongoing insto/private investor capital raising rounds. I also think VMob's business model, despite being a SaaS basis, lends itself to earlier profitability than some might assume. The reason is that VMob’s SaaS customers are large organisations and the VMob platform is a footprint in their marketing programs that drive SaaS revenue from those big customers, plus App revenue for loyalty redemptions. Think of it like this ... the SaaS revenue comes from the 10's of thousands of retail stores being hosted on the VMob Azure platform, the cream revenue comes from App users redemptions. This is quite different and a much more appealing business model for investors than consumer targeted SaaS, like XRO for example.

I think VML will surprise with how much money they spend. They spend money on a blog nobody even comments on.

VMob can only spend the money that investors put to them, and the revenue that they justifiably earn, after costs, while remaining a viable entity. Spending it all shouldn't surprise anyone for a company that has moved to a rapid growth/expansion phase. Investors should be very happy about that, imagine the reaction if VMob wasn’t growing customers, or market share! If VMob didn't spend all of our investment and revenue, after costs, we'd be moaning about not growing the company and badgering them for return of capital.

Do we finally have the basis for an investors discussion? I’d like to share my other thoughts about what VMob could be doing for us investors, but I’m not sure this is the right forum. Some may have picked up on discussion on other boards focused on where VMob is intending to list soon, which is where I’ll be progressively focusing more of my thoughts on in the future.

BAA

[Baa_Baa]

You surely want the FY15 results out before you apply for the SPP? When will the cap raising process be out of the way?

Axe, your curiosity with VMob is endearing though as has been pointed out it doesn't really fit with your investment profile, as you've stated it to be. VMob is a growth company, it has uncertainties and plenty of questions to answer, which probably won't happen in the timeframe or manner we investors want it to. The ASX listing in due course will force more rigid reporting disciplines.

I have no idea when or how VMob will precisely sequence their announcements, I assume though that they will be forced to announce the FY15 results in the timeframe NZAX requires, and this will be amongst the SPP and preceding the ASX listing.

It's more interesting I think to ponder when the interjections of positive announcements and their timing will occur in the preset course of events that we already know about. VMob has a lot up it's sleeve that we aren't privy to yet. They say it's because of contract confidentiality and I can understand that, but from the shareholders meeting they definitely know that their investors expect and deserve more timely information.

So the thing we investors can look forward to is the upside surprises amongst the process of raising capital and listing on the ASX, tempered carefully against their obligations to keep customer commercials confidential.

BAA

[winner69]

Baabaa, please be not offended

The first part of your post above is very succinct and is a good overview of where Vmob are. If you changed the word VMob into Xero (and a couple of other words) it would equally apply to Xero.

But you seem awful disparaging of Xero.

I just find the different views you have of each interesting when they both a strategy of spending to grow with profit a long off goal...... Just an observation

[Xerof]

VMob has a lot up it's sleeve that we aren't privy to yet. They say it's because of contract confidentiality

Really? better be careful about disclosure timing - ask PEB

[Ginger_steps_]

I have a simple question... Why would companies like 7eleven and an Mcdonalds not want to disclose the value of the contract?? If anything I would have thought it to be the other way around. As in Vmob wouldn't like potential customers to know the cheap deals offered to early adopters/influencers?

[axe]

Investors - would you expect the FY15 results before you decide on the SPP?

[Baa_Baa]

No offence taken winner, none at all.


The difference is that VMob IMHO is undervalued presently, whereas XRO is overvalued, though both are valued on sentiment as neither offer a fundamental basis for valuation!


So valuation of SP for both VML and XRO is purely sentiment based, at this point in time. That upsets the FA's who expect and deserve guidance and detailed financial performance results and forward guidance. But we're all getting to grips with the NZ techs who've listed recently, none of whom (VML and XRO included) realise that talking to their market is different to talking to their owners. The IT industry is full of oversell and under deliver, with hype intermingled. They just don't get it, that investors look at the whole picture, they hold them to account for their prognostications as well as their results.


The thing that VML has that differs from XRO, but does not make them an equal or better investment per se (it just makes them different), is that VML make money from the SaaS hosting of 10's thousands of large customers retail marketing programs (much higher monthly revenues from fewer customers), with the cream coming from the retail App driving voucher redemptions. XRO on the other hand rely on acquiring accounting practices and their customer bases, both of which are hosted SasS solutions, XRO rely on millions, VML rely on thousands.


I don't like XRO because it's grossly overpriced with no fundamental basis. I think it’s way overpriced at the moment. If they split 1:5 it would help sentiment. A split would relate to sentiment better. They have declining growth in established markets and uncertain prospects in growth markets. It obviously wouldn't change whether it's overvalued or not.


I do like VML because it's under priced IMO, though it also has no fundamental basis, yet, though due to non-disclosures which they had better rectify soon or be punished. I think VML has been overlooked in the recent market dynamics and will surprise to the upside. I also think it could go to profit in 18-24 months no problem if they want to (I suspect the Directors would like that, to differentiate and return on their investment). They have astutely moved to consolidate, raise capital and look to list on the ASX. Upside announcements will be tempered against commercial contract disclosure constraints, it galls me but I can live with it in the meantime.


There’s so much to say, to discuss, it’s just impossible with all the noise around here.


BAA