Diligent Boardbooks IPO [Archive] - Page 11

robbo24

17-09-2013, 11:28 PM

I particulalry liked this post ;)
Originally Posted by Brighton_Early

I guess it's a question of who is really the one doing the misleading... Afterall, the Securities Markets Act 1988 says: http://www.legislation.govt.nz/act/public/1988/0234/latest/DLM140427.html

Section 11 False or misleading statement or information
A person must not make a statement or disseminate information if—

(a) a material aspect of the statement or information is false or the statement or information is materially misleading; and
(b) the person knows or ought reasonably to know that a material aspect of the statement or information is false or that the statement or information is materially misleading; and
(c) the statement or information is likely to—

(i) induce a person to trade in the securities of a public issuer; or
(ii) have the effect of increasing, reducing, maintaining, or stabilising the price for trading in those securities; or
(iii) induce a person to vote for, or vote against, a transaction, or to abstain from voting in respect of that transaction.

And: http://www.legislation.govt.nz/act/public/1988/0234/latest/DLM140428.html

Section 11A Criminal liability for false or misleading statement or information
A person who contravenes section 11 commits an offence (see section 43 for the maximum penalty of 5 years' imprisonment and a $300,000 fine for an individual or a $1,000,000 fine for a body corporate) if the person has actual knowledge that the statement or information is false in a material aspect or is materially misleading.

Just keep it real...

winner69

18-09-2013, 01:45 AM

I dont have access to the NBR story, but are you saying that the rumours perpetrated on this forum are the basis of the media article? In which case Brighton Early is in deep trouble, if the rumour spreading is so easily traced back to him. Or are the rumours supposed to have originated elsewhere and just been documented here?

The article said "The rumours first surfaced late last week on an investor web forum discussing Diligent,"

Balance

18-09-2013, 06:37 AM

The article said "The rumours first surfaced late last week on an investor web forum discussing Diligent,"

FMA is looking to nail someone in this area and with the co-operation of this forum owner, it is easy enough to trace who anyone is on this forum.

I certainly hope Brighton_Early did not maliciously spread the Milford buying back in to facilitate a quick trade. Again, easy enough to trace as all transactions are traceable.

He was so confident so I wonder if someone in the broking industry planted the infor on him. That is a capital offense for a broker under NZX rules!

blackcap

18-09-2013, 07:30 AM

FMA is looking to nail someone and with the co-operation of this forum owner, it is easy enough to trace who anyone is on this forum.

I certainly hope Brighton_Early did not maliciously spread the Milford buying back in to facilitate a quick trade. Again, easy enough to trace as all transactions are traceable.

He was so confident so I wonder if someone in the broking industry planted the infor on him. That is a capital offense for a broker under NZX rules!

You are onto something there Balance. It could well be something like the "boys" in the broking house playing a prank on a newbie. (or somthing similar)

winner69

18-09-2013, 08:09 AM

You are onto something there Balance. It could well be something like the "boys" in the broking house playing a prank on a newbie. (or somthing similar)

BE sort of implied he was attached to a broking house / insto.

Many here thought he was actually a god guy

Jay

18-09-2013, 08:25 AM

According to the member list he/she was on the forum this morning

Anyhow, looks a bit like Fidelity was buying as Milford was selling, it seem the prices mentioned almost tie up from memory

nextbigthing

18-09-2013, 08:25 AM

Brighton Early, care to comment?

MAC

18-09-2013, 09:15 AM

blakecb

18-09-2013, 09:34 AM

I imagine it very probably is a learning opportunity for Brighton Early. I hope he can be bold enough to make a quick humble statement to put it all in the past and continue onward. There's all the potential in the world for all young new traders.

Yeah I agree. He did also claim on the PEB thread that Stephen Tindall was selling up to half his holding, and I really don't see how that could be used to his/her personal gain. I wonder if he/she had been feed some misinformation that they took as gospel, rather than anything deliberate. But like tumeric said, there is a lingering doubt as to whether this may have been deliberate. I'd like to try and give him the benefit of the doubt.

Everwood

18-09-2013, 09:39 AM

I think some people are giving Brighton Early too much credit by calling him a trader. I think the more likely scenario he is not a trader and he lives in his bedroom at his mother’s home.

blakecb

18-09-2013, 09:42 AM

I think some people are giving Brighton Early too much credit by calling him a trader. I think the more likely scenario he is not a trader and he lives in his bedroom at his mother’s home.

He used IRESS which is a $1400+ per month trading software.

Xerof

18-09-2013, 09:44 AM

Very powerful stuff, this 'insider' pretense. Fortunately he/she was outed very quickly, although quite a few were happy to believe without any substance, even when pushed hard for proof.

ironically, it would have been moderated within minutes on 'that other channel'

either BE has realised that he is breaking various laws/ethics/confidentialities, or the Mods have decided that for him. In any event, apart from quotes, the footprint has been removed.

forget about it, and move on

Is the accounting review finished yet?

:p

Everwood

18-09-2013, 09:44 AM

He used IRESS which is a $1400+ per month trading software.

What actual evidence do you have that he uses IRESS trading software besides claiming he uses it? I might have overlooked something in his actual posts.

winner69

18-09-2013, 10:35 AM

Hey moose ... just read a great story in the Dom Post about DouglasLloyd Jenkins and the new MTG in Napier Sounds fantastic

Moose - you that guy or is he your boss?

Balance

18-09-2013, 10:47 AM

Still 1 share sitting at $5.95 on offer.

Looks like volume wanted at that price.

Xerof

18-09-2013, 12:17 PM

Still 1 share sitting at $5.95 on offer.

Looks like volume wanted at that price.

Balance, what is the significance of this 1 share business? You have lost me, is this a Masonic secret code or something? Serious question....

Balance

18-09-2013, 01:05 PM

Balance, what is the significance of this 1 share business? You have lost me, is this a Masonic secret code or something? Serious question....

I am told that brokers who are trying to cross a big line of stock between 2 unrelated parties, buyer & seller, at a certain agreed price have to wait for the market to hit that price before they can cross. The broker cannot massage the stock to that level to do the crossing.

Happens a lot in Australia if you go and have a look at the quotes and trading depth over there.

So in this case, i assume it means the particular broker has a big crossing to do at $5.95 and must wait until the sp hits that level.

Otherwise, deal is off.

blackcap

18-09-2013, 01:06 PM

My understanding was that brokers in NZ had to cross between the quotes but that the price did not have to hit that level for the cross to be valid. But this is from memory and dates back to 2006. Rules may have changed since then and Balance's suggestion does make more sense in that quotes can often have big spreads and would not be indicative of fair value.

18-09-2013, 02:32 PM

Morning. Firstly, it is public knowledge that ST has sold some PEB. Any broker can tell you that if you ask. In regards to how much he is looking to sell, IMO I would be surprised if he didn't end up selling a meaningful amount. As for BG and Diligent, I still believe he has been buying. Time will tell whether I am correct. :)If you are standing by your statements, why have you deleted your posts, or did admin do that?

Xerof

18-09-2013, 02:35 PM

cheers Balance and blackcap for the info

18-09-2013, 03:10 PM

Simple, to remain anonymous. The same reason you use the CJ in place of your real name.

If I understand correctly, CJ's asking if you deleted your earlier posts or if admin did - nothing to do with your user name.Yip - I have no problems with anonymity, just wondering why you deleted if you then repeat the statement.

not accusing, just curious

blackcap

18-09-2013, 03:29 PM

Simple, to remain anonymous. The same reason you use the CJ in place of your real name.

what has deleting your posts got to do with anonymity?

bonne vie

18-09-2013, 04:06 PM

I am surprised at the number on this thread seeming to be encouraging BE, surely there are only three scenarios here:
1 He is stirring the ST forum readers or
2 Pumping and dumping or
3 He has received some confidential knowledge whether it be second hand or not, he/she is naïve and has yet to learn you can not pass confidential information without consequences. And we should be discouraging this behaviour - it could be your portfolio which gets mentioned next.

winner69

18-09-2013, 04:27 PM

All good material for our mates at the LSE eh balance

bonne vie

18-09-2013, 04:38 PM

So getting back to the thread - any further guesses when we get the next news from Diligent. Was it reinstatement within 3 months and half year or quarterly expected before October?

18-09-2013, 04:56 PM

So getting back to the thread - any further guesses when we get the next news from Diligent. Was it reinstatement within 3 months and half year or quarterly expected before October?Expect the info on the last day possible.

Whipmoney

18-09-2013, 05:14 PM

Expect the info on the last day possible.

Or (based on their track record) another delay..

Mista_Trix

18-09-2013, 05:22 PM

Or (based on their track record) another delay..

Beat me to it :-S

bonne vie

18-09-2013, 08:41 PM

been waiting awhile, might as well wait a bit longer!

I am used to waiting for this one now and at least there has been a good upswing last few days and I suspect it will hover around the current level as some take profits and others buy in. I am just a bit anxious over the next 4 trading days as I will only have limited internet access, not a position I want to be in if by some miracle Diligent do an Oracle and some news actually comes out. Not ready to put a stop loss in.

DISC held

baller18

18-09-2013, 09:48 PM

Snow Leopard

18-09-2013, 11:07 PM

I keep thinking about what winner said a month ago about revenue has slowed down.
If revenue has slowed down (not significantly) this would lead to a decrease in earnings, decrease in cash flow, which means Dil shares could well be affected...
Right now if we are talking PEG then we would just get under one if growth stays at 50%, if growth is less than 50%, then wouldn't it make Dil shares actually quite fully valued?
Has anyone got other perspectives about Dil's growth?
Which therefore, doesn't make Dil share seem cheap at all at the current SP.

Actually it was that revenue growth was slowing, revenue itself is still increasing, and as a follow on cash flow and profit are still increasing.

As to the current value of DIL, well tell me what value you would like and I am sure I can generate a set of figures to justify it.

Best Wishes
Paper Tiger

robbo24

18-09-2013, 11:09 PM

Snow Leopard

18-09-2013, 11:20 PM

$20 a share

OK, So assume a new product for senior management in a similar vein to the board books which obviously will be adopted by all the current customer companies and that in two years time that they start giving away an original Dilbert print signed by Scott Adams with every renewal and the current value is $20.17.

4835

Any valuations higher than this and I would have to start making some optimistic assumptions

Best Wishes
Paper Tiger

baller18

18-09-2013, 11:21 PM

Actually it was that revenue growth was slowing, revenue itself is still increasing, and as a follow on cash flow and profit are still increasing.

As to the current value of DIL, well tell me what value you would like and I am sure I can generate a set of figures to justify it.

Best Wishes
Paper Tiger

Huh, I am quite confused PT, if revenue growth has slowed down, then YOY revenue growth would decrease as well wouldn't it? Then it would carry on to effect earnings and cash flow wouldn't it?

If we are strictly talking about growth of Dil, as I think the SP has accounted into the growth of Dil, but not too show how much...

Thanks heaps again PT

Snow Leopard

19-09-2013, 01:35 AM

Huh, (1) I am quite confused PT, if revenue growth has slowed down, (2) then YOY revenue growth would decrease as well wouldn't it? (3) Then it would carry on to effect earnings and cash flow wouldn't it?

(4) If we are strictly talking about growth of Dil, as I think the SP has accounted into the growth of Dil, but not too show how much...

Thanks heaps again PT

(1) you are not the only one.
(2) it would,
(3) it would
(4) see (1).

Current true value is a range of guesses (educated or otherwise)
Future SP is unknown, but the result of the never ending battle between optimist and pessimist, cautious and reckless, realist and idealist, fundamentalist and chartist, etc, etc.

Best Wishes
Paper Tiger

Whipmoney

19-09-2013, 08:47 AM

Huh, I am quite confused PT, if revenue growth has slowed down, then YOY revenue growth would decrease as well wouldn't it? Then it would carry on to effect earnings and cash flow wouldn't it?

If we are strictly talking about growth of Dil, as I think the SP has accounted into the growth of Dil, but not too show how much...

Thanks heaps again PT

I'm not sure if you are confusing YoY revenue, with YoY revenue growth.

But assuming that Revenue Growth falls then all things being equal both Cash Flow Growth and Earnings Growth will also decline (i.e. a slowdown in the rate of growth) however overall Revenue, Cash-Flows and Earnings will still be up on last year.

I think I get what you're saying though.. i.e. a certain growth factor has been priced into this stock and therefore if they post growth below that threshold then the stock will invariably have to come down in price.

Does that make sense?

winner69

19-09-2013, 09:09 AM

I'm not sure if you are confusing YoY revenue, with YoY revenue growth.

But assuming that Revenue Growth falls then all things being equal both Cash Flow Growth and Earnings Growth will also decline (i.e. a slowdown in the rate of growth) however overall Revenue, Cash-Flows and Earnings will still be up on last year.

The only problem with that statement is that in DIL case over H1and H2 this year revenues were up on last year BUT Free Cash Flows were down on / less than last year

tosspot

19-09-2013, 09:47 AM

Think I might jump out of DIL just for a few days for a gold producer like TRY or KCN, looks like were not going to get restatements until October

Balance

19-09-2013, 09:59 AM

Think I might jump out of DIL just for a few days for a gold producer like TRY or KCN, looks like were not going to get restatements until October

Excellent if you feel like that.

Snakk perhaps? :D

http://www.sharetrader.co.nz/showthread.php?8953-Snakk/page134

According to the believers/posters there, the revenue growth there is going to go ballistic soon.

Whipmoney

19-09-2013, 10:04 AM

The only problem with that statement is that in DIL case over H1and H2 this year revenues were up on last year BUT Free Cash Flows were down on / less than last year

Free Cash Flows are after both CAPEX and changes in working capital.

We know the company is undertaking further CAPEX on their second product suite and they have probably also run up additional working capital to fund their growth. I need to sit down and crunch though the financials but I note that page 8 of their 2013 board report quotes the following:

"The Board’s top priority for capital management is to effectively support the company’s operations and growth initiatives in order that the company capture the full potential of the available market for its digital board solution:
–Invest in increased R&D, Sales and Marketing, Capital Expenditure

The Board intends to retain current and future earnings to support operations and finance future growth initiatives and the development of Diligent’s business, and does not intend to pay a dividend in 2013"

tosspot

19-09-2013, 10:08 AM

Excellent if you feel like that.

Snakk perhaps? :D

http://www.sharetrader.co.nz/showthread.php?8953-Snakk/page134

According to the believers/posters there, the revenue growth there is going to go ballistic soon.
hah lets not get silly now

winner69

19-09-2013, 10:12 AM

Whipmoney

19-09-2013, 10:19 AM

No argument with what you have said whip... you as always are correct ..... but many have taken the current FCF trend and extrapolated that into the future without really allowing for what you pointed out .... and come up with outrageous valuations

Yeah that may be true. Personally I would prefer that they plough cash into CAPEX, presuming that the new project will create significant value (i.e. reach a different part of the market) or a potential bolt on product for say executive management (as opposed to strictly the Boards of Directors).

That way not only will they achieve further growth but we may see a return of a more exponential like growth curve.

The alternative is that they keep growing their subscription base and just run the business for cash in order to pay out dividends which I suspect has less up-side for investors.

Furthermore if the second (or bolt-on product) allows them to gain further penetration into both their existing clients and the market as a whole, this would provide them with greater critical mass/stickiness which is a significant barrier to entry in the SaaS space.

Balance

19-09-2013, 10:22 AM

Interesting feedback from a broker - all those small pesky multiple little trades are genuine orders, nothing sinister or manipulative about them.

Just how the NZX requires brokers to operate some orders these days apparently.

Whipmoney

19-09-2013, 02:48 PM

Actually it's not... try re-reading the part that says "all things being equal".

Baller was confusing a decline in Total Revenue with a decline in Revenue growth.

TimmyTP

19-09-2013, 03:03 PM

[...]
Snakk perhaps? :D
[...]
According to the believers/posters there, the revenue growth there is going to go ballistic soon.

Then why are all of the insiders selling?:rolleyes:

Whipmoney

19-09-2013, 03:40 PM

Please someone correct my logic if I am wrong here as I'm not very good at this stuff, but in very simple terms you are implying that cost growth will be less than revenue growth right? And given you are saying revenue growth will decline then that means you are expecting cost growth will decline by even more?

Yeah he means that revenue growth will exceed cost growth leading to an increased operating margin.

I somewhat agree but that may only show in terms of Net Profit, whereas cash flows are affected by Capex which has been ramping... at least somewhat.

winner69

19-09-2013, 04:07 PM

Yeah he means that revenue growth will exceed cost growth leading to an increased operating margin.

I somewhat agree but that may only show in terms of Net Profit, whereas cash flows are affected by Capex which has been ramping... at least somewhat.

cash flows positive for H1 and H2 this year but 13% and 55% (est) down / less on the same quarter last year ..... even though H1 revenues were up 84% on pcp and we don't know about how much H2 was up

So we have revenues growing (with rate of growth declining) but cash flows declining compared to pcp (although still +ve)

winner69

19-09-2013, 05:48 PM

Baller et all

Just have this graphic imprinted on your mind .... no need for words

Lorne Ranger

19-09-2013, 06:08 PM

Baller et all

Just have this graphic imprinted on your mind .... no need for words

69, That image is like investment porn! I'm printing it out now....

Balance

20-09-2013, 09:39 AM

Baller et all

Just have this graphic imprinted on your mind .... no need for words

In Harvard school, they refer to it as jaws of the crocodile.

winner69

20-09-2013, 04:02 PM

Sorry to burst your bubble, but this model only works where there are high fixed costs and low variable costs. As XRO and a bunch of other companies like WDAY will tell you, when variable costs make up a far greater proportion of total costs, increasing revenue results in increasing costs. Thats why customer acquisition costs and churn determine whether a company will ever break even, not revenues.

So we are coming back to that discussion of yonks ago .....is DIL more of a 'services' company than a pure 'software' company?

All the training, ongoing support etc seems rather costly but a vital part of the DIL offer it seems. Not as profitable as just selling the software where most of the revenue just drops through to the bottom once things are up and running.

With H1and H2 operating cash flows less than pcp maybe this is actually the case?

20-09-2013, 04:12 PM

So we are coming back to that discussion of yonks ago .....is DIL more of a 'services' company than a pure 'software' company?

All the training, ongoing support etc seems rather costly but a vital part of the DIL offer it seems. Not as profitable as just selling the software where most of the revenue just drops through to the bottom once things are up and running.The training is pretty much upfront I would have though (apart from new directors) and ideally, if the product is good, ongoing support should also reduce as everyone becomes more familiar with it.

Can remember his alias but the person who use to work there posted that most support calls were directors forgetting their passwords - this will be solved when apple adds the fingerprint reader to the iPad ;)

Whipmoney

20-09-2013, 04:15 PM

Lots of small trades going on.. Trading Bot back?

Trade No.
Time
Price
Volume
Value
Conditions

1
122
1:53:24 pm
591
2
$12
Off Market

2
121
1:53:09 pm
591
3
$18
Off Market

3
120
1:53:03 pm
591
17
$100
Off Market

4
119
1:52:57 pm
591
159
$940

5
118
1:50:41 pm
591
4
$24
Off Market

6
117
1:50:28 pm
591
307
$1,814

7
116
1:50:08 pm
591
166
$981

8
115
1:49:57 pm
591
683
$4,037

9
114
1:47:38 pm
591
4
$24
Off Market

10
113
1:47:26 pm
591
1
$6
Off Market

barney

20-09-2013, 06:53 PM

Brighton Early: Have you read todays NBR. You made it on to page 14. Had any interesting phone calls yet ?

Lorne Ranger

23-09-2013, 09:26 PM

Spooky. Everything is so quiet....... I mean its a chance for the ulcer to heal so im not complaining, just.... odd.

Hope you're all well.

I'll just wait for something to happen then....

MAC

23-09-2013, 09:29 PM

Spooky. Everything is so quiet....... I mean its a chance for the ulcer to heal so im not complaining, just.... odd.

Hope you're all well.

I'll just wait for something to happen then....

Shhhhh the bears are in their caves sleeping, set the alarm clock for 28th October, no more posts until then.

Lorne Ranger

24-09-2013, 12:19 AM

oh. ok. Sure. Makes sense.

Although technically 28th October is a public holiday being Labour day. But I get that the bears don't know that. Being bears. They don't have calendars. Or alarm clocks. Or shares. Or irony, sarcasm or metaphors.

Dum de dum.... ok then.

Can I post when it breaks $6 later this week?

psychic

25-09-2013, 07:33 PM

More of the same today...
Is this sp not being artificially held up by this action? These mini trades have been going on for days, many completed when the next best significant bid is much lower..
I write this as a newbie trying to understand the action only, would be keen to hear others comments.
cheers

psychic

25-09-2013, 07:52 PM

Thanks Moosie. Ok - but it just seemed that the small trades were often ticking over at a higher level than buyer interest.
Cheers

Monty

26-09-2013, 09:30 AM

sometimes when the faith is being tested (just a little - I have no intention of selling my very modest shareholding) we need a little pick me up. and i saw this http://www.cutimes.com/2013/09/25/online-portals-upgrade-board-communication and i especially like this line

Increasing regulatory pressures and compliance changes have also prompted credit unions to implement online portals.
“For CU directors, who are performing their responsibilities at a time of intense regulatory change and scrutiny, concerns about transparency, governance and compliance are always top of mind,” said Jeff Hilk, director of client services at New York-based Diligent (http://www.cutimes.com/2013/04/26/empowering-credit-union-boardroom-portals)Board Member Services. (http://www.cutimes.com/2013/04/26/empowering-credit-union-boardroom-portals)
By implementing online portals such as Diligent Boardbooks, some financial institutions have cut overall costs by 50% while significantly improving communication and board governance, Hilk said

The Diligent web site advises that
Diligent will endeavour to provide selected operating highlights for the Company’s third quarter in the first two weeks of October. By my reckoning that should be on on Tuesday 8 October 2013 (pure guess)

26-09-2013, 10:09 AM

my guess too, reporting is usually a Tuesday. can't wait!I wouldn't expect it till the friday. No basis for this but why would they rush themselves now ;)

iceman

26-09-2013, 11:41 AM

my guess too, reporting is usually a Tuesday. can't wait!
I will be on the beach in Samoa with phone and laptop permanently turned off. So it better be a good announcement so my holding won't disappear while I'm oblivious in the sun :)
It would be a holiday hard to justify if that happened :eek2:

So I trust you to talk/ramp it up moosie !

iceman

26-09-2013, 11:48 AM

You been there before mate? Love that place - my favourite of the islands I've been to!

Yes went last year after years of Fiji and Cooks. Wife and I loved it so returning to Coconut Beach resort as a "returning nut" :t_up:

Wolf

26-09-2013, 04:51 PM

Fair volume traded today and a wee dip in price. I might get a chance to top up tomorrow :)

baller18

27-09-2013, 04:33 PM

Dil is such a trader's stock right now..
5.7 - 5.95 range...

Lorne Ranger

27-09-2013, 09:03 PM

For those of you who love contrarian indicators, my father has just bought more DIL and has a stake nearly as large as mine in the company now. ;)

My Mum is still holding. Maybe they should meet up? Single? ahem.

Oh and for those overly serious bloggers out there who see this and think "oh my god this just shows what a joke this stock has become, its doomed for sure", please please just pipe down and take a breath. Say anything disparaging about me mum and you'll have the Ranger to deal with. So shush.

baller18

27-09-2013, 09:32 PM

My Mum is still holding. Maybe they should meet up? Single? ahem.

Oh and for those overly serious bloggers out there who see this and think "oh my god this just shows what a joke this stock has become, its doomed for sure", please please just pipe down and take a breath. Say anything disparaging about me mum and you'll have the Ranger to deal with. So shush.

I hope you were not directing that at me mr ranger!
I was just implying the traders must be loving this stock.. lol

Lorne Ranger

27-09-2013, 10:21 PM

I hope you were not directing that at me mr ranger!
I was just implying the traders must be loving this stock.. lol

Oh, no I wasn't. And I agree with you. Wish I had more spare cash (which I have been thinking since I was about 3 1/2)

Glad for the last minute rebound today. Thanks Moosies dad.

Monty

30-09-2013, 09:57 AM

well, could get a quarterly update tomorrow. expecting ~$3M cash to be added to our huge pile :)

Why only $3m Moosie? I thought the pile was growing at a minimum of $2m per quarter - and there has not been a report for a while. What are your rough calculations for the pile of cash growth (I expect the new clients to grow by about $6m per quarter and profit (widening margin) by about $2m+ per quarter even with the audit costs and new product development costs. Any guesses on the size of the pile now?

Monty

30-09-2013, 01:29 PM

Quarterly gains have always been in the range of $2.5-$3M and I do not expect that to change as the re-audit costs will bite and margins are expanding, albeit a bit slowly...

I expect Xmas time to be more a time of giving once this is all behind us and dusted :)

so the pile of cash whould now be about How Much

I was just looking back at the last quarterly update (q10 - JAn- March 2013) some highlights
1. Quarterly revenue of $15.1m
Cumulative sales of $58m
3. Deferred revenue of $18m
4. Cash Balance of $36.5m

Given there has been no update since the Q10(missing the Q11) and q12 is now due (Hopefully) we might expect to see

Cash and reserves about $41m
Total assets about $55m
Quarterly revenue about $19m
total users about 70,000

or am I being too hopeful?

777

30-09-2013, 05:14 PM

Big lots on a number of stocks including TEL. End of quarter settle ups possibly.

winner69

30-09-2013, 07:36 PM

"Diligent continued to demonstrate balance sheet strength during the second
quarter. Diligent's cash balance increased by $US 2.5 million in the second
quarter of 2013, resulting in total cash balances of $US 39.0 million as of
June 30, 2013, after payment of U.S. 2013 estimated quarterly income taxes of
$US 1.8 million and final costs relating to the Special Committee process and
related remediation activities of over $US 1.0 million."

Cash balance should therefor be around ~$42M (USD) :)

Surely a Q3 of $3m would be a HUGE disappointment - Q3 last year was $5.3 after capex and Q4 was $6.6m

If Q3 was $3m than YTD (3 quarters) would be $8.6m compared to $13.7m last year .... every quarter less than last year

And you trying to convince me that this is a growth company .... FCF seems to peaked at $20m a year and on your figures we will lucky to get $10m this year .... and DIL has a market cap of nearly 1/2 billion!!!

blakecb

30-09-2013, 07:40 PM

Big lots on a number of stocks including TEL. End of quarter settle ups possibly.

Or people are very concerned the US government is about to shut down in the midst of uncertain economic times. If it does, it could be quite turbulent on the markets.

bonne vie

30-09-2013, 10:25 PM

Correct me if I am wrong here (I am sure you all will ). There is always a lot talk about the amount of cash held and FCF but my understanding is that you can not look at either of these items in isolation. The rationale being that the amount of "free" cash held is cash/cash equivalents less current liabilities - so a company can have millions in the bank but the liability side needs to be looked at to see if it is at the expense of creditors being paid and to ensure sufficient is cash held to cover deferred items including deferred revenue. Likewise the FCF is calculated from the changes in value of the assets and liabilities e.g accounts receivable value increases it is deducted from cash flow figure , conversely when accounts receivable reduces this is income in and adds to free cashflow. So again the liabilities have to be taken into consideration to get a true FCF. What we want to see is Current assets as a ratio over current liabilities increasing e.g. therefore showing cash/debtors etc are growing at a greater rate than current liabilities.

I would suggest a more meaningful measure of the company's well being is using the working capital calculation e.g. current assets - current liabilities. I was hoping to track this quarterly but it appears the quarterly accounts do not split the assets or liabilities into current and fixed/long term except for the 09/2012 figures included in the USA presentation in US dollars.

Below is a very basic work sheet showing the working capital calculations I could locate the figures for (including the USD presentation) - YOY looks good and while the 31/12/12 ratio appears to have reduced since 30/9/12 this could be due to various reasons including different reporting in the quarterlies.

The second calculation of shareholder equity is trending well.

It would be great if we could get Diligent to provide quarterly balance sheets with the assets and liabilities split into current and fixed/long term especially now the timing of receipts is to be amended which will impact in the deferred revenue figure. IMHO this would provide very meaningful liquidity information

(000's)

31/12/2011

30/09/2012

31/12/2012

31/03/2013

Current Assets

$15,121

USD28,415

$37,958

Current Liabilities

$10,890

USD14,786

$22,760

Working Capital

$4,231

USD13,629

$15,198

Current Ratio

1.39

1.92

1.67

Assets

$18,552

USD34,621

$43,604

$47,154

Liabilities

$11,228

USD20,284

$24,617

$25,586

Stockholder Equity

$7,324

USD14,337

$18,987

$21,568

Assets/Liabilities

1.65

1.71

1.77

1.84

PlatnuM195

30-09-2013, 10:43 PM

So given the share price action over the past couple of months, what would be considered a positive outcome for the restatement? Is it already priced in that there is some kind of significant negative impact?

nextbigthing

30-09-2013, 11:08 PM

bonne vie

30-09-2013, 11:09 PM

thanks for that bv, could be included after the re-audit?

what are your expectations for quarterly profit?

Right 5 minute calculation - EBITDA $5.22m

Revenue $16.8m
Gross Profit $13.8m (82%)
Expenses $8.55 (39% plus additional $2m for accountancy)
EBITDA $5.25m

bonne vie

30-09-2013, 11:19 PM

Bonnie Vie,

My accounting knowledge is only basic at this stage so I may be wrong here, however this could be a flaw in the CA - CL system.

What say every time DIL got to $1m in cash they bought a non current asset such as a shop*. This happened every few weeks consistently. Then each quarter it would appear as if current assets were going no where and CA - CL was remaining about the same. When in reality non current assets were building at an excellent rate. So you'd have to take non current assets into consideration now. Wouldn't this just suggest you need to look at ALL the figures as a whole?

Any accountants out there?

*I realise DIL aren't in the business of buying shops - you get the point.

Cheers, NBT

The rationale not to use Fixed assets and long term liabilities is to assess the companies solvency or liquidity - to be a going concern to utilise the long term assets any business IMHO should be able to cover its current liabilities with its current assets. The actual ratio between the current assets and current liabilities required is dependent on industry e.g. a supermarket - cash business so lower ratio, a company with normal creditor trade terms but extends its customers longer terms and/or needs to hold high stock will require a higher ratio.

An example why IMHO you do not look at the fixed assets when looking at liquidity is the example of where many golf clubs in NZ now find them selves - huge fixed assets but lack of cash flow - or an individual example the many people who are asset rich (home in say Remuera) but have retired/made redundant or simply just do not earn enough money to cover rising rates and insurance.

nextbigthing

30-09-2013, 11:30 PM

I didn't read the original post closely enough, I see you're talking about liquidity and financial health etc, not overall valuations which is what I was thinking.

Cheers,

NBT

bonne vie

30-09-2013, 11:51 PM

I didn't read the original post closely enough, I see you're talking about liquidity and financial health etc, not overall valuations which is what I was thinking.

Cheers,
NBT

Yes just trying to highlight to those with little accounting knowledge not to be misled by focusing on the bank balance only. The current ratio (C/A divided by C/L) and its trend over successive periods is much more meaningful. And with the limited financials available with the current assets and liabilities split out Diligent trend is positive - albeit only 2 full year financial used. This is why the same info quarterly would be great.
Cheers

winner69

01-10-2013, 07:49 AM

cheers. any ongoing costs taken off that though?

Annualised that ebitda and refer to Steve's post on MBE thread and DIL becomes more highly valued than MBE

bonne vie

01-10-2013, 08:12 AM

cheers. any ongoing costs taken off that though?

I am not sure where you are coming from - ongoing costs?. If you are meaning R&D etc then that is all in the expenses. My estimate was purely based on using past results and making an assumption that increases in revenue will continue at approx $1.7m pq with an assumption that the majority of revenue is from monthly fees rather than new sales. As new sales level off then quarterly increases will do likewise. Unfortunately will not be able to follow this thread now until latter this afternoon. Rather concerned with what is happening in the US - but I am telling myself " you are not a trader but along term investor - ride out the rollercoaster" but that is another thread.

01-10-2013, 09:08 AM

Yes just trying to highlight to those with little accounting knowledge not to be misled by focusing on the bank balance only. The current ratio (C/A divided by C/L) and its trend over successive periods is much more meaningful. And with the limited financials available with the current assets and liabilities split out Diligent trend is positive - albeit only 2 full year financial used. This is why the same info quarterly would be great.
CheersCorrect me if I'm wrong but what is the nature of their CL? - I dont think they have debt so the current liabilitys is probably an accounting fiction relation to revenue in advance - therefore not a financial liability per se, more a obligation to continue to provide services for the next year (which they do at a very high gross prifit margin).

Whipmoney

01-10-2013, 10:24 AM

nextbigthing

01-10-2013, 12:51 PM

This makes no sense to me..? Not sure what you're argument is here but DIL isn't piling all of their cash into non-current assets (PP&E, software, IP etc).. They're mainly hoarding it (as cash) so their Current Assets are simply growing.

Bonnie was talking about financial health, I missed that and thought they were talking about overall valuation.

Do the results have to be out this month? Will be very interesting!

Monty

01-10-2013, 01:46 PM

it will be do time - not die time. hold the faith Moosie. there are just too many positives with Diligent that have been rehashed here 1000 times. best to me is the SaaS model, 97% retention rate, Nasdaq listing, new product, cash reserves, 6000 new users per quarter (would like that to be growing instead of stable).

bonne vie

01-10-2013, 02:33 PM

Correct me if I'm wrong but what is the nature of their CL? - I dont think they have debt so the current liabilitys is probably an accounting fiction relation to revenue in advance - therefore not a financial liability per se, more a obligation to continue to provide services for the next year (which they do at a very high gross prifit margin).

CJ total current liabilities 31/12/12 were $22,759m of which $17,581 were deferred revenue - so yes you are right they are more of an "accounting fiction" rather than a "financial liability" and for sure you would expect the risk that the company had to repay these due to non performance, ceasing to trade etc appears very low. But I would still suggest using a current ratio and even say a quasi current ratio where say only 25% of deferred revenue is used in the calculation is a far better test of where the company's liquidity is rather than just looking at "the pile of cash" held in isolation.

The trend quarter to quarter I would expect to be positive but it would be good to be able to have the figures available to calculate quarterly.
IMHO as per an earlier post - I envisage the deferred revenue figure will be the most impacted item in the reinstatement of accounts.

bonne vie

01-10-2013, 02:35 PM

Sorry BV, am referring to one-offs such as the Special Committee and Re-Auditing. This is going to take a sizable chunk out of that profit this quarterly is what I am thinking.

And don't worry about the US market. Last time they shut down was 17 years ago. Gold "spiked" by 3% and the market took a bit of a hit and it lasted all of 3 weeks, but then it was back to normal. They also raised the debt ceiling a few weeks after that. Nothing has changed and its business as usual in the good ol' US of A as the politicians practice their brinkmanship and the normal folk suffer :)

Yes Moosie I agree and this is the additional $2m I added into the expenses figure shown. All best estimates.

Lorne Ranger

01-10-2013, 05:02 PM

Any comment on the rumor that the new product will only run on Blackberry operating systems?

whoa whoa I'm kidding! geee.

robbo24

01-10-2013, 09:07 PM

So... That federal government shutdown... Gonna do wonderful things for global markets, yes?

Blendy

02-10-2013, 07:42 PM

Any comment on the rumor that the new product will only run on Blackberry operating systems?

whoa whoa I'm kidding! geee.

HAHAHAHA that made me laugh!

Monty

03-10-2013, 02:53 PM

like a poor kid waiting for christmas. Hoping for a shiney bike, but also knowing that there could be a lump of coal instead. I think the board will want to make a good impression with good news after a terrible six months

edm

03-10-2013, 03:34 PM

anyone else getting excited that the wait is almost over? even if it is bad, there are still decisions to be made and the future of the company to get on with. felt like its been a total blackout the past few months.

Hi Moosie,

Just wanted to find out what you plan to do once the announcement comes out, whether good / bad news, correct me if I'm wrong but I remember reading something you wrote about being in DIL for LT.

Do you have other plans?

Thanks,

Ed.

Xerof

03-10-2013, 04:09 PM

I note the 5k distributor is back on the case...... After......

I have been buying today for the trading account, ready for an update (not expecting audit for a while, just an update on ops)

bonne vie

03-10-2013, 05:29 PM

Yes, quarterly update will be next week most likely since nothing came out today. Re-audit and half-yearly with updated results out by October 31. It's do or die time! Post last week.

Where did you see the quarterly results will be out this week. As far as I can see the last announcement re timing only talked about Preliminary half year results by 28 Oct and Half Year Report by 29 Dec 2013.

bonne vie

03-10-2013, 07:09 PM

first two weeks of October were the targetted guidance for selected info on 3Q, was in the last DIL rwlease fir timing

Thanks - found it "Diligent will endeavour to provide selected operating highlights for the Company’s third quarter in the first two weeks of October"

edm

04-10-2013, 09:08 AM

Hey EDM

Once the announcement comes out I plan to celebrate! One way or another the whole debacle will finally be over and I can make decisions again! There are two scenarios which can happen here:

Scenario A (Bearish [Negative Story-Change] - 10% chance of happening): DIL has a horrible re-audit with a huge divergence in revenue deferment etc on the order of 15%+. The market reacts by selling hard. I will sell as well and take my losses and re-invest my capital elsewhere. If so, I will constantly watch DIL for a turnaround in order to one day re-invest farther down the track.

Scenario B (Bullish [Story stays the same] - 88% chance of happening): DIL has a good re-audit whereby divergence is <5%, profits are way up from 2Q and margins are still expanding. The SP tracks upwards again and begins a re-test of old highs. I will continue to hold.

Scenario C (Extremely Bullish [Market goes weird!] - 2% chance of happening) - DIL has an awesome re-audit, divergence is +5%, profits are phenomenal at $8M+, huge growth in client numbers, margins are 50%+ and the SP goes to the moon. Will sell on an exponential spike and buy back in after it goes back down.

So, I'm banking on Scenario B and will hopefully be holding on very long-term. My target SP after re-audit is ~$7.50 but there is no way I would sell at that point. I have ~15 cents EPS for FY2013, with an $11 target on the stock next year. I will re-assess my holding AFTER a new product is announced AND DIL has been launched on the Nasdaq. Nothing more, nothing less ;)

Thank you for your input Moosie, much appreciated.

Ed.

iceman

04-10-2013, 12:08 PM

I think you might see a 6 at the front of their sp very qucikly

I'm hoping for a 7 before Christmas :eek2:

iceman

04-10-2013, 12:14 PM

It's going to be a good Christmas iceman, just like last year was ;)

I normally buy and deliver a complete Christmas dinner for one needy family each Christmas. If DIL sp has a 7 in front come this Christmas, I will do it for 3 families I've decided. Fingers crossed !

Xerof

04-10-2013, 12:18 PM

I'm hoping for a 7 before Christmas :eek2:

coming together nicely......

iceman

04-10-2013, 12:24 PM

coming together nicely......

Great image Xerof. I'm glad that I bought more during the "desperation" , "despondency" and "depression"periods. Triple D sounds good to me ;)

Xerof

04-10-2013, 12:32 PM

Yeah, sorry to keep cluttering the threads with it, but it really does encapsulate the underlying emotions posted, quite accurately. Hope things don't go tits up in a big way:p

Lorne Ranger

04-10-2013, 01:19 PM

Yeah, sorry to keep cluttering the threads with it, but it really does encapsulate the underlying emotions posted, quite accurately. Hope things don't go tits up in a big way:p

I think theres more to identifying the cycle stage for a share like DIL than leaping on one word in a chat thread. I agree its a great diagram, but Im not sure it is ever really that simple in reality. My sense of DIL for example is that we are hovering between the depression and hope stage, with a very real pending event giving that hope, not just the share price. Similarly the event(s) that lowered the price in the first place were kind of unnatural, and not really cyclical?

But others might see it on the other side of the chasm yet to cross. So im not sure the tool is that useful without a more accurate way to diagnose progress. What do you think?

MAC

04-10-2013, 02:14 PM

I think theres more to identifying the cycle stage for a share like DIL than leaping on one word in a chat thread. I agree its a great diagram, but Im not sure it is ever really that simple in reality. My sense of DIL for example is that we are hovering between the depression and hope stage, with a very real pending event giving that hope, not just the share price. Similarly the event(s) that lowered the price in the first place were kind of unnatural, and not really cyclical?

But others might see it on the other side of the chasm yet to cross. So im not sure the tool is that useful without a more accurate way to diagnose progress. What do you think?

Consider looking at it from an investor’s perspective rather than a trader's, then sentiment is of not so much importance and you will sleep better at night going from reporting season to season.

4886

Xerof

04-10-2013, 03:11 PM

How's Sakhalin Island this time of year Xerof? ;)

sorry for delay, just had to pop out to get another bottle of vodka.....:D

7degrees according to a google search, heading into winter snow soon. Had a mate working up there for Shell on the big gas project which Gasprom nationalised a couple of years or so ago. They say a change is as good as a holiday, so had a change...

Lorne, make of it what you will, it has been a bit of entertainment for those in depression since the fallout.

maccers recco? jeez, bought a day ahead of that. Now I'll be accused of insider trading......might have to bolt to Sakhalin

MAC, thats a very nice perspective

winner69

05-10-2013, 04:29 PM

I found this on the internet so it must be true - whose going to be a billion dollar company in NZ

Diligent Board Member Services is very popular with boards, who in turn are insiders when it comes to investors. That may mean their $670 million valuation is high, but they are on a healthy growth curve, and I see little reason why that would not continue. So while the market value may fluctuate up and down I expect it to exceed a billion at some stage in the next several years. Earlier if the hype continues.

http://lwcm.co.nz/perspectives/

Mobius

07-10-2013, 05:53 PM

Not the brightest crayon in the pack are we Mr Henry?

Smart enough to get Boardbooks developed, refocus the business completely, launch the company publicly, and to make you a wealthy guy as a result?

---------------------
How many escape pods are there? "NONE, SIR!" You counted them? "TWICE, SIR!"

Whipmoney

08-10-2013, 08:54 AM

woke up with a smile today hoping today is the day :)

What time would you be expecting the announcement? Pre-open or more towards midday?

Whipmoney

08-10-2013, 09:46 AM

Not happening... :S

ddrone

08-10-2013, 09:51 AM

Why did we think it was this soon anyway? All the announcements say before 28th October.

Roberto

08-10-2013, 10:12 AM

Why did we think it was this soon anyway? All the announcements say before 28th October.

It's not the restatement that's expected yet, it's the "selected operating highlights" that they said they'd endeavour to provide in the first 2 weeks of October. But since that gives them until Friday, I'd expect it on Friday.

Whipmoney

08-10-2013, 10:23 AM

It's not the restatement that's expected yet, it's the "selected operating highlights" that they said they'd endeavour to provide in the first 2 weeks of October. But since that gives them until Friday, I'd expect it on Friday.

So they normally provide financial highlights on Tuesday's, the Window for the first two weeks closes this Friday and the key word is "endeavour".

Could be anytime really!

iceman

08-10-2013, 10:40 AM

So they normally provide financial highlights on Tuesday's, the Window for the first two weeks closes this Friday and the key word is "endeavour".

Could be anytime really!

I certainly wouldn't expect anything before Friday, with their appalling record of late !

GRIFFIN

08-10-2013, 11:28 AM

So when ever the report surfaces what will be holders reactions if it is not very positive.?

iceman

08-10-2013, 11:35 AM

So when ever the report surfaces what will be holders reactions if it is not very positive.?

I'm in for the long term so the report/restatement will not change my holding, unless it was a complete disaster which I think is highly unlikely.

Mista_Trix

08-10-2013, 11:35 AM

So when ever the report surfaces what will be holders reactions if it is not very positive.?

Surely they're cleaning up the backlog for a US listing. We've held on this long, why not a little bit longer.
I've stopped taking any fluctuations to heart.

I think we all know the results wont be stellar, but they wont be bad either, a 'good' result that brings with it forward momentum, and I think that's been priced in. It kinda feels like everyone's reasonably on the same page, its just whether you want to be in it (or in at this point) or not.

Balance

09-10-2013, 09:27 AM

Xerof

09-10-2013, 10:14 AM

The 5k capper must have rubbed his eyes in disbelief .......

Roadrunner

09-10-2013, 04:44 PM

Someone is rather keen to buy at $5.75 this morning. The market knows something we don't...? (Or it could just be RR making his debut!)

Also pointed out to me yesterday that the Bollinger Bands are squeezing nice and tight on DIL right now. She's getting ready for another big move...

Haha!Well done Moosie you were spot on sir :) I thought I`d get in quick before the rush!!Gives me about 57000 now and maybe a few more if I can sell that jalopy of mine.It`s been a long wait to get back in but I`ve been lucky enough to get settlement brought forward and my solicitor to send a nice email guaranteeing funds will be in the bank account for Friday.What is it with this modern world,we never see the dosh any more unless we are buying an icecream!Probably a good thing in this game!Good to be back on the Dilly train and hopefully it will start moving to the next station this week???

blackcap

11-10-2013, 09:14 AM

DIL
11/10/2013 09:02
GENERAL

REL: 0902 HRS Diligent Board Member Services INC (NS)

GENERAL: DIL: Diligent Limited Update on Q3 2013

October 11, 2013

Diligent Board Member Services, Inc.
Provides Limited Update on Third Fiscal Quarter 2013

On August 6, 2013, Diligent Board Member Services, Inc. (the "Company")
announced that it would restate its financial statements for the fiscal years
ended December 31, 2010, 2011 and 2012 and the fiscal quarter ended March 31,
2013, and that its previously reported results for such fiscal periods and
interim periods within such fiscal years should no longer be relied upon.
Until the necessary restatement adjustments are finalized, the Company is not
in a position to provide sales or revenue information for the Company's
second quarter ended June 30, 2013 or third quarter ended September 30, 2013.
Selected operating highlights for the Company's third quarter ended
September 30, 2013 are shown below.

3Q 2013 Operating Update

During the third quarter of 2013, Diligent signed a total of 122 net new
client agreements, as compared to 168 net new client agreements in the third
quarter of 2012. Alex Sodi, Diligent's president & CEO, said, "while we
experienced slower new sales growth in the United States in the third
quarter, our upgrade sales to existing US clients continued to be strong.
New sales in other regions were slightly slower for the third quarter due to
slightly slower sales in July and August of 2013. The Company maintained its
client retention rate of 97% in the third quarter. As of September 30, 2013,
Diligent now serves a total of 2,305 Public and Private Companies, with 3,239
boards and over 68,400 users worldwide. Diligent continued to add clients at
both Private and Public Companies across multiple industry segments
worldwide. Diligent's client base is comprised of 53.8% Public Companies and
46.2% Private Companies. Diligent now services 308 Fortune 1000 companies, of
which 14 were added in the third quarter and represent a range of industries.
In addition, we now serve 553 NYSE listed companies, of which 23 were added
in third quarter 2013. We also serve 40% of the FTSE 100 Index (UK)."

Diligent has recently released two new versions of the Boardbooks iPad app,
1.6 and 1.7. These updates will give users additional functionality to manage
and customize their sticky notes to save annotations in a particular section
of the materials, as well as a filtering system to locate and manage resource
items, such as archived minutes, governance manuals and management reports.
Additionally, users are now able to review voting documents and cast their
votes directly on their iPads.

Diligent continued to demonstrate balance sheet strength during the second
quarter. Diligent's cash balance increased by $US 8.4 million in the third
quarter of 2013, resulting in total cash balances of $US 47.4 million ($NZ
57.1 million) as of September 30, 2013. The increase in cash was primarily
due to a strong effort by the new financial team in bringing up-to-date the
Company's billing and collection efforts.

Forward Looking Statements

This document contains forward looking statements within the meaning of the
safe harbor provision of the Securities Litigation Reform Act of 1995. Terms
such as "expect," "believe," "continue," and "intend," as well as similar
comments, are forward looking in nature. These forward looking statements
include statements regarding the Company's intent to restate certain prior
period financial statements and the errors that resulted in the Audit
Committee reaching the decision that these historical financial statements
could no longer be relied upon. There can be no assurance that the Company's
Board of Directors, Audit Committee, management or independent registered
public accounting firm will not identify additional issues in connection with
the restatement or reaudit, or that these issues will not require additional
corrections to the Company's prior period financial statements. These
statements are subject to risks and uncertainties, including the risk that
additional information may become available in preparing and reauditing the
financial statements and may require the Company to make additional
corrections, the time and effort required to complete the restatement of the
financial statements, the ramifications of the Company's potential inability
to timely file periodic and other reports with the US Securities and Exchange
Commission, and the risk of litigation or governmental investigations or
proceedings relating to these matters. In addition, as disclosed in our prior
filings, our Special Committee investigation identified a number of instances
in which we were not, or may not have been, in compliance with applicable New
Zealand and US regulatory obligations and such instances may expose us to
potential regulatory actions and/or contingent liabilities; certain of our
past stock issuances and stock option grants may expose us to potential
contingent liabilities, including potential rescission rights; we are subject
to New Zealand Stock Exchange Listing Rules and compliance with securities
and financial reporting laws and regulations in the US and New Zealand and
face higher costs and compliance risks than a typical US public company due
to the need to comply with these dual regulatory regimes; as of December 31,
2012 we identified material weaknesses in our internal control over financial
reporting and concluded that our disclosure controls were not effective; we
must address the material weaknesses in our internal controls, which
otherwise may impede our ability to produce timely and accurate financial
statements; our business is highly competitive and we face the risk of
declining customer renewals or upgrades; and we may fail to manage our growth
effectively. Please refer to Diligent's Annual Report on Form 10K for the
Fiscal Year ended December 31, 2012 filed with the Securities and
Exchange Commission for further information.

Investor inquiries:
Sonya Joyce
Phone: +64 4 894 6912

Media inquiries:
Geoff Senescall
Phone: +64 21 481 234
End CA:00242252 For:DIL Type:GENERAL Time:2013-10-11 09:02:05

tosspot

11-10-2013, 09:16 AM

Too be honest I dont think this will move the stock much. it usually takes 2 days after an announcement if it does. hopefully im wrong

psychic

11-10-2013, 09:23 AM

WOW, big cash upgrade there!!!:eek2:

Largely due to debtor collection?

blackcap

11-10-2013, 09:25 AM

Largely due to debtor collection?

That seems to be correct. Diligent's cash balance increased by $US 8.4 million in the third
quarter of 2013, resulting in total cash balances of $US 47.4 million ($NZ
57.1 million) as of September 30, 2013. The increase in cash was primarily
due to a strong effort by the new financial team in bringing up-to-date the
Company's billing and collection efforts.

psychic

11-10-2013, 09:28 AM

increase in users q3 4400 (6.8%) c/f q2 (10.3%)
Little change UK
Expected?

robbo24

11-10-2013, 09:29 AM

WOW, big cash upgrade there!!!:eek2:

Buyers running...

psychic

11-10-2013, 09:32 AM

R&D have been busy.. Sticky notes added. Hmmm

Mista_Trix

11-10-2013, 09:39 AM

It's pretty much what I expected, but its still disappointing. After all this time I think we we're all hoping for something surprising to jump out.

They dont make it easy to be an investor.

PlatnuM195

11-10-2013, 09:44 AM

Thought this would be the major new feature:
Additionally, users are now able to review voting documents and cast their votes directly on their iPads.

Nothing too surprising in the new document although it's easily not the doom and gloom scenario priced into the shares at the moment.

RTM

11-10-2013, 09:53 AM

Maybe they should initiate a share buyback with some of their spare cash ?

MAC

11-10-2013, 09:58 AM

It's pretty much what I expected, but its still disappointing. After all this time I think we we're all hoping for something surprising to jump out.

They dont make it easy to be an investor.

There are positives though, staying ahead of the competition with incremental wee upgrades, and as we know margins are increasing nicely on that 97% retention rate.

The dilemma is perhaps where that NZ$57.1M will go, they surely cannot spend it all on 'post-it' upgrades. If these two new version apps are the long awaited 'new product', then perhaps a share buyback is increasingly on the cards.

Lorne Ranger

11-10-2013, 10:02 AM

Nothing too surprising in the new document although it's easily not the doom and gloom scenario priced into the shares at the moment.

I agree. It should be enough to support the SP and provide some upward momentum (those cash reserves ARE impressive regardless of how they came by them), but possibly not quite enough to convince those who believe the growth strategy needs to lower its expectations some.

As you say I think the current share price slightly over compensates for these concerns (amid the nausea of those delayed re-statements) and the announcement is likely to assure investors with progress in the right direction, albeit a slower pace. Seems a little more is riding on the new product than was anticipated.

Personally quite happy with the announcement, shows growth in a difficult year for the company. And given the debt ceiling offer, dare I say Diligent got its timing right at last! (OK it was a fluke, I know!).

If the price was still at $8 id be thinking about reducing my holding for a spell til the next results, but still expecting rises today over 6.00, but who knows til it happens. Good luck everyone, here we go....

blackcap

11-10-2013, 10:05 AM

I agree. It should be enough to support the SP and provide some upward momentum (those cash reserves ARE impressive regardless of how they came by them), but possibly not quite enough to convince those who believe the growth strategy needs to lower its expectations some.

As you say I think the current share price slightly over compensates for these concerns (amid the nausea of those delayed re-statements) and the announcement is likely to assure investors with progress in the right direction, albeit a slower pace. Seems a little more is riding on the new product than was anticipated.

Personally quite happy with the announcement, shows growth in a difficult year for the company. And given the debt ceiling offer, dare I say Diligent got its timing right at last! (OK it was a fluke, I know!).

If the price was still at $8 id be thinking about reducing my holding for a spell til the next results, but still expecting rises today over 6.00, but who knows til it happens. Good luck everyone, here we go....

Rises over $6.00? Who is kidding who. This is a terrible result for a company on such a high PE. Cash reserves up but only because better debtors collection. That is totally irrelevant.

During the third quarter of 2013, Diligent signed a total of 122 net new
client agreements, as compared to 168 net new client agreements in the third
quarter of 2012.

That says it all really. PE not sustainable.

PlatnuM195

11-10-2013, 10:06 AM

I thought they explicitly mentioned a new product at an earlier annual meeting? Plus still no news about the NASDAQ listing even though it's been rumored forever. Plenty of positives that I see.

Mista_Trix

11-10-2013, 10:10 AM

oh my god, look at the depth, jesus

PlatnuM195

11-10-2013, 10:11 AM

So basically the market reaction is that the result is even worse than what was already priced into the shares? Guess we need a NASDAQ listing afterall.

stoploss

11-10-2013, 10:14 AM

Meh, I'm going for coffee, everyone else can stare at the depth and worry their pants off, I'm waiting for the big payoff down the line :p

If you want big payoffs you might as well punt Penny dreadfuls on the Aussie market. I thought investing was about making sound decisions on the fundamentals....fundamentally this is not such a good story atm....

Whipmoney

11-10-2013, 10:16 AM

Who cares if the buyers are running...

This thing is a cash machine and with continued (albeit slower growth) and client retentions of 97% their margins, profits and cash can only go one way... up!

tosspot

11-10-2013, 10:24 AM

Well it seems clear to me that the huge delay in restatement is due to them chasing up all there account receivable. Trying to minimise the brunt of the results come end of the month

Nigel

11-10-2013, 10:28 AM

My 10c... Market share is good, retention is excellent, slowing growth not great, still no restated accounts not great, high PE with slowing growth not great. Long term probably good prospects; short term not so good.

Lorne Ranger

11-10-2013, 10:28 AM

if my memory serves me correctly, Dil board had signaled slightly slowing new client growth in their preview announcement a month ago, so it's tough to believe that was not already understood.

winner69

11-10-2013, 10:28 AM

You guys call DIL a growth company. Guru Sparky said 40% pa plus.

Cash flows have flattened out at about $20m a year so 25-30 times cash flow is the share price

At least this latest announcement confirmed in my own mind DIL is a company reaching maturity. Look at new license numbers below --- where's the growth?

Rerating on the cards methinks - and that is not good from the current lofty heights

Moosie - look at the other opportunities out there and make money (but please not MBE) .... how likely is it that DIL will ever get to 8 bucks again?

Nigel

11-10-2013, 10:31 AM

and depth very concerning

winner69

11-10-2013, 10:32 AM

Sorry about that previous post

I just forgot that I don't just get it .... the hype that is

So the chart is really wrong .... I had a boss once when the chart didn't look good always toild me to go and fix it up .... even if you had to invert the axis

stoploss

11-10-2013, 10:37 AM

The fact that the company is edging towards that $100M p/a mark for 2015, has products (not the plural there) in the pipeline, is spitting out cash and could initiate a buyback at any time (very likely at these prices!) and wants to get off the NZX and go big on the Nasdaq means there is only upside.

What do you think will happen when a new product is launched from a company that is known as THE one and only company (pretty much) to get boardbooks from? Can we say "exponential growth, round 2"?

I'm sticking to my guns.

Moosie I just don't see how they could do a buyback, when they obviously have no idea of the state of their accounts ......Sure they have cash at hand but how much could they potentially be fined for late filings, incorrect filings etc,etc .....Until that is known they will be sitting on that little pile ......

Whipmoney

11-10-2013, 10:41 AM

so would you invest your money in sky city at a pe of 40-50 cause they now have similar growth to DIL and are also a cash cow.

While i'm not all familiar with SKC a quick skim of their June 13 financials shows fairly flat revenue... whereas DIL has grown approx 14% in the last two quarters.

DIL also has $47.4m USD on the books so at $5 they could buy roughly 13.7% of their ordinary stock back in a share buyback and bump the price up to $5.79.

blackcap

11-10-2013, 10:44 AM

DIL also has $47.4m USD on the books so at $5 they could buy roughly 13.7% of their ordinary stock back in a share buyback and bump the price up to $5.79.

And what would that actually achieve? Except destroy Shareholder wealth and future growth. A share buyback for this company at these high PE levels would be a disaster.

PlatnuM195

11-10-2013, 10:49 AM

I'm guessing growth varies throughout the year anyway. We'll have a much clearer picture when we compare YoY EPS and other results when the restatement comes through.

Nothing in the news today was unexpected anyway (except maybe the cash), so logically it should have been priced in. Not saying the market is logical though.

psychic

11-10-2013, 10:50 AM

All this talk of cash pile, but how much is deferred revenue (we don't know - no accounts to rely on last 3 years)
How much is retained profit?

Whipmoney

11-10-2013, 10:50 AM

And what would that actually achieve? Except destroy Shareholder wealth and future growth. A share buyback for this company at these high PE levels would be a disaster.

If you're worried about PE levels then you obviously don't understand this company. Try looking at their FCFF.

Whipmoney

11-10-2013, 10:56 AM

%*
All this talk of cash pile, but how much is deferred revenue (we don't know - no accounts to rely on last 3 years)
How much is retained profit?

Probably $20m+ however please remember that this isn't dollar for dollar. The company had a gross margin of 79% in FY12 which still appears to be trending upwards so could be roughly $4.2m of real cash expenses (i.e. COGS/CAC) if Deferred Revenues are $20m.

Also given that they don't have a huge amount of accounts receivable on their balance sheet i'm actually reading into their billings and collections comment as that they are collecting subscription funds on their contracts faster, i.e. increasing deferred revenue as opposed to reducing their accounts receivable. Likely a combination of both.

stoploss

11-10-2013, 10:57 AM

Margins, margins, margins...

Going to be more important than ever on this re-audit. :)

I see a lot of D's on here today (despondency, depression, etc.) Why you would sell today is beyond me.

I'm trying to hold my father back from hitting the sell button right now, and he's only at break even!

Nice little bit of panic for the traders to come in and pick up nice cheap shares to trade off later. If you really want to sell, wait until it comes back up later in the arvo or next week.

Amateurs trade in the morning, pros in the afternoon.

Moosie , why not sell on bad news .....I used to love my Nokia mobile phone, the world loved them( forestry company to a telecoms giant ) everybody loved their Blackberry...but nothing is forever...look at them now.Stories change.In the absence of good news maybe you are better out preserving your capital.

apac

11-10-2013, 11:05 AM

lastmoa

11-10-2013, 11:07 AM

Not a chance mate, I have done my homework and am sticking to my guns. I am not a panicking, nervous nellie like today has shown, and I am in it until the market realises it is being illogical and irrational. Anyone selling this morning is panicking and has not a clue as to why they first bought the stock.

Today is good news. If you can't see that and the future prospects of this company and all you are focussing on is growth then you need to buy some ABA to get some discount eye-exams and glasses. :P

tend to agree, Moosie. I do see panic-selling here and are looking for a top-up. Wasn't planning to but anything sub $5 is unexpected and will be too good to resist.
Patience here. They have improved their existing product, which will help retention rate, and they have seen existing customer spend on more functionality. I was always in this one for the longer time, as is my Xero holding.

stoploss

11-10-2013, 11:07 AM

Not a chance mate, I have done my homework and am sticking to my guns. I am not a panicking, nervous nellie like today has shown, and I am in it until the market realises it is being illogical and irrational. Anyone selling this morning is panicking and has not a clue as to why they first bought the stock.

Today is good news. If you can't see that and the future prospects of this company and all you are focussing on is growth then you need to buy some ABA to get some discount eye-exams and glasses. :P

Fair enough, just remember someone a lot smarter than probably both of us combined said "the market can stay irrational longer than you can stay solvent " - Recently had an eye exam and current prescription 20/20 :)

psychic

11-10-2013, 11:07 AM

psychic

11-10-2013, 11:13 AM

Let's all panic sell DIL and buy XRO and pray for the best... :eek2:

Can't. Xero trading halted.
:)

Roadrunner

11-10-2013, 11:16 AM

Exactly!Time to buy a buy a few more....If you believe then fill your boots,if you dont then exit stage door left.This company aint going bust and this time next year they will be $12+Happy to admit Im wrong but sometimes it comes down to believing in something regardless of what others think :)

apac

11-10-2013, 11:17 AM

diversify, half xro half dil :D

apac

11-10-2013, 11:19 AM

so anyone buying at this price? or waiting for it to drop more?

robbo24

11-10-2013, 11:25 AM

Relatively small volumes compared to other big drops in the SP - does this indicate selling isn't quite as wholesale as to warrant the panic?

Or should the concern be that buyers aren't buying it back up, on small or big volumes?

ddrone

11-10-2013, 11:29 AM

I'm wondering similar things, hit my stop loss and am currently below it. Don't wanna play catch the knife again though.

MAC

11-10-2013, 11:30 AM

so anyone buying at this price? or waiting for it to drop more?

Given that less than 200k shares have been traded, no one is selling or buying.

Today's move does seem to be yet just another knee jerk reaction to a non result announcement.

Deloitte have until 28th October 2013 and we should anticipate that they will take all that time, less that required by DIL to arrange a board meeting, which of course, should be easier now they have 'post-its'.

Roadrunner

11-10-2013, 11:31 AM

Yeah guilty of being a bit keen after a long wait!!Patience would have done me proud Moosie and waited till settlement today but I would have needed the ol crystal ball for that one I guess :)

ddrone

11-10-2013, 11:33 AM

$5 looks like it will fall at this point. One things for sure, "priced-in" seems to not apply to DIL so a negative report on the 28th is not going to yield a a nil movement.

winner69

11-10-2013, 11:37 AM

Whipmoney

11-10-2013, 11:41 AM

Thanks whipmoney. But we can hardly rely on past accounts can we. We simply don't know what debtor, deferred revenue (indeed - revenue) figures are or have been. I mean whats to say they have not been pulling future sales back to jack up revenue figures?
My stop loss went off at $4.35 last time, I see no reason why it should not be tested again given the little info we have that is reliable

Actually we can somewhat. We know that Total Revenue hasn't/won't change and neither will the cash earned/collected.

What does change is the point of time as to when revenue is considered "earned" under their accounting treatment, and any revenue that doesn't meet this criteria should be treated as "deferred revenue", i.e. as a liability.

I imagine the restatement is simply going to result in more of their revenue being pushed into the deferred revenue category however this doesn't really phase me one bit as the key drivers for this business are ALF, Margins (both Cost of Customer Acquisition and OPEX), Customer Retention, Cash on Hand and Capex.

Revenue / Deferred Revenue is more a function of accounting standards than a representation of the underlying cash-flows of the business... and it's a great business.

Lorne Ranger

11-10-2013, 11:49 AM

Glad to hear im not the only one that's not terribly disappointed by the announcement. They had signaled slower growth in the quarter already (2 of the 3 months it sounds like), happy to see thier billing and debt collection is better (tho to be fair i didn't know it needed improving, but still...), that's fed into a good revenue for the quarter, and growth continues with an excellent retention rate. I'm not thinking NASDAQ as may never happen, but new products seems likely and they have a solid client base already to get that rolling quickly. The announcement seems ok to me.

But there certainly is disappointment, obviously, hence the posts here and the significant SP drop today. Psychologically I think we're a bit worn out, after the last several months of frankly rough seas. I can fully understand holders thinking "that's not stellar, Jesus im not waiting any longer" and pulling out, it is a rough and testing stock right now. Disappointment is an insidious feeling for sure. But I tend to agree with those suggesting patience and I think a few days, once the disappointment has worn off, may reassess the announcement and be able to see the positives.

Holding. May top-up soon.

GRIFFIN

11-10-2013, 11:52 AM

It's all about having confidence, and i wonder how confident the person is that has a bid in for 3000 shares at $101 or are they more educated to this stock than others.?

lastmoa

11-10-2013, 11:54 AM

I should also read the section on new products coming online and continuing the growth curve upwards, no?

Excerpt from said 'One up on Wall St' book :
Signs of when to bail from a stock :
The company has lost market share for two consecutive years and is hiring another advertising agency.
No new products are being developed, spending on R&D is curtailed, and the company appears to be resting on its laurels.
Two recent acquisitions of unrelated businesses look like diversification.
The company has paid so much for acquisitions that the balance sheet has deteriorated significantly, so there is no surplus funds to buy back stock, even if the price falls sharply.
Higher P/E than it’s peers.
No officers or directors have bought shares in the last year.

apac

11-10-2013, 11:57 AM

Actually we can somewhat. We know that Total Revenue hasn't/won't change and neither will the cash earned/collected.

What does change is the point of time as to when revenue is considered "earned" under their accounting treatment, and any revenue that doesn't meet this criteria should be treated as "deferred revenue", i.e. as a liability.

I imagine the restatement is simply going to result in more of their revenue being pushed into the deferred revenue category however this doesn't really phase me one bit as the key drivers for this business are ALF, Margins (both Cost of Customer Acquisition and OPEX), Customer Retention, Cash on Hand and Capex.

Revenue / Deferred Revenue is more a function of accounting standards than a representation of the underlying cash-flows of the business... and it's a great business.

Isn't deferred revenue an asset?

ddrone

11-10-2013, 11:59 AM

Dr Bank (Cash)
Cr Deferred Revenue (Liability)

apac

11-10-2013, 12:01 PM

Dr Bank (Cash)
Cr Deferred Revenue (Liability)

gotcha sorry my mistake. Revenue in advance is the term i'm used to.

11-10-2013, 12:02 PM

Isn't deferred revenue an asset?

Dr Bank (Cash)
Cr Deferred Revenue (Liability)Correct - technically if you dont deliver the service, you have to return the cash to the customer, hence a liability.

This ensures the revenue is matched to the expenses in providing the service - given Boardbooks is such a high margin service, and alot of the cost is probably in the initial sale and training, you have to question whether the IFRS timing rule is appropriate for DIL.

jamiec26

11-10-2013, 12:18 PM

They have one product that any little app developer can recreate. Now with the previous dodgy reporting disclosed you have to think if it's worth having a holding..

Whipmoney

11-10-2013, 12:20 PM

This ensures the revenue is matched to the expenses in providing the service - given Boardbooks is such a high margin service, and alot of the cost is probably in the initial sale and training, you have to question whether the IFRS timing rule is appropriate for DIL.

I think this is what explains the year on year increases in their GP Margin, namely a large chunk of the COGS relates to Deferred Revenues, and as the business is growing (and since the exponential growth has tapered off) this is becoming smaller relative to existing COGS, which are somewhat lower as percentage of sales.

apac

11-10-2013, 12:21 PM

anyone want to guess how low it will get and wat price it will be at by end of year?

apac

11-10-2013, 12:41 PM

MAC

11-10-2013, 12:54 PM

I heard from someone that every analyst says DIL is worth $7+, and his argument for holding is that the analysts can't all be wrong at the same time. I'm sure there's examples of all analysts being wrong in the past, so not really convinced by his argument. Comments?

Then the answer to your question apac, with good advice intended, is to DYOR and FA, see if or how it validates, and then decide for yourself.

One of the conundrums with in investing is the temptation to react to noise and distractions when the signals and fundamentals remain unaltered. Stocks always gravitate back to fundamental valuation over time, it is a matter of research and patience.

robbo24

11-10-2013, 12:55 PM

moosie you are getting hung up on past performance, latest announcement is more relative and clearly shows growth is slowing ALOT dont you think.

The "new customers" may be slowing, but that is not to say that the prospects of the company are dramatically affected in a negative way. After all, if the current customers like the service then they are going to want to upgrade and use future products. There is an indication that this is true, and that existing customers are open to expanding their use of Diligent services:

Alex Sodi, Diligent's president & CEO, said, "while we experienced slower new sales growth in the United States in the third quarter, our upgrade sales to existing US clients continued to be strong.

On this basis, with the rumoured new product and existing upgrades available, there is surely cause to reconsider the margins - as suggested by moosie earlier on. Did the announcement today reduce the inherent value of the company by 11.5% (@ 500cPS)? My guess is no.

Have fun charties and techies though.....

blackcap

11-10-2013, 01:09 PM

Dont get me started the list of when analyst were all wrong is long.

IN the good old days, all analysts said TEL was worth $9 plus. Where is it now?

Mista_Trix

11-10-2013, 01:11 PM

Dont get me started the list of when analyst were all wrong is long.

Including the entire mess we all find ourselves in post 2008 :-S

apac

11-10-2013, 01:17 PM

looks like DIL may not recover today. I wonder what next week will look like

Whipmoney

11-10-2013, 01:26 PM

Xerof

11-10-2013, 01:36 PM

Looks to me like our urgent seller of the past few days (the 5k capper) is now the 5k propper.

If ever there was a quarter in which you would expect hesitancy on new sales, and a team of distracted staff members, it is probably the one just finished.

winner69

11-10-2013, 02:11 PM

When the market is fearful, throw all your books, calculations, etc out the window. The fact is the number crunchers have no numbers to crunch, so how can they value the stock? Because they are fearful, they are also fixated on the other "negative", slow down in growth. Fact is, insto's and funds have a huge grip on this stock now. They are fretting over a huge difference in numbers, and until we can prove them wrong, they are going to panic and sell down.

Fixation on negatives + ignore positives = sell down at any price to keep the boss happy and the margins in check.

There is one number to crunch moosie ....new licenses

And YTD they are now 20% LESS than last year ....and their customer base ?(the cumulative number) is now only a fast diminishing 40% higher than a year ago.

Surely signs of plateauing out .....and not anything like the huge growth built into the price list.

Agree high margins, high retention rates and the existing users will continue to give cash to DIL for some years to come. Great business model but current customer numbers do not represent a high growth company. Like somebody said earlier probably relating to a moderate growth.

You seem to despise "number crunchers" - thanks, I can handle that

You give the impression that nearly everyone in the market seems "irrational" - again thanks but I can handle that as well

But what do I know anyway ...... I am just a "number crunching" "irrational" "fundamentalist" and a "chartie" to boot who based on all criteria sold out of DIL yesterday ......and it was a good trade as well even though I had hoped it would have lasted forever .....like all the way to 10 bucks plus.

Maybe another day

psychic

11-10-2013, 02:43 PM

Agree
129% user growth for year ended 2011, 89% year ended 2012, 31% 9 months 2013
A great business but at what price?
Shouldn't they be getting some traction by now outside the US?

apac

11-10-2013, 02:45 PM

so IF DIL is now a medium growth company, do we think the current price is over-valued, under-valued or about right?

Whipmoney

11-10-2013, 03:01 PM

There is one number to crunch moosie ....new licenses

And YTD they are now 20% LESS than last year ....and their customer base ?(the cumulative number) is now only a fast diminishing 40% higher than a year ago. Surely signs of plateauing out .....and not anything like the huge growth built into the price list. Agree high margins, high retention rates and the existing users will continue to give cash to DIL for some years to come. Great business model but current customer numbers do not represent a high growth company. Like somebody said earlier probably relating to a moderate growth.

I calculate the total licences to be 2304 based on the today's preliminary highlights, which is up 42% on September last year.

Quarterly revenues on the other hand of $15.1m in March 13 are 84% up on the prior year which suggests that not all licences are born equal i.e. some may have higher users numbers which DIL charges extra for. Upgrades are also another point of consideration.

apac

11-10-2013, 03:05 PM

for me a medium growth company growing at 15% would need to have a pe of less than 20%.
DIL is a good company now with medium growth so IMHO has a long way to fall
Happy to have sold for $5

So today's sell off could be justified and is not just a panic? and potentially it will fall further because number crunching may show it is now over valued?

Whipmoney

11-10-2013, 03:13 PM

So, with a calculation of 42% new clients and 84% revenue growth, how is that not high growth???

XRO just posted revenue increases of 84%!
Thanks for that btw whipmoney :)

March 13 - Quarter of Quarter revenue growth was approx 11.28%...

I concede gone are the days of 30% growth per quarter, but even if this were to drop down to 7% growth per quarter (QoQ) for Quarters 2,3 & 4, this equates to Total (YoY) Revenue Growth of 53%.... hardly a medium growth company!

psychic

11-10-2013, 03:15 PM

Seems the sp is only just being held up at the moment by the tradie bot.

Jay

11-10-2013, 03:29 PM

Get the revised results out asap I say, that should kickstart the sp again
Maybe some think, the latest "disappointing" results will also flow thru to revised previous years.
If had a company only growing at 84%, and making a profit, I don't think I would be complaining too much.

ddrone

11-10-2013, 03:35 PM

The lack of an afternoon spike in sp leads me to believe it may trade down fro 3 days then settle up from the 3rd day low.

My thoughts exactly.

winner69

11-10-2013, 03:51 PM

So today's sell off could be justified and is not just a panic? and potentially it will fall further because number crunching may show it is now over valued?

But number crunchers are stupid so no issue here

winner69

11-10-2013, 04:04 PM

I calculate the total licences to be 2304 based on the today's preliminary highlights, which is up 42% on September last year.

.

Agree ..but that 42% number is getting smaller as each quarter passes .....the number of new licenses YTD is 20% less than last year YTD

Another quarter like Q3 and the 42% becomes 34% and then after Q114 it becomes 27%

Anyway that's how I see it and I looking forward and not dwelling on the past. These sort of growth rates even with increased prices and higher margins going forward don't seem to warrant shareprice of 5 to 6 bucks ...and would a new product generate as much as the current one ....the market seems to think so

But I am stupid and the market is irrational so all this is a load crap so ignore

croesus

11-10-2013, 04:28 PM

Good Research K.W.....cant put my finger on it.... but something not right... will avoid.

Moosie.... where is your stop loss set ?

Cheers

apac

11-10-2013, 04:30 PM

I agree DIL has lots going for it and is a sound company and deserve's to be at a premium to a normal pe, but with a continued reported slow down in growth the market will struggle to justify a pe of 40 plus.
I do see justification in a 30-35 pe but you wont want to hear that as this means a lower sp.
Sorry I dont think it was a over reaction today, the last big fall was, just time the market adjusted it's exspection's down and it is doing this by pushing the price down.

what price will make it 30 - 35 pe?

11-10-2013, 04:51 PM

Well, turns out world sales are not "strong" at all. "New sales in other regions were slightly slower for the third quarter due to slightly slower sales in July and August of 2013".
Translated = New sales are slower in the third quarter due to slower sales in 2/3rds of the quarter - WTF? I think that's called stating the obvious?Why are you worried about 'slightly lower'. And they meantion the months to show that September wasn't down so it isn't necessarily the start of a new trend.

Management aren't focused and customers a bit weary. Once they restate, re-focus, they should improve again. Cash is still strong.

croesus

11-10-2013, 04:53 PM

Hope for your sake its not $3.50....when you re assess... is all the news regarding Mr Henry on the table ?... that's all you would need .. a expose in the Sunday Star Times.... I m sure it won't happen...

One good thing no Doug Graham...

Cheers

apac

11-10-2013, 05:02 PM

Market closed. I think we've all had enough for one day. Same again next week aye. Have a good weekend everyone

sideline

11-10-2013, 05:17 PM

March 13 - Quarter of Quarter revenue growth was approx 11.28%...

I concede gone are the days of 30% growth per quarter, but even if this were to drop down to 7% growth per quarter (QoQ) for Quarters 2,3 & 4, this equates to Total (YoY) Revenue Growth of 53%.... hardly a medium growth company!

sorry, I calculate 36.3% YoY based on YOUR numbers (1.1128 x 1.07 x 1.07 x 1.07 = 1.363)

blobbles

11-10-2013, 05:33 PM

Without new products, on the back of slowing sales... I see DIL with a $3.5 - $4 SP now, PE of around 25-30, possibly shrinking depending on the next quarter. That's what makes sense for me. With slow but steady growth and high customer retention, in a couple of years it might be back at $8... if all things remain the same.

DIL was always a dangerous company considering they only have a single product. I mean think about this, they are counting customer growth in the low hundreds, so a slight deviation from customer growth and it will be off the tracks. That's what has happened today.

My feeling is they need at least one more product in their line up going forward to keep growing.

All power to those who sold out at $8, I doubt we will be seeing those days for a while unless one of 3 things happen: They successfully break into new markets (I don't see why they don't do a heap of translation work and hit China/Japan/Europe in a big way using some of their cash pile for marketing), they come out with an exciting and appealing new product or they hit the NASDAQ.

The comparison with XRO is a bit silly - Broad Books is only good for companies of a certain size. Pretty much every business needs accounting software and the smaller ones, of which there are millions, prefer it to be easy and pretty. The market size and hence potential is the difference.

tosspot

11-10-2013, 05:59 PM

really disappointed and pretty guttered about today. they need to do something with that cash soon to reinvigorate this share price. I think they need to let go of any secrets there holding when the restatement comes. no point in keeping a new product or listing secret now

okay

11-10-2013, 06:30 PM

K1W1G0LD

11-10-2013, 07:01 PM

Think our new rallying cry should be "Screw the NZX and RAK, Bring on the 'DAQ!" :eek2:

Going to be mighty peeved if this company is beaten down by NZ market and then is bought out for a song and dance by a foreign company like was with FPH. New Zealand seems to be great at selling good companies for nothing...

No use blaming the NZX Moose , this dog is howling and the only investors I can see on this thread are the ones losing their money,
time to cut your losses and run.
I can recommend SML.

okay

11-10-2013, 07:14 PM

Moosie just noticed you've cracked 5000!

BigBob

11-10-2013, 07:15 PM

Think our new rallying cry should be "Screw the NZX and RAK, Bring on the 'DAQ!" :eek2:

I don't know why a NASDAQ listing is considered such a whit knight... Have you ever seen a what happens to stocks over there when expectations are not met, the market manipulation starts and the shorts attack.... Today was chicken feed in comparison....

forest

11-10-2013, 07:20 PM

When we had the options issues earlier this year (mr Sodi was giving more options in previous years then was legal), a special committee decided to compensate mr Sodi because the company seems at the time so successful and the share price has risen so much.
It seems to me that the compensation to mr Sodi was made on incorrect info. And I also start to wonder if the excessive amount of options mr Sodi had, had an influence the way some of the accounting was carried out.

When at the AGM this year share holders requested more detail, the body language changed clearly. Did mr Sodi feel uncomfortable because he knew his compensation was elevated and this would be hard to explain to a room full of share holders?

Thoughts !!

waddis

11-10-2013, 07:28 PM

Congrats on the 5000 Moosie, must have read most of them!!

BigBob

11-10-2013, 08:32 PM

Think our new rallying cry should be "Screw the NZX and RAK, Bring on the 'DAQ!" :eek2:

I don't know why a NASDAQ listing is considered such a "white knight" event... Have you ever seen a what happens to stocks over there when expectations are not met, the market manipulation starts and the shorts attack.... Today was chicken feed in comparison....

winner69

12-10-2013, 08:52 AM

Schrodinger

12-10-2013, 10:22 AM

Well, turns out world sales are not "strong" at all. "New sales in other regions were slightly slower for the third quarter due to slightly slower sales in July and August of 2013".
Translated = New sales are slower in the third quarter due to slower sales in 2/3rds of the quarter - WTF? I think that's called stating the obvious?

And it just gets worse. "Diligent signed a total of 122 net new client agreements in the third quarter of 2012". That's another 30% drop in sales in just one quarter. They are now currently doing 56% less of new business then they used to. Where will this trend end? Will next quarter see another 30% reduction in sales, will next year see another halving of new customers. The US market is stagnating, and they cannot get traction in new markets.

See you all at $2.50 :D

I might be interested at 2.50

baller18

12-10-2013, 10:33 AM

Moosie, I think from this lesson is we should never 'assume' makes ann ass'n'me by assuming. I sold all out of dil at 5.8 one week ago.
After long careful thoughts nothing added up to the risk vs reward ratio, we were assuming everything was fine, cash flow, customers n etc n etc, however, did we really know what was happening?
i have learnt from this never ever go against market sentiment and never ever buy any stocks in a downtrend especially in a stock when there is an aspect which has not been cleared with the market, therefore, once again, 'assuming'

hilskin

12-10-2013, 11:11 AM

I am sorry to say that I had a nice long walk last night and a think about DIL. I then did some research and homework and feel that DIL no longer stacks up to where I thought it shoukd be. It has let a lot of us down these past few months and I think it is time to cut and run while I still can. I missed a lot of opportunities these past months holding DIL because I believed it was going places, and I'm still missing more opportunities even now. so, this week I will be closing out my position and be buying into other stocks. although I have lost a fair amount I feel I can make it back given time and still watch DIL and maybe buy back in at a later date.

I wish all Dl holders well :)

Feel for you Moosie, probably the right call.
I got out at $5.94 early last week, it just didn't feel right to me. For a whole week before I was toing and throwing on what to do. In hindsight I did the right thing but I was so worried that I was going to miss out on something big if it went up. I have learnt that sometimes it is better to take a smaller profit and keep your hard earned money safe, especially when there is a bit of risk around. This is where trusting your instinct comes in.
Wish you the best with your future investments.
P.S Keep away from PEB, far toooo risky for you :) I have quite a few onboard and don't want to have to add the Moosie Risk Factor when evaluating the risk of PEB. LOL

Schrodinger

12-10-2013, 11:20 AM

Feel for you Moosie, probably the right call.
I got out at $5.94 early last week, it just didn't feel right to me. For a whole week before I was toing and throwing on what to do. In hindsight I did the right thing but I was so worried that I was going to miss out on something big if it went up. I have learnt that sometimes it is better to take a smaller profit and keep your hard earned money safe, especially when there is a bit of risk around. This is where trusting your instinct comes in.
Wish you the best with your future investments.
P.S Keep away from PEB, far toooo risky for you :) I have quite a few onboard and don't want to have to add the Moosie Risk Factor when evaluating the risk of PEB. LOL

Yep maybe load up with some good priced banks. BOQ had a good announcement and is a good long term bet. Dont forget the government will underwrite your investment =P

kizame

12-10-2013, 11:22 AM

I am sorry to say that I had a nice long walk last night and a think about DIL. I then did some research and homework and feel that DIL no longer stacks up to where I thought it shoukd be. It has let a lot of us down these past few months and I think it is time to cut and run while I still can. I missed a lot of opportunities these past months holding DIL because I believed it was going places, and I'm still missing more opportunities even now. so, this week I will be closing out my position and be buying into other stocks. although I have lost a fair amount I feel I can make it back given time and still watch DIL and maybe buy back in at a later date.

I wish all Dl holders well :)

Moosie, I'm sorry for your loss or lower profit on DIL whichever that is. BUT the writing was on the wall when you look at the chart,the company did not let you down,you let yourself down.The company provided you an excellent opportunity to ride up and take those profits away when it got toppy.You yourself said on one of your post that you are a trader,so what happened...
I think this will be a huge reminder for the future,to have a stop loss or profit protection point(trailing) I don't think it matters whether you are an investor or trader in this regard,as the objective is the same,so why give back those profits.

winner69

12-10-2013, 11:35 AM

Hope despondency wont turn to depression moosie me old mate

Balance's mates at the London School of Economics are watching this thread closely

MAC

12-10-2013, 11:40 AM

I am sorry to say that I had a nice long walk last night and a think about DIL. I then did some research and homework and feel that DIL no longer stacks up to where I thought it shoukd be. It has let a lot of us down these past few months and I think it is time to cut and run while I still can. I missed a lot of opportunities these past months holding DIL because I believed it was going places, and I'm still missing more opportunities even now. so, this week I will be closing out my position and be buying into other stocks. although I have lost a fair amount I feel I can make it back given time and still watch DIL and maybe buy back in at a later date.

I wish all Dl holders well :)

So moosie, for those who are considering doing the same thing, capitulating at the bottom of a rather short four month down trend on a stock which will return to intrinsic valuation levels probably early next year. A mere blip in the life of Diligent Ltd.

1. why not wait just two weeks for the HY13 results and minor prior year restatements ?

2. do you really have to be either fully in or fully out ?

3. market consensus is for HY13 45% revenue growth 65% NPAT growth or thereabouts, don't you think the market will receive any growth at all as being positive given the present negative sentiment, large oversell and noise driven overhang ?

4. how many fundamental rules of investing would you be breaking by making a sentiment based decision ?

I'm just genuinely interested in your assessment of the psychology, no discouragement or criticism intended.

nextbigthing

12-10-2013, 12:44 PM

....PEB could be the next DIL.....

IMHO the difference between DIL and PEB is that DIL was always going to taper with regards to growth. PEB on the other hand will make more and more sales once the product becomes accepted by the industry and it becomes the standard - the big if though - IF IT CAN GET SOME U.S. SALES GOING to start with...

Good on you Moosie for accepting what has happened and moving forward. Baller18 you must be releaved with your decision!

Disc; Don't own DIL or PEB, however a modest holding in PEB is on the cards.

Stranger_Danger

12-10-2013, 01:01 PM

I read back over the latest DIL statement, it is quite floored and to be honest parts of it read like the rhectoric you would read in a RAK report.

Lets not forget DIL was trading at 20cps only 3-4 years ago(I know they are a different company now) the rise in share price is justified but to keep a really high pe 40 plus they need to show similar growth.

It looks like growth is falling back and DIL will struggle to optain that 2nd explosive growth stage which can be allusive for alot of high growth stocks.
Yes they can be considered to be high growth stock today(AND A GOOD COMPANY) but the last 6-9 months clearly shows growth is slowing and they wont be a high growth stock much longer.
The markets are always forward thinking, sometimes it over reacts like DIL'S plunge a month ago, but this time me thinks the market is justified in rerating DIL'S PE (that is what it is doing).

It will settle at a fair pe which will be a premium to the fundimentals because of the oppotunities the company still has.
This include's added earnings from add on services to exsisting customers. DIL also experience's high client retention rates(like most good businesses)

IMHO current fair value for DIL is a pe of about 30 which is $4.10 p/s but will probably trade a bit higher than that and settle around the $4.50mark

Now that is still a high pe so market exspectation will still be quite high so any continued weakening of growth will see the pe and share price driven lower.

disc sold yesterday at $5.05

Xero's strategy of never having a P/E looks increasingly brilliant when contrasted against a post like that.

winner69

12-10-2013, 01:54 PM

I might be interested at 2.50

Buffett model says $3.33 .....don't be greedy

And sparky said 8 bucks plus

hilskin

12-10-2013, 02:07 PM

Where is Sparky these days? Always enjoy his posts.
I think I remember something about him going away but that was a while ago. Hope he has been able to watch the markets and got out.

Whipmoney

12-10-2013, 04:44 PM

sorry, I calculate 36.3% YoY based on YOUR numbers (1.1128 x 1.07 x 1.07 x 1.07 = 1.363)

That's because you are using the wrong numbers. Yes if the growth for each of the quarters for FY13 is 11.28%, 7%, 7% and 7% then you are correct in that the cumulative growth factor for FY13 is ~36.3%

However I was referring to YoY growth. FY12 revenues were $43.736m and based on the above growth rates FY13 will be $67.043m, an increase of roughly 53%.

Whipmoney

12-10-2013, 04:50 PM

Moosie - the market is being completely rational and it is you that is being irrational. Time to cut your losses mate. The writing is on the wall for DIL. They simply can NOT justify a PE ratio of 35 odd with falling sales.

The best and only hope for anyone buying at $4.87 (Friday's close) is that a big player takes them over. That is your one and only hope of ever recovering your capital. The drift down to a PE of 10 - about $1.50 - will probably take no more than 6 months.

A P/E of 10? Haha that's ridiculous...

PlatnuM195

12-10-2013, 08:19 PM

Wasn't the PE 120+ not even that long ago?

Whipmoney

12-10-2013, 08:35 PM

yep but not as ridiculous as a pe of 40

Yeah but everybody knows that P/E is only a quick and dirty measure to test the relative price of a stock against it's peers.

Given that its entirely reliant on accounting earnings I don't even see how it's relevant to a SaaS stock with a high level of deferred revenue...

janner

12-10-2013, 09:54 PM

The same sh*t will happen to XRO, its just a question of when. Some might learn their lesson with DIL others will choose to repeat the same mistake. Entertaining as always.

Agree KW.. If your not willing to be a Trader.. Putting it on the line every day/week/month..

Value is the only alternative..

janner

12-10-2013, 09:59 PM

Do not know if others have noticed this in the past..

People who come from families with serious money, can always be picked out because of their clothes..

They are expensive.. But of good lasting quality .. VALUE..

Huskeez

12-10-2013, 11:35 PM

ah I fooled myself thinking I was a long term investor. if you see PEB, WYN, SLI, NTL etc swinging in the future you know who it is!

Ouch mate first SNK now DIL, both times you didn't have an exit strategy in place if I recall? Capital must have taken a beating.

Stop loss/Trailing Stops should be your bread and butter, along with a Risk/Reward ratio that you stick by , No Matter What

I read earlier you didn't use a stop loss due to the fact you would probably get stopped out at the wrong time?
How do you set your stop loss?
A stop loss shouldn't just be some magic figure your grasped out of thin air, it should be based/calculated on the volatility of the price action over "X" time frame, averaged out , and then multiplied by 1.5.

This will give you the average volatility range + 50%, this lets the P/A fluctuate naturally with some give, but any price dips which are totally out of whack with how the stock was previously performing over "X" time frame , will have you out and your capital protected. I could go on and on but just food for thought.

(All of this is just my opinion by the way, feel free to disagree but its how I calculate my stop/trailing stop once and entry Is identified, which slightly changes when adding to positions)

Chin up mate!

Whipmoney

12-10-2013, 11:41 PM

I agree with you but are you saying DIL is good value or that its not?

hilskin

13-10-2013, 12:11 AM

The first thing you need to do Moosie is work out whether you are a trader or holder. Plain and simple.
I think you are lost between the two and the quicker you sorts this out the better.
You are still young and have a long way to go so like you say money come money go and you have time on your side to turn your loses around but aren't you better to have a solid plan and stick to it. I suggest you go and have a coffee with someone like Sparky the clown, he has a game plan and lots of patients. I'm only suggesting Sparky because you mentioned that he would be still holding DIL and still be in the money, why is this so??????? Take a long term view, find those companies that will one day be the next big thing two or three years before it happens. No one is right or wrong on how you should invest your money but as long as you have a solid investment plan and you stick to it you should win more times than not. Thats my theory and I'm sticking to it :)

DISC: Then again what would I know:cool:

P.S stay away from PEB

knl

13-10-2013, 08:40 AM

All,

Sorry if this is a stupid question, as i am pretty new to ST (first post) as well as share trading (3rd months into share) .

I have been following this thread for a while and from memory someone that used to work for DIL that posted in this thread (Mobius?) mentioned that no of new client agreement signed up per quarter isn't the best way to reflect how well DIL is performing, as some of their clients only have like 50 users, and others could have like 3000 users. In the past 7 quarters DIL has been adding in average 6000 users per quarter (which apparently is max no of users they can add as it is limited by how quickly DIL can do 1 on 1 training with each individual users etc). Hypothetically if they sign up one client with 6000 thousand users, the new client agreement update for that quarter will look **** (only 1 added), but in reality the company is doing well (added 6000 users, which is max they can handle, which are all generating revenue etc etc).

Based on majority of the comments in the last 2 days, majority seem to think that DIL has plateau performance wise since a year or two, purely based on the no of new client agreements signed per quarter, which as someone has pointed out, is the wrong metric to track anyway. My personal view is that Diligent has been adding 6000 users per quarter (max they can handle) for the last 7 quarters, and the latest quarter is the first one that show a slight decrease (added 4400 users instead of 6000), which could either be due to all the distraction the company is dealing with or they are in fact slowing down, or whatever other reasons. Is the the right way of looking at things? For a company that only started showing sign of slowing down, a 13% decrease in share price is a bit excessive?

Being so new in share, is there any must read book that any of you can recommend? (i know the basic of what investment is all about, i am really keen to find out how most people do fundamental analysis + technical analysis etc though).

DISC: currently own DIL, might hold until at least after end of Oct to see what happen. Would love to hold long term if i could.

blackcap

13-10-2013, 10:20 AM

read peter lynch's book One Up on all Street, especially the section pertaining to growth companies slowing down.

sorry I didn't reply to your pm , been inundated with pm lately!

Moosie... I am surprised you would quote "one up on wall street" as a book you have read and follow. Because I have just finished reading it and can not for the life of me fathom then why you would even look at companies like SNK and DIL in the first place?

blackcap

13-10-2013, 10:21 AM

Halebop

13-10-2013, 10:26 AM

Good questions KNL,

Any forward looking valuation methodology will involve some sort of discounting mechanism - ascertaining future value and calculating what that is worth now (i.e. $1.00 next year can't be worth $1.00 now because risk, time and opportunity cost need to be considered).

Agree with your premise on customer counts versus user counts although DIL have offered that bigger customers or customers adding extra users have been asking for lower unit prices, so perhaps a 6,000 user customer is not worth as much as 100 x 60 user customers and certainly the concentration equates to a higher risk profile - DIL could also lose 6,000 users with the loss of 1 customer.

4,400 versus 6,000 new users is material on future growth assumptions; a quarter of new user growth has been wiped, so this must impact assumptions. Maybe this could mean revenue growth is now 20% lower than previous growth assumptions? However I'd discount some of the very negative commentary - you could be excused for thinking revenue was in decline reading recent posts here. The question is what drove the drop in growth rate? Quarterly aberration? Discounting by competitors? Saturation? Competitor offers have caught up? Management were distracted by other issues? Ascertaining the correct answer is key to mitigating losses and/or making profits.

I'm still an optimist where DIL is concerned and so would have been burned if I didn't previously let technical triggers tell me to sell. This to me is key. All valuation / purchasing / selling mechanisms are flawed - and accepting additional inputs on decision making adds value.

MAC

13-10-2013, 10:46 AM

Welcome to you knl.

Don’t be put off by the present negativity of this thread which just reflects the sentiment of the day. Technology stocks seem to attract a much higher percentage of short term traders who like to make anxiety based posts and investment decisions. Add’s to the volatility but affects the fundamentals, valuation and long term performance of the company not one bit.

There is some good research and there are some constructive posts if you are prepared to sift back several months through the volumes of chit chat and posts of exuberance and panic.

What many seem to confuse is the difference between the rate of growth and the rate of change in growth. First and second order derivatives if you are a mathematician. The rate of revenue growth for DIL is very good indeed, at FY12 this was 124%, for the delayed HY13 announcement analyst's consensus seems to be around 50%, still amongst the very highest in the NZ50.

With the SP hanging so far below fundamental valuation many have been looking at the last couple of months as a very good buying opportunity, as although the rate of change in growth is lowering and the company may well mature within the next couple of years, the present SP is so far below what it will return to once all the anxious nervous nellie traders have gone and the woes of the present have past.

winner69

13-10-2013, 11:00 AM

Halebop - the DCF model you kindly shared with us a short time ago ....the one that came to $7.05 valuation.

Basic sales assumption was 97% retention plus $25m new business ....the really was the driver of your whole valuation (along with increasing margins)

Hard to say what each new license brings but if you play around with some numbers maybe $30-$35k pa ...yes ongoing until obsolete or whatever. Fits with your model (782 x $33k is your $25m assumption)

So if new licences at say 600 this year v nearly 800 last year your revenue assumptions might change eh ....like 95% retention and say $18m new business pa.

What would reduce your DCF to halebop

Lotto

13-10-2013, 11:17 AM

Sunday a day to take a look at Sharetrader: this one has me puzzled:
DIL ooks like a Company that has grown too quickly in a short period, hence possibly a breakdown of Accounting Procedures and internal Controls.
I have just read the General Announcement to NZX on 6 August :
https://www.nzx.com/companies/DIL/announcements/239321
Quote:
"Based on its review to date, the Company anticipates making corrections to its historical financial statements in the following areas:
• The Company previously disclosed that revenue attributable to particular customer agreements was recognized from the beginning of a month rather than from the date of contract signing, and that the Company failed to defer revenue recognition until customers are provided access to the Company's hosting environment, as required by U.S. GAAP. The Company will correct these errors. The effect of the errors was to accelerate the time when revenues were recognized under the Company’s customer agreements.
• The Company will make an additional correction as a result of a comment letter received from the Staff of the Division of Corporation Finance of the SEC in connection with its review of the Company’s filings. In response to the comment, the Company plans to recognize revenue from installation fees under the Company’s customer agreements over the period during which the customer receives the benefit of the installation services, which will be a longer period than the twelve month contract term over which the Company previously recognized such revenue. The effect of the Company’s prior policy also was to accelerate the time when revenues (in this case installation fees) were recognized.
• The Company will properly capitalize certain costs associated with software developed for internal use. These costs were previously expensed."
UnQuote:

Reading the above it would indicate that Revenue on a rolling 3 or 4 year period will be much the same, unless in the last year of reporting, DIL have recognised Revenue that should be in a future period or year.
The other one is that they have expensed Costs, and now advising that these should be capitalised. In this instance this would make Earnings Before Tax and Interest look better as only Depreciation will be expensed.
I am missing something?

MAC

13-10-2013, 01:27 PM

As good a definition as any:

Capitulation occurs when investors attempt to exit an investment or market so quickly that they are willing to surrender any and all gains to do so. Panicked behaviour often causes a capitulation, and investors may attempt to liquidate most or all of their holdings in these circumstances.

Capitulations are most frequently attributed to investors emotionally "giving up," rather than to external forces like changes in the fundamental outlook of a company. This negative investor sentiment may be the cause (or effect) of reaction and opinion communicated by the media, analysts, traders, or other investors.

There is no guaranteed way to spot capitulation before it happens or while it is happening. However, because capitulations generally reflect the final bottoming-out of a security or market, prices typically increase after a capitulation. Thus, capitulations can also signal the beginning of a turnaround.

http://www.investinganswers.com/financial-dictionary/stock-market/capitulation-351

winner69

13-10-2013, 01:51 PM

And then it leads to despondency and then to depression

But if you aiming that post at moosie he has not capitulated ......he has made a considered judgement that hr got DIL wrong and now time to cur his losses and look to further opportunities.

winner69

13-10-2013, 01:51 PM

Wonder if moosie told his dad yet?

MAC

13-10-2013, 04:43 PM

I think my father needs to pick a stock and stick with it long term, he tries to do the trading thing but doesn't know when to buy or sell properly (much like moi sometimes!) I still believe DIL is a good long term hold, I just believe there is money to be made elsewhere right now before I consider DIL again. Homework, homework, homework!

Moosie, as the SP is presently $4.87 and consensus analysis and fundamental valuation is around $7.15 then there is a modest 47% medium term upside potential for DIL. You must be looking at an absolute dead cert to go elsewhere, please do share ?

winner69

13-10-2013, 05:24 PM

Frankenstein

13-10-2013, 05:56 PM

Winner, I bookmarked Halebop's model it to copy it as it looked so attractive! Post #3247

My version of Halebop's model was a little more conservative so gave me a valuation of $6.60 rather than $7.05.

Anyway, I've just input some new numbers based on these updated assumptions:

- 120 new customers for Q4 2013
- 120 new customers per quarter ongoing = 480 new customers per year
- 24,500 additional revenue per new customer (the approximate average value of each new customer, according to the last two years' worth of quarterly updates)
- 95% retention rate (downgraded from 97%)
- Revenue of 25,000pa per retained customer. This was difficult to estimate, but was calculated as: The sum of revenues for the 4 trailing quarters, minus revenues from new customers for those quarters, divided by the total number of customers one year prior. This value has been increasing steadily, 25,000 was the latest figure.

Disclaimer: As has been discussed on this thread recently new client sales may not be the best indication of revenue. I have used it because it seems to be the best option available considering we haven't received any proper revenue info for ages!!!

Plugging in these assumptions gives ongoing revenue growth of 16.5, 12, 9, 8.5, 8, 7.5 Million through to 2018. A long shot off the initial revenue growth estimate of 25M per annum.

This amounts to growth rates of 38%, 20%, 12%, 10%, 9%, 8%.

And the value the DCF gives:

$4

Inputting the same data into a Graham formula assuming a 16% projected growth rate gives me a slightly lower valuation, $3.81. Bumping growth up to 18% gives $4.19.

Disclaimer: My DCF is conservative and ignores income from interest. Others will no doubt give a higher valuation.
ALSO, THIS IS THE FIRST DCF I'VE EVER DONE SO TAKE MY ANALYSIS WITH A GRAIN OF SALT

I bought into DIL a while back at $5.74 with high hopes and thinking it was a steal. I hope their growth strengthens again in the future and will keep a close eye but based on current available information and on my own research and analysis I will be selling at the first chance I get on Monday.

Boohoohoo

-F-

Frankenstein

13-10-2013, 05:58 PM

MAC, I don't know for sure but would be surprised if that $7.15 figure is still current based on the new information released by the company a few days ago.

winner69

13-10-2013, 06:04 PM

Halebop post 3174 was his DCF model frank

winner69

13-10-2013, 06:06 PM

Winner, I think you may be referring to post #3247 by Hilskin (Not Halebop) - I know because I bookmarked it to copy it as it was such an attractive model!

My version of Hilskin's model was a little more conservative so gave me a valuation of $6.60 rather than $7.05.

Anyway, I've just input some new numbers based on these updated assumptions:

- 120 new customers for Q4 2013
- 120 new customers per quarter ongoing = 480 new customers per year
- 24,500 additional revenue per new customer (the approximate average value of each new customer, according to the last two years' worth of quarterly updates)
- 95% retention rate (downgraded from 97%)
- Revenue of 25,000pa per retained customer. This was difficult to estimate, but was calculated as: The sum of revenues for the 4 trailing quarters, minus revenues from new customers for those quarters, divided by the total number of customers one year prior. This value has been increasing steadily, 25,000 was the latest figure.

Disclaimer: As has been discussed on this thread recently new client sales may not be the best indication of revenue. I have used it because it seems to be the best option available considering we haven't received any proper revenue info for ages!!!

Plugging in these assumptions gives ongoing revenue growth of 16.5, 12, 9, 8.5, 8, 7.5 Million through to 2018. A long shot off the initial revenue growth estimate of 25M per annum.

This amounts to growth rates of 38%, 20%, 12%, 10%, 9%, 8%.

And the value the DCF gives:

$4

Inputting the same data into a Graham formula assuming a 16% projected growth rate gives me a slightly lower valuation, $3.81. Bumping growth up to 18% gives $4.19.

Disclaimer: My DCF is conservative and ignores income from interest. Others will no doubt give a higher valuation.
ALSO, THIS IS THE FIRST DCF I'VE EVER DONE SO TAKE MY ANALYSIS WITH A GRAIN OF SALT

I bought into DIL a while back at $5.74 with high hopes and thinking it was a steal. I hope their growth strengthens again in the future and will keep a close eye but based on current available information and on my own research and analysis I will be selling at the first chance I get on Monday.

Boohoohoo

-F-

This is yellow card material coming up with such a pessimistic view .....you upset a few on this thread mate