New Floats in 2013 - Arria and SLI Systems

[Monty]

Does anyone know about two possible technology listings planned for 2013 that have beein reported in the NBR and New Zealand Herald

On 21 September 2012 the Herald reported that


There is talk in the market of a sharemarket float by a technology company called Arria.
Arria has connections to Brian Henry - a former chief executive and director of Diligent Board Member Services.
Diligent has been a strong success story - a counter-balance perhaps to Henry's past business failures.
According to Henry's website Arria NLG is a global software development group focused on Natural Language Generation and Big Data Analytics.
Stock Takes isn't up with the play when it comes to tech jargon but the company seems to have got Henry very excited.
"I believe Arria NLG has the potential to become one of the most successful technology firms in the world, given its unique intellectual properties and Saas (software-as-a-service) recurring revenue models," he states on his website

then on 25 January 2013 there was this in the NZ Herald


Also expected in the first half of the year is tech company Arria which has connections to Brian Henry - a former chief executive and director of Diligent Board Member Services.

This was a week after another article in the NBR which made these points http://www.nbr.co.nz/article/lots-be-excited-about-year-134724


"London Based software developer Arria NLG is said to be definitely in the frame for an NZX listing and could raise more than $20m and possibly much more in an IPO this year. The Company has been doing the rounds since the third quarter last year and may well be the first cab off the rank."



There is a web-site and it does look an interesting company. But google reveals very little more. Given the success of Diligent and the involvement of Brian Henry is this worth investigating?

[Xerof]

Arria NLG has McDouall Stuart as it's advisor, and Sharon Daniels as Chief Marketing Officer - two connections to Diligent.As founding chair of Arria NLG Ltd, Henry will again be the frontman for any IPO.

looks quite interesting at first run over the website, but no financials (understandably)

[CJ]

Arria NLG has McDouall Stuart as it's advisor, and Sharon Daniels as Chief Marketing Officer - two connections to Diligent.As founding chair of Arria NLG Ltd, Henry will again be the frontman for any IPO.

looks quite interesting at first run over the website, but no financials (understandably)No idea of the market and the competition either.

Anyone else now any other companies looking to list.

Orion Health would be an interesting one.
Imarda was looking to list a few years ago but I think Selwyn Pellett has decided it is better to keep it in the family rather than list.

[percy]

I think Craig's and Forbar brokers had a briefing for SLI Systems on Monday.They are the lead brokers.I have requested a prospectus as I follow this sector owning estaronline shares.I think I will find it interesting comparing the two as SLI Systems has twice the turnover of estaronline,however estaronline are much more profitable.
I have not read anything on Arria,yet.

[Amor Fati]

Anybody have new news on this company Arria NLG?
From what I have read they are developing, it looks exciting to say the least.

[Monty]

rumour is the Listing will not be in NZ. Possible AIM?

[CJ]

Thats a shame.

Interesting that the option is set at a high price. Makes it more unlikely to be exercised which means no money for the company.

[CJ]

looks like you should keep an eye out in 3 years when they actually make a profit then!That would be too late - look at xero. The money in these sort of company is to back a company wil become profitable while the market is still pricing in the risk of failure.

[Monty]

from this website http://www.chrislee.co.nz/index.php?page=newsletter-display&list=2&month=June&year=2013

Taking Stock 27 June 2013

Just a few months ago this newsletter discussed the intention to list in New Zealand one of the world’s most interesting companies.

The company, Arria, born in the artificial intelligence division of a 500 year-old Scottish university (Aberdein), for a short while contemplated a listing in New Zealand.

It considered New Zealand because its need for public subscription was low (maybe NZ$100 million), because the NZX offered a relatively straightforward and low cost path to a listing, because the two small technology start ups, Xero and Diligent, were thriving on the NZX, and because a New Zealander had been a significant funder of Arria, as it sought to commercialize its intellectual property.

Arria fascinated me.

It has been developing a means to convert data to text, or in simple terms, computer data into useable analysis in English or any natural language.

There are several obvious applications of its high value, in such areas as medicine, meteorological work, mining, financial services and air traffic control.

My imagination was captured by the concept of instant analysis of technical data, in readable language (any language you wish).

I recalled my years in management in the finance sector 35 years ago, when computerization was based around main frames, and produced piles and piles of computer sheets, not separated, but joined by a serrated line.

I would receive a foot-high pile every day, from which highly valuable and interesting behaviour and trends were discernible.

My mind works well with such data.

Regrettably, the time spent siphoning out relevant data and deciphering it would have left no time for all my daily tasks so my use of the data was sporadic.

In that respect I did not differ from my colleagues in management, some of whom would not allow the reports to appear in their office!

Much potential knowledge was wasted.

That was 35 years ago.

Today the capacity to produce meaningful data is almost infinite but still there is a limit to what one can read.

I read once that the data available hourly to a weather forecaster would take him 45 days to analyse.

Arria’s software aspires to produce a sane, useable accurate report in 60 seconds or less, having absorbed all of that data.

For various reasons, Arria has now changed its listing plans and will now list in London on a secondary board (AIM) sometime later this year.

Prior to that it will hold meetings in the USA and New Zealand for a pre-float private placement with institutional and wholesale investors.

Michael and I attended such meetings earlier in the year and are subject to a confidentiality agreement, but we are probably no longer well informed on its progress of recent months, though that should change next week when I will be briefed by their UK chief executive, visiting Wellington.

I have no idea of the commercial value of Arria’s intellectual property, and no details of its proposed placement, but at least in my imagination I see Arria as a transformational company, that may change the world. I imagine that its intellectual property could have a commercial value in the billions.

Instant analysis, producing instant solutions, would surely save lives, enhance safety and improve productivity and decision-making.

Aberdein University has worked on this natural language idea for decades and may have the jump on others who have sought to convert data to useful text.

When Arria finally gets to New Zealand, and provides us with specific information we can disseminate, we will disseminate!

[InvestandFight]

I invested in Arria over 12 months ago and from the moment I tried to understand it was very excited. Almost worth the investment for the exciting and interesting journey that surely lays ahead with Arria and nevermind the huge potential returns in the coming years. In the next month or so its show time and I cant wait!!

[False Profit]

Hi, so when is this company due to float? I can find nothing on their website but their offices are just down the road from me. Might pay a visit.

Found this interesting piece....

http://www.stuff.co.nz/business/industries/8988025/Ponzi-accused-in-tech-firm

[InvestandFight]

Hey, early november but that could change slightly. You can contact Andrew McDouall in Wellington regarding purchasing shares once floated. Yes read that, hopefully if the business does as well at it potentially could some of his victims might get some money

[Dej]

Hope Arria does float in NZ, even if it is a dual listing.

Always looking for companies like this that are looking to the future of computing, rather than just relabelling/remarketing something that has already been done. Always more interesting to be on the frontier!!

[Monty]

I think all the investors are quite excited about what the potential of this company will be. forget xero, this is the new cool kid on the block. I understand the shares will be listing on the AIM 14 November 2013. I do not think there are any immediate plans (or any plans ever) to list on the NZX. This is definitely a frontier type company. I plan to hold my shares for a very very long time. I think the biggest issue will be release of the script to meet the demand. I would think most investors will be looking to hold.

[InvestandFight]

yes i certainly will be holding for a long time as surely getting to a $1 billion business would be just a fraction of its potential in the next few years??

[Monty]

So the biggest issue looks likely to be a lack of people willing to sell. I doubt there will be too many people looking for the quick buck, but rather holding on for the long term. Therefore the lack of supply and I would guess high demand will mean the shares can only trend one way.

[Amor Fati]

Arria NLG first day on the London Stock Exchange closed 3.24NZ.

[Harvey Specter]

Arria NLG first day on the London Stock Exchange closed 3.24NZ.what was the recent capital raising at?

[InvestandFight]

$1.00USD...very tasty start

[Monty]

now around $2:80 NZ - after reaching some giddy heights if around $6:00 or more after the second day of trading. I'm happy. but I am a long term investor and do not intend to sell for several years at least. The good news is that rumour is there are some new announcements / contracts being progressed in the pipeline. Should these come home then the demand for the technology will be somewhat proven against the current backdrop of Shell as the sole client and there will be a leap in the shareprice. Well that is what I'm hoping for anyway.

[Harvey Specter]

Hi Monty, you might want to change the name of the thread to just Arria now that SLI has its own and all the talk has just been on Arria.

Seems to have settled down after a bit of over-enthusiasm at the start.

[flipbot]

I've just taken a small holding NLG on the back of big data and an interest in linguistics. I think it's an awesome product and as I was driving home the other night more and more places it could be used popped into my head. My main concern is around implementing the software with a wide range of enterprises. It could turn out to be all sorts of difficult to get working well and that may make it too troublesome to spread far and wide.

[winner69]

Today's paper

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11198163


There were numerous media reports last year that Arria NLG, the Henry brothers' latest company, would list on the NZX in 2013.

Arria is a software development business. The company's target "is to be the global leader in the development and deployment of mission critical, core industrial, enterprise level generation software technologies".

Company representatives visited New Zealand a number of times to assess investor interest but they received a lukewarm response because of the extremely complex nature of Arria's activities. However in December Arria announced that it was listing on AIM, which is the London Stock Exchange's international market for small growth companies.

According to the company's press release "Arria has raised US$40 million in private fundraising since inception, with the last round taking place at US$1.60 (approximately 1) a share to raise 9.85 million. Approximately 6.1 million of the recent private round was conditional on a listing, but otherwise the company has not sought to raise funds as part of this flotation."

Arria's largest shareholders are Gerard Henry with 6.5 per cent and Brian Henry with 6.2 per cent. However neither of them is listedas having any ongoing company role, either at board or managementlevel.

Arria has an unusual capital structure as well as a complicated business model. The company has ordinary shares, B ordinary shares, A preference shares, B preference shares and warrants. Potential investors need a great deal of concentration to trawl through the 134-page listing document to fully understand the company's capital structure and pre-listing capital contributions.

Arria listed on AIM on December 5 and closed that day at 1.625 a share on turnover of 221,280 shares.

The following day it closed at 2.825 after 306,681 shares were traded at an average price of 2.91 each.

Since then Arria's share price has fallen steadily and finished January at 1.15. Share trading volume also dropped off sharply towards the end of last month.

On January 23 the company released its result for the 12 months ended September 30, 2013.

It showed that the company had a net loss of 12.4 million for the year on revenue of just 0.82 million. Total revenue for the second half of the year was 0.61 million.

Thus Arria had a sharemarket value at the end of January of 117.6 million and annualised revenue of 1.2 million, based on second-half September 2013 revenue of 0.61 million. This gives the company a market value to revenue ratio of 98 times.

On the same day Xero had a sharemarket value of $5292 million and annualised revenue of $72.1 million giving it a market value to revenue ratio of 73 times.

There is plenty of argument over whether Xero is overvalued, fairly valued or undervalued but there is no disagreement that New Zealand investors are far better off to have Xero listed on the NZX rather than Arria.

[couta1]

I would stay away from this one! They only have a few customers and it will take many years to bring in meaningful revenues. They have a huge cost base. I can see them needing tens of millions of further funding to keep them in business. Be warned.
Yes why would you bother when you've got the likes of Serko coming up this year?

[winner69]

Sharechat boards are the same the world over

Great company, completely oversold, I'm in for the long term, huge potential, will be paying a divie soon .....

http://www.lse.co.uk/ShareChat.asp?page=1&ShareTicker=NLG

[winner69]

from this website http://www.chrislee.co.nz/index.php?page=newsletter-display&list=2&month=June&year=2013

Taking Stock 27 June 2013

Just a few months ago this newsletter discussed the intention to list in New Zealand one of the world’s most interesting companies.

The company, Arria, born in the artificial intelligence division of a 500 year-old Scottish university (Aberdein), for a short while contemplated a listing in New Zealand.

It considered New Zealand because its need for public subscription was low (maybe NZ$100 million), because the NZX offered a relatively straightforward and low cost path to a listing, because the two small technology start ups, Xero and Diligent, were thriving on the NZX, and because a New Zealander had been a significant funder of Arria, as it sought to commercialize its intellectual property.

Arria fascinated me.

It has been developing a means to convert data to text, or in simple terms, computer data into useable analysis in English or any natural language.

There are several obvious applications of its high value, in such areas as medicine, meteorological work, mining, financial services and air traffic control.

My imagination was captured by the concept of instant analysis of technical data, in readable language (any language you wish).

I recalled my years in management in the finance sector 35 years ago, when computerization was based around main frames, and produced piles and piles of computer sheets, not separated, but joined by a serrated line.

I would receive a foot-high pile every day, from which highly valuable and interesting behaviour and trends were discernible.

My mind works well with such data.

Regrettably, the time spent siphoning out relevant data and deciphering it would have left no time for all my daily tasks so my use of the data was sporadic.

In that respect I did not differ from my colleagues in management, some of whom would not allow the reports to appear in their office!

Much potential knowledge was wasted.

That was 35 years ago.

Today the capacity to produce meaningful data is almost infinite but still there is a limit to what one can read.

I read once that the data available hourly to a weather forecaster would take him 45 days to analyse.

Arria’s software aspires to produce a sane, useable accurate report in 60 seconds or less, having absorbed all of that data.

For various reasons, Arria has now changed its listing plans and will now list in London on a secondary board (AIM) sometime later this year.

Prior to that it will hold meetings in the USA and New Zealand for a pre-float private placement with institutional and wholesale investors.

Michael and I attended such meetings earlier in the year and are subject to a confidentiality agreement, but we are probably no longer well informed on its progress of recent months, though that should change next week when I will be briefed by their UK chief executive, visiting Wellington.

I have no idea of the commercial value of Arria’s intellectual property, and no details of its proposed placement, but at least in my imagination I see Arria as a transformational company, that may change the world. I imagine that its intellectual property could have a commercial value in the billions.

Instant analysis, producing instant solutions, would surely save lives, enhance safety and improve productivity and decision-making.

Aberdein University has worked on this natural language idea for decades and may have the jump on others who have sought to convert data to useful text.

When Arria finally gets to New Zealand, and provides us with specific information we can disseminate, we will disseminate!

He did well our Chris

Recent newletter said - New Zealanders who bought a $50,000 NZ parcel of Arria in late 2013 now are enjoying an apparent value of nearer $90,000 following the listing.

[Harvey Specter]

I would stay away from this one! They only have a few customers and it will take many years to bring in meaningful revenues. They have a huge cost base. I can see them needing tens of millions of further funding to keep them in business. Be warned.I think this may be one company where 'first mover' will not be an advantage.

When the world is ready for it, some one like Google will pounce in.

[Skuxtrader]

I think the company has good potential and is slowly gaining exposure to the industries targeted.

They have a deal with shell which they recently extended to a month by month agreement. I don't think the financial details of the agreement have been realesed but it sends a positive message about the product when you have a major global player signing on. Yes, month to month might not be the most secure deal but recently at the society for petroleum engineers conference DR. Robert Dale ( Chief technology officer and chief stratergy scientist), gave a keynote address at the gala dinner. This address informed the guests of the product and what they have been doing. During the middle of the address a representative from Shell was invited to the stage and gave a glowing report about how the product has been heping them.

the keyote speech can be found here

https://www.arria.com/

this is the reference for the month by month extention

http://www.4-traders.com/ARRIA-NLG-PLC-15147256/news/Arria-Extends-Shell-Agreement-17636086/



the problem i see with the product is getting the customers to understand how it works and how it is benefitting them. I found it quite hard to understand the science at the beginning of the keynote address. Gaining exposure to the giants of the petroleum industry has to be a plus and if they can convince them of the science we may see many of them taking the technology on board

[Monty]

Arria NLG has technology that will become imbedded in the operating systems for Shell. To put things in perspective Shell has revenues of $500b in its extraction business. This technology can improve efficiency estimated to be 4-6%. This translates into dollars. What has appealed to me is that if one oil company is excited about the impact of this technology , then other oil companies will be as well. I do not think it will be too long before this technology is implemented in other oil companies. The prospects ten years from now are so exciting. The oil business is worth trillions every year. There are around 4,000 oil companies internationally. The technology has been 25 years in development, and replication will be difficult. Once it is imbedded it will be difficult to remove. Shell is the 7th largest oil company in the world producing 3.9m barrels per day. The largest produces 12.5m barrels per day. The scale of the oil business is something we cannot imagine here in New Zealand.

I maintain the faith in Arria NLG and believe those who hang in long term will reap rewards that will repay that faith multiple times over.

[airedale]

In today's "Press" Chalkie goes over their figures in some detail. Are Chalkie's articles syndicated to the other major dailies ?

[bottlerboy]

Not sure but its online at http://www.stuff.co.nz/business/opinion-analysis/9710256/Money-in-money-out

[kiwico]

In today's "Press" Chalkie goes over their figures in some detail. Are Chalkie's articles syndicated to the other major dailies ?

Yes they are, or at least it is in today's DomPost.

[Harvey Specter]

Yes they are, or at least it is in today's DomPost.I assume it will be in all Fairfax papers.

[Monty]

And in other news Arria NLG have announced that they have that the Met Office is now offering Arria's NLG-generated weather forecast narratives on its Met Invent website. The forecasts, currently available for any of 5,000 geographic points. This has been in the pipeline for a while but demonstrates diversity in their product. Hopefully some more major announcements coming.

http://www.investegate.co.uk/ArticlePrint.aspx?id=201402101214366900Z

[flipbot]

I haven't done a full analysis but maybe you can follow my logic here. They have two customers. Not even sure if MetService is paying. Revenue of roughly $800k gives them a multiplier of about 100. Xero is on 75 so we aren't in crazy territory for a company with potential. Although maybe we are in crazy territory. Either way, let's carry on this napkin calculation. Add 2 more similar clients and the multiplier drops to 50. With a likely increase in shareprice as people price in more potential, up the risk etc.

Correct me if I'm wrong but it appears that they make significant revenue from each client, they are enterprise focussed, and as others have said those enterprises are large. I think a lot of investors are holding on for a few new client announcements to state the potential of the company.

It's pretty clear to me what they do. They turn a tonne of data points into a written report that summarises what is going on. I definitely don't know how they do it, but I don't know how my computer is turning my keystrokes into letters. Or how the internet works. I think the confusion for customers comes in with adopting a new practice - that of reading something a computer wrote and making decisions from it. Can people get used to that? Not sure. Hope so. Eventually.

[Harvey Specter]

Flipbot - with only two customers a P/S valuation is not suitable yet - look at PEB, a huge market value compared to no sales. At this stage, valuation is pretty much a guess but the key factor is are they able to sign up new clients.

I also question how much Metservice are paying - the value they get form this is limited (the clients dont pay for that summary) compared to Shell who do get a of of value (interpreting a lot of data quickly and easily could make them billions).

[flipbot]

Monty makes the point that each customer is potentially worth a lot of revenue - I think this is true as long as the product can do what it needs to do, and crucially be incorporated into the workflow of the business in a useful way. The reason I mention P/S ratio is because it's actually not too dire at this very early stage, with only 2 customers. I agree it's too early to value the company on it now, but it's food for thought and I think another big customer on board and we'll see some positive movement here - barring the big risk of failing in execution of course... :)...or screwing up the books a la DIL.

[Monty]

I follow what is happening with this stock closely - mainly because I have invested in it. There has been a recent newsletter released on 25 April 2014. here is the link http://www.rns-pdf.londonstockexchange.com/rns/4909F_-2014-4-24.pdf

Like many technology shares it can take a while to get traction. There is nothing solid in the newsletter about signing major contracts. But my reading of the newsletter it is evident that the technology has plenty of irons in the fire. The deal with Shell is obviously still under discussion and negotiation. and this is to be expected given it is a very large and complex contract. But when (not if) this contract does close then Arria should be well positioned for a significant lift in its shareprice. Other contracts that eventually follow will reinforce to the market the capability of NLG.

I think there will be some interesting developments over the next few months.

of particular interest from the newsletter are these excerpts

in General "we are able to access prospective client’s senior leadership and place our technology high on their agenda"

in Healthcare "we have facilitated a number of focused workshops, attended by both Arria scientists and healthcare specialists, leading to joint project teams collaborating on what we intend to be the first large-scale implementations of NLG technology in the healthcare sector"

In Finance
"The level of engagement is growing as these prospects are starting to realise the competitive edge they can obtain from our technology in areas like regulatory compliance, enterprise risk management and trade surveillance,"

In Oil
"The sales team left Saudi Arabia and Utrecht with several sales leads and invitations for further dialogue with a number of oil and gas companies, exploring a range of applications including fracking, wells, electrical submersible pumps, data management and drilling."


Major Industries are very interested in this technology. I remain happy with my investment (although there is room for improvement) as I will remain a long term investor.

[Monty]

Great news released by Arria NLG last week. They have now signed a contract with Shell to roll out more of the technology across the Americas. the full article is here http://www.londonstockexchange.com/exchange/news/market-news/market-news-detail.html?announcementId=11962789

This agreement provides Arria with annual fees for non-exclusive use of the Arria NLG Engine to expand NLG decision support technologies to Shell's offshore platforms across parts of the Americas, plus the adoption of Arria's NLG services expanding from existing Facilities NLG narratives to further service categories in upstream operations across parts of the Americas.


What I believe is significant is that this announcement would have come at the conclusion of detailed discussions and a complex procurement process. While the estimated revenue of $5-10 over three years is not a huge income, I believe this will provide the platform for a worldwide roll-out across Shell Oil exploration infrastructure.

[Harvey Specter]

Great news released by Arria NLG last week. They have now signed a contract with Shell NOt so great news today. Shell contract terminated:
http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11441732&ref=nzhbiz_tw