RFL - Rubik Financial

[Lizard]

Thought I would start a thread on Rubik and see if anyone had any comments on the business/software.

They are in a rather transformative phase as the profitable "COIN" software business they purchased from Macquarie will show up in bottom line in the next financial report.

For history, Rubik was floated via the Ausron shell in late 2007, aimed at acquiring and developing software businesses for small banks/deposit-taking institutions. Fortunately, managed to raise $32.5m in the float, as the subsequent slump in the finance sector made for a wintery start.

A number of small acquisitions around a banking channels, collections and payments saw revenues grow to $11.1m in 2012, with a loss of $788k. Following year end, the acquisition was made of COIN Software Pty Ltd from Macquarie - a provider of financial planning software to institutional providers. Provision to boutique providers was left with Macquarie and licensed from COIN, renamed VISOR. Rubik has now announced the further acquisition of the VISOR business.

On the back of acquisitions, half year revenue jumped to $11.7m - a small loss was reported, but, after adjusting for acquisition costs, profit was around $1.4m. COIN was included for just under 5 months of the period. Cashflows suggested normalised revenues now sitting close to $28m/yr. The company has also reported a number of larger projects in the banking software businesses that are expected to add to revenues in 2013/14.

At market cap of $44m (17cps) the business remains relatively modestly priced and not much above the levels of equity that have been injected for acquisitions. However, they do need to prove themselves this year with these acquisitions and demonstrate that they can continue to grow revenue under new ownership (can't imagine Macquarie Group would sell anything off "cheap"!).

[mark100]

Hi Lizard, I've run my eye over RFL a few times but never taken a position. Basically I'm having trouble working out the level of sustainable earnings going forward. Hopefully the FY report will shed some more light.

[macduffy]

RFL has completed purchase of the Visor Desktop business from Macquarie.

http://www.asx.com.au/asxpdf/20130531/pdf/42g72x5y2wgj0b.pdf

An interesting financial services company. If I didn't have such a big chunk of my portfolio in that general sector I'd be tempted to buy a few.

[Mista_Trix]

Is this on anyone elses radar?

[noodles]

Is this on anyone elses radar?

Absolutely. Would like to hear how all these aquisitions will affect the bottom line.

[Lizard]

Turned in a sound result with underlying NPAT at $3.0m prior to transaction and transition costs. Outlook suggests at least $8m EBITDA for coming year (up from $5.8M) due to growth from current acquisitions.

Currently at 19cps/$50m market cap - if they can achieve their targets, there should be some upside here.

[Mista_Trix]

Argh, have been looking for an entry point, a few weeks ago it looked good, but I had no funds, now both the shareprice is up, and our dollar is down, go figure :-S

[Lizard]

Argh, have been looking for an entry point, a few weeks ago it looked good, but I had no funds, now both the shareprice is up, and our dollar is down, go figure :-S

Share price now 27.5cps - up another 45% in just over a month. However, I think is getting close to fully valued for now. Still some potential growth upside if all goes to plan, but more of a "hold" than a "buy" for now in my view.

[Mista_Trix]

Share price now 27.5cps - up another 45% in just over a month. However, I think is getting close to fully valued for now. Still some potential growth upside if all goes to plan, but more of a "hold" than a "buy" for now in my view.

God I haven't even looked at this lately, how's it doing? Did you end up getting in?
I jumped PEB (NZX) instead, lucky timing really.

[Lizard]

Has been a surge of popularity for RFL both pre and post-results. Currently 41cps on the back of strong revenue growth. May have a chance at making the All Ords this year?

[Toulouse - Luzern]

I picked this in the ASX comp.

I liked the potential trajectory.

SteveFleming and ronthepom picked it also.

My watch list shows it up 49% since I added it in December.

IT SW and Internet companies have the potential for large gains I believe.

REA another of my picks.

While I don't have SEK they all show momentum.

[Mista_Trix]

Hmm, letting out some air, after I'd just topped up again as well, unfortunate :-S

Still, seems to be on a positive trajectory, but it has increased a lot lately.

[mark100]

Article doing the rounds yesterday suggested IRE's XPLAN has gained ground on COIN could explain some softness

[Mista_Trix]

Article doing the rounds yesterday suggested IRE's XPLAN has gained ground on COIN could explain some softness

Ahhhh, that makes sense - do you have a link to the article?? I cant seem to find it.

[mark100]

It's on afr.com you need to be a subscriber to see the full article. Basically it said COIN had lost ground due the disruption of being sold to Macquarie and then RFL

http://www.afr.com/p/business/companies/iress_pulls_ahead_of_rivals_on_wealth_qZataCmlJGX5 ffQgQIXqrJ

But then there is a guy on the ACN facebook page disagreeing with this article so what do you believe?

[steve fleming]

Getting some decent broker coverage now with Cannacord (54cents target) and CZZ Stanton (40 cents) now following

[Mista_Trix]

Looking good;
http://www.asx.com.au/asxpdf/20140331/pdf/42nqh05q4qm5h4.pdf

[Mista_Trix]

Today's jump related to the mortgage platform??

[steve fleming]

Today's jump related to the mortgage platform??

Suspect so

This "third pillar" will really round out the Rubik offering

[Mista_Trix]

Trading halt and capital raising on the cards;
http://www.asx.com.au/asxpdf/20140408/pdf/42nw7dmf9vf0gl.pdf

[Mista_Trix]

Short-term traders getting out? In anticipation of slightly stagnated upwards momentum during capital raising?
Thoughts Steve..? ... as it seems to be only me and you watching this stock :-S

[Toulouse - Luzern]

Hi
I bought RFL shares on 7 April 2014.
Settlement under T3 = 10 April 2014.
The trading halt was announced by RFL the next day after my purchase on 8 April 2014.
It stated you have to be on the register on 5.00PM on 9 April to participate in the RFL SPP.
Has anyone had any luck in appealing against this sort of thing on ASX / ASIC etc.
Seems unfair that only purchasers on the one day are excluded from the SPP.
Why are Trading Halts for CR and SPP 2 days given the T3 settlement rules?

Interested in views of others.

[Mista_Trix]

Close to testing all time highs again.
Incredible upwards momentum over the last couple of weeks.

[stoploss]

http://www.asx.com.au/asxpdf/20140519/pdf/42pq4rw0ngb9mh.pdf

Good take up in the SPP.
DISC : Holding

[Mista_Trix]

Hmmm, quite an amount of selling pressure after the raising.
I wonder how long till it stabilises and starts to climb.

From memory there was meant to be a mortgage announcement in the pipeline coming soon..?

[stoploss]

Hmmm, quite an amount of selling pressure after the raising.
I wonder how long till it stabilises and starts to climb.

From memory there was meant to be a mortgage announcement in the pipeline coming soon..?

Think we are getting through the selling now .......

[Mista_Trix]

Missed this yesterday - what with being a holiday in NZ.

Trading halt till Wednesday, Re: Recent acquisition activities.

[Mista_Trix]

40 minutes before market open ... they're leaving the announcement quite late.

[stoploss]

40 minutes before market open ... they're leaving the announcement quite late.

http://www.asx.com.au/asxpdf/20140604/pdf/01522951.pdf

[Mista_Trix]

'Rubik Financial Limited announces it has acquired Stargate and Infinitive, two leading mortgage industry software companies,together handle around 25% of all Australian intermediated (broker) mortgage settlements.'

See here; http://www.asx.com.au/asxpdf/20140604/pdf/42q0rfsj4nzlrf.pdf

[Mista_Trix]

http://www.asx.com.au/asxpdf/20140604/pdf/01522951.pdf

P.S. your link's broken - it links to when they were uploading the doc :-S

[Toulouse - Luzern]

At 55 cents IMHO it is a market high even if an intraday high at this point (:-)

[Mista_Trix]

"Spencer has billion-dollar ambitions after selling Stargate"
http://www.theadviser.com.au/breaking-news/30329-spencer-has-billion-dollar-ambitions-after-selling-stargate

Summary from the seller side of the recent acquisition.

[Mista_Trix]

Think we are getting through the selling now .......

Jeez, still a lot of selling pressure even after the announcement. I guess for those that bought in at the raising its still almost a 15% gain selling at these levels.

[stoploss]

http://www.investordaily.com.au/35666-big-data-to-take-centre-stage-rubik

[Mista_Trix]

Someone has been trickle buying over the last week or so. There's been some incredibly low numbers going through picking off whatever the sell side is giving them, clearly keen not to disrupt the downtrend as they accumulate - helps make me a little more comfortable as the price slides around.

Good broker upgrade as well.

[Mista_Trix]

A couple of really good reads; Both for (on track) and against (risk circumstances) the stock.
http://www.financialobserver.com.au/articles/rubik-progressing-with-data-project

http://blog.intelligentinvestor.com.au/doddsville/roll-up-for-rubik/

Disc: HOLD

[Mista_Trix]

Whoever has been buying in 50(ish) parcel intervals has increased it to 2162.
I wonder if it's still the same buyer as already identified..?

Slow and steady accumulation.

[Mista_Trix]

So, looks like they continued to buy from 0.46cents upwards. Then hit some selling at early 0.50's but eventually moved through it.

Now sitting at 0.55, looking ready to test its highs. Could be ready for another jump upwards looking at the chart, especially on good news.
Sitting happy :)

Anyone else care to comment :-S

[stoploss]

So, looks like they continued to buy from 0.46cents upwards. Then hit some selling at early 0.50's but eventually moved through it.

Now sitting at 0.55, looking ready to test its highs. Could be ready for another jump upwards looking at the chart, especially on good news.
Sitting happy :)

Anyone else care to comment :-S

Yea chart looks good , hopefully we can take out previous high. Like the industry.

[Mista_Trix]

Haha, oh God. I'm starting to think my posting in this is the contrarian indicator.

Bounced off highs, wayyyy back down again, and quickly.
Ahh well, have another crack in a bit then why don't you. :-S

[Toulouse - Luzern]

I was feeling good about yesterdays highs of 56 also.

It appears the market did not like the Appendix 4c today for the June 2014 quarter.

Showed just $138K net operating positive cash flow for the quarter compared with $4.2M for the 12 months.

[Mista_Trix]

I was feeling good about yesterdays highs of 56 also.

It appears the market did not like the Appendix 4c today for the June 2014 quarter.

Showed just $138K net operating positive cash flow for the quarter compared with $4.2M for the 12 months.

Any personal speculation as to why you think that would be?

[Mista_Trix]

Wow, intraday trading on Friday pushed the SP down to the 200MA (roughly 40 cents) then settled at 45.5c.

A little worrying.

[Mista_Trix]

Double bottom off the Bollinger Bands.

I know I shouldn't be watching intra-day, but at the moment this movement is making me sweat.

[Mista_Trix]

Jeeeeeesus H Christ.

[stoploss]

Jeeeeeesus H Christ.

Yea I have stopped out , win some lose some ......

[Mista_Trix]

I didn't read the results as being that bad, banking obviously sucks a wee bit (+25% predicted, -25% actual, perhaps lost someone at the end), but everything else didn't look too bad in the grand scheme of things.

I guess though perhaps it does suggest they are struggling to realise gains after the acquisitions.

Pun-ished. I thought it would fall and correct, which was stupid, I really need to set up stoplosses.
Ouch, silly silly boy.

[mark100]

Hi Lizard, I've run my eye over RFL a few times but never taken a position. Basically I'm having trouble working out the level of sustainable earnings going forward. Hopefully the FY report will shed some more light.

Well I missed the huge run up in RFL except for a trade here and there mainly because I could never really work out what the NPAT would be. It seems todays announcement confirms there won't be much NPAT for FY15 either. Maybe FY16 will come through with the goods. Still worth keeping eye on but amazing how much money can be made on the promise of a profit regardless of whether it is delivered!

[Lizard]

Well I missed the huge run up in RFL except for a trade here and there mainly because I could never really work out what the NPAT would be. It seems todays announcement confirms there won't be much NPAT for FY15 either. Maybe FY16 will come through with the goods. Still worth keeping eye on but amazing how much money can be made on the promise of a profit regardless of whether it is delivered!

Yes, I did okay with this one Mark - bought 18cps and sold 47cps when I needed funds for a new car... turned out to be one of the better decisions this year, unlike a few small caps where I've managed to ride them back down again due to inattention and over-optimism!

[mark100]

Well done Lizard. It pays to remember small caps can be bumpy!

[Lizard]

Well done Lizard. It pays to remember small caps can be bumpy!

Yes, I put WRR on the market at the same time, at 33cps... only had a few taken before they went into halt and announced a cap raising! After all that, they've ended up back down at 13.5cps! At least the AGM presentation seemed positive in their case, so instead, have ended up buying more.:scared:

[Mista_Trix]

Uuuuuuugly.
Total lack of execution.

Should've completely pulled the pin on this when the SP was higher, instead I left some in, and am now paying the price - what a novice.

How is everyone else doing? Is there still anyone left in this stock? Thoughts on the long term ability to turn this around?

[Toulouse - Luzern]

Hi Mista Trix,

Delighted that Liz had a win with RFL.

I recall the purchase of the new car ...

You may be interested in my experience with RFL ...

Context:

Selected RFL in January 2014 for the ASX competition based on the SP trajectory.

Up 60% by the end of March 2014 ...

Decided to add it to the "real" portfolio on 7 April 2014 ...

Entered on a pull back from an intra day high of AUD .54 cents on 7 April 2014, at AUD 50.5 cents, the low for the day ...

They say timing is everything...

So it would seem, as the very next day, a trading halt was announced for a capital raising at 44 cents.

The only people unable to buy in the SPP were all of us buyers from the 7 April 2014 ...

Thought this was totally unjust and contacted the Company Secretary who said there was nothing they could do.

Critical thinking is you need to raise this kind of issue immediately eg with the ASX and ASIC if anything is to be done ...

Posted on this thread at that time asking for comment.

With ASX and ASIC automated complaint procedures you cannot even get your issue recorded until you are a registered shareholder, and the quantity of spp shares was capped so it was game over and allocation complete.

The shares rose to an intraday high of 56 cents by 30 July 2014 ... (commented at that time on this thread)

It was obvious from then on based on the volumes in the next couple of days that the strong momentum was to sell.

I exited on 1 August 2014 at NZD 49.83 cents, days high was AUD 50 cents ...

Never been higher since ...

Some say don't invest in a company if you no longer trust the management... (or their strategies)

Up to all of us to decide just where we are on that continuum ...

Still look at RFL from time to time but lower stress options are preferred ...

All the best and regards