PYS - PaySauce

[Chanchay]

G'day folks,

Has anyone been following the reverse takeover of PaySauce?

I would love to know any information on the company, I have had a look at their software and concept and it seems solid for SME's, would love anyone elses input before i dip my toes in

[minimoke]

The red flag for me was when Asantha Wijeyeratne described current providers as "dinosaurs" with an inability to innovate. And then went on to describe how they solved farmers problem of paying Minimum Wage to workers. really how hard is 60 hours times $16.50 to derive a gross pay figure.

If they think Payday filing is the biggest issue facing payroll software / business then he is either out of touch or being deliberately mischievous.

I wouldn't touch this with a barge pole

[Chanchay]

Further to the above, here is a link to the limited documentation available:

https://www.paysauce.com/investor/#/documents

[Marilyn Munroe]

The feature that allows staff to submit time sheets by an app on their smart phone is a useful feature.

They are entering a crowded field so would need to be good to even keep their head above water.

My, admittibly limited, experience is good support is essential. There is always some wrinkle in holiday pay working for families or tax codes which requires personalized support. I am not sure if PYS's business model includes this.

Boop boop de do
Marilyn

[minimoke]

My, admittibly limited, experience is good support is essential. There is always some wrinkle in holiday pay working for families or tax codes which requires personalized support. I am not sure if PYS's business model includes this.
n

With $530,000 in total paid to salaries I think its fair to say you should expect zero support. They don't have the staff. Perhaps 3 - 4 people in total.

[whatsup]

Hard company to understand, too many shares on issue, imho definitely not worth the M C of $80+ million when the backdoorers tipped a $10 million business into that listing.
What is the business plan, the financials, the future and with 5.8 BILLION shares on issue that will take some getting my head around , if the current S P was .0014 and not .014 then I could fatham its numbers out.

Im glad I sold out when it was MAD !

[Oliver Mander]

With $530,000 in total paid to salaries I think its fair to say you should expect zero support. They don't have the staff. Perhaps 3 - 4 people in total.

Coincidence...was just looking at this.
I struggle to see how a company with $210k revenue for y/e 31/3/2018 is worth a market cap of $81m.
That's before you get to the salaries.

Their business model seems based around being simple, which seems fair enough to me, and their IT interfaces (including website) look good. But FAR too overvalued right now for me to be interested...

[whatsup]

How long will it be before they do a C R and with 98% of the company owned by the fish heads just who is going to strump up with the hard earned ?

[hardt]

Who is buying this business at 80x annualised revenue...

I wouldn't look past getting in there at ~20x but damn...

[silverblizzard888]

Who is buying this business at 80x annualised revenue...

I wouldn't look past getting in there at ~20x but damn...

Just someone taking a punt, only $811 went through today, but it did push the price up 27%. Crazy valuation, growth rate is high but on tiny revenues.

[hardt]

I need to short this stock ASAP.

[Schrodinger]

I need to short this stock ASAP.

Take a look at their 2018 accounts they cant even name the Directors for the signatures (in fact this is the first time I have seen this). Very amateur gaffe.

Avoid.

[SilverBack]

I actually think this company has a valuable product and has a smart CEO with a strong background in payroll systems. However, I think it is hopelessly over-valued at present.
I recently attended an investor presentation at which Asantha Wijeyeratne spoke. A few weeks earlier, I had talked with a chartered accountant who confirmed that the new payroll requirements for employers to submit PAYE within two business days of paying staff (Payday Filing) from 1 April, is indeed an issue with small businesses. At the seminar, Paysauce claimed that it was the only Payroll solution that met this requirement from 1 April and I have no reason to discredit that claim.
Using my valuation method of using estimated forward revenue for 12 months and calculating price to revenue as a proxy for PE (since PYS is a high growth company that can be expected to declare negative NPAT for the next year and more) I find that with a SP of 1.1 cents today, it has a value of 32.1 compared to 33.4 from XRO and 6.5 from Pushpay. This is based on PYS company guidance of 109% increase in gross revenue for 2019. The SP would need to be 0.22 cents to match PPH and 0.15 cents to match PLX which is on 3.5.
Normally I prefer to apply the operating margin to the gross revenue estimate to obtain a Price to Revenue at Margin ratio but PYS has not revealed its operating margin and so I have had to fall back to gross revenue. XRO has a very high margin of 83% and it is unlikely that PYS will exceed that. Whatever their margin is, it will almost certainly decrease as the company increases in size.
The other matter affecting PYS is the very large number of shares following its reverse takeover of MAD. Sooner or later PYS will consolidate its shares and following that, I fully expect the SP to move back towards a more typical valuation, which no doubt is a reason why the company will not want to consolidate in a hurry.
I have PYS on my watch list because I think it should do well but until the valuation reaches that for similar companies, I will stand aside. Although I used PPH as a comparison, I do not yet put it in the same class as PPH but would compare it more to PLX, which I have on a comparative ratio of 3.5.

[winner69]

SilverBack commented — Paysauce claimed that it was the only Payroll solution that met this (Payday filing) requirement from 1 April and I have no reason to discredit that claim.

I’m sure MYOB, Xero and all the others would discredit that claim

Mate uses MYOB and he’s been doing payday filing from early March (opted in) for his 20 person payroll

In saying i’ve heard some users say Paysauce is OK

[minimoke]

At the seminar, Paysauce claimed that it was the only Payroll solution that met this requirement from 1 April and I have no reason to discredit that claim..

Bwahahaha. Another red flag

[SilverBack]

SilverBack commented — Paysauce claimed that it was the only Payroll solution that met this (Payday filing) requirement from 1 April and I have no reason to discredit that claim.

I’m sure MYOB, Xero and all the others would discredit that claim

Mate uses MYOB and he’s been doing payday filing from early March (opted in) for his 20 person payroll

In saying i’ve heard some users say Paysauce is OK

I do not use Paysauce or deal with anyone who does. Perhaps the claim related to automated filing using a B2B interface with IRD?
Anyway, the substance of my post was that PYS is extremely overvalued at present, even based on its own revenue projections.

[SilverBack]

I do not use Paysauce or deal with anyone who does. Perhaps the claim related to automated filing using a B2B interface with IRD?
Anyway, the substance of my post was that PYS is extermely over valued.

[minimoke]

I do not use Paysauce or deal with anyone who does. Perhaps the claim related to automated filing using a B2B interface with IRD?
Anyway, the substance of my post was that PYS is extremely overvalued at present, even based on its own revenue projections.

Heres a company claiming to be first to pay day file, rather than "only"
https://www.flexitime.co.nz/payday-f...0aAll8EALw_wcB

[minimoke]

Its timely that they give a market updater today - which doesnt make pretty reading.

1384 customers covering 7237 employees. So that is 5.2 employees per customer

$72m in payroll processed. So thats $52,000 per customer or $9,950 per employee

Quite clearly their market is the very small employer with employees likely to be seasonal workers. From that we can conclude their sales / marketing costs are going to be huge relative to the number of sales made. Which is a major worry given they only have $240k in recurring revenue in a quarter.

Number of payslips issued = 46,812. Which is a dumb metric as payslips dont have to be issued. The number = 6.4 payslips per employee which doesnt make sense if they are paid weekly, fortnightly or monthly.

(They are certainly over-cooking the payday filing thing. Which is simply just sending a table file to IRD electronically each pay. No mention of Holiday Act compliance which is the real and pressing concern attendees at their Dairy Women Group meetings should have. Given the new minimum wage I would have thought that would have been more pressing - especially given the average rate of pay going through payroll. )

[winner69]

Minimoke said - They are certainly over-cooking the payday filing thing. Which is simply just sending a table file to IRD electronically each pay.

Dress it up and make it look and feel magical it probably is magic.