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Thread: PYS - PaySauce

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    Default PYS - PaySauce

    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

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    Legend minimoke's Avatar
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    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

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

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

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    Senior Member Marilyn Munroe's Avatar
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    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
    Last edited by Marilyn Munroe; 09-01-2019 at 12:23 PM. Reason: admissibly-admittidly. GRR! spell checker
    Diamonds are a girls best friend.

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    Legend minimoke's Avatar
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    Quote Originally Posted by Marilyn Munroe View Post

    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.

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    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 !
    Last edited by whatsup; 09-01-2019 at 01:06 PM.

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    Quote Originally Posted by minimoke View Post
    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...

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    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 ?

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    Senior Member hardt's Avatar
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    Who is buying this business at 80x annualised revenue...

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

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    2019 NZ Stock Picking Winner silverblizzard888's Avatar
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    Quote Originally Posted by hardt View Post
    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.

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    Senior Member hardt's Avatar
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    I need to short this stock ASAP.

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    Quote Originally Posted by hardt View Post
    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.

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    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.

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    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
    Last edited by winner69; 08-04-2019 at 08:22 PM.
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    Legend minimoke's Avatar
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    Quote Originally Posted by SilverBack View Post
    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

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