Wynyard Group capital raising?

[CJ]

And remember the indicative range is indicative only. So what happens if it prices at $1.70? Given they take the money upfront (I think) I assume you have to provide number of shares x$1.65 and you will get a refund once the price is determined.

Correction - For ASB at least, you just have to have clear funds in your account on 24th June after the bookbuild price is determined. They won't take out funds prior.

[Banksie]

Mmhh...one of the independent directors is also a director at Rakon.

[glasszon]

Who's getting into this IPO? Doing my maths now to see how much I should apply for.

[Banksie]

There is also quite a variance in the number of shares they are going to issue:

Indicative number of Shares to be issued by Wynyard: 59.1 million to 39.4 million

(Also with the proviso this indicative number is indicative only )

[CJ]

IPO price Sparky???

The risk is the price will be driven less by valuations and more by oversubscriptions.

[TimmyTP]

Im all signed up with ASB now so I now have at least the option of participating. Now time for me to do some resaerch. What are the +s and -s people see in this company to get me started??

I note CJs earlier comments re revenue and clearly the indicative range etc is an issue....

Time to stick my head above the parapet. I read the offer doc yesterday, but don't have it in front of me, so apologies for inaccuracies in this brief opinion:
1. considering their target market, expect long sales cycles, multi-year commitments (as can be seen from some of the press releases) and relatively stable budgets. Even the banking sector budgets could be stable, since it will be boring, reliable compliance people holding the cheque books.
2. around half of their income is in a currency other than NZD or AUD. If you think that GBP and USD will appreciate vs the dollar, implications on NZD revenue are good. AUD could be a downside risk, but this is small potatoes currently.
3. Balance of recurring and non-recurring revenue, with the former increasing.
4. they have some professional services in the mix. Managed well, it can provide valuable feedback to product development, as well as being a rich source of additional revenue.
5. the barriers to entry are high, along with a long sales cycle, the overall number of sales is probably reasonably small (400 customers worldwide right now I recall?). I suppose this has mixed effects for Wynyard, as they are defending their market, but have ambitions for expansion too. My guess is that 2013 sales are pretty much done now; a much smaller proportion of 2014 sales could be considered as high probability just yet.
6. I cannot judge on the validity of their description of the software architecture. They are saying the right things, but I think we would have to find someone with first-hand experience to validate that. trackers, can you offer any insight?

There are people on this forum much better equipped to judge the directors and the value the market might attach to these shares. For me it looks like a long term hold for growth, but I have only applied for 5,000 as I'm chicken about the valuation. I might look to pick up some more on market, depending on how many I am allocated, what happens to the price after the IPO and what I can learn from wise heads here and elsewhere.

[CJ]

Good comments Timmy. A couple of points:

1. Agree
2. While they are making a loss, a falling NZ dollar helps Revenue but hurts profits. I'll call this neutral as no one can ever forecast Forex.
3. Agree
4. -
5. The risk is very long lead time for sales. Once you have a product, you wont be changing for a while. That is a positive if you are the current supplier, not if you are the new boy. You could see this with the likes of Endace which was targeting similar customers. Very lumpy revenue with most sales done prior to year end, or just after (all to do with big govt budgets having to be spent or waiting till next years cycle)
6. -

One extra thing I will point out. They have 4 products, 2 of which are brand new. These should be an easier sale to their existing 400 customers which is a positive in the short term (cross selling an integrated product) and long term (ie. they hve 4 different touch points into a customer, and can cross sell from their).

The key issue is they need to have the best technology - that is what will drive sales and resales. We see this with DIL which has continued growth and very low churn. Given what it is, it will be very hard to get an insight into this (I dont see the CIA doing an advertorial in 'Spys Monthly' on why they chose Wynyard)

[TimmyTP]

I'm still waiting for the offer doc from ASB

Did you take a look at http://www.intelligentinvestment.co.nz?

Good points CJ, thanks for those. Especially this one:

Given what it is, it will be very hard to get an insight into this (I dont see the CIA doing an advertorial in 'Spys Monthly' on why they chose Wynyard)

Agree with your comment about the best technology. I think that 4 has a bearing on that - I'll take a guess that the "professional services" people on site have the ability to modify the system to fit local requirements; feeding this back into their product management can be a valuable tool for keeping the product relevant and customers locked in.

Would love to hear from trackers or anyone else who can tell us more about how they and their software operate internally.

[Mista_Trix]

I used to work in the intel community up until very recently and can safely say this was not the software that is/was being used by the sector in NZ or abroad. They will have an interesting time competing with a very strong incumbent.

[Banksie]

I used to work in the intel community up until very recently and can safely say this was not the software that is/was being used by the sector in NZ or abroad. They will have an interesting time competing with a very strong incumbent.

Who is the very strong incumbent?