IKE - Ike GPS.com

[Rawz]

they were at pains to point out on the call earlier today about the huge investments in systems which will show up in the P&L statement. The said it was necessary for them to scale. i.e. revenue increase much much faster than expenses.

so dont worry about profit this year or next. its a valid explanation for a business doing $30m revenues but aiming for $100m in the coming years

[t.rexjr]

Whether it’s profit or not seems to depend Foreign what exchange rate gains and Movement of fair value assets and liabilities comes in at. These were favourable $5m in first half

"ongoing these exchange rate fluctuations are becoming insignificant"

Something like that anyway. Drown them in profit I guess

[Cobber]

they were at pains to point out on the call earlier today about the huge investments in systems which will show up in the P&L statement. The said it was necessary for them to scale. i.e. revenue increase much much faster than expenses.

so dont worry about profit this year or next. its a valid explanation for a business doing $30m revenues but aiming for $100m in the coming years

I’ve heard this all before.

[winner69]

sheesh you look at the market depth and it looks like a sick puppy. Next time to buy imo is right before Q2 announcement or 1H FY24 in October. Could be 5 months of pain

You could be right with your 5 months of pain before Q2 announcement

After initial positive response share price back to where it was on Wednesday before announcement.

[Rawz]

You could be right with your 5 months of pain before Q2 announcement

After initial positive response share price back to where it was on Wednesday before announcement.

The more I think about it the worse it gets. Q1 FY24 is going to be flat at best based on their commentary about transaction revenue FALLING AGAIN next quarter.

So it will be 3 quarters in a row of falling revenues.

SP peaked on 7th Feb bang on Q3 FY23 performance update. This was when IKE reported revenue of $7.7m down from previous quarter of $8.8m (peak qrtly revenue). SP dropped 18% between quarters.

Now that Q4 is in and revenue is $7.5m down from $7.7m in Q3...... what will we see? Another 18% drop???? SP down to 67cents??
And then as I suspect next quarter is going to be no help.. flat at best. So another drop before 1HY FY24 and then we hope like heck there is a change of the falling revenue trend?

Next week or so very important for the SP. Looks like the 50d is bang on the 200d... if it crosses below.. ugly

[winner69]

IKE share price went to 88 cents after the update the other day

Been downhill since

Maybe Rawz right with his outlook

[justakiwi]

That's normal and doesn't mean anything. IKE is a pretty illiquid stock, those who sell around the time of an update, are investors who brought in very cheaply, who are taking a few profits. Those buying are investors who understand the potential of this company. There is seldom enough to buy for those looking to add.

If you don't understand this business, or what they are achieving, and that it takes time to grow a business to the level they aspire to - you should give the rest of us the opportunity to buy more, and find something else to invest in.

IKE share price went to 88 cents after the update the other day

Been downhill since

Maybe Rawz right with his outlook

[Rawz]

Hey Winner69 and JAK..

I was reading DMX asset management (whom specialise in small caps) monthly report earlier today and took notice of the below bit. Couldnt help but think about IKE when i was reading..........

Reflections and portfolio positioning

In recent years, while the majority of our portfolio has been focussed on profitable, usually dividend paying stocks, we have purchased a number of typically smaller positions in technology stocks with low market caps that have been close to cash flow break even to provide exposure to interesting emerging growth stories. We had expected that with their growth profile and attractive unit economics they would grow to become NPAT positive in the short to medium term. This journey to profitability among this basket of stocks has taken much longer, and proved more challenging and frustrating than we had expected. It has taken until this quarter to see the first in this basket (KYP - as discussed above, after over four years of holding) to reach an NPAT profit.

Gross profit improvements on the back of revenue growth have typically been offset by increased growth costs and technology spend, and complicated by strategy and management changes in some cases. We have found that for those companies that have invested in growth (and those that have a culture of gifting management shares), the transition from EBITDA positive to NPAT positive, and then generating operating leverage can be a long and painful (for shareholders) journey. CCR, which we discussed above, is a good example of this, while it is operational EBITDA positive, there is uncertainty as to when it will be NPAT positive, and post month end undertook yet another capital raise to fund its growth. For one of our companies, Design Milk (ASX: DMC) found it too difficult to transform to a profitable business and has now sold its operations and is looking for new opportunities. We are much more sceptical now of those sorts of opportunities, and of management teams that are promoting these transitioning to profit companies.

[justakiwi]

Thanks Rawz. Interesting reading and I'm sure it is an accurate reflection of whatever companies they invested in. I accept that there are no guarantees with IKE, but I firmly believe they know what they are doing, and will deliver. Patience is going to be necessary, and I am OK with that. IKE is my one speculative investment and I have zero regrets about adding them to my portfolio.

With regards to the DMX report - I see no mention of the last few years of Covid related disruption. I do think one needs to keep that in mind when drawing any conclusions.

Hey Winner69 and JAK..

I was reading DMX asset management (whom specialise in small caps) monthly report earlier today and took notice of the below bit. Couldnt help but think about IKE when i was reading..........

[winner69]

Hey Winner69 and JAK..

I was reading DMX asset management (whom specialise in small caps) monthly report earlier today and took notice of the below bit. Couldnt help but think about IKE when i was reading..........

That’s a good piece from DMX …must retrieve the email from the trash and read the whole report.

Several similar funds / investors have expressed thoughts along similar lines - one theme I’ve found interesting is that many companies don’t charge enough for what they offer and so will always struggle to make sustainable real profits …….unless they charge heaps more and we know where that sometimes ends up

Thanks for posting