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10-05-2023, 08:30 PM
#6351
I haven't followed this company for many years but have I got this roughly right;
Plexure paid an exorbitant amount for Task, something close to 10 x revenues but by doing so Task $hitcanned PLX management and have sorted out the contracts etc and we are now seeing some real synergies with the new enterprise and cash flows are ramping massively along with revenues which should translate into earnings, there is no debt and maybe just maybe this is starting to actually work.
Looks like cash is pouring in, 15 million free cash flow over last 12 Months.
EBITDA
I - well there isn't really any
T - well there isn't really any
D - is very low
A - is mostly to do with the merger costs and doesn't reflect ongoing costs.
Anyone have any idea why this large cash flow wont ramp into earnings soon?
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10-05-2023, 09:09 PM
#6352
Originally Posted by SailorRob
I haven't followed this company for many years but have I got this roughly right;
Plexure paid an exorbitant amount for Task, something close to 10 x revenues but by doing so Task $hitcanned PLX management and have sorted out the contracts etc and we are now seeing some real synergies with the new enterprise and cash flows are ramping massively along with revenues which should translate into earnings, there is no debt and maybe just maybe this is starting to actually work.
Looks like cash is pouring in, 15 million free cash flow over last 12 Months.
EBITDA
I - well there isn't really any
T - well there isn't really any
D - is very low
A - is mostly to do with the merger costs and doesn't reflect ongoing costs.
Anyone have any idea why this large cash flow wont ramp into earnings soon?
No, no idea why it won't. I think you're right, it's finally starting to really work.
Basically this was an exciting company especially the VML to PLX days but they got into trouble with the premier McD's contract, even though it is huge, turns out it wasn't making money. They didn't have much else going for them, a few smaller customers, tiny by comparison. But they did/do have amazing tech and in hindsight the TASK team saw this and the reverse takeover threw a lifeline. Otherwise, I think PLX would've gone bust or be bought by McD's at pennies on the $.
Th PLX management took a bath and the key directors as well. Again with hindsight that not only makes sense, but with the new management and board, it's almost completed the transformation and is obviously going from strength to strength. It's even showing up in the financials. It's not just the passion of the new directors/management I like, it's the practicality no-nonsense get on with the business, make it work! Perhaps not surprising as they have a great deal invested in making this work, but refreshing nevertheless.
The combined PLX/TASK tech is really a leading end-to-end solution in their market. Since then it's retained the McD's 9% shareholding with rights to extend, secured a 5 year McD's contract profitably, and extended a whole lot of existing TASK customers contracts and brought on a few more contracts, like Pita Pit (which could go global as well). Some premier customers as well, like Starbucks. They've abandoned the fringe sectors like grocery, and are basically focusing on what TASK does well, and PLX augments, inventory -> kitchen -> retail QSR.
So the cash is flowing in like it never has before (it's only been a few months), and the turnaround is almost complete already! I'd expect a flat NPAT maybe negligible loss for the past FY based on the EBITDA turnaround, and a boomer current FY. There's plenty of cash at bank so expect more acquisitions to come, hopefully EPS accretive.
Most importantly imo is in the current market climate, that they go to profitable, maybe at the expense of growth. No ones buying into loss making tech companies. I think they get that.
IMO the only real risk is that they have such a low market cap, they'll be attractive to an acquisition, and the Houdens have about 37% of the company, and on top of the windfall to them from the reverse takeover, they could stand to gain a lot more from an attractive takeover buying them out. There's no sign of that so far, so I'd consider the risk to be negligible, but it is a risk.
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11-05-2023, 08:23 AM
#6353
Originally Posted by Baa_Baa
No, no idea why it won't. I think you're right, it's finally starting to really work.
Basically this was an exciting company especially the VML to PLX days but they got into trouble with the premier McD's contract, even though it is huge, turns out it wasn't making money. They didn't have much else going for them, a few smaller customers, tiny by comparison. But they did/do have amazing tech and in hindsight the TASK team saw this and the reverse takeover threw a lifeline. Otherwise, I think PLX would've gone bust or be bought by McD's at pennies on the $.
Th PLX management took a bath and the key directors as well. Again with hindsight that not only makes sense, but with the new management and board, it's almost completed the transformation and is obviously going from strength to strength. It's even showing up in the financials. It's not just the passion of the new directors/management I like, it's the practicality no-nonsense get on with the business, make it work! Perhaps not surprising as they have a great deal invested in making this work, but refreshing nevertheless.
The combined PLX/TASK tech is really a leading end-to-end solution in their market. Since then it's retained the McD's 9% shareholding with rights to extend, secured a 5 year McD's contract profitably, and extended a whole lot of existing TASK customers contracts and brought on a few more contracts, like Pita Pit (which could go global as well). Some premier customers as well, like Starbucks. They've abandoned the fringe sectors like grocery, and are basically focusing on what TASK does well, and PLX augments, inventory -> kitchen -> retail QSR.
So the cash is flowing in like it never has before (it's only been a few months), and the turnaround is almost complete already! I'd expect a flat NPAT maybe negligible loss for the past FY based on the EBITDA turnaround, and a boomer current FY. There's plenty of cash at bank so expect more acquisitions to come, hopefully EPS accretive.
Most importantly imo is in the current market climate, that they go to profitable, maybe at the expense of growth. No ones buying into loss making tech companies. I think they get that.
IMO the only real risk is that they have such a low market cap, they'll be attractive to an acquisition, and the Houdens have about 37% of the company, and on top of the windfall to them from the reverse takeover, they could stand to gain a lot more from an attractive takeover buying them out. There's no sign of that so far, so I'd consider the risk to be negligible, but it is a risk.
Great informative post BaaBaa which I have come to expect from you.
I bought in to VML and held while they transitioned to PLX, I paid roughly 32c and from memory went down to 13c and then I sold around 82c, all a long time ago and haven't really followed since.
'Most importantly imo is in the current market climate, that they go to profitable, maybe at the expense of growth. No ones buying into loss making tech companies. I think they get that'.
Regarding that, I hope they don't make decisions in the short term to try and influence the share price unless they need to raise capital. Their obligation and duty is to act in the best long term interest of all shareholders. But yes profitability is of course the name of the game.
It looks to me like they are already and they even mention this fact, huge cash flows with no technical profitability is of course a big win from a tax perspective.
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11-05-2023, 08:36 AM
#6354
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16-05-2023, 01:22 PM
#6355
Getting move on in time for FY results to be out in couple of weeks time.
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16-05-2023, 11:34 PM
#6356
Expecting them to report a $1-2 million profit.
The key to the share price will be future guidance on growth and capital allocation plans.
Next 12 months could be massive as the company heads into strong profit making territory.
Last edited by silverblizzard888; 16-05-2023 at 11:36 PM.
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17-05-2023, 07:33 AM
#6357
Originally Posted by silverblizzard888
Expecting them to report a $1-2 million profit.
The key to the share price will be future guidance on growth and capital allocation plans.
Next 12 months could be massive as the company heads into strong profit making territory.
Yeah, agreed with all that.
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17-05-2023, 08:16 AM
#6358
Originally Posted by silverblizzard888
Expecting them to report a $1-2 million profit.
The key to the share price will be future guidance on growth and capital allocation plans.
Next 12 months could be massive as the company heads into strong profit making territory.
I expect break even to 1 million loss but would be happy with a profit.
They also have loads in the bank and maybe have an acquisition in mind or a new contract announcement
Last edited by Ggcc; 17-05-2023 at 08:21 AM.
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17-05-2023, 08:27 AM
#6359
Originally Posted by silverblizzard888
Expecting them to report a $1-2 million profit.
The key to the share price will be future guidance on growth and capital allocation plans.
Next 12 months could be massive as the company heads into strong profit making territory.
Agree with that
Exciting times ahead
“ At the top of every bubble, everyone is convinced it's not yet a bubble.”
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17-05-2023, 08:35 AM
#6360
Originally Posted by Ggcc
I expect break even to 1 million loss but would be happy with a profit.
They also have loads in the bank and maybe have an acquisition in mind or a new contract announcement
The difference between a million profit and a million loss is all just accounting noise, they can play with the numbers as they wish at that level.
The real story is in the cash flow that has just showed up.
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