Category: growth companies

Has Vault Intelligence Ltd (ASX:VLT) finally unlocked its potential?

With Vault Intelligence Ltd (ASX: VLT) recently hitting $6 million CRR now may be the perfect time to take a closer look.

Vault Intelligence Ltd (ASX:VLT) shareholders have endured a frustrating time since the company’s IPO back in 2016.  This may all be about to change with the company’s outlook appearing to have finally turned the corner.

Company Video 

https://www.vaultintel.com/ 

In layman’s terms Vault’s software takes the hard work out of OH&S compliance. It replaces paper and excel spreadsheets in both large and small companies to ensure companies meet and exceeded regulatory requirements.

Vault Intelligence Limited (ASX: VLT) was listed on the Australian Stock Exchange (ASX) in July 2016 as the only provider of Risk and Safety Management Software listed in Australia.
Vault software is used in over 30 industries by over 400 customers with over 1 million individual users and 22,000 mobile app users. Vault has offices in Christchurch, Melbourne, Sydney and Perth.

Besides the regulatory requirements businesses are embracing vault software because they’re actually seeing a return on investment.

They see this in two ways.

Firstly insurance premiums are reduced for companies which use the software.  Secondly workplace efficiencies gained by moving away from legacy OHS systems to Vault’s software has seen significant reductions in costs spent on compliance. So in short, the customers find vault software more than pays for itself.

Catalysts for future share price growth.

When looking for outsize gains in small companies it’s is import to understand what might see the market rerate the value of the company.

Possible catalysts to rerate Vault’s share price include:

  • Cashflow positive operations. It’s a simple concept but many small companies struggle to ever reach this mark but when they do the market takes notice. Vault is well on the way to such a milestone with their latest announcement showing they had hit the forecast $6mill CRR figure.
  • The Chinese market. OHS issues are just starting to get recognized in China. The Chinese government has recently enacted laws requiring companies to adhere to OHS standards. Part of the legislation involved the use of OHS software. Vault is currently partnering with a Singapore/Chinese company in an effort to break into both the Asian and Chinese market
  • Solo software and its partnership with Samsung on wearable technology. Many workers in varying industries such as mining or telecommunications work alone well away from home base. Solo software helps companies keep track of where it’s workers are and their condition. When Solo software is installed on a Samsung watch the home base is able to monitor not only where a worker is but also their heart beat and things such as if they fallen off a ladder or injured themselves. Employers are also able to set invisible barriers so if an employee wanders into a dangerous zone the software will alert them to such an occurrence.

From all reports Solo software has been well received in the market place and looks set to be a possible company maker for Vault Intelligence.

 

Useful Links on Vault Intelligence

Investor Presentation June 2018 (available on YouTube)

 

Latest Trading Update

ASX Announcement

https://www.asx.com.au/asxpdf/20190708/pdf/446g20h3ty0ft6.pdf

 

Do you have an opinion on Vault Intelligence  ?

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Please join me and over 800 members on our investing forum. Just click here.

Disclosure and warning

Please Note: None of the above should be considered investment advice. These are my own opinions based on a number of years market experience. Please do your own research and consult a qualified financial advisor if you wish to invest.

At the time of publication Alonzo owned shares in Vault Intelligence. Price at time of publication 22 cents.

GetSwift AGM 2017, Can it really conquer the world?

2017 has been a pivotal year for GetSwift (GSW:ASX) with management believing the best is yet to come for this small Australia tech company.

Let me kick off my thoughts on GetSwift Ltd (ASX: GSW) Annual General Meeting by saying that if you’re looking for an executive chairman who can sell a story, look no further than GetSwift’s Bane Hunter. If he’s doing as good a job on prospective clients as he did on the attendees at its AGM then the company is in safe hands.

I joked on the CTHGPRO forums if I was in a church at the end of Bane’s sermon, I would have jumped to my feet and yelled “hallelujah brother”!

Now don’t get me wrong. I am not knocking Bane’s ability, in fact from what I can gauge, he’s a prized asset and for a company that boasts zero marketing staff, he seamlessly steps into that role.

So what did I learn at the AGM?

Firstly I was happy to see Bane kicking off proceedings by addressing a question many investors have regarding GetSwift.

Why would a company pay GetSwift Ltd when they could build it themselves ?

Let me start by saying if you hear an analyst ask this question, withdraw your money from their care and run not walk, as far away as you can. Why? because they obviously have zero real world experience.

Having worked in various companies across various industries, implementing company-wide software is far from easy. It takes considerable time and money. I am yet to see any large implementation go smoothly with many mistakes and miscalculations along the way. So when GeySwift comes knocking and says it will take on these risks and you only need to pay as you go, well-travelled CEOs and CFOs are definitely sitting up and listening.

Another key difference over an in-house approach is the intelligence gathered by GetSwift operating across different sectors and countries, which the team at GSW were keen to point out  is funneled back into software improvements.

Next came the presentation slides which can be found here

I will let you make your own mind up about the presentation.  The key takeaway in my opinion and a point that was made a few times by management at the AGM is that GetSwift is now being sought out by Fortune 1000 companies in the US as word-of-mouth spreads.

Question time

Before I go any further, I would encourage all shareholders to attend AGMs and to ask questions. Too many times I have attended AGMs and I’m the only one left to ask questions.

I kicked off question time by asking for specific examples of how GetSwift had improved its software over the last 12 months from intelligence gathered ?

To be honest, I am not sure my question was addressed completely. You know when someone says that’s a good question, they are trying to think of an answer. Without giving specifics examples, management answered that they had learned how different industries operated and offered new functionality in its software.

The next question that came from the audience and asked how the NA Williams project was progressing?

While the company was limited at what they could say in regards to market sensitive comments, they indicated the project was on track and an announcement about the progress would be made early in the new year.

The next question came back to me and I asked if they could explain the 1 billion transactions (NA Williams) as I was struggling to understand where those numbers came from?

I was pleased to learn the 1 billion figure actually came from NA Williams itself when they engaged GetSwift. Both the chairman and managing director admitted they also doubted those figures when they first heard them. This led to them spending sometime in the US with NA Williams at their delivery sites and on delivery trucks to get a better grasp of how many transactions would be involved across all divisions of NA Williams.

The next question was around small companies vs larger deals and where that was headed?

At the moment around 60% of transactions are from smaller companies but as deals are signed and come on line Getswift was expecting it to end up 80/20 to larger implementations.

The final question and perhaps the most telling was one asked about the current trading halt and the announcement of a “significant deal”.

The chairman said that while he was unable to give any specifics until it was released to market (tomorrow) he joked many readers of the announcement would experience a jaw dropping moment.

The AGM concluded with an update that a number of key appointments would be announced shortly from well known international companies. GetSwift management believes this validates their faith in the company.

Conclusion

I have written a few times that I like to keep my distance from company management so I do not fall under the spell of a great storyteller.

Having said that I was happy to see management was prepared to address the questions that the market has for such a young company. As a shareholder of GSW I look forward to finding myself nursing a sore jaw around 10am tomorrow morning but my 20 odd years in the market has me very skeptical indeed.

 

Do you have an opinion on GetSwift?

I would love to hear it!!

Please join me on my new forum. Just click here.

Disclosure:
Please Note: None of the above should be considered investment advice. These are my own opinions based on a number of years market experience. Please do your own research and consult a qualified financial advisor if you wish to invest.

 

Why you need to know GetSwift quick smart!

It is not often that Australia produces a company with prospects of a worldwide audience but in GetSwift Ltd (ASX:GSW) we might just have one.

Well I never thought I would be excited by a company run by an ex-footballer but it has happened!

Former Brisbane and Melbourne AFL player Joel Macdonald in my opinion may well control one of the most exciting stocks on the ASX if not globally at this very moment.

I was not surprise to learn in the company’s recent capital raising that overseas investors were not only keeping a close eye on his company but were also prepared to invest substantial cash into the idea.

So what is GetSwift and why do I like it so much?

You would have to have been living under a rock not to have heard about Amazon’s upcoming arrival in Australia, along with the dire predictions for the Australian retail sector when the US giant hits our shores.

What is particularly worrying for Australian retailers is Amazon’s ability to deliver quickly and cheaply. This means for Aussie retailers to survive, they will need to be able to match such a service.

Through adversity comes opportunity

In a nutshell GetSwift provides retailers with software that manages dispatch and delivery services to their customers.

The company’s slogan might give you an idea of why I am excited by GetSwift’s prospects.

“Dispatch like Uber, track like Dominos, set routes like FedEx”

Chairman Bane Hunter describes GetSwift’s advantage in this manner.

“GetSwift is a cost effective way of tackling the threat from Amazon, Foodora, UberEats, Deliveroo and other global technology companies attempting to capture this space, and charge retailers a significant premium for the benefit of what is becoming an expected service,”

But it isn’t just large retailers that can benefit from GetSwift’s software. Small shop front retailers will benefit from delivery drivers with excess capacity who can log in and pick up jobs from GetSwift’s platform similar to the way UberEats functions.

In theory this means any corner store could start to compete with Amazon on delivery times at a cost effective price!

Do you have an opinion on GetSwift or how Amazon will change retail in Australia?

I would love to hear it!

Please join me on my new forum. Just click here.

Disclosure:

Please Note: None of the above should be considered investment advice. These are my own opinions based on a number of years market experience. Please do your own research and consult a qualified financial advisor if you wish to invest.

Please note.

There have been some lies spread around the internet that this page was removed because of Getswift’s fall from grace. This is far from the truth, a few pages were switched off a while back including the famous George Costanza (reverse thing) page 🙂 because they were causing the website to slow. With an upgrade in hosting plans and updates in the forum software I am now able to switch all pages back on. I find it strange that such lies were spread when my second article on GetSwift has remained up on the site since it was written back in 2017 plus Get-Swift is far from my worst performer. Anyway haters gonna hate as they say. If anyone has concerns please feel free to contact me directly at cthgpro@gmail.com.

Is CML Group Ltd (ASX:CGR) a potential “multibagger”?

2016 has been a transformational year for CML Group Ltd (ASX:CGR) with its move into invoicing financing starting to pay dividends.

2016 has been a significant year for CML Group Ltd (ASX:CGR).  CML Group Ltd has been transformed by disposing of its payroll services to concentrate resources into its fast growing debtor finance division.

To this end CML Goup has recently acquired 2 competitors (Cashflow Advantage and 180 Group) and is now in the process of rebranding the businesses under “Cashflow Finance”.

This is how invoice finance works. (source CML Group Ltd website)

Debtor Finance at a glance

Cashflow can make or break a business. Debtor finance, also known as invoice factoring, can streamline cashflow, making income regular and reliable.

 It is not a loan.

In a nutshell, debtor finance means that when you set up your facility with a provider, upon invoicing a client, that provider will pay up to 80 percent of the invoice to you, often within 24 hours of it being lodged. When your client pays, you receive the rest, minus a small fee. No waiting and no worrying.

http://cashflowfinance.com.au/

 

CML Group – 2016FY and Outlook

 

Comments

From its 2016FY results we can see that CML Group Ltd‘s growth has started to accelerate with its move into invoice/debtor financing. While the numbers are impressive the growth hasn’t been without its hiccups. Just 12 months ago a major debt went bad leaving a substantial hole in the company’s bottom line. While the threat of bad debts is part of doing business, the risk has been reduced with the growth in the loan book size. This means any single bad debt will now have less of an impact.

Management

As I have written before, I like companies where the original owner still holds a substantial slice of the company. CML ticks this box with the chairman and founder of CML holding around 10% of the register.

Also on the plus side I liked the addition to the board back in 2015 of Geoffrey Sam, primarily due to his previous experience on the board of Money3 Corporation Limited (ASX:MNY) another company I rank highly in the small cap space.

Catalyst

When looking for companies with the potential to “multibag” it is important to find possible catalysts which might make this occur. For CML Group I can see 3 possible catalysts.

1.       Continued Acquisitions

2.       Large New Client wins

3.       Takeover target

 Tips for new investors

As every seasoned investor knows, there is no such thing as a “sure thing”. Even the very best business ideas can come unstuck when unforeseen problems arise. When I look to invest in small companies I look for companies that are cash flow positive and a business that I can understand. This way the company will not be continually asking me to provide more capital and I am able to foresee external problems before they impact the business substantially.

 

Disclosure:
Please Note: None of the above should be considered investment advice. These are my own opinions based on a number of years market experience. Please do your own research and consult a qualified financial advisor if you wish to invest.

Has Bellamy’s damaged its brand in China?

Bellamy’s Australia Ltd (ASX:BAL) share price went into free fall last Friday when the company downgraded its expectations for the 2017 financial year.

Bellamy’s Australia Ltd (ASX:BAL) share price went into free fall last Friday when the company downgraded its expectations for the 2017 financial year. The downgrade comes just 6 weeks after its 2016 Annual General Meeting when no such problems were forecast.

The downgrade amounts to roughly a 30% reduction on what analysts had been predicting, with revenues forecast to match 2016 and margins falling by around 10%.

Bellamy’s lays the blame for the downgrade at the feet of the proposed changes by the Chinese government along with competitors rushing to clear stock (at reduced prices) before the legislative changes take affect.

Was the fall justified ?

Pros

  • Changes to Chinese laws is outside of the Bellamy’s control, they are also temporary in nature. (hopefully)
  • Regulatory changes should result in less competition as the legislation takes affect
  • Bellamy’s appears confident they will meet the new requires and be able to continue to sell into the Chinese market
  • Demand for Bellamy’s products appears to remain strong as shown by sales numbers at Chinese annual singles day event.

Cons

  • Downgrade comes just 6 weeks after its annual AGM which casts doubt on management’s current knowledge of the market or openness to investors.
  • Competitor a2 Milk Company Ltd (Australia) (ASX:A2M) recent guidance appears to indicate that they have not been as affected by competitors dumping product. This indicates possible higher brand loyalty to a2 milk products and/or a better understanding of the Chinese consumer.
  • Brand perception is paramount. Investors need to ask what damage has been done to the brand by price discounting.

Comments

It is hard to overstate the importance of brand perception in China, particularly in regard to children’s food and health. The whole reason Australian companies were able to gain a foot hold into the Chinese market came from safety concerns surrounding local products. This perceived safety was the driving reason behind a2 Milk and Bellamy’s being sort after by “diagou” shoppers in Australia with the Chinese market valuing premium quality (even if just perceived) over price . (see here)

To this end my greatest concern is what damage has been done by Bellamy’s engaging in price discounting, which is rare for a premium brand in China. In my opinion this may indicate a failure by Bellamys to understand its position within the market or the importance that the premium tag carries.

Tips for new investors

Understanding what a company does is only part of the puzzle. You also need to understand where the company fits in the market and what are the key drivers to its success. Regulatory changes are also important to consider and how a company adapts to such changes reflects directly on the quality of the management.

Update:

The Australian Financial Review has spoken to “diagou” shoppers you can read their thoughts  here.

Disclosure:
Please Note: None of the above should be considered investment advice. These are my own opinions based on a number of years market experience. Please do your own research and consult a qualified financial advisor if you wish to invest.