Reasons to be the optimist
- Blur group CEO Philip Letts has a vision to make this a $1bn company; currently it’s a $5.3m - $5.6m company.
- Blur has $13m of cash, this can be used to develop and scale the company and the amount covers total liabilities more than 3 times.
- Blur’s KPI Metrics are growing exponentially.
- There are numerous revenue outlets for Blur to cash in; these are listing fees of $375 per project exceeding $3,750 in value or 10% of project value that are below that.
- The company specially stated ‘No Competition’ in this space.
- Blur is seeing higher ‘Deferred Revenue’ than last year; this is relevant to the business model that they are operating in.
Reasons to be pessimistic
- The number of permanent staff that Blur has employed is a total of 37, so can they be able to vet tens of thousands of new experts, along with assessing viable projects is beyond any company. Hence, check out their increase in impairment in trade receivables.
- Revenue recognition is measured at ‘Gross’ amount meaning they book the total value of the project as revenue. So how much do these experts get for helping the buyer to complete their project. Check their latest trading update and compare their bookings against revenue for this year and last year.
- Other receivables and Accruals has increased between 8 to 10 times from 2011 against a revenue increase of 2 times in the same period.
- Blur increase in trade and other receivables has increased from 39 days in 2011 to 192 in 2012.
Reasons to be confused or is there an opportunity
- Blur measures of the average brief value in Q4 2013 over Q3 2013 went from $28,800 to $89,700, a 300% increase, when compared to the same period Q4 2012 to Q3 2012 it only increased by 25%.
- Blur seems to be over-reporting their receivable amounts using terms like ‘due at reporting date’ and ‘not due at reporting date’. The ‘NOT DUE’ part is confusing because the project has NOT been completed yet, let alone billed to the customers and should be classified under ‘INVENTORY’, as work in progress.
- Blur also mentioned in their Annual Report 2012 that average credit period is 34 days, being that you need to work out the ‘PURCHASES’, which is “Beginning Inventories+ COGS- Beginning Inventories”. Since there is no inventories displayed…
