This thread is to discuss today's (2nd Septmber 2009) AGM and AGM statement. Some work on the Endace Wiki is required, which I will try to do in due course, as I have been studying the company and investing in it for several years now - but I have rather a large backlog of other tasks first. To get the ball rolling here are my notes & thoughts from today's meeting.
Introduction
This year’s AGM was held via videoconference with New Zealand. John Scott & Mark Rowan participated from London and other directors were in NZ. Besides directors & advisors in London, it was a pleasure to be joined by “AliceinWonder1” (TMF) & “knackers” (ADVFN). Neil Richardson (Richardson Trustee, 12% shareholder) participated from NZ. The Videocon worked well.
We were somewhat disheartened by the statement read at the start of the AGM – more on that later.
Formal Business
JS chaired the meeting. After reading the statement, he advised that all resolutions were supported by at least 89% of the proxy votes cast. During the meeting, all were passed unanimously on a show of hands.
Q&A
I’ll document questions & answers that were asked both during the formal business & afterwards here (not necessarily in the order they were asked!). Please note that questions & answers are NOT verbatim but are my understanding/interpretation of the responses.
Q1. What are current market expectations?
A1. [for 2009/10]Revenue US$35.8m (+50%); net earnings US$6m, EPS 23p (+0%)
Q2. Why are earnings flat against strong revenue growth?
A2. Considerable investment is being made this year (following on from last year) in better positioning the company for appliance sales & support vs the traditional DAG card market.
Q3. Is there much “recurring revenue”?
A3. Service revenues account for ~10% of the total. As Endace is positioned as a hardware vendor*, most support is provided within the first year after delivery. Customers do not generally renew service contracts after the first year. [surely this must change with appliance sales, as opposed to card sales, e.g. to offer remote diagnosis? I will ask the company about this.]. This reliance on revenue from product sales does cause problems with sales visibility.
Q4. p6 of the annual report, indicates 65% growth for Asia Pacific, however the segmental analysis in note 3 actually shows a decline…
