LON:ATQT | Attraqt Plc - Beauty Spot Or Blemish? You Decide!

29th May '16 by Dearg Doom

7 comments 8529 reads

ATTRAQT (LON:ATQT)

Share price: 28p
No. shares: 26.9m
Market cap: £7.68

The Beauty Spot (The Investment Case)

Attraqt’s Freestyle Merchandising platform helps retailers with their visual merchandising on-line. The platform can deliver better conversion rates of visitors to sites by increasing the number of customers making a purchase as well. The platform creates multiple purchases by the same customers for higher basket sale by a significant percentage.

The company certainly has an impressive array of high street recognisable names of circa 110 major businesses. Customers of its Software as a Service (SaaS) generate recurring revenue of £3 million+ per annum.

The company had been loss-making for years but with the recent increase in the client, numbers is now operating at a marginal loss at y/e 2015. Losses have reduced from 750K down to 200K

No need to worry about bank debt. The company has cash in bank of circa 3 million have had a successful fundraising. The company intends to employ a bigger sales team, spend more on marketing efforts and increase client capacity.

Yudu Media which offers digital catalogues in the USA is restrained somewhat by their static content. Attraqt plc believes it can assist Yudu it what it does as well and at the same time fast track its entrance to USA market. Revenues of millions from the Yudu Media tie up are anticipated.

Azini Capital Partners took a circa 32% share interest-holding in the company in November 2015. Azini Capital Partners specialise in this area of the market and would be presumed to be savvy. Azini Capital Partners normally look for a trade sale within 5 years.

Below are the Attraq plc accounts to 2015 showing the financial and operational highlights including the recent fundraising.

Financial Highlights

· Significant revenue growth of 40% to £2.91m (2014: £2.09m)

· Recurring monthly revenue increased by 38% to £2.65m (2014: £1.92m), now representing 91% of all revenue (2014: 90%)

· Exit rate (year-end annualised billing) up 29% at £3.05m (2014: £2.36m)

· Increased gross margin to 84% (2014: 81%)

· 44% increase in gross profit to £2.4m (2014: £1.69m)

· Adjusted EBITDA1 losses reduced…

Unlock with Email

Unlock with Google

Already have an account?
Login here

xcity

30th May '16

It might be jam and butter tomorrow, but at least there is bread today in the form of customers, conracts and increasing sales. Unlike many of the blue sky companies. Dan Wagner's involvement is a big red flag though. I've seen a suggestion that they might have been getting a very preferential rate in the Powa building: implies a possibility of hefty rent increases.

I can cope with spending to increase sales in the US, although I would have thought there should be a lot more potential growth in the UK and Europe if the product is good enough. But can they be trusted?

Dearg Doom

7th Jun '16

Finally made up my mind that Attraqt plc is a "blemished stock and not a beauty spot".

The delay in break-even for another couple of years to 2018/2019 suggests that sales are much harder to generate than expected. Investors are becoming simply impatient and disbelieving in a positive future outcome.

" In FY 2016, the investment of the proceeds of the fundraising in expanding sales, marketing and production (detailed further in the section below) are expected to lead to EBITDA losses increasing in the short-term, reflecting investment in the Group’s operational expansion; however the rate of growth is expected to accelerate as a result, with a return to EBITDA profitability in the mid-term."

Word of mouth to sell their services does not seem to be enough. Boots on the ground are required. Hence I agree with the training and development of a sales team proposed by the company.

I don't fully understand why sales would not increase more rapidly than forecasted. The newly increased sales force surely beckons profitability ever nearer.

Some part of the story is missing for investors. Try finding the company 2015 annual accounts on attraqt.com website. Rather difficult you may agree It surely shows investors are not forefront in managements mind. I suspect another fundraising expected within 12 months.

A clear out of a few stocks in June gives cash for other opportunities, Decided to dispose of small holding in this share which I recently aquired. Liquidity in the share is terrible with often no daily trades.

For remaining shareholders, every thing rests on Andre Brown CEO to deliver.

Regards

garbetklb

My first 2 checks :
Do I trust the management?
Are the management reasonably rewarded for what they do in the context of the company

If they fail these 2 checks, I rarely bother reading any further. From Dearg Doom's commentary, they fail pretty comprehensively.

10th Jun '16

I noticed a 500,000 share sale in ATTRAQT (LON:ATQT) plc at 23.43p in the afternoon.Down over 17%. New low for share price.

Someone, somewhere is worried!.

I suspect that wild volatility in many AIM shares will occur over the summer where volume is not normally available to trade in the share. It concerns me on occasions that stocks that I hold often have no daily trades.

Need possible suggestions on what % of daily or weekly trade volume should be a guide figure for participation in these stocks which offer such poor liquidity. Many of these share names are discussed on this website.

21st Jun '16

Interesting to note some recent share price worthy news in relation to Attraqt plc caused by the resignation of controversial figure Dan Wagner as chairman in a RNS released on 15th June 2016,

This news alone seems to have increase the share price by 70%+ from a low of 23.43p to 40p over a few days. Mind you the turnover of 100K of stock for the last few trading days is relatively small. The seller at 23.43p was on its own a lot bigger sell i volume terms. Buyers must be expecting that with Dan Wagner removed as chairman warrants a re-valuation of the stock.

An alternative view is that Dan Wagner will be off loading the balance of his stock in the foreseeable future which will weigh somewhat on the company share price. More importantly the company has postponed break-even for another year or so.

I am also not convinced about how unique their software actually it and whether it is facing stiff competition on what seems a few additional lines of code which could be simply replicated.

An opportunity for some investors to sell into the recent strength rather than an opportunity to buy.

24th Jun '16

Another Bear Sign - Spread 34p - 40p

Major shareholder BRIGHT STATION VENTURES LTD reduced their shareholding from above 9% to below 0% on the exercise of a put option. Sold circa 2.5 million shares to nil share holdings.

This somewhat reverses the random uptick in the shares linked to controversial chairman Dan Wagners recent resignation from Attraqt plc.

gus 1065

30th Jan '17

Good thread. Just read with interest for the first time. More developments this morning.

7.00am RNS with bullish trading update on full year results although £1.8m of £3.0m cash pile spent in 2016. Another fundraising required?

7.10 AIM announcement that shares temporarily suspended pending announcement.

7.15 Further RNS. Major acquisition and heavily discounted fundraising @ 35p (vis CSP of c.49p Friday close).

http://www.investegate.co.uk/attraqt-group-plc--atqt-/rns/acquisition-of-fredhopper-and-firm-placing/201701300715034145V/

Not even finished the cornflakes yet ....!!

Gus.

Attraqt plc - Beauty Spot or Blemish? You Decide!

Unlock the rest of this article with a 14 day trial

About the Author

Dearg Doom

7 comments

Unlock the metrics for all these stocks and more...

Unlock the metrics for all these stocks and more...