Good morning!
Synety (LON:SNTY)
This is the most interesting RNS of the morning for me, as I have high hopes for this small growth company.
Generally blue sky shares make bad investments - very few of them succeed commercially, and virtually all are over-hyped and hence over-valued. I've lost count of the number of times people have said to me, "This is going to be HUGE!", and it then turns out to be a commercial flop.
However, I like a good story as much as anyone else, but I look for very rapid sales growth combined with a good story. After all, if a company has sub-£1m turnover, and cannot generate 50%+ sales growth from that level, then what they are selling probably doesn't appeal to potential customers. Even if a product is good, it can be impossible to overcome the inertia of an established product from large competitors.
Therefore rapid sales growth needs to be combined with a product that is a no-brainer for customers - something that is not just an incremental improvement, but something that is obvious value for money, and provides a much better product or service than the one currently used by target customers.
Synety (LON:SNTY) ticks those boxes for me. It's cloud telephony, which integrates into CRM systems like Salesforce. Not only does that streamline making & receiving telephone calls with customers, but they are also recorded & instantly retrievable through the CRM system. It means that companies that need to record phone calls with customers can now do so without any capex at all on switchboard-based phone systems.
At the moment Synety have very little direct competition, so this is a land grab whilst they sign up customers of CRM systems such as Salesforce, Bullhorn, and others. The CRM market is very fragmented, so there are lots to go for, and integrations are fairly straightforward apparently.
So I like the company, and think it has considerable potential. Although as with all early stage growth companies, it's difficult to value, as on current performance it's loss-making, so you have to make assumptions about the future in order to value it at all.
This morning's update on KPIs is encouraging news in my view. I approve of the company's policy of releasing KPI numbers quarterly, which is exactly what you need with a rapid growth company. The key…
