cars4fun
05 Feb 2015
Re: Business stable - potential long ter... my post from ADVFNFor what it’s worth I will add my view on the numbers …..I will try to separate the ‘facts’ from the ‘opinions’Historic facts:• Gross profit for 13/14 H1 was 30% for 13/14 H2 was 28.3%• Costs (Admin/Marketing) for 13/14 H1 was £7.14m and for 13/14 H2 was 6.4m• Tax for 13/14 H1 was 400k and for H2 300K• Argentine revenues we 83% of total last year now 86%• Inflation in Argentina is @25-35% - no accurate figuresExtending the ‘facts’:• Turnover was £18.5m – assuming a gross profit of 30% leaves £5.6m• Admin costs to make any profit (EBITA) must have been less than £5.6m so some staff costs or expenses must have been reduced by @800K in last 6 months• Tax will be slightly down on 300K ….maybe 200K• Revenues in Argentina were 83% last year (for full year) and now are 86% however revenues are down @30% overall so …looks like non Argentine revenue is declining too (from £4.59m to £2.59m)Opinions• Business is loss making – I think @200k in 1H• Revenue for last 4 Q’s (my view) is something like (with % increase/decrease on last Q):- 11.89m – 10.96m (-8%) – 10.3m (-6%) – 9.58m (-7%) – 9.02m (-6%)- So declining steadily despite Subs continuing to increase• Cash figure has large % difference (month on month) so I think is over quoted and looking at the ‘China frauds’ who declare huge cash balances that then disappear I don’t think it can be used in valuation of business other than ‘rough’ guide• No growth outside Argentina in revenue terms in fact 44% decline in non-Argentine revenues ….and hard to see it can be making a profit with such low revenues (£3.1m in six months …@£520k per month)Other comments:• Subs: At AGM SB stated clearly that the subs numbers were not a reliable way to access performance (and that they are continuing to increase in Argentina)…..So why is he stating numbers for Brazil??? What are the KPI’s for MOS? If he knows them why not share?• Growth in Brazil looks poor – it might increase it might not - but SB stated in the past that ‘no reason why Argentine model will not work other markets’ …hmmm…Brazil/Mexico/Columbia seem to indicate it does not …India anyone?• Mobile operator revenues have all but collapsed from @5m per year to less than 700K (my forecast this year)• Cash: We have no idea when they pay bills – SB used to stated that we paid (some) upfront but clearly looking at the numbers this cannot be a meaningful amount – staff and marketing costs are @£1m per month so if paid at end of the month (or start) will have a significant effect on cash reported and should have led to a decline in cash as MOS are not profitable in the 1H.• Devaluation/inflation – MOS states that ‘peso devaluation (against the GBP) was 31% for the year, almost exactly equivalent to the revenue decline when dominated in GBP’ ….OK! but what about inflation (@30%... increase in prices …does this not apply to MOS’s products too?) and the increase in subs (told its still growing) ….sounds odd….most likely the revenue per sub is declining very fastOverall• Tough to be positive about anything other than the cash• MOS is loss making and will continue to be so unless they can grow or cut costs• Growth inside and outside Argentina is declining in revenue terms• SB’s ‘historic’ statements are increasingly being shown to be incorrect/irrelevant to performance/misleading• No reason to jump in right now so am expecting the decline in share price to continueJust my views – happy to discuss – but let me know if anyone thinks I have anything wrong here.
gubu
02 Feb 2015
Re: Business stable - potential long term It does seem to be a bit of a mixed bagWe get reasonably frequent updates as and when expected but the CEO has a habit of releasing different pieces of information each time so the KPIs cannot easily be tracked from one timeframe to the next, it seems to be deliberate, perhaps he doesn’t want competitors to knowApart from a slower than hoped for uptake in Brazil but it also looks as if Mexico actually went backwards over the last 12 months, we knew they were going to stall as there was some report of a partner having problems of some sort but I didn’t think they would go into reverseAnyway it still looks undervalued, cash balances holding up even increasing so I had another little topper, maybe India /Africa will surprise us next time, if they are able to report a profit that has to be good
pendil
29 Jan 2015
Business stable - potential long term There's cash of 9p per share with rest of the business effectively being valued at about £500k, compared with full year revenues likely to be around £35m. Full year profits could come out between say £500k and £1m so it looks awfully cheap. What's more cash of £3.4m is higher than at the end of August (£3.2m) so it doesn't look like they are going bust.Problem obviously is that most of the revenue as well as just under £1m of the cash is in Argentina. Brazil is a big potential market but in a year they have managed to add just 35,000 active users which is disappointing - they need to get to about 100 times that to make a real difference. I would have hoped that there would be an exponential growth to start with as users spread the word to their friends, but that doesn't seem to have happened in Mexico where they have been going for a few years but it is still only just over 10% of Argentina revenues despite having 3 or 4 times the population. What is it about Argentina?India is an even bigger potential market but they won't get any revenue there this financial year.With the business stable and given the net cash there doesn't seem too much downside here although I expect they will spend some of the cash on marketing in India and Africa. Upside could be substantial if they can really break into one of the bigger markets. But I think we will have a while to wait for any evidence of that.
TigerG
29 Jan 2015
Re: It hit singles the news looks good perhaps its time to average down now.
wkdmarty
29 Jan 2015
It hit singles I think this will start to rise now, and with positive news (could there be any negative left? lol), it should go mad, but because I'm in this share now, it probably won't.I'm conkers deep in MOS so I'm definitely in for the long term, hope it's not longer than I live for lol.
wkdmarty
07 Jan 2015
Single digits soon So ARS has strengthened slightly, but MOS has dropped.They really are doing something catastrophically wrong here aren't they?
wkdmarty
25 Nov 2014
*yawn* very predictable! As promised, here's the slide, sub 10p coming!Sammie? £1.00 by Christmas? ROFL you are so out of touch with reality, it'll be more like 9p by Christmas!
