Apologies for the long post but the talk of late has had me concerned... in particular re the number of services IAM needs to initially complete & then dramatically increase to justify its market cap & have any chance in achieving the milestone goals.
MF has just 2 years left now to grow the client base sufficiently for him to get his m1-4 targets which many here have especially recently begun to doubt. Lets be honest, if they are all reached then it would astonish most. Its been good to get the recent alternate more grounded views from those willing to discuss the challenges ahead, so thanks to other posters for taking the time.
I've been doing some calcs to try to work out realistic potential & wanted to share them for feedback from those more knowledgable here.
All approximate round figures for simplicity -
Sentry has approx 400 planners... (while not all Sentrys planners will certainly use IAMs services, they have now been okayed to if they wish), as IAM already has multiple other clients already, lets use 400 planners for ease.
Say those 400 planners each need 3 x SOA's / week = 1200 / wk @ say $50 each average = $60,000 / wk for IAM x 48 (working) weeks / yr = $2,880,000 / yr... (yes, this is revenue, not npat).
That being said, its not only the SOAs providing income but also the back office tasks IAM can help clients with. Not to mention Klip software offered & over time the cost savings in the reduction of office staff & increased bottom line savings as the AI tech comes into play.
According to the graph on the recent Investor Presentation, in March 2017 approx 1250 tasks were completed for that month. To support just Sentry only its likely approx 4 x that number of tasks need to be completed to keep up with demand from 400 planners alone so its likely we will need to dramatically increase staff numbers to cope?...(or do we) subject to the AI tech being developed?
Per the Investor Presentation, IAMs portal offers 24/7 mass ordering facility with guaranteed cost & guaranteed delivery time promise... all fully industry compliant with no contracts & are paid per use. A steady / even dramatic increase to the services provided via the very soon to be released portal will make achieving milestones more realistic. I feel m1, m2 & m3 are very much achievable. It eliminates the naming issues, brings in immediate payment for service & opens the door to any FP wishing to trial the service
Even
if we were fortunate to get work from 5% of the 23,000 planners in oz is 1150 planners each doing only 3 SOA's only a week at average $50 each x 48 wks/ year that is $8,280,000 revenue to IAM.
For comparison though, a well know FP Firm in Australia named Dover (who has 360 advisers in their network) per their website offer 'discounted SOA preparation' starting at $300, or a complex SOA approx $600. In addition to this 'special' pricing, they also require a $8,750 annual fee per adviser or by my calcs an extra $60 per SOA based on 3 x SOA / wk x 48 wk yr.
Now, rather than my above $50 cost, if per the Investor Presentation IAM charge $249 for a SOA, then thats still a dramatic 17% saving on Dovers $300 SOA base price (which fyi Dovers SOA appear to be done in Vietnam) but doesnt offer a 24 hour turnaround like IAM nor does it allow the extra cost for Dovers $8,750 annual fee.
On the same figures above 5% of 23,000 planners in oz is only 1150 planners each doing just 3 x SOA's a week at $249 each x 48 working weeks a year is $41,234,400 revenue for IAM.
Also dont forget we still have to come the income from remaining option conversion by the end of the year.
M3 & maybe M4 is still a possibility ? Time (& quarterlies) will tell.
I still believe even with expense of additional office, increased staff costs & that of ongoing technology improvements, IAM still looks to me to realistically have a profitable future & disruptive potential. There are many other companies out there with considerably larger market caps still running at losses. Surely following the expected dramatic quarterly increased growth, then by end of the year hopefully being in a profitable position (per PC) should mean LT holders will begin to be rewarded for their trust & patience in IAMs management & business model. Your feedback welcomed. All the best holders.
