Hey, thanks for all those posting on De.mem. Went through the...

Hey, thanks for all those posting on De.mem. Went through the catalogue and read the discussion, been really useful.

I have posted my research on De.mem on FinTwit if you're interested. I'll post the link below, but generally HC deletes it anyway. I'd be really keen to hear from you folks if you agree/disagree on any of points, as you've got some great insights into De.mem.

The top-line growth from De.mem has been really good, and this quarter is no different. Both organic and acquisitive growth has been well above expectations. The margins are looking really healthy, and have been increasing. The business model is really well developed by Andreas - I liken it to Amereco in the US or Delorean over here. They can clearly continue to scale out to new markets, new products, and even new geographies. But I think they may find a lot more competition as they do that, and margins could get squeezed.

The one issue I really have with De.mem is their lack of operational leverage. Not sure if this is temporary matter as they reinvest in new production and R&D. However despite the top-line growth, their SG&A has been increasing at an even greater rate it seems! I would be expecting synergies from their acquisitions, but apart from cross-selling, they have no actually driven any efficiencies. On the contrary, their admin costs are about double where they should be (is that a really high customer acquisition cost?). Until I see this change materially, I think it's hard to judge whether the growth will be good for shareholders or not.

GLTAH.