(Below) Is the transcript form 30/1.
@$stock1 That is the MS excerpt (only) from the full transcript of the 30/1 guidance update. There is a later MS transcript section from the 21st Feb 1H17 results presentation.
You will see that tone is different- more relaxed. There are some other analyst Q&As that are interesting, too- but maybe later.
Btw, your theory is interesting, as Morgan Stanley traded positive 1.46M shares in the week of your data- possibly closing out?
Anyway- here is the latest transcript, after the one you have posted. Note the emphasis on user-based contracts being impacted by enterprise partner wins (bolded).
This highlights the significance of the recent Bechtel, AECOM, Fluor and Exxon Mobil wins and activity I have been posting on HC recently.
James Bales: (Morgan Stanley, Analyst) Hi guys, just going back onto the revenue visibility, can you talk through the moving parts as to how - I think in PCP you had 97% of the coming half as visible revenue, the metric's now 90%. What's changed there, and what are the moving parts?
Leigh Jasper: We've consistently had revenue visibility in the order of just over 90%, I don't think that's changed particularly.
What we have seen is that it's a couple of percentage points below where it was in previous years, and that's primarily due to increases in professional services.
So we have seen an increase in the amount of revenue in professional services and expect - particularly around Connected Cost - that there will be some additional professional services there. Also the Conject business has a higher level of professional services than the Aconex - the old Aconex business had.
James Bales: (Morgan Stanley, Analyst) Then is there any colour you can give on user-based contracts? How many are there and how have they scaled versus budget in the first half?
Leigh Jasper: Yes, so we've got a handful of user-based contracts with some quite large companies. They've been a little - as I mentioned - they've been slower than we expected. They're still stepping up quite well, but we're obviously dependent on the win rates of those companies in terms of the work they're winning. That's what drives the step up in those contracts.
They're non-material in aggregate, so those user-based contracts are still a very small part of our revenue, although we did expect them to step up more than they did in the first half. Our view of those contracts is they're progressing well. As those companies win new work we will see a step up in the numbers of users on those contracts.
James Bales: (Morgan Stanley, Analyst) All right. Then on slide 29 you've given FX rates there as at 31 December, is that what's factored into second half guidance, and should we be making adjustments to spot rates?
Leigh Jasper: The short answer is yes. So we've factored - we've based our forecasts on those rates. I think the rates have continued to deteriorate from a revenue point of view. Obviously we can't predict what the currency will do, but certainly any changes in spot rates you should work through any forecasts.
James Bales: (Morgan Stanley, Analyst) Then finally could you talk a little bit to the margin outlook? There was no reiteration of the commentary at AGM where you sort of gave longer-term EBITDA guidance ranges of - oh, EBITDA margin ranges of 17% to 22%.
Leigh Jasper: So our view is that over time EBITDA will continue to step up.
Clearly we're making decisions around the investment levels in the business, and balancing revenue growth with profitability. I think it's too early for us to say what that decision will be for our FY18 budget.
Short to say that we're focused on again balancing those two factors of long-term revenue growth and EBITDA margins. But we do expect them, as the business scales, to step up over time.
James Bales: (Morgan Stanley, Analyst) Right, okay, thanks guys.
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This post is based on my own research and is not investment advice. When making investment decisions, always DYOR.
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