Australia's largest stock trading and investment forum Australia's #1 stock forum

BUD

Click for more information

0.00%

0.6¢ buddy technologies ltd

Interesting I like the response, but I would like to have an...

First 151 Last

Share
Profile

Follow
crazydave1942

7,196 Posts.

609

05/06/18

23:18

Post #: 33516886
Share
Originally posted by DreadPirateRoberts ↑

I sent the above post to Dave and asked if he could respond to the specific concerns you mentioned. His response:

*********

Hi there – thanks for sending me this post. I do check in on HC from time to time, but there tends to be so much flawed (and inaccurate) assumption that it’s better for me just to spend time elsewhere. Happy to clarify where I can though.

Without going back and reading the entire online thread, let me offer a couple of comments:

We’ve never given guidance of a 3,500 unit waiting list of purchased-product customers. I think that number came from a release nearly exactly a year ago when we said, “During the course of the week-long roadshow, Buddy confirmed follow-up interest with customers and channel partners representing more than 3,500 facilities across Australia and New Zealand, including more than 80 facilities in the queue for their first installations”.

I am extremely careful with how I word statements, since I know that there’s a segment of the market that is prone to misread anything I say to both extreme ends of the spectrum! In this case, we had requests for followup conversations with folks whose customers amounted to over 3,500 facilities. That statement does not say that we’re installing 3,500 systems or that we’ve sold 3,500 systems – just that there’s confirmed follow-up interest from customers with real businesses of some size. Remember also that the product hadn’t even been manufactured at this point, so there was literally nothing to sell yet. We felt an obligation to inform the market of our progress, and that was about as full a metric as we had at that early stage. To be clear, that 3,500 facilities number is now vastly greater (plus would include the EU, Latin America, US, Canada, etc…) but it makes no sense to talk in terms of “follow-up interest” at this stage of the business because the clear metric investors care about (and should care about) is simply revenue (and growth).

Per our ASX Aware letter responses, the term used in our contract with Digicel is literally and exactly, “minimum commitment” with a significant penalty that would be deeply unpleasant to Digicel (the loss of exclusivity after the investment they’re making in the product/marketing dependent on that exclusivity). I’m not going to comment beyond the extensive text we’ve published on this note in the aware letter responses, but just to be clear, the term we used is the term from the contract itself.

We raised the capital we did last year to fund global expansion of Ohm. We knew that signing up with a global partner would not mean we or they could be satisfied entering one or two additional markets per year. We had to have the resources to go into a number of new territories – which you’ve seen us do. As we’ve also made clear in a number of communications, the cost of the hardware is absolutely not the largest cost in entering new markets. Our spend is increasing as we do enter new markets, but given how long it takes to spin new markets up (which we’ve also been transparent about), having cash on hand to fund 1) entering new markets, and 2) having the staying power to see them through to success required the additional capital. I don’t think any shareholder would critique the company on the fact that we took the steps we did (either the raise or the global deal).

I’m think we’ve been very transparent about the effect of last season’s hurricanes on our Digicel roll-out, and I think Digicel themselves have been transparent too (as recently as the March Connect event where Bryan Kane from Digicel mentioned this).

Hard as it may be to believe, I regularly travel to Hong Kong and Australia, and brief all manner of investors – top tier, big fund, mid-size, small-cap only, etc… without there being capital raises planned or needed. I do this regularly and repeatedly, and most recently two weeks ago. I do this to keep our institutional investor roster on top of the business, and to give them face time with me. I try to do this with retail investors to the best of my ability too – most recently in Sydney a couple of weeks ago. The capital raise last year did not come about after a formal CR roadshow. Yes, I was on a tour of investors, and yes they asked about our ability to ship globally, and yes they asked if we could accelerate our global plans if we had additional cash in the bank. It’s as simple as that – we have extraordinary relationships with very significant funds and investors across the Asia Pacific region, and that has been demonstrated by the calibre of funds and investors that have invested in the business.

I recognize that it’s easy to look back and try to pick holes in a “story” a year on. We’ve always given guidance that the sales flywheel takes time to build up momentum, and sales are in no way linear across a three year contract. We’ve shared that the hurricanes greatly impacted our (at the time) largest and primary distribution channel. We’ve shared that following the completion of manufacture and commencement of sales and installations, that first revenues for Ohm landed in November last year. We haven’t been “selling” Ohm for a year (units didn’t arrive until late July/early August – we used the term pre-sales for our customer roadshows) and definitely not in 30 countries or anywhere like that (Ingram Micro US only launched sales April 29, AU sales were halted during Telstra negotiations, UK only launched when I was there in April, etc…). But let’s not nitpick.

Here’s the bottom line – what matters is revenue and growth. I’ve told the market, as I’ve told our team – it’s all in our execution. We have the product, we have the market, we have the team – we just need to execute, and so that’s what we’re completely focused on. And, FWIW, I stand by what we’ve told the market w.r.t our quarterlies and our commitments around 2019.

Thanks for the opportunity to offer some clarifications.

Cheers, Dave.

Expand

Interesting I like the response, but I would like to have an idea on numbers installed. I don't get why he can't he say we have between 100 to 200 installs or something like that completed. No investor can calculate the earning potential without knowing the average amount of installs.

It's apart of the business that's really annoying if you ask me. I wonder how many installs are happening a week. These are things keeping SP down as company progress can only be viewed by the amount of cash generated at each qrt but still no numbers on installs given. The company doesn't even have to say who installed them just an amount and I think it's fair to know that.

I believe in the story but the above is concerning when numbers are being are kept behind closed doors all IMO.
BUD Price at posting: 11.5¢ Sentiment: Hold Disclosure: Held
7 Upvote

0 Great analysis

Reply

Top Stories

CMX

ChemX Materials kicks off first stage works at WA high purity alumina pilot

SVL

Silver Mines models five new calderas close to 396Moz Bowdens deposit

AVA

Ava Risk Group expands US presence with A$0.7M Substation Deal

Week 26 Wrap: Cerberus of inflation barks – rents, electricity & fuel – and world watches two elders bicker

Wealth Within weighs in on shock 4% inflation read – and stocks that could survive the gloom

SS1

Sun Silver gets that drill to thrill feeling from high grade hits at Maverick Spring

LRV

Larvotto identifies new exploration target at NSW's Hillgrove, boosting shares by nearly 20%

Microcap Wrap: 5 explorers with news out today

LU7

Lithium Universe (ASX:LU7) board visits Quebec to engage key stakeholders

RCE

Recce's R327 found effective against E.coli during clinical trial

There are more pages in this discussion • 393 more messages in this thread...

First 151 Last

Add BUD (ASX) to my watchlist

SPONSORED BY