It’s fair to say that the current SP is not what we were hoping for. So it’s at times like this I go back over my notes, annual reports, 4c’s, half yearly’s, presentations, interviews, posts, feeds, networks, and review my investment decision and the times I bought or sold.
My background is 30 years of package software design, development, installation, training, implementation, support and marketing of business software for medium to large corporations, and government bodies. So I’m probably looking at SPX in a different light than most investors.
I came across Cirralto when I was researching another (non tech) stock, liked what I saw and particularly liked Adrian’s vision. In my experience software companies driven by a CEO/MD with a vision and many years of experience in a particular sector build very good, paradigm shifting, products and companies. Software companies who are run by people who don’t understand the vision are company destroyers. I have experienced both.
So I took a small parcel. I find I’m much more focussed on a stock when I own some.
Then I saw the page that listed all the GL AP AR integrations. If someone had walked into my office years ago and said
……….. “there’s a customer who wants real time access to their suppliers SAP system and their customers’ MYOB AP ledger” …….
I would have said great idea but “tell them they’re dreaming!” I found out a little more how they were technically doing it and bought a lot more shares.
I am familiar with some companies who on a good day ship 5% of orders with missing items or items not ordered. On a bad day it’s more like 20%. Needless to say their customers are pissed off, reconciliation is a nightmare, and hundreds of thousands of dollars are sitting in the 90 day receivables column with loads of man hours wasted. Being able to reconcile the differences real time is a huge game changer and is the foundation far all the rest(I think). You can have the best and fastest payments system in the world, and available finance, but it’s as useful as a housebrick until the customer hits the “Pay Now” button.
Currently supply chains are struggling. So the Spenda Collection should be pretty useful right now.
But the big deal for me was the plums to Alibaba via Woolies and JT transaction. That was a bloody good pilot of a complex scenario. I thought at the time what a pity it was too late for Xmas but then remembered the article on the four 747s carrying $85m worth of fresh cherries for Chinese New Year. Good timing after all. So I doubled my holding.
The Q2 4C. If the revenue came in any where near a million I would probably sold everything and put my money elsewhere. This would have meant that the company was doing a cash grab just to please the market and not concentrating on existing customers, quality and consolidation. Not a good long term investment and I’ve seen it before. My guesstimate for Q4 was around $660k ish as I had included some eBev revenue. I should have realised that it was too early for any eBev revenue as it takes time to implement the solution. I was once involved in a project that rolled out new software to over 500 locations nationally which required training 1200 users. That doesn’t happen overnight. More like 16-18 weeks. That’s just the logistics of change management on a national scale. If you don’t properly train people how to use a new system then it’s just a pet rock.
So, for me, the revenue was just fine. But if I was greedy or had a day trader mentality, as soon as I saw the number, I would have sold the lot as blind Freddie could see what was about to unfold with market sentiment. I didn’t because nobody is getting my shares under ($TBA).
I really liked the plan for this year. It focuses on quality, consolidation, bedding down the first customers, refining procedures and developing strategic partnerships. I like it for a company this early in its SDLC. (Software Development Life Cycle). There’s a bucket load of things to do at this point in time and getting the foundations right is of paramount importance.
CEO. I remember when Larry Ellison was in trouble at Oracle, Bill Gates almost lost Microsoft and Steve Jobs got the flick from Apple. Adrian’s the right bloke for the job. He’s the visionary - absolutely essential - with the experience and technological expertise to be the architect of the solution. He also hires very smart and capable people who stick around. Spenda seems to have a low turnover. He develops very strategic partnerships and can grasp the technological evolution that’s coming. I have enjoyed, and related to, everyone of his presentations (especially the dealing with Woolies bit) (chuckle)
TECHNOLOGY. Designing software for the current technological environment is ok but fairly short sighted and is an easy target for competitors. Embracing new tech directions? That’s the ticket! Microsoft Azure seems to be a good environment to run a data centre providing SaaS products so why wouldn’t you. But the the next evolution of the Web is where it’s at. So if you’re not designing for Web 3.0, blockchain, contracts, digital identity, DeFi, tokens, provenance, MERN stacks, DAOs, Wallets, a bucket load of API’s, and all the layer protocols, then you could become an also ran.
Embracing emerging technology is where the paradigm shifts happen. And getting it right is very rewarding.
PARTNERSHIPS. Spx has quality partners who have done years of due diligence on the company. This means a lot to me.
BNPL. It’s a simple way to describe finance and the world knows the acronym. But comparing it to the financing capabilities of the Spenda environment is just wrong. BNPL is me going into JB Hi-Fi, buying a pair of expensive noise cancelling headphones, and paying it off over 4 payments. I’ll basically pass the credit check if I’m over 18 and have a pulse. Business finance is way more complex and requires real time data to prove a company’s character, and capacity (2 of the 4 C’s of lending) to repay and manage the debt. It’s like comparing changing a tyre to an engine rebuild. BNPL has been a 2 edged sword. An easy fluffy marketing term but, as evidenced, you live and die by the market perception of this segment.
This needs a new name to differentiate from the simplistic reverse lay buy. Decentralised business finance on demand - DeFiBod? BodDefi? Oh I’m sure lots of people an do better.
Data Driven Decentralised Trade Finance On Demand. Acronym that.
COMMUNICATION to the Market. You know almost everyone I know in the IT/ICT world tries to explain concepts and product in simple terms. I don’t, and have never, subscribed to that discipline. My process was to explain and name the technology and describe it until the customers eyes glaze over and say “well you seem to know what you’re talking about”. They become relaxed and secure in the knowledge that you know what you’re talking about, you’ll look after them and provide the right solutions and look after them, which we always did. No bullsh*t. Just facts.
Just a thought.
But here’s what I’d like to be communicated to me and the SH…
- A strategic customer testimonial
- A bit more detail on the SaaS revenue holding still. Are we discounting to encourage lending revenue? A foot in the door to add-on’s?
- More detail about on boarding/implementation (see below)
- Presentations from some of the other senior Spenda team on their areas of responsibility to gain a broader perspective of the latest developments and experience the quality of the team.
ONBOARDING (or for me - Implementation). I’d like to have a bit more understanding of the process and typical timeframes. I understand that typical might be hard in this flexible, modular solution but recent experience, or customer testimony, may provide a real world publishable example. Lending is the upfront priority but there’s a lot more to offer. Once nodes become customers what’s the uptake and implementation timeframes, and challenges, for the spokes? It would explain why eBev revenue wasn’t included 4C and set the right level of expectation.
Well that’s my take on why I’m a shareholder. It’s not the first stock I’ve had to dive hard and (maybe) bounce high. I still like what I see for many reasons and I think 2023 will be a very interesting year.
As always, you need to do your own research. It’s fine if you don’t agree with me. I hope your decisions are your own, based on research, and work for you. I’m not selling my shares but at this price I just might spend a quid.
GLTASH. And post with integrity and be polite.
PS Many Spenda employees are also shareholders by choice. I’d like to think that their judgement is well placed and their designing, developing and supporting is outstanding. There are some very smart people who work here.
PPS. I feel confident that Whola, eBev and JT are very well run, tech savvy businesses at the forefront of cross border B2B and that they can evaluate good software and services suppliers who will add value to their respective businesses.
(20min delay)