STTCOMP RXH, FA LONG Rewardle Holdings fpo: 188m
mc: $2.25@ $0.012c
Cash: ~$1.24m (31 Mar)
EV: ~$1m
Look this is going to be a bit short, as I didn’t fully finish writing a proper note, and I didn’t think we’d also see Rewardle down this low. So apologies if this paragraph is a bit rough and rushed, but I think my timing is saying I have to lob this one in now….
Not for the risk averse, as it looks like it is going to blow up, but I just can’t simply seeing it blow up given the MD, Ruwan and management put in over a $1m at the last CR at 5c. People use the app, café’s (some 2,000 of them) are clearly paying for it, and there’s a valuation somewhere. Does it deserve to trade on a shell value. Imo No it doesn’t. Dimmi or some other rewards player could buy it out if Ruwan was a seller, but I don’t think he is. And also, why would PNC do a deal with them if they were on death's door...So he has basically a few weeks to pull a rabbit out of the hat in terms of a CR, or some sort of loan. Will be interesting to watch…..
Last 3 quarter revenues of $335,000 (Mar Q), $268,000 (Dec Q) and $483,000 (Sept Q)
Quarterly SaaS Revenue of 216K (from 106K Sept Q)
Over 2000 Paying Merchants
Merchant Growth (2172 Mar Q 2004 Dec Q and 1678 Sept Q, from 1030 Ann Report,
Noted March commentary:
The restructuring of Merchant acquisition and account management as part of the transition from Network establishment to commercialisation has resulted in a substantial, ongoing reduction in operating costs while maintaining servicing capability. Further restructuring is planned in coming periods and is expected to deliver further cost efficiencies. Management expects the trend of reducing cash outflow to continue as working capital is managed by balancing operating costs against closely monitored revenue generation targets.
