IKE - IKE GPS Group

[Dolcile]

surely they are reinvesting in growth rather than paying a dividend?

[Minimoke]

surely they are reinvesting in growth rather than paying a dividend?

That is currently what they are doing.

But as they earn more, there will be a limit on what they can spend on R&D to get a commercial return. So the money that otherwise could have gone to R&D can go to shareholders.

[BlackPeter]

surely they are reinvesting in growth rather than paying a dividend?

That is currently what they are doing.

But as they earn more, there will be a limit on what they can spend on R&D to get a commercial return. So the money that otherwise could have gone to R&D can go to shareholders.

amazing ... is this the same company which made up to date an average of negative 6 cts earnings per share (in some circles called loss) and with a NTA of 1 cent per share?

Just wondering where the dividend some people are dreaming off will come from, but hey - maybe in this case hope is the driving investment strategy, though it rarely is successful.

[Minimoke]

amazing ... is this the same company which made up to date an average of negative 6 cts earnings per share (in some circles called loss) and with a NTA of 1 cent per share?

Just wondering where the dividend some people are dreaming off will come from, but hey - maybe in this case hope is the driving investment strategy, though it rarely is successful.

Looking to the past is not an accurate predictor of the future.


You are correct - if you look at the past. And at today a dividend is not conceivable.

However start looking at the runs that are accumulating on the board. More customers, more sticky revenue, proportional overheads, decreased R&D spend (but never $0.00). At some point you end up with a surplus (or in some circles called a profit)

IKE have already said they would be profitable but for their R&D spend.

[BlackPeter]

Looking to the past is not an accurate predictor of the future.


You are correct - if you look at the past. And at today a dividend is not conceivable.

However start looking at the runs that are accumulating on the board. More customers, more sticky revenue, proportional overheads, decreased R&D spend (but never $0.00). At some point you end up with a surplus (or in some circles called a profit)

IKE have already said they would be profitable but for their R&D spend.

Which just leaves the question - for how long?

Just curious - anybody knows, how much they need to invest into customization for any new customer (most of which they will book under R&D)?

That's the way the industry works ... the day you stop further development, bug fixing and (particular for ERP systems like this) customizing your system is the day you start to die.

Nobody will buy into a new software system (any ...) which is not maintained. Nobody will buy an ERP system which is not customized for their needs.

So - as long as they want to survive, they won't stop R&D.

[Minimoke]

Which just leaves the question - for how long?

Just curious - anybody knows, how much they need to invest into customization for any new customer (most of which they will book under R&D)?

That's the way the industry works ... the day you stop further development, bug fixing and (particular for ERP systems like this) customizing your system is the day you start to die.

Nobody will buy into a new software system (any ...) which is not maintained. Nobody will buy an ERP system which is not customized for their needs.

So - as long as they want to survive, they won't stop R&D.

You must have missed the bit in my post which said " decreased R&D spend (but never $0.00"

[Greekwatchdog]

Which just leaves the question - for how long?

Just curious - anybody knows, how much they need to invest into customization for any new customer (most of which they will book under R&D)?

That's the way the industry works ... the day you stop further development, bug fixing and (particular for ERP systems like this) customizing your system is the day you start to die.

Nobody will buy into a new software system (any ...) which is not maintained. Nobody will buy an ERP system which is not customized for their needs.

So - as long as they want to survive, they won't stop R&D.

BP go read Glens comments earlier on last update from memory. They don't need to raise more cash, just turn the taps off R & D slowly. Doesnt mean you stop R & D just means you trim it down a little.

[winner (n)]

A SaaS metric commonly used is the Magic Number. It measures the efficiency of sales & marketing spend

Couldn't do it for IKE as quarterly sales didn't grow in Q3 ...even though S&M expenses was about $2.5m

Have a go at this after Q4 is known but this Magic Number doesn't apply to iKE

[Left Field]

Here's the news today that got the market a tab excited ( SP up approx 9% or 7c)

https://www.nzx.com/announcements/447690

IKE Secures New Multi-Year Subscription Contracts With Two Major U.S. Investor-Owned Electric Utilities.
 
Total initial value of subscriptions contracts closed of ~NZ$3m.
 
 This includes an agreement with the third largest electric utility in North America.
 
 The expectation is that, based on use of IKE's distribution network design software, these subscription commitments will extend to an additive ~NZ$1m p.a. of ARR.
 
 ikeGPS Group Limited (ASX/NZX:IKE) or IKE, today announces that:
 
 It has won two new multi-year software subscription contracts, initially worth ~NZ$3m.
 
 Specifically:
 + One of these customer commitments means over 700 engineers at this electric utility will use IKE Poleforeman's advanced capabilities for structural analysis and the design of distribution assets, to meet grid resiliency and network capacity targets over the coming decades.
 + An expected consequence of these Distribution Standards department decisions is that additional engineering companies and communications groups, working across these power utility's networks, will also adopt IKE PoleForeman long term.
 + Overall, these two companies deliver power to more than 6.5m U.S. customers.
 
 IKE expects that further significant subscription contracts will close in the short and medium term.

[winner (n)]

Which just leaves the question - for how long?

Just curious - anybody knows, how much they need to invest into customization for any new customer (most of which they will book under R&D)?

That's the way the industry works ... the day you stop further development, bug fixing and (particular for ERP systems like this) customizing your system is the day you start to die.

Nobody will buy into a new software system (any ...) which is not maintained. Nobody will buy an ERP system which is not customized for their needs.

So - as long as they want to survive, they won't stop R&D.

Good points there Peter ...hope people take notice

Looking at expense breakdown v revenue growth it does seem that are to a certain extent a 'service' company compared to a true SaaS outfit .....and that requires ongoing expenses

Just my opinion but I agree with you

[Greekwatchdog]

TEK Trust adding more...

https://www.nzx.com/announcements/448608

Guess we will get update in a months time..

[Left Field]

Recent US National Power Demand study outlines tailwinds for IKE (and IFT's Longroad.)

https://cleanpower.org/news/us-national-power-demand-study/#:~:text=It%20predicts%20U.S.%20electricity%20demand,underlie%20the%20long%2Dterm%20dynamics

The full US National Power Demand Study will describe a critical gap between the current energy supply and future needs. It predicts U.S. electricity demand will surge by 35-50% between 2024 and 2040.

[Greekwatchdog]

22nd April for 4th Quarter update. I wonder if there are any reason to be cautious around Tariffs?

[Greekwatchdog]

4th Quarter update. Hard not to like it.

https://www.nzx.com/announcements/450357

[BlackPeter]

4th Quarter update. Hard not to like it.

https://www.nzx.com/announcements/450357

Glad you are easy to please.

Looks like their FY25 revenue falls 1.1.m short of predictions (25.1m vs 26.2m), and they didn't even review their presentation before publishing it ... just look at the dates in slide 8 and 9.

Bat apart from that - a growth company with a patchy revenue CAGR growth of just 6%?