Mello Event and Crimson Tide  Presentation  


I attended the Mello event yesterday where I reviewed Terry Smith’s book entitled “Investing for Growth” and Andrew Latto reviewed my book entitled “Business Perspective Investing”. He gave it a very positive review and made some suggestions for a second edition such as adding some case studies. I will ponder whether to work on another edition.

Another interesting session was a presentation by Crimson Tide (TIDE). This is a very small company even though it’s been around for a number of years – market cap only £19 million. It sells a software product called MPRO5 which claims to be a “leading mobile workforce management platform and service” on their web site. I own a very few shares in the company.

The presentation was by Luke Jeffrey, CEO, and he clearly has a technical background. He somewhat disappointed me by saying the product is a “toolkit”. It’s obviously a technology platform not an application solution. It has to be configured to meet application needs of which there seem to be a wide variety, i.e. there is no very strong focus on any business sector.

My experience of the software industry has taught me that people are looking for solutions not toolkits. Not surprisingly, he mentioned when asked about competitors that they often come up against “point solutions”.

They also seem to be extending their technology to cover IOT applications and also developing a “micro business” version. I find the idea of marketing software products to businesses such as plumbers to be a quite horrific business proposition. Selling low-cost software solutions to small businesses is rarely economic because it takes as much time and effort to sell to a small business as it does a large one while the price you can charge never reflects that. Sales, marketing and distribution in that sector is a major problem.

In summary I am not convinced that they can turn their interesting technology into a big business unless substantial changes are made. The presentation actually discouraged me from buying more shares in the company which is no doubt the opposite of what the speaker was aiming for.

Roger Lawson (Twitter:  )

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Parsley Box Webinar, Wey Education Offer, Crimson Tide Placing and Deliveroo

I have just watched a Mello presentation by Parsley Box (MEAL) which was most interesting. They have recently listed on AIM at a price of 200p valuing the company at £84 million. The business supplies “ready meals” direct to consumers and targets the “baby boomers” like I and my wife, i.e. the 70+ age group, or younger. To quote from their prospectus which is well worth reading: “Parsley Box is listening intently to its customers and aspires to champion the needs of the life-loving 60+ population, whose voice has gone too long unheard and untapped”.

The products are pre-cooked and do not need refrigerating so can be stored in any cupboard with a shelf life of 6 months. It is not a subscription model and orders can be placed by phone or over the internet with next working day delivery. Convenience is clearly the key in comparison with having to visit a local store or order a take-away – you just need to open a cupboard.

The business was founded in 2017 and revenue last year was £24 million with a pre-tax loss of £3.2 million. The reason for the loss seems to be the high expenditure on marketing to grow the customer base. The management team seems very experienced even if the CEO looks a lot younger than his age. When will it make a profit? Who knows?

On a quick read of the prospectus I could not see anything amiss but I have ordered a sample pack to personally check out the product before investing – it does seem to have good reviews on the net. My only possible concern is that there are no clear barriers to entry in the business so competitors could move into the space. That was one reason why I did not consider buying shares in Deliveroo which turned into the biggest IPO flop ever – that’s apart from the dual voting structure which also put off many institutional investors and several other concerns about the business.

One surprise today was an offer for Wey Education (WEY) which I have held since 2019. It’s a bid from Inspired Education via a scheme of arrangement – a cash offer at 47.5p which is a premium of 46% to the last closing price. They already have 53% of the shares committed to vote in favour and with the offer looking very generous I think it’s likely to be a done deal. I will certainly be voting in favour.

Another slight surprise today was a placing by another small AIM company I hold which is Crimson Tide (TIDE) who share a director with Wey. They are raising £6.0 million to fund more sales/marketing and product development. The annual results also announced today were positive with revenue up 21% and pre-tax profits up 51%. However, the historic rate of growth of this business has not been great so perhaps the intention is to fix that. The amount being raised will certainly substantially dilute the share base so it needs to help with revenue and profits growth or eps will be falling significantly.

It seems to make sense to raise funds to develop the business but I will not be rushing into buying the shares particularly until the picture is clearer.

Roger Lawson (Twitter:  )

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