December Round Up
Running late, me not the sector...
Happy New Year. Writing slowed a bit with a decent break over the holidays and a trip to the South West to see the fam. Thankfully, December was relatively quiet. Items of interest that are on the periphery or weren’t quite meaty enough to write a single post about (yet) include:
Keeping a watch on MTR Group as rumours continue to circulate post the DCC/Exteris news1. Their latest accounts were filed at the end of December for the year ending 31st March 2024. Revenue increased 8.13% YoY from £39.4m to £42.6m which management attribute to further improvements in the Samsung account. Gross profit margin improved slightly as well, up from 16.4% to 17.9% just outpacing the YoY increase in administrative expenses which were up 16%. Operating profit grew from £687k to £931k attributed mainly to the growth through sales in MTR’s consumer channels. There’s been some notable changes in the balance sheet including a large increase in assets as they took on more warehousing space; significant increase in debtors and a cash position that’s halved. On the surface, nothing to worry about though and whilst buyers may try to discount possible supply concentration, on balance the latest information is probably better news for the seller than it is for any prospective bidders.
Foxway appear to have done a decent job of strengthening their CWS segment sales pipeline. The strategic tie up with Tele2 announced just before Christmas2 to provide their business customers with Foxway’s device-as-a-service offer fits neatly. Tele2 Business focuses mainly on the Swedish market with over 100,000 businesses and 82% of regions and municipalities on the books. Usually I’m sceptical of such partnerships, but I’ve got my fingers crossed for this one. As I mentioned in the Foxway Research Update3, growth is going to have to come organically due to the bond restrictions putting additional acquisitions on temporary hold. In their Q32024 update, Foxway pointed out new deals in the pipeline and this one has the potential to be a banger. Good stuff.
I don’t know about you, but I’m entirely over big fintech/insurtech raise announcements. I’m looking into something for a client right now and I noted some VC raises getting into FGHI territory with profitability still somewhere uphill, on a chart. Yawn. So forgive me for not getting excited about Bolttech’s $100m Series C announcement4 one whole month after their $50m venture debt raise announcement. The funds will be used to “to continue to enhance its platform’s capabilities, expand its market presence globally, and accelerate its goal to make insurance more tailored, accessible, affordable and convenient for customers”. Apparently this gives them a valuation of $2.1bn which is about the same as Lemonade’s current market cap. I promised a deeper look. I’m still navigating the Singaporean registry.
I don’t know who created this graphic, but I like it. “Apple is killing its never-released iPhone subscription service”. I saw this headline5 and was initially a bit confused. I remember the “iPhone for life” service being launched sometime ago with a few US friends signed up and you can definitely still sign up to Apple’s UK iPhone Upgrade program, the financing of which is currently outsourced (to Barclays in the UK). Reading the detail though, the service was to be billed through your App Store account and financing would have been undertaken in-house. From a consumer perspective, this sounded like a great idea. Given that the upgrade programme probably does most of what Apple wants to keep an iPhone in your hand, I think it’s likely the cashflow, credit risk and regulatory impacts that finally saw this off.
Remember Backmarket spouting off6 in November? Well, Recommerce clearly wanted some of the action and decided to join the tête à tête7. Recommerce CEO Benoît Varin critiques “the unregulated competition fostered by such platforms, which sometimes allow vendors to bypass taxes and quality assurances”. No company is without a few skeletons and I’d usually advise not slagging off the competition, but in this case I’ll agree, put the popcorn on and wait for next month’s instalment. Something Benoît can do from the relative safety of the United.B collective.
Extremely disappointed to read8 that not too many weeks after their IPO Ingram intended to make 850 people redundant to “enhance organizational efficiency and strengthen customer service capabilities to better position the company for long-term, sustainable growth”. Given that Platinum Equity pocketed a fair portion of the $400m raised just in time for Christmas, this must feel like a slap in the face to everyone impacted. The announcement did nothing to improve Ingram’s post IPO share price performance which is currently trading below it’s launch value.
After the AO / MusicMapgie acquisition, I’ve been meaning to update on the latest AO Mobile results for a while now. However, after delay in getting the files uploaded, there now seems to be a tech issue at Companies House which means the latest filing remains unavailable. Unusual. I’ve logged it and hopefully will have something to report on next month.
December kicked off with good news for Swappie, raising €17m from the European Investment Bank9. Seems like 2024 has been a great year for them, surpassing 2 million customers and hopefully improving on the €207m revenue written in 2023. I like that the funds are earmarked to “enhance research, development, and robotics capabilities, ensuring faster and more reliable refurbishments”. Improving circularity in this sector is going to take far more R&D investment and it’s great to read Swappie are not shying away from playing their part. Here’s to more businesses being in the position in 2025 to do the same.
Peace,
sb.
See the November Round Up and the MTR Group Research Update.