AER - Aeeris Limited

[System]

Aeeris Limited, the owner of The Early Warning Network, is a company providing an early warning multi-channel communication service focused on the protection of life, assets and business operations by providing early warning alerts for all natural and manmade hazards.

http://www.aeeris.com.au

 

[galumay]

One that has flown under the radar! No posts at all.
Well I have been looking at the company for a while now, and have taken a position recently. I discovered it while doing some work for a client using GIS ESRI mapping applications and realised that the business was at what some call an "inflection point" - caused by the tie in with ESRI and the likely resultant revenue stream.

 

[galumay]

Nice 4C, such a beautiful clean Cash FLow statement, OCF drops straight through to FCF. Not a single financing or investing expence, thats a capital light business model!

This little business is starting to gush cash, I would like to build my position a bit more, but its so illiquid and there are almost no sellers now.

 

[galumay]

I have got past my anchoring and added some more to my position. I will now wait to see the FY results before reassessing this investment.

 

[galumay]

AR out today, nothing to get excited about, progress is in the right direction and when you back out the $1/2m R&D refund from last years results its more attractive, but AER will need some decent growth in revenue now to realise the potential in the business. The good thing is that any growth from here will pretty much fall straight through to the bottom line.

 

[galumay]

4C out today, still not really setting the world on fire, a 10% slip in revenue is a bit concerning when so much has been made of the ESRI integration and talk of new opportunities etc. Still, another Q'er of FCF +'ve is good. Overall a pass.

 

[MrChow]

AER is one of the most interesting stocks I've seen at these levels.

Increased ARR 3 years in row and valued at 3x ARR.

Almost no cash burn.

Any blue sky opportunity like ESRI (scalable technology meaning revenue without expenses) would turn AER profitable and likely give multifold returns currently at $5m market cap.

They haven't done it yet but the risk reward looks compelling.

 

[galumay]

Its got one of the cleanest balance sheets I have ever seen. Ever cent of revenue drops straight thru to FCF, its just about enough growth to make it meaningful. So far thats proven elusive and I only have a small position at this stage.

 

[MrChow]

I wonder what the step change in revenue could be though?

SP tripled after the ESRI announcment in 2019 but hasn't followed through with material revenue and hasn't been mentioned for a while.

 

[galumay]

I think it will come from ESRI, I think it was always going to take a while to bed down and then the COVID thing has probably had a negative impact.

If there is not significant growth in revenue this year, then I think the growth thesis is broken.

 

[MrChow]

Looking at the volume of trading averages about $50k a month.

30% spread between buyer / seller.

Might have to be strategic to get a holding.

 

[galumay]

Another 4C showing stable business operations with continuing profitability & FCF, the bit that is still missing is any growth. The commentary says there were a significant number of new customers added, none lost, and increased R&D. Trouble is revenue was flat (maybe a timing issue?? and although they dont break R&D out of PM&O costs, they were flat for the quarter so what offset the increase in R&D?

I continue to hold, but as mentioned previously, my patience will wear thin if they have failed to execute on the growth by the EOFY.

 

[galumay]

FY 2021 - looks like the growth might finally be stirring! As well as noting the improved results this financial year, AER also noted they have already picked up an extra $200k of annuity revenue since EOFY. Hopefully this is the year of transformation for this little business!

 

[Dona Ferentes]

Aeeris Limited (AER.ASX) is pleased to announce that it has received binding commitments from institutional and sophisticated investors to successfully raise $1.5million at 13c a share

The funds from the Placement will enable the Company to:
• Increase Research and Development capacity with the addition of a data scientist and developer, complete a transition to the cloud and create automation tools for the Company Climate Risk Platform
• Add to the Sales and Marketing team with the addition of Business Development Manager/s and the appointment of a Digital Marketing Agency
• Expand into New Data feeds including flood, spatial risk analyser and for a Climate Risk Platform upgrade

Proprietary Technology

• Bushfires, storms and other natural disasters cost $18.2bn per year in Australia.
• Proprietary Aeeris technology evaluates climate risks and provides localised warnings to save money and livesThese capabilities are powered by the Company's Spatial Analysis Risk Platform (SARP)
• Example : Aeeris warns major Automotive Insurance policy holders of impending hailstorms at their address. This is valued by customers and reduces claims.
• Example : Aeeris warns largest telecom infrastructure provider of storm severity across the network in order to deploy repair teams optimally

 

[galumay]

This is an unfortunate turn of events, AER has done a deal with a Micro Cap Fund manager to raise capital, excluding existing shareholders and significantly diluting us. It looks like a deal for wealth creation for the fund & management at the expense of existing shareholders. Very hard to see a need for the CR and the justification from management is weak. I am inclined to sell my position, I doubt managements ability to execute in light of this and they are clearly not aligned with SH's. Its only a tiny position so i havent actually pulled the trigger yet.

 

[Dona Ferentes]

Highlights:
• Receipts from customers were $743,919, up 36% from prior quarter
• Current cash and cash equivalent $2,739,215
• New customers include Australia’s largest retailer, auto maker, banks and insurers with multiple potential new customers added to the sales pipeline
• First Climatics customer
• Successful migration of operational SARP to the Azure cloud platform

The Company’s Early Warning Network system and proprietary SARP technology platform ingests and maps vast amounts of live data from multiple sources regarding severe weather, fire, traffic, and other geospatial hazards. The technology allows us to track and monitor very large numbers of users, assets and operations. Risks are communicated instantly over multiple channels to those that need it, where and how they want it.

The Company’s legacy GNIS dedicated servers based in Sydney were decommissioned. The Company’s core system, SARP, is now running from the Microsoft Azure Cloud. The migration was technically challenging and successful achieved without any data loss or disruption to users. The streamlining of operations to the Cloud will enhance operational performance and achieve some technology cost savings. It has vastly improved granular control of system performance, scalability and redundancy. This was a crucial step in a generational upgrade to the core system and will provide stability and scalability for the future.

 

[galumay]

Still struggling to scale Dona Ferentes, still negative OCF. I still hodl.

 

[Dona Ferentes]

Still struggling to scale Dona Ferentes, still negative OCF. I still hodl.

I can't see where the 'scale' is, actually. Very niche, but does this translate to being essential (equals pricing power)?
The OCF gap is narrowing , I saw that. The move to cloud might take a while to show up.

Was only looking at it as a tip for August, btw .

(DNHodl)

 

[Captain_Chaza]

I am Amazed, Bewildered and Amused
No Volume at all
The Chart says it all

Not for me Thanks

 

[tookie]

Took a gamble on this for the August comp - the move to cloud looks like it will be promising but as already mentioned may take a while... has some good customers so I'll just hope for the best with this one