AER - Aeeris Limited

Dona Ferentes said:

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)

Click to expand...

My thesis was the scale comes as more clients sign up because its incredibly capital light and fixed costs should be stable. For some reason, as the revenue has raised, so have the expenses, which was not how it looked! Hopefully there is an inflection point as we like to say, and the business does finally scale. Its very niche as you observe, but also very high focus area with climate change management. I am happy to wait it out, small position, otherwise lots of things i like - illiquid, microcap, founder run, tight registry & very clean financials.

Captain_Chaza said:

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

... Not for me.

Click to expand...

Yes, its definitely not a trader's share! As a microcap investor I love the lack of volume!

H1 2023 report out today, good signs that its actually starting to scale, $300k of incremental revenue over PRP with $100k of incremental cost and $200k earnings. Another 50% growth in revenue should see it profitable at this rate. (note the R&D Tax incentives in the PRP, needs to be backed out to understand the financials properly)

Another insipid result from AER this year, some tiny signs of scaling, revenue growth slightly higher than expenses growth, possibly marginally better than it looks once you account for the R&D grant.
Trouble is that R&D Grant masks the scale of the losses and negative OCF, this business has a lot of heavy lifting to do in order to reach profit and investibility. I hold a tiny speculative position based on the narrative. My exception to the rule of never gambling on the share market!.

Appalling behaviour from the company in the latest 4C, uses the term "Cashflows from Operating Activities" to describe just the incoming cashflows!! So sales, interest and Government grants. The clear implication is they are OCF +'ve which is straight out deception.

Backing out the grants its clearly negatively scaling still, increased revenue, greatly increased negative operating cash flow.

Time to sell this #shitco, dumped my position. A lesson about sticking to process and rules. Bought when it was loss making and cash flow negative, proved unable to scale and as revenues increased, losses got bigger. Sold for about a 60% loss. Luckily it was only a tiny position but should have never been a hodler.