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CXZ - Connexion Mobility

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Beyond me too, but the fact that they swung such a significant deal with GM demonstrates they must have something going for them!
 
Very strong HY results released this week, CXZ up nearly 40% on the news. If they can pick up some more customers it can develop into a very good business. Cash flow conversion is great, straight to the bottom line. I will add some more now in the dips.
 
Am finding it hard to work out exactly what the company does, quite a bit of jargon there, but clearly they serve a purpose.

Good outlook statement, too .... potential to scale (and become the 'industry standard'?)
 
Anyone read the quarterly activity report? It seems legitimate with sales and cash coming in. I'm surprised that a major IT vendor has not picked up the opportunity too, but given small revenue profile currently (7mm rev run rate) it doesn't really make sense for any large company to do so right now.

Managing director leaving also a red-flag but growth profile and saas like business structure seems very interesting. Anyone else has additional thoughts? I'm trying to reach out to the management team to figure out more.
 
@ben267 welcome mate. I have nothing to add but was interested to see what products they have and the vehicle tracking system looks impressive.

https://connexionltd.com/products/cxz-telematics/

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I like the business, they have been focussed in the development and application of the product, and have managed to secure a significant client and successfully implement their systems across the organisation in the US. I think its a bit of a binary play, if they don't manage to pick up more customers then its just a profitable little business with no real prospects of organic growth.

On the other hand if they can pick up other customers in the major Auto companies then there is obviously a lot of potential growth with great scaling metrics for the bottom line.

Edit - Welcome to ASF mate, just noticed it was your first post after seeing Trav.'s post
 
Thanks all, didn't think I would receive such a warm welcome. Other stock forums aren't so hospitable haha.

This currently trades at a 5-6x PE which is extremely cheap, however this comes at a caveat. Their relationship with GM for the CTP program only lasts until 2021, so they might have to re-compete for any GM related contracts in the near future. This is their biggest source of revenue currently so it'll be a huge issue if they don't win this again.

Their other business segment is Commercial Link which i believe was also with GM. GM recently decided to in-house this program which what previous posters feared about. This is indeed binary, if they scale properly, it could be a huge home run, if not, you could get another 4mm of cash on the balance sheet which isn't too bad I suppose.
 
fair to say it's on track

• Total Revenue up 131% to $8.20m (FY19 $3.56m)
• Net Profit Before Tax up 340% to $2.05m (FY19 $0.47m)
• Net Profit After Tax up 587% to $3.20m (FY19 $0.47m)
• Diluted EPS up 537% to 0.35c (FY19 0.06c)
• Net Cashflow up 254% to $1.49m (FY19 $0.42m)
• Working Capital up 256% to $3.35m (FY19 $0.94m)
• Tech and Support Team expanded by 33%
• OnTRAC CTP/CTA subscription base averaged 69k vehicles for the year
• COVID-19 impact on the business largely mitigated by increase in recurring revenues
• Significant ongoing customisation and improvements to the OnTRAC program
• Growth initiatives pursued into FY21
 
Must be the biggest mover of reporting season! up over 90% at one stage today, a spiffy pop for me momentarily! Finished up over 40%, on basically no new news to the market, crazy world at the moment.
 
The share price has been pretty stagnant since but the metrics are fantastic and the AGM presentation says all the right things.

I'd back up what ben267 said about their revenue being 100% exposed to GM - surely they'd be scrambling to develop other sources of income. Considering their tech they could offer fleet management direct to SMEs or as a software for car sharing though I know there are a few of those.

I'd assume any further re rating would be due to diversification of the revenue through other OEMs or showing how sticky they have become inside of the GM network.
 
I think thats the underlying issue, the single client risk is the problem for CXZ, there is no certainty GM will continue to use them post this contract in 2021, so the business could be worthless within 12 months, or they maintain GM and remain a profitable little business with no growth, or they can win other car manufactures over to their model and remove the single client risk and odd growth!
 
Yeah exactly, I'm in for a tiny position to dip my toes in. We'll see how things progress from here.

What's your assessment of the turnover in leadership? I would imagine that would impact any sort of relationship/business development if they have a new CEO every 6 months or so.
 
Todays announcement about 2 new board members & new CEO looks like a step in the right direction, the new independent directors in particular look like good choices. Hopefully thats the end of the deckchair shuffling and they get the GM contract renewed and find some new clients!
 
Good news today for CXZ shareholders as they announce the GM contract has been renewed for 5 years, hopefully now they can concentrate on finding some new clients and de-risking the business.
 
Looks like the business is tracking well with the launch of CXZTRAC - if my understanding is correct then this will enable CXZ to target dealers outside of GM's network
 
Not really sure why the price is going up, its not like there are any surprises while its a single client business. We basically already know what the numbers are for FY2021, so no surprises likely there. Anyway, I am not complaining!
 
I think the last quarterly showed good cashflow starting to come through now that CXZTRAC has launched. They racked up $500k in cash last quarter with majority of revenue coming from SAAS - any growth in clients/vehicle subscriptions should scale up profit/profit margins quite quickly
 
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