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TSM - ThinkSmart Limited

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Re: TSM - Thinksmart

ThinkSmart Limited today announced that it has received notice that its warranty services contract with Dick Smith and the Warranty Group will not be extended beyond 7th April 2012.

As foreshadowed at the time of the recent full year results announcement, the warranty services contract, which is not core to ThinkSmart's strategy, was due to expire on 31 March 2012. In line with the company's previous guidance the impact of the non renewal of this contract will be approximately A$1.2m in NPAT for the remaining nine months of 2012.

This notice is unrelated to ThinkSmart's primary contract with Dick Smith for its core RentSmart products which is scheduled for renewal in December 2014 and contains no change of control provisions.​

More info in the official asx announcement.

And kaboom goes the price hitting 0.305 around midday.
 
Re: TSM - Thinksmart

Moving very much against it's recent trend and todays market capitulation.
Volumes aren't massive but that can be a little tricky with no great amounts of liquidity.
 
Re: TSM - Thinksmart

More bad news for TSM.

Ned Montarello does a wonderful job of painting a rosy picture for the future of this company but it seems that the market has had enough of his over-promising and under-delivering.

Profit to be lower in FY12 after a downgraded FH12 to a $2m loss...
 
Re: TSM - Thinksmart

FXL is a superior business. TSM seems to be about 3 years behind them. Have a look at FXL's fastest growing businesses they're both things that TSM is trying to get into; "no interest ever" and commercial leasing products.

From the AGM address which stuck out to me:

One of the largest incumbent providers has insisted on exclusive arrangement -- forcing retailers to choose between it and Fido. As a result we have changed our strategy...
Click to expand...

I'm pretty confident this incumbent is FXL. The problem with TSM's existing business is that it relies very heavily on retailers providing it with significant volume of consumers willing to take on debt. They're trying to diversify out of that with their new products but they're behind the curve and the elephant in the room isn't giving up market share without a fight.

That being said, their UK business is still performing well and at under 20c this thing is probably worth a punt for those so inclined.
 
Re: TSM - Thinksmart

TSM is another stock that Montgomery used to ramp up if I recall.
 
Re: TSM - Thinksmart

Interesting to see that the announcement last night indicated that Ned Montarello was very close to being disapproved for the long term share incentive plan!

Considering that TSM is going to post at least a $2m HY loss (I doubt their statements are conservative), their Aussie market is horrible (look at JB and Dick Smith for direct indicators), and the growth in the UK may moderate after experiencing initial exponential type growth...I really cant see any catalysts for the SP moving up in at least the next 6 months.

I think I'll throw this one to the bottom draw until the half yearly comes out, at that time perhaps the worst will be out of the way and I'll reconsider this one.
 
Re: TSM - Thinksmart

VSntchr said:
I think I'll throw this one to the bottom draw until the half yearly comes out, at that time perhaps the worst will be out of the way and I'll reconsider this one.
Click to expand...

Surely this one has hit some if not most of your fundamental stop loss criteria already?!

You are giving Tech/A plenty of ammunition for his TGA thread discussion...
 
Re: TSM - Thinksmart

skc said:
Surely this one has hit some if not most of your fundamental stop loss criteria already?!

You are giving Tech/A plenty of ammunition for his TGA thread discussion...
Click to expand...

LOL!

I meant throw it in the bottom draw for analysis, thankfully im not holding :p:

Pretty disgusting that management raises capital at 35c, fully aware of what is to come....shareholders have been shafted!
 
Re: TSM - Thinksmart

VSntchr said:
LOL!

I meant throw it in the bottom draw for analysis, thankfully im not holding :p:

Pretty disgusting that management raises capital at 35c, fully aware of what is to come....shareholders have been shafted!
Click to expand...

Got you... I don't use a draw for my "to-be-analysed" pile so...
 
Re: TSM - Thinksmart

It was on my "BUY" watchlist...thus I had already analysed...but now its gone back down to the "Revisit in 6 Months" watchlist.
 
Re: TSM - Thinksmart

Hi all,

I have two questions about TSM, something that I don't seem to understand.

Change to lease accounting was blamed for the loss in the latest annual report. Lease accounting spreads profit evenly over the whole interest term, rather than booking it all at once. Why would this cause a loss though? Does this mean the business was operating at a forward loss previously, masking it by growing and share issues? Probably not, I am sure I am not understanding something, but what is it?

Second question - how exactly do they make money off their FIDO product? There's no interest, so where's the money coming from?

Thanks
 
Re: TSM - Thinksmart

KnowThePast said:
Change to lease accounting was blamed for the loss in the latest annual report. Lease accounting spreads profit evenly over the whole interest term, rather than booking it all at once. Why would this cause a loss though? Does this mean the business was operating at a forward loss previously, masking it by growing and share issues? Probably not, I am sure I am not understanding something, but what is it?
Click to expand...

Under the old model they used to recognise pretty much all their revenue upfront. Now they will earn 40-50% more over the life of a contract but it will be recognised over 2.5+ years. So the implementation has created a bit of a pocket in revenue.

KnowThePast said:
Second question - how exactly do they make money off their FIDO product? There's no interest, so where's the money coming from?
Click to expand...

Higher cost for the product (I think)
 
Re: TSM - Thinksmart

P&F Daily Update:-

140214 - TSMs.gif
 
Re: TSM - Thinksmart

some people are still keen on it, the story is always that something is going to happen...
 
Re: TSM - Thinksmart

A brief summary:
- Net cash is about half of market cap - although this is does not include the CDS with Secure Trust Bank (STB) and the cash security deposit
- Expected NPAT of 3.5m for the FY
- Assets under management growing at double digits
- Recent dutch auction and on market buyback reduce shares on issue substantially (above calcs taking this into account)
- Media noise about the Chairman wanting to take the company to the UK exchange (and off the australian exchange) caused a fair few to sell.
- David Gamell holds a significant amount through Wulura investments - now holds about 10% after increasing his holding substantially in the 31-32c range

FYI: I don't hold - metrics look good, but single client risk (Dixons Carphone - even though contract has been renewed), unknowns in UK retail and my inability to fully understand how revenues are recognised is stopping me.
 
Re: TSM - Thinksmart

Klogg said:
A brief summary:

- Media noise about the Chairman wanting to take the company to the UK exchange (and off the australian exchange) caused a fair few to sell.
Click to expand...

It wasn't just media speculation, that is what I was told by their shareholder communications PR company that were spruiking the share buy-back plan.
 

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