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By Steve Moore | Thursday 7 December 2017
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from ShareProphets). I have no business relationship with any company whose stock is mentioned in this article.
In June Dillistone (DSG) delivered a “significantly below market expectations” warning, though sought to mitigate by emphasising a confidential new product it reckoned “has the potential to transform the nature of our business and to deliver significant shareholder value”. The shares would still fall from 84.5p towards 50p, but are currently soaring back above 70p today on the back of a 'GatedTalent demand surpasses expectations' announcement…
‘GatedTalent’ is the, previously confidential, new product and “a new private network designed to allow executives to share information with recruiters in a private manner while also assisting recruiters in their General Data Protection Regulation compliance”.
Dillistone states “in planning for the platform, the board anticipated that our clients would send in excess of 1,000,000 invitations to executives by March 2018 and that a certain percentage of these would create profiles. Based on the volume, nature and expected usage of the firms that have signed, or are expected to sign to implement the platform, the board is increasingly confident that it will achieve and very significantly beat this target”.
However, it goes on to add that “it remains too early to estimate the conversion rate of invitations to profiles” and “while revenue in 2018 will largely be generated by Search firm subscriptions, longer term financial performance of the business will be derived from the size and quality of the executive database”.
Meanwhile, first half of 2017 results saw a slide into loss and decline to a £1 million net cash position and a £1.8 million net current liabilities position. This has seen £0.4 million of 8.15% interest per annum loan notes, convertible at 71.6p, from management.
With these trading and balance sheet positions (another fundraising ahoy?) and GatedTalent longer term financial performance still very much unclear, I currently continue to avoid.
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