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By HotStockRockets | Saturday 2 June 2018
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.
Catenae Innovation (CTEA) has announced a “first agreement for the provision of Trust in Media's Fanbase service to one of the UK's largest entertainment promoters representing some major names in the music industry” – helping the shares up to a current 0.15p to buy…
We noted in the 0.13p March tip of the month, one of the real businesses in here was about GDPR-compliant solutions for the music industry. Trust in Media is a joint venture with Martin Heath, who has a long-standing pedigree in the music industry and issues around royalty payments, IP protection and artists' rights. Catenae will receive 50% of the net profits from the venture and its Fanbase service is described as utilising information gathered via its analytics platform to analyse sales via Ticketmaster's ticketing to provide in-depth information regarding engaged audience, the most influential fans from a social media perspective and those who are triggering the greatest spend.
Catenae emphasises this “provides invaluable targeting information to the client for both current and subsequent social media based marketing and sales campaigns” and Martin Heath that “our pilots to date have achieved a 19% click to sale ratio, around 20x normal conversion rates and 70% of sign-ups have come from users referring friends peer-to-peer via social networks”.
This announced first agreement is to “provide event marketing and social media analytical services for a number of artists playing at events held at racecourses over the summer months”, with Catenae CEO Tony Sanders “pleased that the first agreement signed by Trust in Media since the forming of the JV in March 2018 has been delivered ahead of schedule and is set to make a positive revenue contribution from the start date. The expectation is that the contribution of this agreement will gather momentum over the course of the next quarter”.
This “ahead of schedule” enhances confidence in annual pre and post tax profits of several hundred thousand pounds by as soon as next year we suggested possible in the March tip. That was also with some further business areas - particularly solutions (re. for example payment processing and intellectual property) utilising blockchain technologies - new boss Sanders is very excited about the potential of.
The market cap is still currently circa £3 million, though some further equity is likely to further strengthen a balance sheet which at 30th September 2017 showed cash of £749,972, though net liabilities of £0.65 million. However, in recent months the company has raised £0.15 million in a placing, £0.12 million via convertible loan notes and been settling some creditor balances in shares.
At this early-stage of turnaround, there thus remain clear risks. However, there also looks some exciting potential – both speculatively (e.g. the shares touched 0.7p+ a number of months back on a blockchain spike) and more fundamentally (the profit potential from sound businesses in growth areas). As such up to around current levels – and looking to sell at comfortably above 0.2p, the stance, at 0.15p or better, remains buy.
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