OTCPK:EUCTF - Post by User
Post by
RE38on Dec 30, 2015 10:33am
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Post# 24419069
EUO seems to be underpricing its products
EUO seems to be underpricing its productsNotice on the call with Bob that he gave an example...GFI gets $1.5M in recurring revenue annually for a program that saves $10M in tax revenue A MONTH. So this is essentially a 98% to 99% margin business for the governments. Assuming his example is aligned with reality. Even if he is embellishing a bit, an 80% to 90% margin would still be a slam dunk business case for the governments.
Perhaps part of the reason why SICPA can take over this business and we will be confident that the 5% royalty will eventually grow bigger than 100% of what EUO had with GFI under its belt is a price increase. Imagine once those contracts come due, SICPA raises the price 10x to $15M....the government is still going to say yes if they are saving $10M a month in lost tax revenue. SICPA has the wherewithal to really negotiate a fairer price for the service they provide. I'm sure that would flow to Xenemetrix as well.