OTCPK:EUCTF - Post by User
Comment by
lscfaon Jan 02, 2016 2:02am
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Post# 24424527
RE:EUO seems to be underpricing its products
RE:EUO seems to be underpricing its productsThis is another strike against Rowlands mgmt expertise. Why the hell were they selling the product so cheaply when the "sticky" clients would have been willing to pay much higher prices?.......
RE38 wrote: Notice 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.