Post by
RE38 on Dec 30, 2015 10:33am
EUO seems to be underpricing its products
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.
Comment by
stack on Dec 31, 2015 1:58pm
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Comment by
kidl2 on Dec 30, 2015 2:03pm
Let’s get to the TSX first and we will ... ;-)
Comment by
stack on Dec 30, 2015 2:45pm
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Comment by
kidl2 on Dec 30, 2015 2:50pm
OT ... ORT is a really bad example. It’s the epitome of a mismanaged story stock.
Comment by
lscfa on Jan 02, 2016 2:02am
This 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?.......
Comment by
kidl2 on Jan 03, 2016 10:44am
>>>This is another strike against Rowlands mgmt expertise.<<< Another??? WOW, talk about a taugh crowd ... LOL
Comment by
lscfa on Jan 03, 2016 11:26am
Yes, another strike. The fact that EUO has not been able to grow sales of Xenemetrix in the last 5 years despite the product winning awards, being superior quality and 20% cheaper than competitors means Rowlands is not very good at marketing spectrometers.
Comment by
shawshank on Jan 03, 2016 1:26pm
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Comment by
kidl2 on Jan 03, 2016 2:44pm
Point actually well taken but something which is about to change now that R&D / marketing cash is no longer in short supply. Petromarine comes to mind ...