Brightcom Group Limited (Formerly Lycos Internet) - Way to Digitalization

Reflect on this tonight: Lycos paid a tax of Rs 177 crore odd in 2017, this share didnt deserve to trade at 5.

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The company struggles to convert its sales into cash. This trend is continuing for many years. It is better to stay away from this scrip.

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Do make an effort to check the press release.
Lycos contributed 1.2% to the total profits. Now does it make sense to shell out $36 mn for an entity generating that much profits?

Name changed to Brightcom Group as a result of losing control over Lycos Inc.

Did anybody attended todays concall. Just saw notice of concall and could not attend it.

Guys, Did anyone listen to the con call? I tried but unfortunately could not connect

My notes from todays Investor call. it might not be 100% accurate for which I apologies. But wanted to share it with the Investor Community. Since we did not get any updates on the previous call.

Y Srinivas Rao
Total Receivable Days - 132 days
Other accounting information was also share which I have not Captured*

Suresh Reddy:

Salary is drawn by Suresh by Subsidiary
Big Initiative β†’ GDPR (Fully Compliant now)
Programmatic Advertising
- 1st in consumer March of this year
- WordPress plugin developed
- Prospective engage -
Services
- few new projects on AI (Israeli company on Agriculture intelligence)
Corp Announcement
Name change (Took time because of some queries from ROC)
Why Change name
Better name
Judgment
Ads Business
Fund raising - Work in progress (SEBi Formula on pricing)
Only Debt left is in Indian operations.
BrightCom
Is a brand (Not legal Entity)
OMF/OMS is a legal entity (Not sure if it is OMF or OMS)
is 100% secure and comes and under OMF/OMS.
400 Cr β†’ where is it going? β†’
Currently 350 Mn β†’ Want to grow it bigger to billion-dollar company.
Lycos Life - Did not work.
Daum β†’ Receivership done
Settle is for once and for all, 42Cr needs to paid.

Questions:
Funder Raiser β†’ Current or New? - Need 60CR β†’ Will give Clarity in future via exchanges
Funder Raiser β†’ Operation’s / Legal β†’ Will give Clarity in future via exchanges
Consolidate Results β†’ Audit by E&Y? - E&Y (Need to cover 77% before becoming the main Auditor) is Internal Auditor. E&Y will put in the right systems before taking over complete operations. 37% of the Business is Audited by E&Y. BrightCom (Israeli) is audited by E&Y.
Cash Flows β†’ Reinvestment Going on β†’ is it only BrightCom having low revenue or a more general trend in the market? - Agencies and Advertisers pay every 3 to 5 months based on location. We pay the Publishers at the end of each month.
Cash Flows β†’ Reinvestment Going on β†’ Is it a problem for everyone? This is not unique to us. Effort made to reduce the number of Receivable days down.
2018 β†’ Any steps taken to give value for Investors?
> Legal battle will get addressed
> Debt β†’ Clearing this out is also priority.
> Dividend β†’ Very Keen. Need to Manage legal issue. Small Dividend will be paid to start.
BrightCom going to work on Voice ads?
> Audio ads β†’ Already doing that
> Digital Hoardings - Exploring

Blockchain & IOT
> IOT did not take off. Put in the back corner. Product is ready. Wait for funding.
> Blockchain - Working on this
> AI - Working on this. Getting good feedback from consumers

Apollo Lycos
> Brands to enter India can use this portal for easy access to the Indian market.
> Roadblocks face - More attention needed. Either will Terminate or Rejuvenate it.

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An article about Lycos/Brightcom in a local e-paper:

Did any body attended todays concall. Is it possible to post concall updates.

I missed the concall. Comments from Bitran in Moneycontrol:

  • First of all, I have to admit SKR appeared very confident unlike past times and did not beat around the bush.
  • He also said, he/promoters do not have money/liquidity to buy from open market.
  • He agreed and accepted the pain of the shareholders and admitted it is difficult time for them
  • Confirmed that Rights issue is lined up and the price for that is 6 Rs.
  • Negotiation with Daum is still going on but he cannot reveal anything on that yet and it is taking time ( mentioned that it requires 2 hands to clap )
  • He mentioned that business is doing good but the share has been brought down by ageing shareholders and also due to corporate issues.
  • Mentioned that they are very keen on removing the debt which is acquired from LGS and they are working on that.
  • All in all, unlike last times, he appeared very confident. He agreed to consider dividend distribution as some percentage of profit as suggested by some investor but requested time to settle the current issues.
  • He promised to give a good news by next quarter conference call
  • He also mentioned to create focus group to promote awareness of company and credibility of its numbers.

Disclaimer: This is a copy and paste from moneycontrol. I am not sure about the validity of the data.

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Note: 3rd Quarter is always the best quarter for the Business
Advertising:
- Video is the revenue winner
- Static ads revenue has improved (Since everyone else is not focusing on banner )
- Commfident partnership is doing well
Dyomo
- Artificial Intelligence and Machine Learning services has reduce the need for man power.
Corporate announcement
- Daum - Management feels settlement is very close. Investors will be updated as soon has company plans closure. .
- Market appreciation - We should see improvement overtime(Once outstanding issues are settled).
- Dividend / buy back proposal is submitted to the board and the boar is consideration it. Dividend policy is be coming soon on how much and how often to pay.
- Bank Loan - 15 Cr paid - 35 Cr remaining - Plans to be debt free by Sept.

Consolidated Subsidiaries
- Some delays are there (currency conversion issue). This will be done within a month
Salary is not disclose
- 36 Lakh per promoter.

Investor Trust
- Regarding Finances
- E&Y is the Audited a big part of finances audit this time.
- Unfinished settlement with DAUM is causing the lack of the communication between Investors and the company.
- Transcripts are not getting posted
- Unfinsished settelement with DAUM is causing the lack of the communication between Investors and
- Once daum is settlement is done. All transcripts will be posted

Free Cash issues
- Challenge is to go past the hurdle Debtors days.
- Once we cross 450 cr we should be have better free cash

LGS
- Originally was 150 CR Debt(High Interest Debt). We are paying down the debt. The receivable are not coming. 15 Cr paid - 35 Cr renaming - Debt free by Sept.
- LGS Enterprise, Mobile and Cloud Business have be merged into Dyomo

Institutional Investors
- Managements focus currently is on running and Building the Business
- Having talk about the company as a good investment prospects to the investor community.
- Company is continuing to pitch the business opportunity to investors.
- 35 to 40K shareholders are there currently.

How much needs to be paid to Daum ?
- The amount has to be mutually agreed upon. Negotiation are going on.
- Intention is close it soon.

Rights Issue
- Approval is given stock holder
- Right price for the issue to be decided

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Hi Friends I understand in DAUM case the current state is
" In 2018, a New York court ruled in favor of Daum and appointed Daum (by then merged with Kakao) as receiver of Ybrant’s 56% ownership interest in Lycos.[21]"

what does this ^ mean ?
Due to non payment of the pending second and final settlement amount to DAUM Ybrant will return the ownership(56% of Lycos which was bought in 2010) back to DAUM.

The initial payment from Ybrant(now Brightcom) of 20million $( ~ 150 crores Rupees) is a loss and no recovery?


So the point mentioned in the above post is slightly confusing:

The company was negotiating with Daum for a final settlement amount outside the court. The previously ongoing discussions would have determined the amount that both would agree on.

But this is no longer the case. Check this [BSE update on Daum].

On the 18th March 2019, the Supreme Court of the State of New York, New York County denied Daum motion to convert preliminary injunction in to a permanent in junction.
As the preliminary injunction has been rendered superfluous,the Honorable Court dismissed Daum complaint in its entirety and the action is disposed of.

Not a 100% sure what that means. My understanding is that Brightcom need not pay anything to Daum anymore. But what about shareholding? Not clear on that

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Must read for all stock research enthusiasts.
Found an OPEN LETTER with very valid questions to Mr.Reddy on Brightcom FB post comments section. (https://www.facebook.com/BrightcomGroup/photos/a.210897548944628/2558220404212319/?type=3&theater).

FOR URGENT ATTENTION OF MR REDDY CEO BRIGHTCOM GROUP OF COMPANIES HYDERABAD

Mr Suresh Kumar Reddy

CHAIRMAN & MANAGING DIRECTOR

BRIGHTCOM GROUP LIMITED

(FORMERLY Lycos Internet Ltd)

Subject:

Some important questions for answers in a written response and to be also answered at the coming confrenece call about the annual accounts of the company.

Ref. Shereholders queries about the annual report year ending March 2019

Dear Mr. Reddy,

I am a shareholder of the company holding above 400000 shares.

I have following very important questions for you.I will need a written detailed response and also highly appreciate these questions to be answered at the coming conference call about the annual accounts of the company year ending March 2019.Your answering these questions in detail qill quell investors doubts about the financial health and future of the company and may provide some relief to long suffering long term shareholders of the company.

1… Under point 2 of the auditors report to Brightcom board of directors they have mentioned that the total assets of 14 subsidiaries worth 32233961345 rupee that is above 3223 crores 2. We did not audit the financial statements of all the 14 subsidiaries whose financial statements/ consolidated financial statements reflect total assets before elimination of Rs. 32,23,39,61,345/- as at 31.03.2019 and the total revenue of Rs. 21,32,59,06,216/β€” for the year then ended which are considered in preparation of the Statement. These interim financial statements and other financial information have been prepared by the management whose reports have been furnished to us, and our opinion on the quarterly financial results and the year to date results to the extent that they have been derived from such interim unaudited financial statements is based solely on the report of the management.Question is why these accounts of 14 companies have not been audited by appropriate accountants.

  1. What is exactly the capital work in progress worth 14778 lakh.

  2. What are intangible assets worth 49984 lakhs

  3. What are the details of other intangible assets worth 49984 lakhs

  4. Under financial assets what are the full details of investments worth 22545 lakhs and what return are they giving.

  5. Financial assets under loans worth 16512 lakhs who has these loans been given to and under what terms.

  6. What are other financial assets worth 1374 lakhs

  7. What is the split of trade receivables of 88977 ;lakhs in terms of the duration that they are over due and when does the company expects to receive them? What action company has taken to improve on this front?

  8. Company has been consistently showing high EPS of 9 rupee or so for the last 4-5 years every year yet shareholders have not been paid any decent dividend . Whereas IT industry of India usual standard is paying 30% of eps as dividend.Why is BRIGHTCOM not paying a dividend of say at least 2 to 3 rupee per annum and when do you think that will happen.

  9. When do you think Daum issue will be finally closed? Do you have any timelines that you can tell the shareholders.?

  10. Liabilities of the sold compamy are passed on to the buyer company including loans unless there is an exclusion clause in the purchase agreement. Hence directors of the sold com[pany are no longer responsible for the loans of the company that Brightcom bought. So bank cant sell the assets of the seller company director which banks have kept as security. That uis my simple and very clear understanding. I have big interest as a shareholder of Brightcom but that is the honest and true position.It pays for a company to sort such issues quickly and wisely to the benefit of the company and its shareholders.

Thank you

and kind regards.

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The company has answered some of these questions in the clarification issued recently but not all. Anyone attended the con call?

Source : https://finance.yahoo.com/news/edited-transcript-lycos-nse-earnings-163700925.html
Disclosure : I have not attended thee con-call.

Please see the PDF attached of the above site.
Edited Transcript of LYCOS.pdf (179.4 KB)

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Any update from todays AGM.

Thanks in advance.

Investor update regarding Canara bank debt clearance.
ref: https://www.bseindia.com/xml-data/corpfiling/AttachLive/05367679-54e1-4b63-b5ec-997e7d1084a7.pdf

Bouncing the scrip up. Developments happening in and for the company. Daum settlement coming up, stock rerating to happen soon.

Experienced and Expert Investors: Please advise on the fresh perspectives for this scrip.

There are a couple of interesting announcements by this company
One compares its capabilities with other competitors

ref: https://www.bseindia.com/xml-data/corpfiling/AttachHis/44c90a08-6f95-4ae5-8aed-079447b33639.pdf

Other Investor Presentation: https://www.bseindia.com/xml-data/corpfiling/AttachLive/e0f4f558-5778-4dcc-a099-0f097a6ffb53.pdf

Any views by experts on valuation of the company ?