8 Comments

I was taking a look a couple of months ago at this company, and even when the past is bright, didn't find enough reasons to think the future may follow the same trend. BTW I've probably missed something.

At the end of Q222, as of Q322, IFI increased ifirma pricing by 12.66-15% (depending on subscription type). Q222-Q322 revenue grew at 1% and in Q322-Q422 at 8%. If my understanding of their subscription model is correct, it basically means they have to lose some customers. Not a huge number, but not negligible. Also, when researching the opinions on the internet about ifirma it seems that in the last few months there is a higher number of customers dissatisfied with the quality of service (high number of customers per accountant). AFAIK management don't provide details on number of clients. Don't you find this issue worrying?

Thanks for sharing!

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Hi Damien,

Thanks for reading the post.

You are right that Ifirma pricing increased, although they put this out MUCH earlier than you quote. Rather, the price was increased between 22-30% in Q2 2021* (not 2022). to which you'll see a consistent uptick in quarterly revenue and gross profit at that time.

Q3 21 +50% Revenue +73% GP

Q4 21 +50% Revenue +111% GP

Q1 22 +47% Revenue +107% GP

Q2 22 +34% Revenue +41% GP (First QTR where they have partly comparatives on new price)

Q3 22 +19% Revenue +8% GP (First full QTR with comparatives on same price)

Nevertheless, there is a fair few reviews both good and positive, obviously with a skew to negative, it's rare you get overly positive reviews as people are more likely to rate on bad experiences than positive so Reviews tend to be a source of negative bias'.

There is no doubt a fair amount of competion (wfirma, infakt etc.) nevertheless. The bigger risk to ifirma to me is that it's a gig economy beneficiary, which is the one of the first areas governments should automate etc. so i question longevity.

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Just listened to you on Buyback Capital pod. I invested in a couple of waste management business in Poland but they haven't done much. I think maybe the high inflation handclapped them a little. Firmbee doesn't look interesting as it could have global reach.

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Firstly, thanks for listening to the pod. Hopefully got something out of it.

Re: Poland It's a shame you haven't seen the performance you wanted on those waste management co's. I'm not so sure it's an inflation thing as it really wasn't that high relative to other countries. Fairly characteristic of europe as a whole, and low comparative to other central europe countries.

Firmbee is not something I would ascribe any value to, however, as I noted in the post there is expenditure going to it. The bread and butter here is really the accounting software. Firmbee is really quite a good price for what it does though, so it really would not surprise me should it become a future cash cow for the group. But as I said, ascribe a NIL value and buy on the basis of ifirma as a continuing business without firmbee to whatever price you deem fair.

I would like to point out Ifirma has actually been an extremely successful investment over virtually any time period over the past decade, with the 10y return being close to a compound 40% or 28x return. 5y return being a bit over compound 40% and pretty much the same story on most timelines due to a good dividend, and very impressive earnings growth.

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Cheers for the reply.

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Thanks for discovering this gem ! I didnt find any document in English on their investor page, did you?

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Hi Ed,

Thanks. They do not release in english for the most part, but a translater works just fine.

I do have an exception, they did release some english slides mid last year which you can read below.

https://1drv.ms/b/s!AtqDenTtZWIY11hdWrw2ELQxVGJD?e=azMhsF

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yeah I've been using Google translate with good results. This company reminds me of Livechat but the share price completely stalled for 1 year vs an increase of 36%

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