Fleet management is presented as a logistical job, with managers expected to know which specific asset within the fleet is at what position at any given time. Traditionally, this presented a significant challenge with fraud being the ramification of poor management.
However, with the continuous growth in the technology space, the field has seen its fair share of benefits accruing from the former. Fleet management is now carried out from an office with GPS systems being used to track down vehicles and cargo to the second, be they on the move or on standstill.
A beneficiary of this is DSG Global Inc (OTCMKTS:DSGT), a company which has made a name in this space but with a touch of specialization. DSGT specializes in the golf industry, an industry valued at over $70 billion in the US alone, where they use their patented technology to provide fleet management systems to players within the industry.
This being said, one would expect that their shares would be skyrocketing given such a specialization and a solid industry that ensures constant revenues; however, this has not been the case. Their share price has taken a dip in the past with their shares closing at $0.0055 as seen below:
Despite this plummeting, we believe that this presents the best time for investors to look at a reversal in the share price. This piece will build a case as to the ability of DSGT to bounce back long into the future to the benefit of investors with a long term view.
Before then, let us first bring readers up to speed with who exactly DSGT are as well as the space the company operates in.
DSG Global Inc (OTCQB:DSGT): An Overview
Founded in 2007, DSGT is a technology company that specializes in the golf industry, majorly in fleet management. They use their patented technology, TAG System, to ensure the safety of golf fleets as well as enhance the satisfaction of clients as will be seen later. Presently, their technology has been installed in over 15,000 vehicles on 300 courses worldwide.
The company, however, is growing towards a broader horizon through the golf industry. Management has stipulated the mission of DSGT as finding solutions in the golf industry, mainly to do with management of costs and protecting mobile fleets of assets, with the aim of getting this to the rest of the industry through general fleet management.
Currently, they have completed several successful pilots of the TAG system in other markets such as agriculture and commercial fleet operations. Moreover, they are heavily invested in Europe, the continent from which management expects the bulk of their revenues will be generated.
With this, coupled with recent events that have marked their growth (discussed below), they expect to solidify their revenue base and make more profits into the future.
Recent Events affecting DSGT
Over the period till June 2017, the company has had significant announcements and events that have signaled their growth prospects.
First, the company announced that they had achieved record sales in Europe. They prided this on the integration of their system that would ensure the satisfaction of their clients was achieved beyond their imagination. Over the same period, they partnered with 2 additional Swedish resorts: Sotenas featuring a 27-hole resort and Bokskogens features a 36-hole system. During the launch, the DSG CEO Robert Silzer Sr., commented:
“We have built an exceptional array of products to maximize efficiencies in the golf business. We’ve enjoyed a tremendous start to 2017 and I’m very pleased to add these two top rated properties in Sweden to our list of premiere partners. These great additions really strengthen our position in the European market. DSG has recently installed four courses in Sweden, ten in the UK and two in Spain.”
Second and importantly, they launched a new product: The Solo Rider RAPT’R. the product is meant to increase the tee times per day for players within matches. This is a great boost to the efficiency of the golf sector in its totality, a factor which seemed to have been underscored by the orders already received by the company. Over the period of the launch, DSGT received over 100 orders for the product, an overwhelming response according to their CEO who said:
“We knew there would be interest in our solo rider RAPT’R, but the enthusiasm at the PGA Show surpassed our high expectations and bodes very well for sales of this product.”
As stated, this will be very beneficial to their sales in coming periods and the management sees this as an opportunity to increase their client base, in addition to their already large base, and retain them over the long term through quality service.
Let us now find out how their financial position looks and what it says about the company.
Will their growth be hampered by lean pockets?
The company, with a market capitalization of $212,524, has in the past had some significant problems generating revenues and profits. However, this changed drastically in the quarter ended June 2017 (2Q2017).
During this period, they made $434,000 in revenues as compared to $248,000 in 1Q2017 while also making a gross profit of over $1.33 million as compared to the net loss of $2.094 million in the previous quarter. Their sales and general expenses have also been falling over time with the figure standing at $396,000 from $462,000 in the previous quarter with their R & D costs falling to zero in the 2017 period. Management have attributed this to a cost-cutting strategy they have adopted to ensure they maximize on profits into the future.
The above story would be great news to shareholders, however, they still face significant hurdles. With an over $6.27 million working capital deficit, the company has stated their need to raise up to $2.55 million to finance its growth. This will present a challenge for management who need to find ways of raising this money in the capital markets as soon as they can.
Management is still optimistic of a comeback in the coming periods given their growth both by product and by geographical outreach. They have stated that they expect their revenues to go up by over 30% while operating costs fall by 35% in the coming period. Furthermore, they expect gross profits to grow to 65% from 56% in 2016 and that the company will be cash flow positive by Q42017.
DSGT is seen to be growing slowly and positioning itself using technology in the logistics sector. The company, despite challenges, is poised for growth and is expected to grow even faster in the future.
We will be updating our subscribers as soon as we know more. For the latest updates on DSGT, sign up below!
Disclosure:We have no position in DSGT and have not been compensated for this article.