Bond International Share Discussion Threads

[pj 1] 25/2/2015 19:01

I know. Makes it much harder. Maybe brings home as PI's we need to club together more and visit Co's and share info imo, apols somewhat off thread!

It doesnt mean Co's cannot update if they value PI's though!!

[battlebus2] 25/2/2015 18:56

I'm in the same position P.J. need to cull a few tortoise shares. Trouble is we only get news twice a year and the new rules meaning co's are not obliged to issue trading updates isn't good for investors like ourselves.

[pj 1] 25/2/2015 18:49

Looks interesting BB, looking to add here if momentum continues. Im stuck in too many Cos at mo with no movement (ok maybe should be happy their not going south lol)

[battlebus2] 25/2/2015 18:39

If correct a very good sign is the late reported 50k bought at 106 :))

[battlebus2] 24/2/2015 22:11

Thanks R2, GHF has them in the header, i think a lot overlook the dividend here which is forecast just under 3%.

[battlebus2] 24/2/2015 15:28

Nice little jump :)) on what appears to be no buys..

[battlebus2] 19/2/2015 17:04

Your selling on the cheap janeann :)) Craw does look interesting but i'm inclined to wait a little longer before buying again.

Berry Recruitment Group selects Bond Adapt for specialist staffing and recruitment software
Posted in Partnerships on 19th Feb 2015


Berry Recruitment Group (BRG), a fast-growing, multi-division recruitment company, has selected specialist recruitment & staffing software Bond Adapt from Bond International Software to manage the placement of candidates more effectively and profitably. Bond Adapt was awarded the six-figure contract following a four-way selection process.

BRG was in need of a system that would provide improved visibility of the entire candidate placement process – from initial client brief, candidate matching and interview to placement. Bond Adapt was selected because of its functionality and the ease of integration with third-party software. With implementation due to be completed in Q3 2015, BRG expects to benefit significantly from improved productivity and service levels as well as reduced time spent on administrative tasks.

BRG will host Bond Adapt On Premise giving it additional flexibility and full product customisation. Other functionalities under the agreement include Web Recruit, Bond Adapt’s fully interactive web portal that can be accessed by clients, recruiters and candidates faster and more efficiently; and an integrated two-way finance system that enables the fast and easy administration of payroll and billing, worker details, bank details, timesheets, holiday accrual and more.

Jon Butler, IT Manager at BRG, comments: “Our primary focus is on temporary candidate placement within selected industry sectors and timing is therefore of the essence. Bond Adapt will enable each of the Group’s divisions to work smarter and keep our competitive advantage. It offers us everything we were looking for: flexibility, functionality, ease of use and its scalability will aid the Group’s rapid expansion policy.”

[janeann] 19/2/2015 13:04

Yes looking better. But I will be happy with a little over the 100p; Craw is looking interesting again now and would like a little cash for it!

[battlebus2] 19/2/2015 11:43

Moving well mow Janeann, should be trading well above the current level, 140 would seem nearer value imv.

[battlebus2] 19/2/2015 10:41

Yes its a bit frustrating but hopefully we get a better response to the bext results.

[janeann] 19/2/2015 08:38

Morning battlebus; stunning response to that 6 figure contract win!! Cant say I am not a bit disappointed there wasn't a trade or two, or even a small increase in sp

[battlebus2] 19/2/2015 07:14

Great news this morning with a six figure contract with Berry recruitment :))

[battlebus2] 06/2/2015 17:36

A few more buyers today and the spread has widened considerably.

[battlebus2] 04/2/2015 16:37

Good to see the slack snapped up today, someone got a bargain with 10k bought below 90....a mention in SCSW would be nice...

[battlebus2] 23/1/2015 16:09

Last buy left below 93p i believe..

[battlebus2] 23/1/2015 14:18

A few buys going through today, seems you can pick up below the offer so a bargain long term imv..

[battlebus2] 14/1/2015 10:55

No surprise to see a few selling here on a bad day, waiting to add on any weakness, company on the up with a very undemanding valuation and hopefully the next news will justify my optimism here.

[glasshalfull] 03/1/2015 18:34

Please see my investment rationale below & now captured in the header. I would direct you to the excellent AIM PROSPECTOR which provides a great summary on BDI (link in the post).

---

Web Site -

Bond supports more than 100,000 staffing professionals in 42 countries and has over 400 employees worldwide, with offices in the United Kingdom, the USA, Australia, South Africa, Hong Kong, China, Peru, Singapore and Japan.

Background

The excellent AIM PROSPECTOR publication carries a good background article on Bond's development in the May 2014 issue, providing the investment rationale.



Bond has transformed itself since the dark days of 2009 when recruitment software spending fell off a cliff following the downturn in the UK & US which were Bond's major markets. This highlighted the cyclical nature of earnings and essentially Bond required to diversify into other Human Resource areas to mitigate this downturn in the core recruitment software side, acquiring businesses that offered high levels of recurring revenues.

Bond is now an entirely different concern having moved its recruitment software business to a Software as a Service model (SaaS) over recent years and built up an Outsourced HR & Payroll Division in addition to a smaller HR & Payroll software business.

At 30.06.2014 the Divisional breakdown was as follows:-

Recruitment Software (49% of revenue)

HR & Payroll software (14%)

Outsourced HR & Payroll services (37%)

The Outsourcing Division is clearly the engine of growth in the new Bond and I would anticipate that it now comprises c.40-45% of company revenues at the current revenue run-rate and offers higher operating margins.


Major Shareholders

Constellation Software Inc 20.9%
(also has 4,720,558 non-voting convertible shares)
Liontrust Investment Partners Llp 19.0%
S R Russell (CEO) 14.7%
Axa Investment Managers Uk Ltd. 10.7%
Fidelity Investments International 6.0%
Octopus Investments Ltd 5.20%
T Richards (Exec) 3.2%

This is where Bond gets very interesting. The acquisition of VCG in 2010 that was supported by Constellation Software Inc, led to Constellation increasing their stake in Bond to c.24% and entering into a standstill agreement that they would not increase their holding from this level (or 29.9% from 20 October 2015).

As the AIM Prospector update acknowledges, with 80% of the shares in Constellations, institutional & management hands, it's not too fanciful to suggest that Constellation Software with a $7.3 billion market cap may well decide the time is ripe to acquire Bond in 2015. As an aside, they undertook 30 acquisitions in 2013!

Mark Leonard, Constellations CEO, left his non-Exec role in Bond during March 2014 and it's unclear whether this indicates a change in Constellations intentions on Bond either in terms of it's investment or as an acquisition target.

This article provides a brief overview of Mark and Constellation




Fundamentals

Market Cap:- £32.5m @ 86p (01.01.2015)
Shares in issue:- 37,843,216
Last Annual:- December 31st, 2013
Last Interim:- June 30th, 2014
Free Float:- 20.6m (54.4%)

Interim results (15.09.2014)



FINANCIAL HIGHLIGHTS

* Revenue of £18.4m (H1 2013: £17.0m) now represents 98% of fixed operating costs (H1 2013 94%)
* Operating profit up 25% to £1.7m (H1 2013: £1.3m)
* Operating Margin increased to 9% (H1 2013: 8%)
* Adjusted Profit before Tax increased by 31% to £1.4m (H1 2013: 1.1m)
* Adjusted earnings per share up 29% to 3.41p (H1 2013: 2.65p)

Highlighted the transition of move to a SaaS model with revenues resuming a growth trajectory in 2014. H1 sales increased by 8% to £18.4m including a small maiden contribution from Eurowage which was acquired in April 2014 and provides significant economies of scale to their existing payroll division.

Importantly recurring revenues of £12.4m represent 67% of total sales revenues and
covered 98% of the group’s fixed operating costs (94% in 2013). Operational gearing self evident with company delivering a 25% rise in adjusted operating profit to £1.68m. Pleasingly they reported 14.3% organic growth & the operating margin rose from 8% to 9%.

With the purchase of Eurowage this provides Bond with an excellent strategic fit for their existing Payroll Outsourcing division as it brings a blue chip customer base which extends Bond’s reach outside the UK and also enhances the recurring revenue profile of the Group. The acquisition of FMP was immediately accretive to forecasts, 30%+ in
FY14, and given its expected contribution in H2, the momentum in the rest of the
Group and the turnaround in Japan we will hopefully observe a strong finish to 2014.

Bond should deliver on forecasts for year just ended (31.12.2014) of 8.6p adj EPS which at 86p provides for a PER 10 and 30% earnings growth for 2014.

Moving into 2015, brokers are estimating that Bond will deliver further 15% earnings growth and 9.9p EPS or PER 8.7 @86p

Earnings

(EPS listed below on a fully diluted basis)

•​31/12/12 - 2.3p - £950k PBT (Dividend 1.8p)

•31/12/13 - 3.52p (+50%) - £1.45m PBT (Dividend 2.2p)

Forecasts

•​31/12/14 - 8.56p (+144%) - £4.6m PBT (Dividend 2.4p)
Dividend Yield 2.8% (@86p)

•​31/12/15 - 9.9p (15.7%) - £5.3m PBT (Dividend 2.7p)
Dividend Yield 3.1%


Conclusion

In conclusion Bond appear to have been successful in the transition from cyclical recruitment software business to one that delivers high levels of recurring revenue and growth via the outsourcing payroll offering. It also offers increasing operating margins (c.16&) and improved scale following the Eurowage acquisition earlier in the year.

The shareprice has come off significantly this year & has fallen from a peak of 151p at the end of May 2014 to 86p at the time of this write-up...a 43% fall. I can't see anything in the interim statement that would warrant such a material pullback in the shareprice, especially with brokers indicating that Bond will deliver earnings of 8.6p for the year just ended and further 15% earnings growth this year, and dividend yield c.3%.

Looks a good risk/reward play to me although with the 80% of equity held by significant parties, the shares are very illiquid. Might explain why they fell so far...but conversely could also lead to substantial gains. Illiquidity works both ways.

I have taken a small holding here and await a trading update of preliminary results for 2014 before commenting further/

Please DYOR.

Regards,
GHF

[value viper] 02/1/2015 11:00

Chart as recently as last week was breaking down sub 90 and didn't look good; I have always wondered if and when constellation might just move for all of it (NRI)
Certainly the stock is well down on the highs but I guess next update will set the tone.

[battlebus2] 02/1/2015 10:42

Dan great to here a negative point of view, development costs yes but only bad depending on your point of view. In this case with the increased revenue and increased profits from the acquisition i think we are undervalued going forward.
Happy to continue adding as funds allow.

[dan_the_epic] 02/1/2015 09:25

More tat that does not make MUCH MONEY. PRofit Schmofit.

Half year results
1.4 mil £ pbt
1.7 mil £ on development costs
real eps are NEGATIVE

NO WONDER the BALANCE SHEET IS GETTING WORSE. NO WONDER IT IS HEADING DOWN. DONT BE FOOLED.

[battlebus2] 02/1/2015 08:57

Thanks for the new thread Glasshalfull, i've been buying a few of these myself and see them as my nap for 2015. I believe there's been a seller which has forced these down as they're illiquid at times. To me they are very cheap going forward as GHF will no doubt tell us but forecasts i have are
31st DEC 40.72 4.6 8.56p with a p/e of 10 which is lets face it really cheap for a software co and gives us EPS growth of 30%.
I don't believe the market has taken onboard the recent acquisition either.

Should recover well in 2015 imv but as ever dyor etc..

[glasshalfull] 01/1/2015 13:46

AISHAH - I'm interested in these...in process of creating a New Thread for a New Year! Will finish it off over the next few days with my initial thoughts.



A Happy New Year to everyone.

Regards,
GHF