Communisis Share Discussion Threads

[rivaldo] 09/3/2017 15:37

Decent-sized director buying - a non-exec buys 100,000 shares at 49.9p:

[isis] 09/3/2017 14:24

The HMRC contract is likely to add nearly £300m turnover to the Company - that is getting on for double what it is now.

[rivaldo] 09/3/2017 11:43

Techmarketview are also positive:



Conclusion:

" combination of efficiency improvements, such as from the new two division structure (see here), and recent contract wins give Communisis more confidence about the future. We were particularly pleased to see significant new multi-year contracts with Liverpool Victoria Friendly Society, HMRC (see Communisis wins “landmark” HMRC deal) and a global healthcare client during the year. A growing international presence should support future growth – international sales now account for 26% of group revenue, up from 18% in 2015, and Communisis is set to open its first office in the US by June, initially providing content-marketing services to existing client Linked-In.

Communisis reports the start of 2017 has been in line with expectations and it’s expecting ‘another positive year’ for the group. The assumption is that, with outsourcing of incoming and outgoing customer communications on the rise but clients tending to reduce the number of service providers they use, providers with scale and a broad range of services, such as Communisis, will benefit from any increase in spending."

[mcfly79] 09/3/2017 11:27

Thanks njb,CMS has also been a very good investment for me overall. I'm going to hold as I'm hopeful we are now entering a period of stronger cash flows after the investments of the previous years.All the best.

[speedsgh] 09/3/2017 11:14

Short video interview with CEO Andy Blundell on the Final Results...

Significant improvement in 2016 profitability for Communisis (6min 52secs) -

Andy Blundell, chief executive of Communisis PLC (LON:CMS), tells Proactive that a rigorous focus on being the UK market leader for transactional communication, and expansion of brand deployment business overseas helped boost profit in 2016.

It's an achievement for the integrated marketing services company which from having no business overseas seven years ago now has 26% of its group turnover outside the UK.

Blundell is also particularly proud about the company's £9mln reduction in net debt over the period.

[robards] 09/3/2017 10:50

Mr Roper, it's not short-term interest rates, but long term yields.
By way of illustration, the yield on 10 year gilts was as low as 0.5% last summer, and increased to 1.5% by January this year. It's now down at about 1.2% again but the trend is upwards. The bond bubble is over, inflation is back, etc.

[masurenguy] 09/3/2017 10:49

Good spot isis. The most salient points were:

"Considering its market capitalisation is £110m, a free cash flow of £12.9m per annum implies a free cash flow yield of 11.7%. So compared to current interest rates, the shares look severely undervalued. Shares in Communisis look undervalued on other metrics as well. For example, at the time of writing the shares are trading at a historic P/E of 8.3 based on today’s adjusted earnings figures. For the past four years, the shares have traded at an average P/E of 10 so a return to this multiple would see the shares hit 61p. That’s not all. Over the next two years, analysts expect earnings per share to hit 6.5p, indicating a potential price target of 65p. Over this period, 5p per share of dividends are also pencilled-in, suggesting a potential total return of 70p — that’s a potential upside of 40% from current levels."

[bootie64] 09/3/2017 09:56

Picking up nicely after some early sells


5 day view



1 day view





Final dividend has also been increased by 10% to 1.61p per share, payable in May.

[interceptor2] 09/3/2017 09:47

For clarity I did sell my holding here at the open.

There were negatives and positives in todays results which made my decision a difficult one. My main concern remains the pension deficit even though the figures were already known in the last trading update. I understand that a review is due soon so there is an unknown about future contributions, and another unknown about future interest rates in the UK.

Yet I feel that 2017 is likely to be a good trading year with margins, contracts and revenue all likely to rise, but I will watch from the sidelines for now and watch developments with a view to invest again if the opportunity arises.

Wish investors here all the best.

[njb67] 09/3/2017 09:15

McFly

Looking at MYI and CCJI - a couple of investment trusts - rather than individual stocks. As I get older, the portfolio is moving more toward reliable income streams, investment trusts rather than individual stocks and geographic diversification - I am overweight UK so looking to reduce.

CMS has been one of my best ever investments but I feel now is a good time to move on. I try and form an objective pros and cons list for all my investments. I posted earlier my bear points on CMS, so will not repeat here. While I remain a big fan of the company, the balance of risk / reward is no longer attractive to me and I would rather hold other UK investments.

Good luck to all that continue to hold, hope CMS treats you as well as it has done me over the years.

[edmundshaw] 09/3/2017 09:14

Given the closing price of 53p yesterday was not a real price, share price almost back where we started now.

Decent results, share price is still very undervalued. I cannot bring myself to sell any at this discount. In fact I even picked up a few of njb's on the dip!

Cheers njb, and good luck with the next investment!

[speedsgh] 09/3/2017 09:12

EDIT: To give some historical context to the pension deficit & net debt:

PENSION DEFICIT
2016: £55.5m
2015: £41.1m
2014: £39.1m
2013: £27.7m
2012: £21.7m
2011: £14.2m
2010: £9.7m

NET DEBT
2016: £30.4m
2015: £39.4m
2014: £35.9m
2013: £25.7m
2012: £20.0m
2011: £24.7m
2010: £19.2m

[brucie5] 09/3/2017 09:11

Some people are hard to satisfy! I would be waiting for at least 60. And good share stories tend to overshoot.

[qs99] 09/3/2017 09:08

beat me to it Riv!

[rivaldo] 09/3/2017 08:42

Bouncing now. Liberum have a 75p target and conclude as follows:

"Valuation - Trading on 0.4x sales, a P/E of 8x, and a FCF yield of 12% CMS is still lowly valued despite the recent bounce in the shares. This partly reflects the challenging pension backdrop and the mixed track record of acquired businesses. However, there is evidence that the digital operations are better positioned going into FY17 and at a group-wide level the willingness of management to focus on a cost management programme helps add visibility to profit forecasts.

We believe future growth in earnings and cash, together with a potential reversal in the longer-term outlook in the pension deficit, can support a re-rating towards
our Price Target of 75p (equivalent to an FY16 P/E of 12x)."

[qs99] 09/3/2017 08:39

edging back up...

[mr roper] 09/3/2017 08:34

every time I read about pension deficits I see folk saying with interest rates on the rise or interest rates are rising.. .the question is where? I can't see the BOE raising rates, inflation is hardly rampant. The Fed look to be the only show in town where they might raise next week. The rest is just talk. The BOE have been talking about raising rates for a decade now...When will they walk the walk?

[mcfly79] 09/3/2017 08:23

Thanks for letting us know.Have you got a new stock in mind for the cash. Please let us know if you're able. I'm going to have some free cash in a few months time so I'm looking to research some new stocks.

[njb67] 09/3/2017 08:16

After being part of my portfolio since 2009, I sold out this morning. I will continue to keep an eye on CMS. Have enjoyed the ride, it has looked after me very well.

[edmundshaw] 09/3/2017 08:02

Good results. Aviva had similarly good results and marked up 5% on open. Oh to be noticed! :-)

[joe say] 09/3/2017 08:02

The next pension payment calculations will be calculated imminently - ie March 2017

I would have thought that the position since 31 December has undoubtedly improved and thus whilst the statement may cast a picture of doom and gloom, the reality may well prove to be a lot better

And securing further long-term contracts has got to be a major positive. Onwards and upwards I say

[mcfly79] 09/3/2017 07:56

Over recent years the company has always reported exceptional items and required capex for investment in new contracts.I look at true free cash flow as the only reliable indicator of the improvement in the business. This has improved in the year. Net debt has decreased by £9m but this includes a £2.4m benefit from currency movements. Underlying free cash flow was therefore £6.6m. The company paid £4.8m in dividends in the year so I make true free cash flow £11.4m for the year. Definitely going in the right direction.

[qs99] 09/3/2017 07:54

have to think long-term with PD IMO, with interest rates on the rise, those with big PD should IMO benefit as the yields on "risk free" assets rise, very slow, not overnight and still risk I get that, but not sure the market will take too much fright..look at WIN and COA where pension deficits were big, but people start to see turn into equity value in the future and buy in to the story....DYOR