Gresham Technologies Share Discussion Threads

[thebullyboy] 19/8/2016 12:13

Well the share price has been sliding for almost a year. The company has been saying it has been spending on sales and marketing for a good number of years, I hope that line changes soon and the company gives reassurances about next year and turns this around soon. Will Kestrel be happy with the new CEO if things remain the same.

[jadeticl3] 13/8/2016 19:18

There you are gold nugget. What is your next question?

[thebullyboy] 12/8/2016 15:54

I hope the company has a paragraph in the next interim results about how it spent £800k in 6 months.

[goldnugget] 10/8/2016 09:04

Share price slowly drifting down...Will it go sub 90p?

[qantas] 06/8/2016 19:45

Richjp Thank you....

[richjp] 06/8/2016 18:52

For what it's worth the August issue of Techinvest still has GHT as a buy.

The item really just summarises the trading update and gives nothing new, but does say that continued progress should improve the share price

[wh1spa] 03/8/2016 04:42

coincidence?https://www.gresham-computing.com/11541-2/https://governmentasaplatform.blog.gov.uk/2016/07/29/pay-pci-accreditation/

[richjp] 28/7/2016 19:16

Capitalisation of development costs is indeed contentious which is why I dislike EBITDA as does Warren Buffett amongst others.

The old saying is something like profit is fantasy whereas cash is reality. If the cash diminishes too much then you end up with more fund raising with the subsequent dilution of shareholder value, even if the profit forecasts are met.

[amt] 27/7/2016 22:01

Development costs are internally generated and are capitalised at cost. These intangible assets have been assessed as having a finite life and are amortised on a straight-line basis over their useful lives of six to 20 years. These assets are tested for impairment where an indicator of impairment arises


Yes they do capitalise development costs which is normal practice but worth checking out when considering cash flow because I tend to look at cash movements closely.

[amt] 27/7/2016 21:55

One thing to watch out for is I think they capitalise some R&D so they could still have profit of 3m and burn cash notwithstanding cap ex less amortisation and working capital adjustments. It's worth keeping an eye on because some analysts don't like that and would rather see R&D written off immediately. That's why it's difficult to interpret a trading statement, it doesn't give us that type of detail.

[thebullyboy] 27/7/2016 21:43

N+1 SINGER forecasts are readily available and are as follows:

Year Ending, Profit (£m), EPS, P/E, PEG, EPS Grth., DivYield
31-Dec-16 3.09 4.87p 19.6 0.4 +47% n/a 0.0%
31-Dec-17 3.56 5.60p 17.1 1.1 +15% n/a 0.0%

hxxps://www.share.com/find-investments/advanced-finder/company-overview/gresham-computing/financials/forecasts/24591/

If these numbers are met then the pe ratio is undemanding for the next few years.

[richjp] 27/7/2016 15:19

The trading update was certainly below my more positive expectations and I am largely in agreement with everything amt has posted. It is all very well comparing CTC growth to the first half year last year but compared to the second half last year, which surely should be more relevant, there appears to have been no growth at all. They also mentioned six new orders but did not say if one of them was the major client that was expected.

N+1 Singer is the house broker so I would expect them to be positive as they have been in the past. schytalk I don’t think the broker has suddenly become supportive. They have been in the past it is just that us PIs do not always get access to their analysis, whereas on this occasion someone has found a link. The broker talks about GHT meeting their year end “expectations”, but they have not stated what those expectations are. I would love to see the broker forecasts for the year end if anyone has access to that information.

The TechMarketView summation is more interesting although I do think that TechMarketView do get a bit carried away sometimes in their enthusiasm for what they see as disruptive technologies.

The fall in cash must be a concern although in the final results for 2015 they did say they would be investing further in expansion. GHT say also that things are in line with management "expectations", but again we do not know what those expectations are. I am afraid that use of the expectations word is just common management speak.

In the 2015 results they stated that they will “consider a maiden dividend in respect of financial year 2017”. When the interims are announced I would like to see a further commitment to that statement, as well as an explanation as to why the cash balance has dropped considerably.

[gnnmartin] 26/7/2016 11:14

I too am waiting for the interims. I can't help seeing scope for these first half results being better than they look at first glance (so many different measures: growth in CTC revenues versus growth in CTC software revenues, change in cash versus year end versus change in cash at previous half year end, etc.). Doubtless I'm suffering from confirmation (or rather wishful thinking) bias.

[schytalk] 26/7/2016 11:02

amt

I think the uncertain market will create opportunity for Gresham rather than further entrench systems that are not fit for purpose. However, I accept that perhaps it will cause some delay whilst banks get their head around the new environment, perhaps that has already delayed some deals and that would in part explain the numbers.

Time will tell and I agree that brokers can be fickle but up to now they have not really been on side, as I say neutral at best. It does look like the brokers are now pro so I presume they like the new CEO and what he has achieved so far, albeit we have not seem this in the results.

Hope your investment strategy works out for you.

[amt] 26/7/2016 10:28

Yes all could be well and they could have a dazzling H2.
Not sure we can read much into the Brokers report though as I have seen so many instances where they make bullish sounds only for the share price to collapse a few weeks later. Anyway I have been selling a few into strength to reduce my holding as those numbers made me nervous. Not sure if the new guy is like so many putting a positive spin on things, he is relatively new so we don't know how he handles the reporting. His predecessor seemed to tell us how it is so hope this chap does. My overall impression though is that the share price might go up 10% if they make the numbers but be down in the 60s again if they don't because it's on such a high rating. I had hoped they would show decent growth and I could have locked away my shares for 10 years and see what happens. If they are back on target by y/e I won't mind buying back in ten or twenty percent higher and will have done on with my remaining holding. Perhaps Kestrel buying more will give a better indication. Finally a deterioration in the economic situation is likely to lead to investment cut backs so exposure there also. Companies might stick with their spreadsheets for a bit longer.

[schytalk] 26/7/2016 08:11

amt

Agree the headline numbers were not that impressive and my feeling was the same as yours but I think we should wait and look at the detail in the interim report.

The share price was marginally up yesterday and the bid spread is trying to tease it up further. As I said in my previous post, the brokers seem to be on board now after at best being neutral, so what do they know that we do not.

Gresham state they have an excellent sales pipe line going into H2. I think this is a small set back but after all we are talking about Gresham here!

[amt] 25/7/2016 15:53

CTC REVENUES

H1 2015 2.2
H2 2015 3.1
H1 2016 3.2

Where's the growth? They should have been 4.5m to show acceleration.
It's too soon to celebrate unless they have something up their sleeve for H2.
They need 4.5m at least in H2 to show momentum.
The legacy business is irrelevant to the valuation apart from helping to reduce losses.
Aso there must be worries about banks holding back on investment as the economy takes a hit.
It's the first time I have been negative for a long time.

[amt] 25/7/2016 15:40

All very well but on closer inspection there has been a dramatic slowdown in growth of Clarretti from 200% to only 45% which on such low revenue is peanuts. The worst part is the cash being consumed. I am selling into hopefully strength in share price

[schytalk] 25/7/2016 11:33

Well a positive note from the brokers, that is a real plus and they now seem to be fully on board and supportive. Seems from the language that they believe the share price is below where it should be. I have felt for a long time that Singers were at best neutral as regards Gresham, looks like they now rate it as a buy. Very good news indeed!

The Holway note is also very supportive, overall some much needed positive press.

[4-10] 25/7/2016 11:10

From Richard Holways firm.


Gresham indicates a strong first half
Peter Roe, 09:52, 25 July 2016

In March we wrote about Gresham Computing’s excellent performance throughout 2015, see here, where they launched a cloud-based, as-a-Service option for their Clareti transaction control and data integrity software (CTC) and announced 11 new customer wins.

Now the management team indicates that this strong progress has continued throughout the first half of 2016, with six new CTC customers added, three of whom are in the US. Overall group revenue growth is expected to be 10% over the first half of 2015. This does represent a slow-down from the 16% growth reported in 2015, but this will be largely due to the phasing of legacy contracts. CTC revenue growth remains very strong, up 44%, with recurring licence revenues up 47%, albeit showing a small decline on the 51% reported last year. The continued revenue growth and the shift away from project-based consultancy services should also enable an improvement in EBITDA margins.
In addition to new customer signings, we would also expect good news about greater share of wallet and additional benefit from focusing on customers in the capital markets and transaction banking sector.

The interim results are expected on August 24th.

[qantas] 25/7/2016 08:25

Six new CTC customers in first half, trading in line
25 July 2016
RNS Number: 0508F

Gresham Computing plc (LSE: “GHT”, “Gresham”; or the “Group”), the leading software and services company that specialises in providing real-time transaction control and enterprise data integrity software, is pleased to provide a trading update for the half year to 30 June 2016.

Gresham expects to report that Group revenues for the six-month period ended 30 June 2016 will be ahead by 10% over the same period in 2015, in line with management’s expectations. The Group’s flagship CTC offering continues to grow strongly with total Clareti revenues expected to be ahead 44% and Clareti recurring licence revenues up 47%. Net cash at 30 June 2016 was £3.9m, and gross margins continued to strengthen in line with plan. Management remains confident in the full year outlook.

Gresham expects to announce its interim results for the six months to 30 June 2016 on 24 August 2016.

Ian Manocha, CEO, commented:

“Clareti sales continue to propel the Group forward as data integrity moves up the regulatory agenda for financial services firms. We booked six new CTC customers in the first half, including three in the US. The investments the Group has made in sales and marketing, and in our Clareti-as-a-Service cloud offering, are flowing through into our pipeline and we enter the second half with strong momentum. I look forward to providing more details in my Interim Report.”


hxxps://www.gresham-computing.com/regulatory-announcements/six-new-ctc-customers-first-half-trading-line/


onday 25 July 2016
Gresham indicates a strong first half

gcIn March we wrote about Gresham Computing’s excellent performance throughout 2015, see here, where they launched a cloud-based, as-a-Service option for their Clareti transaction control and data integrity software (CTC) and announced 11 new customer wins.

Now the management team indicates that this strong progress has continued throughout the first half of 2016, with six new CTC customers added, three of whom are in the US. Overall group revenue growth is expected to be 10% over the first half of 2015. This does represent a slow-down from the 16% growth reported in 2015, but this will be largely due to the phasing of legacy contracts. CTC revenue growth remains very strong, up 44%, with recurring licence revenues up 47%, albeit showing a small decline on the 51% reported last year. The continued revenue growth and the shift away from project-based consultancy services should also enable an improvement in EBITDA margins.

In addition to new customer signings, we would also expect good news about greater share of wallet and additional benefit from focusing on customers in the capital markets and transaction banking sector.

The interim results are expected on August 24th.