Gresham Technologies Share Discussion Threads

[thebullyboy] 24/8/2016 14:45

Some one is selling but some one else is buying. I hope new investors or directors are taking part and not just Kestral for a change.

[the drewster] 24/8/2016 14:29

goldnugget - NO.

If %growth-in-earnings > %increase-in-share-price then the PE comes down.

PEG ratio of less than one is considered good value, so long as you believe the growth is sustainable.

PE 30
Growth prediction > 30%

Fairly good sign, and should be easily bettered in my view.

[thebullyboy] 24/8/2016 12:41

Also remember historically GHT has always traded around pe 30. If they meet expectations it may continue to do so.

[goldnugget] 24/8/2016 12:37

For the PE to come down doesn't the share price have to remain stagnant against rising earnings?

[schytalk] 24/8/2016 12:25

Well said BB I think at last things are moving in the right direction and the board have remained 'confident' through what appears to be a sticky patch.

[thebullyboy] 24/8/2016 12:06

PE of 32 is historic or very soon to be, we are looking at 20 and 18 for 2016 and 2017. The Board are confident of expectations for this year.

[qantas] 24/8/2016 12:00

But the big question is what level is considered high or low?

There is not short answer to that question. Different people interept the PE differently.

For example, growth investors may regard a PE of 32x as not unreasonable if a company is expected to grow strongly.

Whereas a value investor like (Warren Buffet prefer companies with a low PE.s .

[goldnugget] 24/8/2016 11:45

PE ratio of 32 is pretty high...

[schytalk] 24/8/2016 11:44

SP moving up nicely (6p) on a good volume of shares (623k), looks like the half year report has been well received.

[amt] 24/8/2016 11:27

Its certainly high risk on such a high pe so they must meet the talk with the financials in h2.

[mick bell] 24/8/2016 11:04

It would be even nicer if they beat expectations in H2, after a year or 2 of
results not quite meeting expectations.

However looks like someone has had enough 600,000 in 4 large sell trades so
far this morning.

[amt] 24/8/2016 09:33

Yes they have set a high expectation for H2 which if met could be start of take off in share price

[amt] 24/8/2016 09:33

Yes they have set a high expectation for H2 which if met could be start of take off in share price

[schytalk] 24/8/2016 08:59

It does appear that H1 performance was somewhat behind what the board had expected. No big name client signed in Q2 but it appears that this was signed since July 1st - "As anticipated, since 1 July 2016 the Group has signed a North American Tier 1 bank and expects to be able to recognise revenue from this important new win later in the second half of the year once contracted milestones have been achieved.".

Further - "Additionally, Gresham has secured a CTC licence upgrade from an existing global investment bank customer enabling it to extend the use of the technology into new areas, including the replacement of legacy incumbent solutions. This agreement provides for an increase in recurring licence fees and a pricing framework for the bank to deploy additional data integrity controls onto the platform. The Group has also commenced a chargeable pilot project with a UK Tier 1 bank for a new use case for the Clareti platform."

Cash has been used in growing the sales force and this is key - "Clareti sales opportunities are progressing positively in all target regions following the Group's investment in sales and marketing, and we have advanced Clareti opportunities with a number of major institutions that we expect to close in the second half of the year. The Group now has experienced sales staff in the UK, Western Europe, Singapore, Australia & the US and is encouraged by the strengthening pipeline and customer wins"

As BB has pointed out the innovation lab is now complete - "This new facility is the home for our research and development team as well as our 24/7 operations centre for cloud customers and is also proving to be a valuable sales tool when leveraged for client presentations and workshops."


I think when you read the detail this is a very positive report and I think we can expect a strong second half performance, crunch time me thinks/

[thebullyboy] 24/8/2016 08:31

I like the talk of growth and high quality clients to be won. No talk about brexit and banks. I think this is more upbeat than in the recent past from GHT. I am pleased this innovations lab is finnished and perhaps now cash can grow again.

[amt] 24/8/2016 07:42

Looks ok but need to close deals in second half to show the market they are making goid progress as financials in first hakf are not at all exciting as we knew already.

[thebullyboy] 23/8/2016 16:05

Lets see what brings tomorrow and I hope they include an update on current cash, and I hope it is more or at the very least similar to 30 June level. Otherwise I am sure I am not going to be the only one concerned.

I know some of us pi's have come back here but you have to give it to some of the institutions who have stayed with GHT through out. GHT have been very fortunate and I hope they realise this. This product is probably GHTs last chance.

[goldnugget] 23/8/2016 15:41

Medium term analysis from investtech.com:

GRESHAM COMPUTING is within a falling trend and continued decline within the current trend is indicated. On reactions back, there is resistance against the ceiling of the trend channel. Gave a negative signal from a head and shoulders formation by the break down through the support at 98.76. Further fall to 81.60 or lower is signaled. The stock has resistance at pence 95.50. Poor liquidity (traded 86% of the days, mean 2.50 mill per day) weakens the analysis. The stock is overall assessed as technically neutral for the medium long term.

[richjp] 23/8/2016 14:51

BullyBoy, I fully understand why either institutions or PIs can be impatient with the long term history. The point I was making however was that I believe that it is too early to be impatient with the current CEO just yet.

You mentioned the "promise of super growth". That was certainly the case back in the RTN days. Even if it was not exactly promised it was very strongly implied. If RTN had taken off it could have been a de facto standard used by a vast number of banks around the world. In fact it needed to become a standard to succeed, because the benefit to any individual bank would be reduced if only some of their counter parties were involved.

CTC is very different indeed and is unlikely to become a standard because it does not need to be. I don't think that GHT recently has promised "super growth" with CTC. Good growth yes, but not super and I think one or two people's expectations have gotten a bit ahead of the reality.

Still, let us wait now until we see what they have to say tomorrow.

[thebullyboy] 20/8/2016 11:15

The Board bear responsibility as well. As stated this wasn't a broken company and therefore not a big job to come into. I dont think it will be pi's putting the pressure on the new CEO. Some large shareholders similar to some pi's have been with GHT for a few decade now on the promise of super growth. I dont think waiting for a few decade is being impatient. Some of them listed below:

Schroder Investment Management Ltd. 8,890,000 14.0%
Kestrel Partners LLP 7,229,664 11.4%
J.O. Hambro Capital Management Ltd. 6,885,000 10.8%
Majedie Asset Management Ltd. 4,927,967 7.76%
Herald Investment Management Ltd. 4,868,774 7.66%
Hargreave Hale Ltd. 3,505,000 5.52%
Ma Green 3,073,290 4.84%
Investec Wealth & Investment Ltd. 3,058,230 4.81%
Frank Blevins Managers Ireland Ltd. 2,178,091 3.43%
Stephen W. Purchase 2,001,678 3.15%

[4-10] 20/8/2016 09:29

Well said Rich as always the voice of reason. Let's give the guy a chance to perform.

[richjp] 19/8/2016 18:52

I think it’s a little too early to start criticising the chief exec. He only started in June last year. This is not a situation where a company is in dire straits and costs have to be cut urgently, and bits sold off etc. In that sort of situation I would expect to see quick results in the financials.

The new man was brought in to build on what we think is a good base. That means he will have to review the different markets where CTC is relevant and decide how to develop those markets. That in turn may entail changes in product development which will not happen overnight. He will also need to review the pricing models as I suspect that different pricing models will be needed for different market sectors. There is also the possibility that more sales resource has needed to be hired and existing resources reorganised.

I reckon that it would have taken a full year for the company to be set up the way the new chief exec wants it. I have already said that I would have liked to see more progress by now, however that has not happened. The time to start judging the CEO will be when the full year 2016 results are known and we see what has happened in the second half of the year, where the CEO’s activities should be making a bigger impact.

The fact that the share price is below the CEO’s option price to me is irrelevant. GHT is a small cap stock and the share price of a small cap stock can be over optimistic as it was in 2013 at 140P, or over pessimistic as it may be now. The CEO should and probably is taking at least a five year, if not ten year view, to gain his rewards.

Us PIs, myself included are of course more impatient.

[schytalk] 19/8/2016 14:40

BB that is logical and as I say the company seem to be confident and they set an option price for the CEO of 110p over a year ago so I reckon it should be at least this level if not something north of that.

[thebullyboy] 19/8/2016 13:52

Unless there is any nasty surprise in the interims next week, my gut feeling is the share price may be at the bottom and we may start to climb.

[schytalk] 19/8/2016 13:26

BB, I have had similar thoughts and posted previously here. The new CEO has a low profile and was indeed brought in to build the sales channel and significantly expand the business.

GHT has made good steady, if not spectacular progress, and the management are providing plenty of 'confidence' statements, plus of course Kestrel continue to support the share price with share purchases.

Something doesn't seem to add up here especially as the CEO has options at 110p which are quite a bit under water. We should see the half year report very soon so that we can perhaps understand a bit more of where the company is at.

I am hoping the share price is just in a lull and that it will soon move into positive territory - fingers crossed.