Gresham Technologies Share Discussion Threads

[amt] 09/1/2017 21:56

Quantas yes see what you mean. The acquisition makes it impossible to analyse. Have to wait until March.

[qantas] 09/1/2017 21:41

AMT what you have to work out is C24 paid with a share placing price 3.41M plus 1.14m if target reached the question to ask is C24 cash burn and what did C24 bring to the table cash etc and what was the cash value of C24 at time of purchase. Please do your own research...

[amt] 09/1/2017 20:50

Closing cash was 7.2m They had 4.7m at December 2016 so only up by 2.5m when they say strong cash generation. Where has rest of cash gone. Have they capitalised some costs ?

[double double] 09/1/2017 18:55

The cash increase could also be due to high margin on CTC. Cantor did point out the cash generative nature of Greshams' business.

[richjp] 09/1/2017 18:33

The big surprise for me and a very pleasant one as I keep banging on about it, is the cash position of £7.2M, up from £3.9M at the half year, particularly as they have still been spending on infrastructure. They talk about strong customer cash collection in the fourth quarter but I suspect there is more to it than that. Perhaps C24 had a decent amount of cash on it's balance sheet when acquired and the other possibility would be that one or more clients paid up front on a more traditional sales model rather than GHT's preferred SaaS model.

By the way schytalk, they have never suggested they would pay a divi in 2017, but in the last half year accounts said they would "consider" paying a divi in respect of fiscal year 2017, which I take to mean that the first actual payment would be in 2018.

Otherwise although a number of strategic objectives seem to have been achieved the overall revenue growth is still less than I would like to see. The percentage CTC growth looks good but that is because the base was so low. Also the annual recurring revenue is still growing slowly but perhaps we are getting used to that.

CTC still accounts for less than fifty per cent of total revenue and the non CTC revenue seems static, so we do need a lot more growth from CTC for the share price to go much higher from here in my view.

Will this be the year when they really kick on? Maybe we will get a better idea when the full results come out in March.

[double double] 09/1/2017 15:27

Afternoon run or US joining in.

I noticed another time there was a spike, about this time in the afternoon.

[4-10] 09/1/2017 12:02

Richard Holway's firm TechMarket likes the announcement...

Gresham signals excellent progress
Peter Roe, 09:34, 09 January 2017

The management of this provider of real-time transaction control and enterprise data integrity solutions continued to make significant progress in November and December – capping what had already been a very successful year.
Firstly, “Gresham Computing” changed its name to Gresham Technologies, after the acquisition of C24 Technologies and to recognise the changing profile of the group. Another win for the company’s Clareti Transaction Control software was announced, adding a contract value of over £1.1m and a fourth insurance client to the company’s list of recent successes.
Potentially however, the biggest news was the signing up of a US Tier 1 bank at the end of December. The 5-year contract, initially with a minimum value of US$1.1m, will enable this major bank to replace out-dated in-house processes, improving data quality and customer service and supporting management controls and regulatory reporting. This is the first significant success for the company’s New York sales operation and opens a significant market opportunity (possibly explaining the sharp recent rise in the share price).
Today’s confident trading update forecasts 2016 revenues up 16%, to £17.2m (compared with a 10% rise in H1). Adjusted EBITDA is forecast up 39% to £3.8m. Revenues from the Clareti solution were up 42%, to represent over 40% of the Group total with Clareti software recurring revenues up 57%. The C24 acquisition is already making a significant contribution. 11 new Clareti customers were signed up during the year. The company has net cash of £7.2m.
2017 looks like being another year of progress and improving financials. The Clareti product is gaining momentum (as seen in the win with the major US bank) and Gresham has broadened and strengthened its routes to market, with international sales capability and the perceptive C24 acquisition. Detailed results will be published in mid-March.

[martinthebrave] 09/1/2017 10:41

schytalk - Excellent analysis.

[double double] 09/1/2017 10:14

I am sure it takes many years for a product to take off especially on the international market. They broker US only last year so I am prepared to give them a chance. I would expect client wins to accelarate in the coming months and years, I think this is what Cantor alluded to “stand before significant GLOBAL market opportunities".

[schytalk] 09/1/2017 10:04

dd, given the cash position I think dividends should commence in 2017.

I am still cogitating the update but confess to being underwhelmed, mind you the market likes it and I reckon 150p is about right for now, I have for some time (as expressed on here) thought this was a fair share price number.

I firmly believe that the potential here is enormous but can this CEO deliver, beginning to have my doubts. Looks like the two deals announced in December were, as richjp hinted, somewhat of a scramble to make the numbers rather than some 'jam'.

All to play for.

[double double] 09/1/2017 09:23

Up 7p now, I think I can safely say that 140p barrier is now gone. I wonder if Tintin and Ashton will update their numbers for 2017 and 2018 today or wait for March.

Currently we are on pe of 23 for current year. People are going to be looking ahead to 2018 relatvely soon and perhaps dividends!

[schytalk] 09/1/2017 09:01

Overall a good set of results but it is a rather boiler plate announcement and will take some time and effort to understand what the real picture is. Looking forwards to an improved information flow from GHT in 2017.

Great cash position.

Start of contributions from C24 and two new signings.

The revenue line is at the low end of my expectations but this seems to be due to CTC services revenue (which has been lumpy) being £1.2 million (£1.3 million for H2 2015) for the second half and £2.8 million for the year. So is this lack of customer demand, services being given away for free or internal projects such as Loan Control, C24 integration etc.

On the plus side recurring CTC revenues are up strongly (43% ignoring C24) and is in the 30/40% compound range that I calculated was the true run rate (based on overall 15% growth). It does seem that once signed, rather than minimum revenues the expectation is for strong organic growth.

We have 11 new CTC wins, the same number as 2015, so no real growth as yet being delivered by the new sales force, presumably this is yet to make a significant impact.

No mention of Clareti Loan Control which was supposed to start making a contribution, again should be a good contributor in 2017.

Although stated 'in line with market expectations' EBITDA appears to be at the very bottom end of the scale - 3.8 against a range of 3.9/4.2.

So a good set of results which include some very strong recurring revenue numbers. Not as good as I had hoped for though and perhaps this is explained by some management distraction around the C24 acquisition, with normal business slipping in priority somewhat.

One thing I cannot work out is the forecast for 2017, revenues of circa 20 million (19.8/20.3). This seems on the low side to me, starting from 17.2 for 2016, increasing that by 15% (30% compound CTC growth) and adding a full year of C24 revenue (1.5 million at least?) then surely it is 21 million plus.


As always with GHT, more questions than answers, but as I write this I see the share price is up 4p.

Certainly these numbers support the Cantor report and therefore the 180p BUY. I still believe there is explosive growth potential in this share, as always DYOR.

[amt] 09/1/2017 07:15

Sales at lower end but good cash at first glance.

[double double] 09/1/2017 07:08

That is very good cash.

[gottafly] 08/1/2017 09:20

inforprofit, the meaning of the low bid for the 100k shares is pretty simple I think. N1 had demand, knew they could sell them and make a profit. Brokers are a bit like the tax man, a necessarily requirement but they have the same objective, they want their slice of the pie.

Still yet another little indication that there are 'those in the know' and I remain very uncomfortable as regards the share price movements, as someone said it always seems to move for no real reason, ususally prior to an announcement. GHT have not helped with their communication strategy, or rather the lack of it, but I see no advantage to GHT in having a too low (or too high) SP, it is however an opportunity for others to make money.

I am still mystified that the share price did not move following the C24 acquisition although it had been steadily rising prior to. If the current price hike had happened with the C24 announcement I could understand it but it seems to have needed the Cantor note (and BUY at 180p) to spotlight the share.

As always DYOR.

[4-10] 07/1/2017 22:25

Gee I wish I was as clever as Rich, I never had the guts to throw more money at GHT I thought about it loads of times when the price was low. But at least, finally, it looks like I will recover my initial investment and maybe even make a profit. The signs all look very good for the share price to grow significantly in 2017. Good luck to you all.

[qantas] 07/1/2017 21:08

True just trust your gut feeling..

[richjp] 07/1/2017 19:41

For the record, I am another long term GHT holder.

My first purchase was 5,000 at 108P around 2003. Like 4-10 I watched it soar to £4.50 and just like 4-10, I held on when the smarter move would have been to sell half. I still believed in the RTN story and compounded my error by buying more as it went down.

I started buying again from mid 2008 until 2012 at prices from as low as 30P up to 67P. The result is that I now have 80,000 of these babies at an overall average purchase price of 54P, with the bonus that all of them were bought with ISA and SIPP money.

I am obviously a pretty happy chappy at the moment although common sense says I should at least top slice or sell half, as GHT forms by far the largest percentage holding of my portfolio by some distance. Still, what has common sense got to do with it.

[qantas] 07/1/2017 10:35

Means they are short of stock to sell back to buyers...DYOR

[inforprofit] 07/1/2017 10:03

Just had a chat with my pal who introduced me to GHT. Apparently N1 approached him to sell 100,000 shares at 116p immediately prior to the rapid share price price hike. Not sure what that exactly means but it doesn't feel right.

[4-10] 06/1/2017 16:42

Thanks, lots of great educational stuff flying low over my head here guys did someone say ducks!

[richjp] 06/1/2017 16:35

double, double, my understanding is that each insti will have it's own rules and that there is no standard or regulatory requirement. For example some instis will not invest in AIM stocks, others in companies that do not pay a dividend etc. whereas others will.

[wh1spa] 06/1/2017 16:01

could always be down to quacking ducks - GHT is fairly illiquid!

[double double] 06/1/2017 15:47

richjp, if there are restrictions it normally applies to any new purchases, i.e. you are allowed to hold over 10% [of the portfolio, and assuming that is their limit] if the value of the investment rose as a result of market movement.

[gottafly] 06/1/2017 15:44

richjp, one further though, if Hambro had to sell to to their rules/the share price increase, would they not have sold 150k shares to a large investor rather than in job lots to PI's. Surely with the Cantor brokers note and 180p buy there are a number of institutions lined up to invest, or is 150k too small a position. I confess my ignorance of these things but it looks like a curious affair.