|Horizon Technology Group
||EPS - Basic
||Market Cap (m)
|Software & Computer Services
Real-Time news about Horizon Tech. (London Stock Exchange): 0 recent articles
|tole: BUY recommendation out today from Goodbody Brokers.
Horizon (Buy, Closing Price 0.94)
H107 Results tomorrow
Analyst: Gerry Hennigan
Horizon is scheduled to release H107 results on tomorrow, a period which will mark the first full six month contribution from all three acquisitions (EquIP Technology, EPC and WBT) completed in 2006. That, along with the disposal of the distribution franchise (wholly confined to Ireland), should give greater visibility on the revised model, which is now firmly focussed on network infrastructure and application consulting. We are forecasting H1 sales of 141.9m and adjusted EPS of 4.9c. On a continuing basis, our H1 revenue outcome would represent annual growth of 8% and a sequential increase of 12%. Within the revenue line points of note will include:
the proportional contribution from the geographic spheres of operation (UK and Ireland); and
the strength or otherwise of each of the two broad revenue categories (infrastructure and application consulting) due to the divergence of margin achieved.
The dynamic will warrant attention, in our view, particularly in light of exposure to Sun platforms, from which 50% - 60% of revenue is derived. A clear objective of recent M&A activity, in our view, was to provide the platform for revenue growth in the UK, while at the same time concentrating the model in higher margin revenue streams. Divestment of the distribution business has partly aided that transition, as has an increase in the relative exposure to application consulting. Past commentary would also suggest the prospect for further dealflow. While the model transition has created a degree of uncertainty over the past year, current valuation at 8.2x FY07 and 7.4x FY08 adj. earnings is undemanding. A solid H1 outturn should, thus, provide a 'floor' for the share price.|
|this_is_me: A great jump in the share price.|
|tole: Admittedly have never held - but watched with interest.
A couple of summary notes -
Disposal of the distribution business.
Analyst: Gerry Hennigan
Horizon announced yesterday the sale of its distribution business for EUR6.2m in cash to UK-based Westcoast. Adding the EUR9.1m in associated net debt suggests a take-out price of c.11x FY05 EBIT. The rationale for the deal would appear to be based on: (i) greater concentration on the infrastructure business where growth has been more apparent (revenue up 11% yoy while EBIT increased 13% yoy in FY05, compared to a 24% decline in distribution EBIT); and (ii) a focus on the more profitable end of the business (FY05 EBIT margin in infrastructure of 5.4% v 1.1% in distribution). Distribution, which accounted for 40% of FY05 revenue but 12% of EBIT had struggled of late in part because of general market conditions (price deflation) but also over-exposure, in our view, to HP (we estimate c.90% of distribution sales derived from HP) and tighter credit terms mandated from HP. Distribution trading margin declined by 33 basis points in FY05. Guidance for FY06 earnings is now in the range of 9.0c - 9.5c. At the mid-point that would suggest an FY06 earnings multiple of 10.5x, which is undemanding. We had been forecasting 11.0c, however, with consensus of the order of 10.6c. Hence, while the disposal streamlines the business, guidance would also suggest a transition period to allow for recent acquisitions (EquIP, EPC and WBT) and the disposal to bed down.
H1'06 Results Preview.
Analyst: Gerry Hennigan
Developments since the release of FY05 results in March provide ample scope for discussion when Horizon releases H1'06 results on Thursday September 14th. Two acquisitions, the disposal of the distribution business and revised earnings guidance for the year have resulted in considerable change, and, based on the share price direction (down 23%) over the intervening period, a degree of uncertainty. We are forecasting sales of EUR171.6m and adj. EPS of 4.4c. Within that, we are forecasting revenue from distribution of EUR60.1m with the remainder from enterprise solutions. Aside from the EquIP acquisition, non-distribution sales are derived from the integration of Sun systems in the UK and Ireland, application consulting and bespoke development (Client Solutions) in Ireland and initial IBM-related sales in the UK on foot of recent investment. Our forecast for distribution sales represents 9% yoy growth, but a 5% sequential decline. The limited growth in that market, combined with ongoing margin pressure, provided the apparent basis for management's decision to exit distribution in favour for the higher margin and growth associated with its systems integration revenue lines in the UK and Ireland. Earnings for the current year have now been pegged in the range of 9.0c to 9.5c compared to our original forecast of 11.0c, which we have yet to revise. At the mid-point, that would suggest an FY06 earnings multiple of just 9.8x, which is undemanding and thus would suggest value. That said, the recent downward revision to earnings would suggest a period of transition, and in that regard attention is more likely, in our view, to focus on management comments and guidance, rather than on the actual results for the first six months of the year.|
|this_is_me: Bought back in this morning. I was watching the share price with the intention of buying when I was confident that the share price had bottomed out and was on the rise, but this morning's announcement caught me on the hop.|
thought i'd drop by and say hi on this quiet thread. Cathal is an excellent CFO. I bought HOR at 18p last May and watched re-rating to 60p in six months. The share price has now consolidated for eight months and i agree with you, i think we'll see a further upward movement to about 100p in the next few months...
...another of my favourite shares is OMG (www.omg3d.com www.vicon.com.) Currently has a market cap. of £13 million (with £4 million cash in bank). I expect OMG market cap. will reach approx. £50 million during the next two years. OMG will be issuing an interesting press release later today...|
|smoketrader: Yes! I'm still in, the share price was starting to drift a little and I was wondering if I'd made a mistake holding on to them. But a nice return to profit and a cautious outlook so hopefully we'll see a continuation of the rise from here.|
|smoketrader: Ermmm... well... er... you could be right.
Although, since as far as I know they never announced winning the Ingersoll-Rand contract in the first place it could still have a positive effect on the share price.
(Bluffed my way out of that one quite well I think)|
|blackbear: company does have a few high profile customers...
O2 on-Line: O2's Integrated Mobile Internet Service
Xerox: Building World Class Data Centre Infrastructures for Global Organisation
Vivao: Integrating the Internet and Wireless Worlds
Care4Free.com: New Multi-Channel Portal for over 20 Major UK Charities
Expocentric.com: First Interactive 3D Virtual Exhibition Website
University of Ulster: Consolidated Server and Storage Platform
Waterford Crystal: Waterford Crystal Data Warehouse
Pepsi Cola: OLIS Warehouse
Elan Pharmaceutical: Quality Reporting System
Elan Pharmaceutical: Regulatory Projects Tracking System
Elan Pharmaceutical: Electronic Document Indexing System
AIB Group: On-Line Business Calculators
Bank of Ireland: Same Day Money Transfer
Bank of Ireland: Customer Information Point Touch Screen Services
Eircom: Delivering Customer Service
Davy Stockbrokers: Share Price and Research Companies System
Janssen Pharmaceutical: Change Control System
Saab.ie: On-Line Content Management System
this is a mid cap stock going for penny's|
Horizon Technology share price data is direct from the London Stock Exchange