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Real-Time news about Ncipher (London Stock Exchange): 0 recent articles
|rivaldo: Interesting stuff from the FT - several bidders apparently. Looking like Thales have got it though judging by the price action:
"Ncipher recommends £51m takeover bid
By Rob Minto, Technology Correspondent
Published: July 11 2008 18:19 | Last updated: July 11 2008 18:19
Ncipher, the Cambridge-based data encryption specialist, has recommended a £51m bid from Thales, the French military electronics company, ending a lengthy sale process that attracted several bidders.
Rumours of the 300p a share bid emerged on Thursday, causing the shares to rise by almost three-quarters. After the move was confirmed on Friday, they rose 26p to 286p.
A previous bid in 2006 by SafeNet, a direct US rival to Ncipher, fell through after it was referred to the UK competition regulator. The Thales offer was described by Geoffrey Finlay, Ncipher chief executive, as "a good result for shareholders".
He said there were no plans for redundancies. Alex Dorrian, chief executive of Thales's British operations, said the deal would beef up its security products and improve its data security services.
Analysts were positive about the deal. Ian Mitchell of Charles Stanley Securities said shareholders should "take the money".
Ian Spence of IS Research described it as a "cracking deal". He added: "The market has struggled to understand the prospects of Ncipher and the price was clearly a surprise. But this is a solid, synergistic deal."
With the share price as low as 125p a few months ago, a 300p a share offer must be a relief for many shareholders. After a management reorganisation earlier this year that removed the company's founders, Alex and Nicko Van Someren, and a substantial investment programme, Thales has realised a good buying opportunity although one that surprised the market. But the SafeNet bid of two years ago valued the company at £86.1m and, in that light, £50m does not seem quite so high. That may be explained partly by the fact that Ncipher counts several banks among its clients at a time when the financial services industry is in the midst of a crisis. But the company also works for governments, whose software and security requirements are far less cyclical. Thales wants Ncipher to access its hardware. The French company makes more than 60 per cent of its sales to the military and operates in more than 50 countries, so has the opportunity to increase Ncipher's estimated £25.1m 2008 sales."|
|weatherman: A new CEO has an incentive to trash the share price by issuing a profit warning when announcing a new direction - then his Options are worth more when the company goes back to fair price. 130p to 260p would be 100% and look pretty good, but pretty rubbish really to trash it in the first place mind. He could have planned faster growth while keeping the eps healthy.
Yes I am a cynic, but seen this too many times.
Still it could be a good investment from here.|
|clogue: Tim Tom2,
The point you made in your previous post(27) was that you were happy with the previous management. In my opinion the previous management were not good for the share price and you must remember the price was down to 150p before this clown made his results statement.
Whither the new team can produce the goods remains to be seen, but lets not get dewy eyed about the last lot.|
How about charting the share price over the last three years against any index you like, I can tell you it does not look good.
They sat on a mountain of cash and didn't have a clue what to do. When the previous management did move they made a complete mess of things.
The new CEO may have made a mess of his results statement but he does not have a tough act to follow in terms of increasing shareholder value.|
|clogue: On further consideration I now now see that the gross profit will be there, and even increased, but that the bottom line will be less due to the profits invested in the business.
In my simple way of thinking I would just take some of my cash and invest it in the business but I take it that accountancy rules would make me set it against profits for that year.
I take the point that we had a company with a pile of cash but little idea of what to do with it. We now have a company with cash (or near cash) of at least £9m and a plan that they can fund out of profits.
As long as they don't throw the baby out with the bath water we should see real progress from a company with plenty of cash and a large and expanding market.
Edit: You don't have to show bottom line profit for the market to upgrade the company. With rising turnover and increasing top line the share price will rise.|
|clogue: Increased inventory of £2m and increased deferred revenue of £1.6m brings us back up to £11m figure.
I can't say I like the style of the new CEO. Can you really say that, through a deliberate policy change you will be substantially reducing profits in the next year, and just leave it at that ?
The share price has been battered and he (deliberately?)batters it some more. Is this a not very cunning plan to make himself look smart further down the line ?|
|rivaldo: Excellent results, but the comment about investment affecting 2008 results is far too vague (apart from the obvious reduction!) - does he mean reduced from 2008 expectations or from 2007 levels?
The market probably won't like it, but then the share price has been so beaten down already that there may not be that much more to go!
NCH has £7.3m of cash too against the £24m m/cap, though that's far less than I thought due to the increase in working capital - the receipt of debtors should increase the cash back to £10m or so.|
|rivaldo: Sophos have now pulled their IPO given market conditions - hardly surprising! The valuation looked far too toppy to me.
More surprising is the decline in the NCH share price. Only two months ago the Chairman was buying 100,000 shares at 245p. the volumes have been pitifully small, so I suspect any interest would perk things up quickly.
There was a trading update on 18th December last year (mixed in with Abridean news) so hopefully we'll get another one soon.
Remembering that NCH had £11.1m of cash against the £38m m/cap at the interims (probably £12m now), here's the latest forecasts:
Broker Date Rec Pre-tax (£) EPS (p) Pre-tax (£) EPS (p)
KBC Peel Hunt Ltd 07-12-07 BUY 3.58 9.91 4.29 15.93
Panmure Gordon 07-12-07 BUY 3.37 9.11 3.39 12.88
Charles Stanley 26-10-07 BUY 3.40 10.27 4.10 16.69|
|rivaldo: Lots of PR in the papers about the impending IPO of Sophos, a fellow British security company, including the article below.
Interesting to compare the two:
Sophos - £400m m/cap, £83m sales, loss-making (per other articles)
nCipher - £43m m/cap, £25m or so sales, £11m cash, £4.5m PBT (say) this year
Purely on a simple comparison basis NCH should therefore be valued at three times the current share price.
Comments from more tech-minded posters than me appreciated!
At the least the IPO might focus a bit of attention on NCH and its sector:
"Computer & Internet Security News07 November 2007
Sophos to go for brave IPO
By John E. Dunn, Techworld
Despite instability in global markets, UK security vendor Sophos is to press ahead with plans to float itself on the London Stock Exchange.
A timescale, price and prospectus have yet to be made public, but the company [PDF] has boasted of its track record as one of the most prominent security software outfits, with reported billings for 2006-2007 of $167 million. The intention to float has been one of the industry's worst-kept secrets in recent months, with speculation putting the value of the company at around £400 million ($800 million).
The rationale is simple, even if the timing is brave.
"Increasingly open corporate networks, device proliferation, and an always-on threat environment mean that security focus has shifted from protecting the network perimeter to protecting the endpoint. Complex individual product strategies are being replaced by simple and coherent suites of products," an official release stated.
This is another way of saying that security is still a boom market, and protection of the troublesome endpoint the PC for the most part is still to the fore, just as it always has been since the beginning of software security.
More importantly, the big spenders on security are in the US, and an IPO raises a company's profile on that market. Earlier this year, recently-appointed CFO Paul Smolinski was quoted as saying to a third party that the company's attempts to break into the lucrative US market were hampered by its lack of profile there. "They already have 100 security companies and many of them are already listed," he said wistfully.
Public offerings of UK security companies are few and far between, perhaps the last major one being nCipher, engineered by its high-profile CEO, Alex van Someren, in 2000."|
|nirvs: rivaldo - So you do not expect to see any nasty surprises on Thursday?(I am currently long).
I am aware of the cash pile and their top-notch relationships with Microsoft etc.
I am very surprised by the lack of interest in NCH share price...
Where can one view the trend in revenue etc?|
Ncipher share price data is direct from the London Stock Exchange