Share Name Share Symbol Market Type Share ISIN Share Description
Outsourcery LSE:OUT London Ordinary Share GB00B9G9LV10 ORD 1P
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  +0.00p +0.00% 4.125p 0.00p 0.00p - - - 0.00 05:00:10
Industry Sector Turnover (m) Profit (m) EPS - Basic PE Ratio Market Cap (m)
Software & Computer Services 7.4 -7.6 -19.7 - 1.95

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Date Time Title Posts
18/7/201608:30Outsourcery plc1,327.00
10/6/201613:16Outsourcery (OUT) proposed sale could be imminent.15.00
08/6/201610:04Outsourcery (OUT) proposed sale could be imminent.38.00
14/5/201607:14Britex The Movie1.00
21/2/201619:14*** Britain is OUT ***9.00

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DateSubject
29/4/2016
07:07
hotorcold: Any offer will be at many multiples of the current share price.
22/11/2014
10:14
tpau: From the other thread... femaletrader 20 Nov'14 - 12:08 - 431 of 433 0 0 OUT 71P Why Outsourcery just surged by 89% By Lee Wild | Thu, 20th November 2014 - 11:27 Why Outsourcery just surged by 89% We caught up with cloud service provider Outsourcery recently, and after an interesting conversation with chief executive and Dragon's Den star Piers Linney, concluded that "the shares could fly." Eight weeks later, and having just secured inclusion on the Microsoft Cloud programme, they have. As part of the Microsoft Cloud Solution Provider Programme, Outsourcery can now provide direct billing, sell combined services and support Microsoft Cloud offerings such as Office 365. "We are able to further integrate Office 365 with our own offering down to billing whereas previously the billing and contractual relationship was managed by Microsoft," said Linney Thursday. "As we have already proven, we can add material value for end-customers by integrating Office 365 with our own cloud capabilities to create hybrid solutions for commercial and public sector organisations." This is a clear boost to Outsourcery whose share price has slumped since listing on AIM at 110p in May last year. It closed at just 10.25p Wednesday night, but traded as high as 19.35p Thursday. As we acknowledged in September, there have been problems. Partners have come on stream much slower than expected, always an issue when dealing with big organisations. That explains modest revenue of just £3.4 million in the six months to June 2014, which includes no contribution from key strategic partners. With hefty admin costs of £4.8 million, Outsourcery made an underlying pre-tax loss of £3.6 million during the period. But it's the top line that's important here. Its main cost is people, and spend doesn't increase much whether the business is generating sales of £1 million or £50 million. "The model isn't broken, it's just delayed," Linney told Interactive Investor. "If Vodafone (VOD) and Microsoft (MSFT) thought we weren't special they wouldn't be working with us." Outsourcery focuses on the delivery of services based on Microsoft technologies; things like servers and emails. It designs and deploys cloud services for partners, which it then bills monthly based on usage and storage. Others are charged a monthly fee. Contracts are typically for three to seven years. Interestingly, the company is also working with Microsoft and Dell (DELL) on highly secure cloud services for central government. Linney tells us that Outsourcery is one of only two UK companies capable of doing this on scale, and hopes to generate revenue from it during the first quarter of 2015. According to house broker Investec Securities: The company will need to prove that it can deliver this level of new business from its growing pipeline. More frequent news of material contract traction with its large partners will give forecast confidence and ease balance sheet concerns. Until we see evidence of this we expect the stock to continue to be volatile, but retain our Buy based on the long term potential of the business. Our new 71p TP is based on 2x FY15E EV/Sales. As we said before, Outsourcery shares are not for widows and orphans, but they should do well when there's evidence of greater up-take.
20/11/2014
12:08
femaletrader: OUT 71P Why Outsourcery just surged by 89% By Lee Wild | Thu, 20th November 2014 - 11:27 Why Outsourcery just surged by 89% We caught up with cloud service provider Outsourcery recently, and after an interesting conversation with chief executive and Dragon's Den star Piers Linney, concluded that "the shares could fly." Eight weeks later, and having just secured inclusion on the Microsoft Cloud programme, they have. As part of the Microsoft Cloud Solution Provider Programme, Outsourcery can now provide direct billing, sell combined services and support Microsoft Cloud offerings such as Office 365. "We are able to further integrate Office 365 with our own offering down to billing whereas previously the billing and contractual relationship was managed by Microsoft," said Linney Thursday. "As we have already proven, we can add material value for end-customers by integrating Office 365 with our own cloud capabilities to create hybrid solutions for commercial and public sector organisations." This is a clear boost to Outsourcery whose share price has slumped since listing on AIM at 110p in May last year. It closed at just 10.25p Wednesday night, but traded as high as 19.35p Thursday. As we acknowledged in September, there have been problems. Partners have come on stream much slower than expected, always an issue when dealing with big organisations. That explains modest revenue of just £3.4 million in the six months to June 2014, which includes no contribution from key strategic partners. With hefty admin costs of £4.8 million, Outsourcery made an underlying pre-tax loss of £3.6 million during the period. But it's the top line that's important here. Its main cost is people, and spend doesn't increase much whether the business is generating sales of £1 million or £50 million. "The model isn't broken, it's just delayed," Linney told Interactive Investor. "If Vodafone (VOD) and Microsoft (MSFT) thought we weren't special they wouldn't be working with us." Outsourcery focuses on the delivery of services based on Microsoft technologies; things like servers and emails. It designs and deploys cloud services for partners, which it then bills monthly based on usage and storage. Others are charged a monthly fee. Contracts are typically for three to seven years. Interestingly, the company is also working with Microsoft and Dell (DELL) on highly secure cloud services for central government. Linney tells us that Outsourcery is one of only two UK companies capable of doing this on scale, and hopes to generate revenue from it during the first quarter of 2015. According to house broker Investec Securities: The company will need to prove that it can deliver this level of new business from its growing pipeline. More frequent news of material contract traction with its large partners will give forecast confidence and ease balance sheet concerns. Until we see evidence of this we expect the stock to continue to be volatile, but retain our Buy based on the long term potential of the business. Our new 71p TP is based on 2x FY15E EV/Sales. As we said before, Outsourcery shares are not for widows and orphans, but they should do well when there's evidence of greater up-take.
09/7/2014
10:05
dosser2: A lot depends on good management in future. They may have to take on partners to achieve below.... Many of these businesses have merit and the current depressed share prices represent potentially interesting entry points. Incoming investors will need patience, however, as management rebuild confidence in the proposition. Cash rich overseas companies remain potential acquirers of businesses with interesting intellectual property and evidence of commercial traction. Outsourcery announced that one of its major partners had secured their first order. And on 3 June, a smaller channel partner signed up their first customer, too: global engineering group Lloyd's Register. The values of the contracts were not disclosed, but it's a start. Valuation: Pace of adoption drives valuation Our base case discounted cash flow calculates a per share value of 525p (down from 546p before our forecast changes). If revenues in five years' time were 25% lower than forecast, we estimate this would reduce the per share value to 288p, still substantially above the current share price. The markets will need to see evidence of strong growth in MRR for the share price to move towards these values and newsflow that strategic partners are signing up initial customers could provide a catalyst for performance. If management can deliver on its strategy, the potential for valuation upside is significant Source: Edison Investment Research, Outsourcery (historic) Impact on valuation Given the early stage in the company's development, there is significant forecast uncertainty and we present a number of valuation scenarios below. Our forecasts assume that revenues increase to £12m in 2014, £23m in 2015 and £36m in 2016 (a three year CAGR of 96%) driving an increase in the EBITDA margin to 35% over the same period. Beyond this period, for DCF purposes, we assume the growth rate fades (CAGR 15% 2016-2022) to 2% in perpetuity with EBITDA margins peaking at 52%. This returns a DCF value of 525p (down from 546p before the forecast changes). If we assume the company delivers a slower revenue growth than our base case (25% lower by 2016), then we calculate a share value of 288p, still materially above the current share price
08/7/2014
22:17
dosser2: Cloud expert could be on the cusp of a huge ramp in revenues A chance to put a panel member of BBC's Dragon's Den on the spot and ask him some searching questions is an opportunity that is simply too good to miss. Piers Linney, co-chief executive officer (co-CEO) of Outsourcery (OUT:AIM), does not disappoint. Both he and his fellow co-CEO, Simon Newton, are engaging, talkative and above all passionate about their firm, what it does and what it is capable of in the long term. Linney wastes no time in getting to the point when we meet at the £38 million cap company's London office, situated on the fringe of Fitzrovia. 'We are a pure play. This is all we do. We see ourselves as operating in a growth market where we see disruptive change in information technology and the cloud, thanks to the internet,' says Linney, bristling with enthusiasm. 'We are a small company in terms of revenues but we have made significant investments to enable scale. There's a lot going on beneath the surface and you should see a lot happen in the next two to three years.' Outsourcery provides cloud-based IT and communications solutions to companies. It offers cloud-based platform application and unified communications services over the internet on a subscription basis so clients do not have to install, own or maintain the necessary kit. The customer enjoys lower costs and an improved experience, as Outsourcery's expertise creates an integrated network, which seamlessly covers the entire IT and communications estate of firms of any size. Perfect partners Linney and Newton have positioned their firm carefully. It has an excellent relationship with Microsoft (MSFT:NDQ), as evidenced by its Gold Partner status, and is an expert in the Seattle giant's full suite of products, ranging from CRM to SharePoint, Exchange and Lync. Microsoft's huge list of customers represents a great opportunity. 'There is going to be a massive shift in Microsoft's installed base,' confirms Linney. 'We don't talk about underlying tech hardware or blade servers here but about services and hybrid integration with legacy on-premises systems and although we focus on Microsoft, we can host almost any application via our infrastructure-as-a-service offering.' A newcomer to Aim in May 2013, when it raised £12.7 million gross at 110p a share, Outsourcery sells its offering 'as a service' and thus generates monthly subscription fees from clients. One key performance indicator for the company is the annualised run-rate of these revenues which are recurring, as the company tends to operate with three-to-five year contracts. Another is the development of the one-off consulting fees which usually accompany a new customer win.Linney and Newton are undaunted and feel it is only a matter of time before revenues and profits mushroom. Griller Bar charts 'There's a very high barrier to entry here, apart from the significant investment we have made and time measured in years and that's deep know-how around how solutions are integrated. We can take a call from a smartphone to Microsoft Lync and on to a Polycom video conference facility, integrating all this with the client's existing system,' asserts Linney. 'We have lot of professional services capability, we are partner-centric and we are now busy tying up the channel.' By this the co-CEO and 14.1% stakeholder means Outsourcery is building up a formidable array of resellers, advisers and partners who take its services to market. Growth in partner numbers is another metric by which the managers measure themselves. Besides Microsoft, other household names to feature here include Virgin Media, privately-owned US computing specialist Dell,Hewlett-Packard (HP:NDQ), French IT services giant Atos (ATO:PA) and alsoVodafone (VOD). Robust platform Outsourcery's foundations lie with its O-Cloud platform, developed at a cost of some £30 million. Reluctant adopters of cloud-based services tend to cite security, business continuity and connection quality as reasons for not taking the plunge. The O-Cloud addresses all of these according to Newton, whose equity stake in the company is the same as Linney's. A contract with publisher Pearson (PSON) that dates back to 2012 offers proof. 'It owns over 200 companies, each with their own IT and email systems. The CIO (chief investment officer) is a huge Microsoft fan and wanted to outsource and roll out global messaging, email and document management. We won that global tender,' smiles Newton. Such a landmark deal is a huge help when it comes to winning new business. It is a big ask for large corporations to entrust their IT and communications to a firm with just 150 staff and a technical breach of a loan covenant in its numbers for 2012 relating to a £2.8 million liability that bears interest at 12.5%. The balance sheet is by no means weak, as the year-end net cash position of £2.1 million suggests but the company is in the red and thus consuming cash. December's £4.2 million placing will help and Linney frequently emphasises how the bulk of Outsourcery's investment phase is behind it. The business is scaleable and profits should rise much quicker than sales as and when they come in owing to the company's operational gearing. Big deals Two agreements in particular have the potential to really get Outsourcery's profits motoring. One is with Dell, to design and deploy cloud computing, storage and networking infrastructure that is compliant with the IL3 standard required by the UK Government. In October, Whitehall accepted Outsourcery into its G-Cloud procurement network to raise hopes for substantial future business flow, as the IL3 work will effectively see the company use its existing O-Cloud platform but just in a different security wrapper. The other is the Vodafone re-sale agreement. 'It's like a tsunami. The water has gone out and we're just waiting for it to come flooding back in,' says Linney, who is also waiting for initial revenues from Virgin Media. Neither Linney nor Newton seem concerned that these partners could one day become competitors. 'If they started today to try and replicate O-Cloud it would take them three years and by then we'd have moved on.' This begs the question of whether a partner has done with it and simply acquires Outsourcery lock, stock and barrel. Newton and Linney just smile. Outsourcery's origins actually lie in a mobile telecoms services business, Genesis, which in 2007 they bought out of Dixons Retail (DXNS), or DSG International as it was known then. They then bought Thus Mobile in 2009, only to sell the whole lot in two chunks in 2011, including one to Daisy (DAY:AIM) for £12 million. The co-heads then started entirely from scratch to create the O-Cloud and Outsourcery. Such an entrepreneurial record suggests neither man is going to mess around this time either. 'We could go and sell it to a partner – or we could just go and build a multi-billion dollar business,' says Linney in a very matter-of-fact way. Despite this enticing outlook, Outsourcery's share price has yet to truly catch light. Newton accepts the market is waiting for more news and additional sales: 'We've got to acquire more partners and speed up their activation rate. We're broadening our offering with IL3 and we could go international, too'. 'What we're doing is leading the transition of a huge Microsoft installed base to the cloud,' concludes Linney. 'That's a market that is worth billions.'
08/7/2014
16:04
tommytipple1: KEEP IT FRESH AND NEW. Bashers are finished watch them appear funds buying and retail investors are back. Many of these businesses have merit and the current depressed share prices represent potentially interesting entry points. Incoming investors will need patience, however, as management rebuild confidence in the proposition. Cash rich overseas companies remain potential acquirers of businesses with interesting intellectual property and evidence of commercial traction. Outsourcery announced that one of its major partners had secured their first order. And on 3 June, a smaller channel partner signed up their first customer, too: global engineering group Lloyd's Register. The values of the contracts were not disclosed, but it's a start. Valuation: Pace of adoption drives valuation Our base case discounted cash flow calculates a per share value of 525p (down from 546p before our forecast changes). If revenues in five years' time were 25% lower than forecast, we estimate this would reduce the per share value to 288p, still substantially above the current share price. The markets will need to see evidence of strong growth in MRR for the share price to move towards these values and newsflow that strategic partners are signing up initial customers could provide a catalyst for performance. If management can deliver on its strategy, the potential for valuation upside is significant Source: Edison Investment Research, Outsourcery (historic) Impact on valuation Given the early stage in the company's development, there is significant forecast uncertainty and we present a number of valuation scenarios below. Our forecasts assume that revenues increase to £12m in 2014, £23m in 2015 and £36m in 2016 (a three year CAGR of 96%) driving an increase in the EBITDA margin to 35% over the same period. Beyond this period, for DCF purposes, we assume the growth rate fades (CAGR 15% 2016-2022) to 2% in perpetuity with EBITDA margins peaking at 52%. This returns a DCF value of 525p (down from 546p before the forecast changes). If we assume the company delivers a slower revenue growth than our base case (25% lower by 2016), then we calculate a share value of 288p, still materially above the current share price Threshold(s) that is/are crossed or reached: vi, vii More than 6 % 8. Notified details: A: Voting rights attached to shares viii, ix Class/type of shares if possible using the ISIN CODE Situation previous to the triggering transaction Resulting situation after the triggering transaction Number of Shares Number of Voting Rights Number of shares Number of voting rights % of voting rights x Direct Direct xi Indirectxii Direct Indirect GB00B9G9LV10 1,847,395 0 2,347,395 2,347,395 6.78% 5. Date of the transaction and date on which the threshold is crossed or reached: v 3 July 2013 6. Date on which issuer notified: 7 July 2013 7. Threshold(s) that is/are crossed or reached: vi, vii More than 4 % and 5% 8. Notified details: A: Voting rights attached to shares viii, ix Class/type of shares if possible using the ISIN CODE Situation previous to the triggering transaction Resulting situation after the triggering transaction Number of Shares Number of Voting Rights Number of shares Number of voting rights % of voting rights x Direct Direct xi Indirectxii Direct Indirect GB00B9G9LV10 1,358,759 0 1,847,395 1,847,395 5.34% Shareholder name Number of shares Holding % Piers Linney & family 4,890,147 14.14 Simon Newton & family 4,890,147 14.14 ETIVE Captial Limited 3,567,182 10.32 BlackRock Investment Management 3,075,110 8.89 SFM UK Management LLP 2,902,454 8.39 Hargreave Hale 2,859,787 8.27 Ennismore Fund Management 1,116,286 3.23
08/7/2014
16:03
tommytipple1: Bashers are finished watch them appear funds buying and retail investors are back. Many of these businesses have merit and the current depressed share prices represent potentially interesting entry points. Incoming investors will need patience, however, as management rebuild confidence in the proposition. Cash rich overseas companies remain potential acquirers of businesses with interesting intellectual property and evidence of commercial traction. Outsourcery announced that one of its major partners had secured their first order. And on 3 June, a smaller channel partner signed up their first customer, too: global engineering group Lloyd's Register. The values of the contracts were not disclosed, but it's a start. Valuation: Pace of adoption drives valuation Our base case discounted cash flow calculates a per share value of 525p (down from 546p before our forecast changes). If revenues in five years' time were 25% lower than forecast, we estimate this would reduce the per share value to 288p, still substantially above the current share price. The markets will need to see evidence of strong growth in MRR for the share price to move towards these values and newsflow that strategic partners are signing up initial customers could provide a catalyst for performance. If management can deliver on its strategy, the potential for valuation upside is significant Source: Edison Investment Research, Outsourcery (historic) Impact on valuation Given the early stage in the company's development, there is significant forecast uncertainty and we present a number of valuation scenarios below. Our forecasts assume that revenues increase to £12m in 2014, £23m in 2015 and £36m in 2016 (a three year CAGR of 96%) driving an increase in the EBITDA margin to 35% over the same period. Beyond this period, for DCF purposes, we assume the growth rate fades (CAGR 15% 2016-2022) to 2% in perpetuity with EBITDA margins peaking at 52%. This returns a DCF value of 525p (down from 546p before the forecast changes). If we assume the company delivers a slower revenue growth than our base case (25% lower by 2016), then we calculate a share value of 288p, still materially above the current share price Threshold(s) that is/are crossed or reached: vi, vii More than 6 % 8. Notified details: A: Voting rights attached to shares viii, ix Class/type of shares if possible using the ISIN CODE Situation previous to the triggering transaction Resulting situation after the triggering transaction Number of Shares Number of Voting Rights Number of shares Number of voting rights % of voting rights x Direct Direct xi Indirectxii Direct Indirect GB00B9G9LV10 1,847,395 0 2,347,395 2,347,395 6.78% 5. Date of the transaction and date on which the threshold is crossed or reached: v 3 July 2013 6. Date on which issuer notified: 7 July 2013 7. Threshold(s) that is/are crossed or reached: vi, vii More than 4 % and 5% 8. Notified details: A: Voting rights attached to shares viii, ix Class/type of shares if possible using the ISIN CODE Situation previous to the triggering transaction Resulting situation after the triggering transaction Number of Shares Number of Voting Rights Number of shares Number of voting rights % of voting rights x Direct Direct xi Indirectxii Direct Indirect GB00B9G9LV10 1,358,759 0 1,847,395 1,847,395 5.34% Shareholder name Number of shares Holding % Piers Linney & family 4,890,147 14.14 Simon Newton & family 4,890,147 14.14 ETIVE Captial Limited 3,567,182 10.32 BlackRock Investment Management 3,075,110 8.89 SFM UK Management LLP 2,902,454 8.39 Hargreave Hale 2,859,787 8.27 Ennismore Fund Management 1,116,286 3.23
05/7/2014
12:09
tommytipple1: At 28p, a potential 19-bagger Outsourcery,major contracts,LloydS, Vodafone,Cable & Wireles,Virgin Media and BT Today, 1:05 PM http://bit.ly/TVfR3V OUT HEDGE FUND HAS 5% and that's a fact. LOADING UP AHEAD OF BID Broker note and northland on proactive FACT Outsourcery (LON:OUT).Northland Capital Takeover Talk http://bit.ly/1hAMc5m Today, 8:57 AM Edison Investment Research, Outsourcery 525p Today, 12:51 PM http://bit.ly/1hAMc5m Outsourcery expands partner programme since its IPO "to meet customer demand" Today, 9:52 PM Outsourcery (OUT) Capital Markets Day Presentation Today, 11:14 PM http://bit.ly/1hAMc5m Outsourcery a confident Linney predicts a £100 million turnover by 2015. Today, 2:04 PM http://bit.ly/1hAMc5m Many of these businesses have merit and the current depressed share prices represent potentially interesting entry points. Incoming investors will need patience, however, as management rebuild confidence in the proposition. Cash rich overseas companies remain potential acquirers of businesses with interesting intellectual property and evidence of commercial traction. Outsourcery announced that one of its major partners had secured their first order. And on 3 June, a smaller channel partner signed up their first customer, too: global engineering group Lloyd's Register. The values of the contracts were not disclosed, but it's a start. Valuation: Pace of adoption drives valuation Our base case discounted cash flow calculates a per share value of 525p (down from 546p before our forecast changes). If revenues in five years' time were 25% lower than forecast, we estimate this would reduce the per share value to 288p, still substantially above the current share price. The markets will need to see evidence of strong growth in MRR for the share price to move towards these values and newsflow that strategic partners are signing up initial customers could provide a catalyst for performance. If management can deliver on its strategy, the potential for valuation upside is significant Source: Edison Investment Research, Outsourcery (historic) Impact on valuation Given the early stage in the company's development, there is significant forecast uncertainty and we present a number of valuation scenarios below. Our forecasts assume that revenues increase to £12m in 2014, £23m in 2015 and £36m in 2016 (a three year CAGR of 96%) driving an increase in the EBITDA margin to 35% over the same period. Beyond this period, for DCF purposes, we assume the growth rate fades (CAGR 15% 2016-2022) to 2% in perpetuity with EBITDA margins peaking at 52%. This returns a DCF value of 525p (down from 546p before the forecast changes). If we assume the company delivers a slower revenue growth than our base case (25% lower by 2016), then we calculate a share value of 288p, still materially above the current share price Threshold(s) that is/are crossed or reached: vi, vii More than 6 % 8. Notified details: A: Voting rights attached to shares viii, ix Class/type of shares if possible using the ISIN CODE Situation previous to the triggering transaction Resulting situation after the triggering transaction Number of Shares Number of Voting Rights Number of shares Number of voting rights % of voting rights x Direct Direct xi Indirectxii Direct Indirect GB00B9G9LV10 1,847,395 0 2,347,395 2,347,395 6.78% 5. Date of the transaction and date on which the threshold is crossed or reached: v 3 July 2013 6. Date on which issuer notified: 7 July 2013 7. Threshold(s) that is/are crossed or reached: vi, vii More than 4 % and 5% 8. Notified details: A: Voting rights attached to shares viii, ix Class/type of shares if possible using the ISIN CODE Situation previous to the triggering transaction Resulting situation after the triggering transaction Number of Shares Number of Voting Rights Number of shares Number of voting rights % of voting rights x Direct Direct xi Indirectxii Direct Indirect GB00B9G9LV10 1,358,759 0 1,847,395 1,847,395 5.34% Shareholder name Number of shares Holding % Piers Linney & family 4,890,147 14.14 Simon Newton & family 4,890,147 14.14 ETIVE Captial Limited 3,567,182 10.32 BlackRock Investment Management 3,075,110 8.89 SFM UK Management LLP 2,902,454 8.39 Hargreave Hale 2,859,787 8.27 Ennismore Fund Management 1,116,286 3.23
22/6/2014
15:36
hedgehog 100: From "Shares" magazine nearly three months ago (27th. March 2014): "Outsourcery weaves its magic Cloud expert could be on the cusp of a huge ramp in revenues A chance to put a panel member of BBC's Dragon's Den on the spot and ask him some searching questions is an opportunity that is simply too good to miss. Piers Linney, co-chief executive officer (co-CEO) of Outsourcery (OUT:AIM), does not disappoint. Both he and his fellow co-CEO, Simon Newton, are engaging, talkative and above all passionate about their firm, what it does and what it is capable of in the long term. Linney wastes no time in getting to the point when we meet at the £38 million cap company's London office, situated on the fringe of Fitzrovia. 'We are a pure play. This is all we do. We see ourselves as operating in a growth market where we see disruptive change in information technology and the cloud, thanks to the internet,' says Linney, bristling with enthusiasm. 'We are a small company in terms of revenues but we have made significant investments to enable scale. There's a lot going on beneath the surface and you should see a lot happen in the next two to three years.' Outsourcery provides cloud-based IT and communications solutions to companies. It offers cloud-based platform application and unified communications services over the internet on a subscription basis so clients do not have to install, own or maintain the necessary kit. The customer enjoys lower costs and an improved experience, as Outsourcery's expertise creates an integrated network, which seamlessly covers the entire IT and communications estate of firms of any size. Perfect partners Linney and Newton have positioned their firm carefully. It has an excellent relationship with Microsoft (MSFT:NDQ), as evidenced by its Gold Partner status, and is an expert in the Seattle giant's full suite of products, ranging from CRM to SharePoint, Exchange and Lync. Microsoft's huge list of customers represents a great opportunity. 'There is going to be a massive shift in Microsoft's installed base,' confirms Linney. 'We don't talk about underlying tech hardware or blade servers here but about services and hybrid integration with legacy on-premises systems and although we focus on Microsoft, we can host almost any application via our infrastructure-as-a-service offering.' A newcomer to Aim in May 2013, when it raised £12.7 million gross at 110p a share, Outsourcery sells its offering 'as a service' and thus generates monthly subscription fees from clients. One key performance indicator for the company is the annualised run-rate of these revenues which are recurring, as the company tends to operate with three-to-five year contracts. Another is the development of the one-off consulting fees which usually accompany a new customer win. Shortly after we meet, Outsourcery publishes full-year results (19 Mar). The recurring revenue run rate jumped from £3.1 million to £7 million in 2013. Professional services sales came to £1.1 million, against £0.7 million in the prior period. The firm is still in loss but Linney and Newton are undaunted and feel it is only a matter of time before revenues and profits mushroom. 'There's a very high barrier to entry here, apart from the significant investment we have made and time measured in years and that's deep know-how around how solutions are integrated. We can take a call from a smartphone to Microsoft Lync and on to a Polycom video conference facility, integrating all this with the client's existing system,' asserts Linney. 'We have lot of professional services capability, we are partner-centric and we are now busy tying up the channel.' By this the co-CEO and 14.1% stakeholder means Outsourcery is building up a formidable array of resellers, advisers and partners who take its services to market. Growth in partner numbers is another metric by which the managers measure themselves. Besides Microsoft, other household names to feature here include Virgin Media, privately-owned US computing specialist Dell, Hewlett-Packard (HP:NDQ), French IT services giant Atos (ATO:PA) and also Vodafone (VOD). Robust platform Outsourcery's foundations lie with its O-Cloud platform, developed at a cost of some £30 million. Reluctant adopters of cloud-based services tend to cite security, business continuity and connection quality as reasons for not taking the plunge. The O-Cloud addresses all of these according to Newton, whose equity stake in the company is the same as Linney's. A contract with publisher Pearson (PSON) that dates back to 2012 offers proof. 'It owns over 200 companies, each with their own IT and email systems. The CIO (chief investment officer) is a huge Microsoft fan and wanted to outsource and roll out global messaging, email and document management. We won that global tender,' smiles Newton. Such a landmark deal is a huge help when it comes to winning new business. It is a big ask for large corporations to entrust their IT and communications to a firm with just 150 staff and a technical breach of a loan covenant in its numbers for 2012 relating to a £2.8 million liability that bears interest at 12.5%. The balance sheet is by no means weak, as the year-end net cash position of £2.1 million suggests but the company is in the red and thus consuming cash. December's £4.2 million placing will help and Linney frequently emphasises how the bulk of Outsourcery's investment phase is behind it. The business is scaleable and profits should rise much quicker than sales as and when they come in owing to the company's operational gearing. Big deals Two agreements in particular have the potential to really get Outsourcery's profits motoring. One is with Dell, to design and deploy cloud computing, storage and networking infrastructure that is compliant with the IL3 standard required by the UK Government. In October, Whitehall accepted Outsourcery into its G-Cloud procurement network to raise hopes for substantial future business flow, as the IL3 work will effectively see the company use its existing O-Cloud platform but just in a different security wrapper. The other is the Vodafone re-sale agreement. 'It's like a tsunami. The water has gone out and we're just waiting for it to come flooding back in,' says Linney, who is also waiting for initial revenues from Virgin Media. Neither Linney nor Newton seem concerned that these partners could one day become competitors. 'If they started today to try and replicate O-Cloud it would take them three years and by then we'd have moved on.' This begs the question of whether a partner has done with it and simply acquires Outsourcery lock, stock and barrel. Newton and Linney just smile. Outsourcery's origins actually lie in a mobile telecoms services business, Genesis, which in 2007 they bought out of Dixons Retail (DXNS), or DSG International as it was known then. They then bought Thus Mobile in 2009, only to sell the whole lot in two chunks in 2011, including one to Daisy (DAY:AIM) for £12 million. The co-heads then started entirely from scratch to create the O-Cloud and Outsourcery. Such an entrepreneurial record suggests neither man is going to mess around this time either. 'We could go and sell it to a partner – or we could just go and build a multi-billion dollar business,' says Linney in a very matter-of-fact way. Despite this enticing outlook, Outsourcery's share price has yet to truly catch light. Newton accepts the market is waiting for more news and additional sales: 'We've got to acquire more partners and speed up their activation rate. We're broadening our offering with IL3 and we could go international, too'. 'What we're doing is leading the transition of a huge Microsoft installed base to the cloud,' concludes Linney. 'That's a market that is worth billions.' Outsourcery (OUT:AIM) 109.5p The shares are sagging but any signs annualised subscription revenues are building should provide fresh impetus. Bull case • Microsoft relationship • O-Cloud platform • Partner network Bear case • Loss-making • Consumes cash • Debt bears high rates Market value: £38 million Prospective PE Mar 2014: n/a Prospective dividend yield: n/a BROKER CONSENSUS 1 Buy Issue Date: 27 Mar 2014 Page: 59 Tags: " http://www.sharesmagazine.co.uk/articles/outsourcery-is-the-host-with-the-most#.U6b2lslwbcs
22/6/2014
15:31
hedgehog 100: "Smallworld: Investors tell Outsourcery, "I'm OUT" By Matthew Allan , 18 June 2014 Dragons' Den star Piers Linney is in the dungeon with investors after the collapse in the share price of his Aim-traded tech venture Outsourcery (OUT). Mr Linney became a 'Dragon' on the hit BBC show in 2013 after an entrepreneurial career in telecommunications and internet businesses dating back to the dot-com boom. He co-founded Outsourcery, a provider of cloud-based IT services, in 2007. After he "invested millions" in the business, Mr Linney told us Outsourcery required more capital to "scale up" so he floated it on Aim in May 2013, raising £13m at a price of 110p a share. He topped up the company's coffers with a further £4.2m placing at 112p a share in December (all of the shares were placed by Investec). But by 11 June, the share price had fallen to just 28p. So what happened? Sources close to Outsourcery adamantly deny the price move was based on recent trading activity or clumsy institutional investor selling; rather, they blame a wider sell-off in technology stocks. The Aim Technology Index has retreated by 20 per cent since April, having more than doubled in the previous two years. But the two-thirds fall in Outsourcery's share price over the same period would suggest either something else may be going on, or the shares were wildly overvalued to start with. Andrew Darley, research director of technology and telecoms at small-cap broker finnCap, suggests it's a bit of both. "The fall from grace from a highly-rated stock is a potentially precipitous one," Mr Darley wrote in a recent note to clients. "We think [Outsourcery's IPO] marked the starting gun for the valuation hysteria in the UK." At the same time, there has not been as much sales growth as investors initially hoped. The company needs to nearly quadruple 2013's revenues just to break even or turn a small profit, because of its large fixed cost base. Outsourcery has been loss-making for much of the past seven years - it lost around £10m in each of the past two reporting periods - while it developed its platform that bundles together Microsoft cloud applications such as online video conferencing, file sharing and storage, and other traditional services such as Microsoft Office. "In IT, things are going in one direction and that is cloud," Mr Linney says, "Companies no longer need to build expensive systems in-house; instead, they can consume services over the internet for a monthly fee per user." Microsoft is a leading developer of cloud-based applications and Outsourcery wants to be the largest re-seller of them. It's a competitive market, but one in which Mr Linney believes Outsourcery may have a head-start on competitors. Other companies are nevertheless likely to catch up quickly. To capitalise on its first-mover advantage, Outsourcery has partnered with other middlemen such as Vodafone, Virgin and BT, who have agreed to try to sell Outsourcery's services to their existing business customers. The partnerships could eventually prove very fruitful but Outsourcery has already been working with some of them for years - and as yet the relationships have not translated into substantial sales. As finnCap's Mr Darley expounds: "Our preference...is for direct sales to a tighter niche. Nobody would really want their company's sales success to be decided by Vodafone's lame duck that is Cable & Wireless, or the attention deficient behemoths that are Virgin Media and BT when wearing their channel hats." That said, on 28 March Outsourcery announced that one of its major partners had secured their first order. And on 3 June, a smaller channel partner signed up their first customer, too: global engineering group Lloyd's Register. The values of the contracts were not disclosed, but it's a start. Analysts from house broker Investec Securities and paid research group Edison have both increased their group loss estimates for 2014 since initiating coverage last year, due to rising costs. They have yet to downgrade revenue forecasts, but this may only be a matter of time. Edison's base-case discounted cash-flow model calculates a per share value of 525p should Outsourcery meet its revenue projections for the next five years. That would make the shares, at 28p, a potential 19-bagger. Both brokers highlight the key risk to their forecasts as "timing on partners securing deals". Our view, and seemingly the view held by the market, is that the lofty revenue estimates for the Dragon's business are likely to go up in smoke. At the time of its IPO, Outsourcery's enterprise value-to-forecast sales ratio was about six; it's now closer to two, which Mr Darley says is "probably the right price". About Smallworld Investors Chronicle's Smallworld column focuses exclusively on companies listed on London's Alternative Investment Market (Aim) with a market capitalisation of less than £100m. This is a chronically under-researched area of the market, even though it represents over three-quarters of Aim companies. We caution, however, that trading in these types of small-cap shares carries a higher degree of risk and is often volatile or illiquid." http://www.investorschronicle.co.uk/2014/06/18/comment/chronic-investor-blog/smallworld-investors-tell-outsourcery-i-m-out-2rwOjdvbSPd9xqjHP2gPbN/article.html
Outsourcery share price data is direct from the London Stock Exchange
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