|Phoenix It Group
||EPS - Basic
||Market Cap (m)
|Software & Computer Services
Real-Time news about Phoenix It (London Stock Exchange): 0 recent articles
|grigor: Why is the share price over the offer price at the end of today?|
|milacs: Wonder what has prompted the share price recovery.
Take over possibilities?
|milacs: Bought a few of these today.
Potential earnings next year 31p per share.
Average p/e rating of 13 gives potentially 400p share price 65% gain.
In addition always a possible T/O candidate.
|2lb: From the annual report
Principal risks and uncertainties
As a result of the contracted revenues in the order book, the Group has a high degree of forward visibility of its revenues over the next twelve months. Nonetheless, there are a number of potential risks and uncertainties which could have a material impact on the Group's performance over the current financial year and which could cause the Group's actual results to materially deviate from expected and historical results.
The ongoing integration of ICM and reorganisation of the Group into three customer facing divisions supported by Shared Operations and Corporate Services is expected to yield material annual cost savings and operational efficiencies. Execution of the plan is now well underway and the Group has good visibility of the remaining actions and activities, the synergies that will be delivered and the one-off costs arising. However, an activity of this scale may cause short term disruption to the Group. To mitigate this risk the integration activity has been thoroughly planned, external advisers have been used where appropriate, and the Group parallel-runs activities to test the effectiveness of the new processes. The resulting plans are being executed in series and are being tested at each stage to ensure that any disruption to the Group's customers is either eliminated or minimised.
Since November 2004, the Group has made three successful acquisitions. However, acquisitions can involve risks that may have a material impact on the Group. The Group mitigates this risk by undertaking thorough due diligence, and, where practical, by contractual representations, warranties and indemnities.
The IT services industry is highly competitive. Several competitors, including, in some cases, Phoenix's partners, have longer operating histories, higher brand recognition, greater financial, technical, marketing, personnel and other resources than the Group. The Group's competitors have, and other potential competitors may have, well established relationships with current and potential partners of the Group. As a result, these competitors may be able to respond more quickly to new or emerging technology and changes in partner requirements, or to devote greater resources to the development, promotion and sale of their services, than the Group. In addition, the Group may experience increased competition from low cost outsourcing centres, including offshore centres, and new or existing niche market participants whose costs, particularly for labour and for service desks may be lower. Increased competition could lead to the loss of market share, loss of material contracts, renegotiation of price levels or a general reduction in revenues of the Group.
Macro economic risk
Whilst the Group has not seen any downturn in activity the recent tightening of credit and increases in market interest rates could lead to a slowing of growth in the UK economy. However, while there is a risk of macro economic factors and particularly the so called 'credit crunch' affecting direct sales activities, this risk is mitigated by the high proportion of long term contracted annuity business.
Jeremy Stafford had a guaranteed bonus for the year ended 31 March 2008 of £250,000 (first year only).
Nice work if you can get it - get appointed, oversee a 53% fall in the share price then get £250k guaranteed, non performance related bonus|
|tole: Update from Altium earlier - summary
Compelling valuation - Following a more than 40% slide in the share price in the past three months, Phoenix shares stand at less than 7.0x March 2009E earnings, with a free cash flow yield of 13% for the same period. Even factoring the group's net debt position of just over £100m, a FY 2009E EV/EBITDA of less than 5x is too low given the high level of recurring revenue and more than 100% cash conversion.
Although we have reduced our target price from 500p to 400p (equating to an
undemanding FY 2009E P/E of 12x) in order to account for the relative derating of the sector, that still leaves upside of almost 80% from current levels.|
|tole: Thanks Ged - might take another look (its the research element they offer that I like the sound of - you cant tell me what their charges are quickly can you? appreciate not wanting to faf about myself) ta.
Got to think that the share price will push on from here imo - an inexpensive, highly cash-generative stock.|
|tole: Thanks GED - nope hadnt seen that thanks.
Been buying myself the last few days as like you mentioned share price definately back in buying territory.
I like what Altium have to say on this one - highlights the fact that PNX trades at a circa 20% discount to its peers which it believes undeserved - and argues that with PNX's recurring revenues, exceptional margins and partnership business model would actually justify a premium to the wider IT services sector...
Can see this one as they mention get re-rated pretty soon imo.|
|tole: Well this is what Altium said back at the beginning of March -
'Having enjoyed a strong recovery bounce following teh favourable resolution of the DWP contract in mid-january, Phoenix shares gave back many of those gains in February. This recent capitlation is unwarranted, in our opinion. It is our view that, with the DWP negotiations behind it, Phoenix should now be free to focus on winning new business. We also believe that teh recent share price correction is only the first stage in a deserved re-rating that implies significant further upside'
Buy rating and Initial Target Price of 360p|
|ged5: Oh! There it is.
"UK Government Department desktop support contract
Phoenix IT Group is pleased to announce that it has successfully concluded its
contract negotiations with EDS Global Field Services for the provision of
desktop maintenance, deskside support and implementation services for a major UK Government Department.
The contract runs from 1 January 2006 until 31 August 2010 and, whilst the
revenues will depend on volumes of activities, the experience gained to date
indicates revenues in 2006 of around £8m. The contract includes some phased unit price reductions against certain activities in future years. This, together with an anticipated technology refresh programme within the Department, is likely to result in a further reduction of revenue from this contract in 2007.
The contract forms part of a new Framework Agreement that has been signed by
Phoenix and EDS Global Field Services to facilitate additional business and it
represents a significant strengthening of the partnership that has existed
between the companies for more than five years in the delivery of services to
customers such as BP and Aon."
From the share price this morning it looks like this was all that was holding the rise up. Let's hope we make up lost ground now.|
|ged5: Obviously in the Christmas spirit last time I posted.
The drop in share price reminds me of last year before the ex-dividend date. Hopefully the rise after the dividend will also be forthcoming. I was wondering whether I should be panicking and kicking myself for not selling all my shares between 3.20 and 3.40 so I decided to look back at the results. I find optimism and a good outlook going forward. The only problem seemed to be the BT contract for the Dept of Work & Pensions.
Perhaps there'll be an announcement very shortly.|
Phoenix It share price data is direct from the London Stock Exchange