||EPS - Basic
||Market Cap (m)
|lgpixels: Small tick up today, we could well see this trend continue as there won't be many sellers around at these levels. Would be interesting to see if any more contract news is forth coming and what its impact is on the share price (only just over a month untill the year end).|
|aleman: Occasional small buys finally affected the share price again. Should hopefully creep up with results not that far away. End of January last year. Market cap only £600k after cash for new lurkers.|
|aleman: My first purchase here was 50,000 shares and I got it at 7.2p when the spread was 5.5-7.5, so things are not quite as bad as you would suggest. However, it does seem a bit daft that the MMs antics could determine the future of the company by putting off potential new investors who would increase the share price and the liquidity. They do seem very good value for a small punt at the current offer, though, when you think that they are profitable and carrying cash to the value of half the market cap. I don't understand why they aren't attracting the interest you get in Formjet, for instance. One could understand the management being frustrated.|
|topvest: purple - yes, valuation is very low now that this is profitable imo. Unless they have lost some of the original long term business, I agree with you that recurring income should now be c£2m. The forward P/E ratio is desparately low if the cash is ignored. All bodes well for a very strong re-rating over the next 2 years if the company continues to grow strongly. The share price collapse today looks like it was triggered by the 50,000 sell. Fairly illiquid. Tood good an opportunity to miss for me. My average price is about 7.4p so I'm underwater at the moment, but quite happy with that sort of purchase price on a business that looks like it has a very promising future.|
|topvest: Some good posts today. I'm still optimistic on this one. As with many new businesses things take longer than planned, but progress seems to be accelerating and there is the possibility that things are starting to come together on this business. It is certainly cheap and would be due a major re-rating once it is valued on forecast profits which i guess could be a year off or so, being realistic.
Aleman - yes, still in DIP. Another very quiet stock, but a real growth story judging by the latest results. Again, share price performance very poor. Never mind, at some point they and this will be noticed.|
|purple: Agree about the good cash position but we need profits and growth. I am hoping the direct sales team headed by David Sheppard will contribute to growth and profits. As soon as the business model becomes profitable they can ramp up the direct sales activity to increase growth rates. The current depressed share price makes Red Squared an takeover target for its software and recurring revenues are very attractive for other players. Guess sales will be in the region of £1.7+ million with an overall improvement in financial performance. Results should be out in the next month so we will be able to stop guessing and have a better idea of future prospects.|
|aleman: I did not take the AGM statement to be a profit warning. Here it is again for the benefit of others.
"Current market conditions present a challenge for the Company, however we are
confident that our skills and expertise will ensure further contracts are won
and existing partnerships strengthened."
It could simply be a way of saying they are confident of a good longer term outlook, but in the short term we're not quite sure how fast we will grow given the nature of the contracts being negotiated and their demands on resources. As a small player in a large market, I suspect the trouble is finding the customers that want to do business from a sea of potential clients that will waste time and money wanting to see proof of potential savings. With the economy sluggish at the moment, this filtering may be time-consuming, but will result in good recurring revenue given time. Because it was such a big Speedy Hire contract win, I can't see D.S.'s latest forecast being unduly optimistic, despite the overenthusiasm last time. I don't think they would want to make the same mistake again, so I am happy to go with their numbers. Even if profit and revenue growth were half the D.S. forecast the rating on the current share price would not be demanding - a p/e of 4.1 for 2007 leaves a little room for manoeuvre.|
|purple: I have added the directors holdings together and stated when they were acquired. I think the management team have got a passion for the business so they are in it for the long term. The buoyant market place and addition of a direct sales team has transformed the company's fortunes and indeed its prospects. I agree that it appears we are at the start of a new growth face in the company's life and that the prospects look mouth watering (the MD John McGuire recently stated "We've come a long way since 2004"). I however feel that a takeover by Netstore can not be ruled out if it is pitched at a significant premium to the current share price. Red Squared is a very attractive take over target for the bigger Netstore as it would benefit from the managed service business and Network Monitoring software (huge potential market!).
G Cooper 2,121,200 Chairman (held since flotation) 7.5%
J McGuire 4,848,400 Managing Director (held since flotation) 17.3%
A Pilkington 4,848,400 Technical Director (held since flotation) 17.3%
Mr David Sheppard 150,000 Sales Director (acquired August 2005) 0.53%
Approximate director's holdings 42%
Mr A K Simpson and Mr J Patterson 2,990,000 10%
Adam and Company International Nominees 1,017,500 3.6%
John Story 900,000 (acquired from the market May 2004 around 20p per share) 3%
Jarvis Investment Company (acquired January 2006) 5%
Substantial shareholders 21.6%
Free float 36%|
|aleman: Are 60% of the shares still held by directors? What did they hold when they floated on ofex, and at what price? I have seen 48p mentioned. There'll be no takeovers if they have ambitions to take the share price much higher. Given that they are only just starting to gain traction in direct sales, I would imagine they would want the business to mature much further before they would be prepared to sell out.|
|purple: Although the recent deal with speedy hire in great news in the short term its significance is more important. It demonstrates the company can compete at the top end of the market and its offering has a competitive advantage. I would therefore expect Red Squared to generate more deals like this over the coming years. This top line turnover will then have a dramatic impact on the bottom line and the company moves into sustained profitability. We now have a growth business with good transparencies for future revenues and profits.
Red Squared has a market capitalisation of just £1.8 Million of which £1 Million is cash. The company should move into profit this year of around £100k, followed by £400k in 2007. It would not surprise me to see the share price move strongly up soon or be taken out by some of its larger competitors such as Netstore.|
Red Squared share price data is direct from the London Stock Exchange