Red24 Share Discussion Threads

[battlebus2] 17/6/2014 08:38

Still on my watchlist but even more so with the drop this morning on a few sellers/profit taking. Results read well imv showing steady growth with increased dividend and cash balance.

[blanketstacker] 12/6/2014 20:07

The results were always to be released next week. The company gave me 'week beginning 16 June' a good while ago. Apologies for not posting that earlier. Hoping for the best, fearing the worst!

[anumidium] 11/6/2014 12:15

Anyone know when the results are expected?

[davydoo] 06/6/2014 14:16

It's tax related, they're pretty open about it. Simon Richards writes some of the clearest, honest summaries I have seen as a small cap investor.

[5oletrader] 06/6/2014 13:48

Its a Tough one to judge.I agree with 'glasshalffull' it's all positive stuff however I'm also in agreement with 'mctmct' I look forward to reading the results.

[mctmct] 06/6/2014 10:11

REDT's revenue has been growing steadily but Net Profit and EPS have flattened off over recent years. What's the reason for that?

[battlebus2] 06/6/2014 09:45

Morning all, held these a while back but hadn't realised the dividend was 2.5% and most importantly progressive. Looking closer.

[cheshire man] 06/6/2014 08:08

Good commenting as usual GHF :-)

[glasshalfull] 06/6/2014 08:05

I'd imagine results will be released within the next fortnight.

Only capitalised at £9.5million, I've already flagged (Post 858) that forecasts are for the company to achieve 1.6p EPS (on fully taxed basis) which equates to 5-years profitable growth, while analysts have 1.8p EPS pencilled in for next year (+12.5% growth)...so prospective PER of 11.

Looks good value against their excellent recurring revenue stream & operating in growth markets of crisis management & food safety; balance sheet containing c. £2m net cash & possibility of strong results from their 25% share of enlarged Linx trading business which they merged their ARC training business into last year & which they indicated was "performing ahead of expectations" at H1 stage.

Also note REDT's move into cyber crime market



red24 Offers Information to Those at Risk from Cyber Crime and Identity Theft

The international crisis management firm red24 ( has offered information on how to deal with new computer viruses that have already been responsible for worldwide computer users losing an estimated £60 million.

---

Smashing small cap on an inexpensive rating...oh & forgot to mention their progressive dividend policy and current 2.5% yield.

Regards,
GHF

[lanzarote666] 05/6/2014 08:44

Difficult to pick up even a small position this morning without moving the price, but pleased to have jumped aboard.

Cannot argue with that five year track record and news from the results later this month could be interesting.

8-)

[mctmct] 04/6/2014 16:52

Does REDT offer a grocer's apostrophe emergency remediation service?

[ericjhan] 04/6/2014 16:37

Plas - really! 'how time fly's' (post 857)

I think you mean 'how time flies'. The only use of the word and apostrophe in fly's would be in the sentence 'the fly's knee was arthritic'

For goodness' sake, man. let's get a grip

Eric JH

[cheshire man] 27/5/2014 12:42

A few trades pushing the share price up on the run up to results on the 11th of June,,,,,hope for some positive reading for us to enjoy :-) DYOR

[glasshalfull] 24/3/2014 19:08

Fresh off the press...

Crisis Management Specialists red24 Launches New Product Recall Website

Monday, 24 March 2014




Crisis management assistance specialist red24, with offices in London, Cape Town and New York, has launched a new website to highlight its extensive range of food and drink product recall and advisory services.

The website, Red24.com which is updated daily and available for reference 24/7, has been developed to give specialist information to food and drink companies.

Eric Smith, Head of Food Safety and Product Recall at red24, believes the new website will highlight to businesses and organisations the range of services red24assist can provide.

He said, "Given the volume of news stories relating to food and drink incidents, we felt the need to make our partners aware of the available resources to give them as much information and support as possible."

The website provides timely updates on food related issues, and is a free-to-use resource that anyone working at a senior level in the food and drink industry can learn from.

red24assist provides a number of pre-incident services in order to pre-empt any potential incidents and solve problems before they occur.

• Accredited Training Courses: red24assist is a licenced training centre for the Chartered Institute of Environmental Health (CIEH) and the Royal Society for Public Health (RSPH). They run a number of courses that provide training for staff members ranging from customer service to upper management.

• Crisis Management Plan Development: As it is a legal requirement for companies to have a crisis management plan in place, the team will help with the creation of these plans.

• Crisis Simulation: Eric Smith and his team will work with a company's crisis management team to simulate an incident, evaluating the company's approach to crisis management and offering methods of improvement.

• Legislative and Regulatory Compliance: red24assist will offer advice on how a company can deal with legislative and regulatory bodies in different global territories.

• Site Risk Assessment and Audits: The company will conduct an on-site review of an organisation's procedures, providing a written report on any issues that would be noticed by regulatory commissions.

In the event of a product recall crisis, red24assist also offers the following services:

• Crisis Team Support: The company will assist in the assembly of multi-disciplinary teams to deal with managing a crisis when/ if it arises.

• Independent Product Testing: red24assist has access to a global network of independent product testing facilities, which will aid companies in any request.

• Malicious Product Tampering: The company has a number of Malicious Product Tamper specialists who will conduct investigations into MPT incidents and ensure that an appropriate media response plan is formulated.

• Public Relations and Crisis Communications: the Crisis Communications Team will provide media training and interview preparation for organisations to deal with media coverage.

If a product recall crisis has occurred, red24assist also provides a post-incident support service, which will help implement new safety measures to minimise the risk of a repeat incident.

[glasshalfull] 20/3/2014 23:22

Thanks Midas. Good article which sums up the investment case adequately.

The recurring revenue is the kicker here and the H1 announcement which confirmed that AIG had renewed until 2016 alongside earlier announcement that HSBC extended to 2017. As the article indicates, 85% of budgeted revenue is ALREADY contracted for 2014/15.

We also learned in H1 that REDT's sale of ARC for a 25% stake in the enlarged Linx Training business was performing ahead of expectations & we'll get a first glimpse of earnings from Linx in the full year figures...although I don't believe finnCap's 2014 or 2015 forecasts currently factor in any contribution from the Linx associate business.

(Note - H1 figures included 4 months contribution from ARC prior to the sale of the business to Linx, which amounted to £16k. 2013 figures showed ARC contributed £58k).

Last year I posted a snapshot of their performance, demonstrating the profitable growth REDT has exhibited during the last 5-years which isn't readily identifiable if one simply focuses on PER due to the incremental increase in the tax rate each year.

Here it is for newbies to the company with addition of finnCap's estimates for Yr ending March 2014 & 2015.

Glasshalfull Tuesday 11 June 2013

Snapshot

Net Cash position:-

2009 - £328k
2010 - £938k
2011 - £1.2 million
2012 - £2.07million
2013 - £1.6 million*

2014 est - £2.2 million
2015 est - £2.7 million

*H1 2013 saw REDT purchase freehold of their S African HQ for £800k & removing £80k annual rental payment.

Progressive Dividend:-

2009 - nil
2010 - 0.15p (maiden dividend)
2011 - 0.24p (+60%)
2012 - 0.32p (+33%)
2013 - 0.4p (+25%)

2014 est - 0.5p (+25%)
2015 est - 0.5p

0.2p dividend announced June 2013 was technically Final dividend for 2013 as they move to interim & final dividend payouts for 2014

5- years profitable growth achieved and I feel there is distinct possibility that REDT will surprise to the upside of finnCap's forecasts for 2014 & 2015:-

PBT

2009 - £537k
2010 - £628k (+17%)
2011 - £742k (+18%)
2012 - £863k (+16)
2013 - £940k (+9%)

2014 est - finnCap simply states £0.9 million & same as 2013
2015 est - £1m


EPS growth affected by utilisation of tax losses, with tax showing incremental increase each year:-

EPS (diluted)

2009 - 0.95p
2010 - 1.4p (47% growth) - nil tax
2011 - 1.50p (7% growth) - 2.4% tax
2012 - 1.53p (1.5% growth) - 13.5% tax
2013 - 1.54p (0.5% growth) - 19.4% tax

2014 est - 1.6p (6% growth)- 22% tax
2015 est - 1.8p (8.6% growth) - 24% tax rate

Also worth pointing out that the company has not had recourse to the market to raise funds in the last 5 years and have focused solely on organic growth.

One of my main concerns was alleviated with news that the HSBC contract is tied up until 2017. I believe that the AIG and HSBC contracts amount to c.£2m per annum. This underpins the growth ambitions of the company and move into other markets such as the cyber-crime service for insurers, where they remarked having went live with their first insurer in April 2013.

Regards,
GHF

[plast] 20/3/2014 22:45

how time fly's, Ive been in these for about ten years now ,i brought this when it was ark risk management, i think i payed 2.5p tipped in a shares mag of the same name and here we are reading it all again, i still hold my shares for the long haul, long long haul, good luck all, and a £1 a share will do me just fine, weather we get there is another thing.

[m1das_touch] 20/3/2014 22:36

Text from Shares Magazine article below:

Red24 is hot prospect

Security and crisis management expert fired up with growth efforts

Historically pedestrian service group Red24 (REDT:AIM) could be worth another look as the £8.4 million cap is displaying a welcome growth impetus. Chief executive officer (CEO) Mal Worsley-Tonks says the benefits are starting to appear from hiring a business development team in summer 2013. With high levels of recurring revenue, Red24 looks cheap.

The company supplies information on security risks and helps individuals and corporates deal with problems, be it personal identity theft to the physical rescue of corporate workers in a hostile environment. It is in talks with undisclosed banks to offer a similar version of its security information product packaged with 1.4 million HSBC (HSBA) current accounts.

The most popular component is a home visit to help people understand what to do in the event of identity theft, such as their name being used by someone else to open a mobile phone account. The police aren't really interested in helping in these situations, hence why banks like Red24's personal touch as it shows they can assist customers beyond providing a banking system. The costs to Red24 are fairly low.

Other big customers include insurance group AIG (AIG:NYSE) which includes Red24 travel safety advice services within its product features. The small cap has just won a new deal with financial services group Liberty. Such is growing awareness of its services in the financial markets that underwriters are now approaching the company unsolicited to enquire about its offering, says Worsley-Tonks. For example, it was recently asked to contribute to a new cybercrime insurance product.

REDT - Comparison Line Chart (Rebased to first) The CEO claims that 85% of budgeted revenue is already secured for the financial year to March 2015. This strong forward earnings visibility is one of the core investment attractions of Red24. There is a risk of high dependency on large customers but it is reassuring to see the HSBC deal extended last year until 2017 and AIG has renewed its deal until 2016.

Red24 is hired by eight underwriters to respond to kidnap and ransom situations, receiving cash as a retainer and a fee for doing the work. Freelance consultants are hired on a daily rate which doesn't come cheap. It never budgets making a profit on this activity, merely seeing it as an essential service for persuading clients to take its broader security risk management proposition.

More encouraging for profit growth is a rise in demand for help with malicious product tampering. It is retained by nine underwriters for this activity and is now trying to expand through direct contracts with corporates. Blackmail situations are more common than you might imagine, such as a disgruntled employee tampering with a product and threatening to release a video of the incident on the internet. Red24 advises on how to deal with the situation, together with product recalls due to safety concerns or production errors.

House broker finnCap forecasts 1.6p earnings per share for the year to March 2014, rising to 1.8p in 2015. Taking the latter figure, Red24's price/earnings (PE) ratio is a mere 9.5 times. We'd expect a stock with high levels of recurring revenues and a new growth element to trade on at least a PE of 13. When that rating is applied to finnCap's estimates, you get a 23.4p price target, 37% above the current trading level.

[pjhutchy] 20/3/2014 22:26

Does anyone have the shares magazine article? This may trigger a lot of attention. Seems a decent little company. One to hold long term I think.

[dashton42] 20/3/2014 14:00

Been in since last year, BB2, courtesy of a screen I ran. The fundamentals looked good then, and they still look good to me!

This is exactly the sort of small company I love; largely off the radar of most investors, but with a steady track record.

[battlebus2] 20/3/2014 13:39

Good to see u back Cheshire Man.
Dashton no way your a holder :))
Moving higher ?

[dashton42] 20/3/2014 10:38

Are you moving the market again, BB2? Good on you! See, I told you, our portfolios are almost identical...

[cheshire man] 20/3/2014 10:32

Good cold morning to you battlebus,,,,,,,thanks to Midas I topped up first thing,have a decent holding here now :-)

[battlebus2] 20/3/2014 10:11

Bought a small amount this morning but should have got in much sooner!