Regenersis Share Discussion Threads

[al101uk] 02/6/2015 11:38

Posted over the the VALU thread, just taken a position here...

Just added a new holding to my portfolio, Regenersis.

They are a technology company, so I immediately had concerns about assets, debt, cashflow and earnings visibility. I don't generally go for companies in this kind of sector.

Their core business is aftersales repairs of technology products, mobile phones, home entertainment, IT etc for insurance companies and end users. They also provide fault diagnostic equipment such as an In-Field tester for STBs (Set Top Box) and a "Smartchk applications suite" for mobile phones. A new acquisition (a Swedish company called Biancco) allows them to also provide data erasure services.

The company has a footprint that spans 23 countries and they claim to be in among the market leaders in each of their regions.

Market cap is £168 million, revenue has increased in each of the last five years and so have "headline profits". I'd normally have an issue with using a number like headline profits, but in the case of Regenersis their EPS has been affected by acquisitions and restructuring and having looked at the numbers provided they seem reasonable.

Broker forecasts are at a consensus forward PE of a little over 9, my math shows this to potentially be conservative if there are no more acquisitions and restructuring costs are not ongoing... I believe the underlying business just doing what it's doing could easily command a PE of 8 or below.

With the acquisitive nature of the company in mind, it's listing on the AIM market it's technology focus and it's lack of an asset base it's critical that management show high standards of corporate governance and finance the company correctly. In this regard I was impressed!

First of all, the acquisitions are made with cash, placings are used where necessary, debt is kept to a minimum (they are net cash at present), the companies they acquire do genuinely seem to compliment the business and they do seem to be value adding. The corporate governance leaves many main market listings looking shoddy. They use main market corporate governance best practice as their benchmark and note where they have failed to meet the standard and the reasons why. They produce a full audit report with the auditors full list of risks and investigations, their annual report is genuinely one of the best and most thorough I've seen in a long while.

I believe the companies lowly rating is down to last years acquisitions, restructuring costs and the placing used to fund the acquisition. On the face of it the company is trading on a PE of over 30 and their other numbers are equally all over the place depending on which site you take them from.

The shareholder register shows around 40% of the shares taken up by II's, M&G being by far the largest holder with nearly 13%.

Their customer base is diverse enough, although there is work to be done. Their biggest customer makes up 14% of their business by revenue, my fears when I first started looking at this company was thay the sitaution would be far worse and it is an area they are concentrating on.

Overall I see a company that is lowly rated, highly profitable and growing strongly with a very competent management team. There are risks, certainly in the companies acquisitions and I question why they are paying an increasing dividend at this point in their development... in fact my one bugbear with the company is that it paid a dividend while also issuing a placing to raise capital which always seems odd to me. Overall though I like the company very much and look forward to it realising it's potential over the coming months and years.

[deadly] 08/5/2015 11:46

RGS getting hit again, but I don't see the negative of the election.

Good time to buy back in.

[rivaldo] 27/4/2015 09:50

I look at RGS this way - it's a solid core business, which largely underpins the current share price, plus a number of other exciting businesses thrown in for hardly anything at all at these levels, i.e Blancco, IFT, Xcaliber and Digital Care.

This is one of Mark Slater's (and mine!) favourite investment strategies, where you have the current m/cap largely underpinned and the value of other "blue sky" divisions largely hidden from view - until the market suddenly recognises that value.

[paleje] 24/4/2015 15:11

Cheers Rivaldo, it seems unexciting but its a solid business, I've used their repair services and they're excellent but it was Blancco and the EU tightening of data protection laws that drew me in, I hope nothing happens to throw that off track.

[rhatton] 23/4/2015 17:20

Another cracking day.

[macarre] 23/4/2015 12:58

Deadly - I can find you lots of reasons ;-)

[deadly] 23/4/2015 09:33

Strong today for some reason. Tipped again?

[macarre] 22/4/2015 18:32

I meant 247p over the next week. Certainly 300p+ in a few months.

[rimmy2000] 22/4/2015 16:09

i'll be there as a holder

[aishah] 22/4/2015 16:06

Panmure has a target of 403p.

[rivaldo] 22/4/2015 15:57

RGS are presenting next Wednesday if anyone's free - they're the only company out of the four who are worth an investment though imo :o))

http ://www.sharesmagazine.co.uk/events/event/investor-evening-29-apr-2015/presenting/

[rivaldo] 22/4/2015 13:55

Continuing to look strong.

I'm hoping for more like 347p :o)) And that's not too different from analyst price targets from memory.

[macarre] 20/4/2015 20:20

Nice rise today. 233p likely. 247p would be a dream come true.

[rhatton] 20/4/2015 11:44

Interesting move up currently.
Big sell went through and the price jumps. Maybe it was holding us back.

[rhatton] 17/4/2015 08:26

A welcome bit of buying thus far this morning.

[rhatton] 14/4/2015 08:06

Like clockwork. AT trade at 220 but this time for 57 shares.

[edmate] 13/4/2015 08:31

Yeah and gaps open up at 2.20 every morning for the past week now only to fall gradually throughout the day....

[rhatton] 13/4/2015 08:09

Where do these annoying 48 AT trades come from everymorning?

[cestnous] 10/4/2015 11:19

Cheers Aishah

[aishah] 10/4/2015 10:50

We have both here - income (divi fcst to increase by 20%) and growth.

[rivaldo] 10/4/2015 10:09

Cheers Aishah. I see they arrive at a 331p vale per share, so plenty of upside.

Assuming RGS remain on track for at least 18.2p EPS for the year ending soon, the market will start to concentrate on the 21.5p EPS forecast to June'16 and should begin a decent re-rating.

[rhatton] 10/4/2015 07:29

Thanks for posting that.