Touchstone Grp Share Discussion Threads

[smarkmmm] 17/6/2009 18:19

I have posted this on the other board, but I was under the impression that you need to get 75% approval from your shareholders before delisting?

If that is the case then the tender amount should be more attractive? since the Birch family are over 25% short of the required amount - unless of course the institutions vote for delisting, which seems unlikely.

[davidosh] 17/6/2009 17:11

There are lots of comments over on this thread if you wish to add your views...

[goldenshare888] 17/6/2009 15:53

These were tipped by Paul Hill of PGI on 24.04.08.

He rated them a medium risk buy with a fair value of £1.88 and a target price of £2.30+ by march 2010.

What has happened and has he changed his mind?

E. & O. E.

DYOR.

[weatherman] 17/6/2009 12:40

You can hold the shares outside of aim. I am wondering whether it is a good time to buy more and hold for a few years then try and sell via a matched bargain basis. Presumably the family will want to make a success of the company and it surely has to be worth 150 - 200p at the top of the business cycle - 10 times current levels.

All imo only.

[3800] 17/6/2009 11:26

Hi Weatherman,
You state " It would be nice to have an indicative price." I have a feeling you nor I are going to like the price, the market doesn't think so either thats why its fallen. Future prospects are just starting to look a little better for this company too. With the birch family holding half the shares they can vote through whatever they like, so I expect to get shafted over this one.
3800

[weatherman] 17/6/2009 08:56

I see these have fallen today on the news of aim cancellation, but presumably the company will have to offer a reasonable price in a share buy back ?

It would be nice to have an indicative price.

[8trader] 05/3/2009 13:13

Just shows how market makers will work thesedays, why oh why do
people chase up a stock where the mm's or one of them has acquired
over 100k at 5p yesterday so they push up the price all the time
and make 3 times as much selling it on, it's just too easy for them
at times !

[davidosh] 05/3/2009 01:24

31-Mar-09 30.00 0.90 5.00p 2.00p
31-Mar-10 30.00 1.20 6.70p 2.50p


Those were the pre tax ,eps and divi forecasts so I guess if they can still do £0.5m and 3p that is not a bad result at this price. There will be fears for a full year loss and worries about how long the downturn will keep them there. Survival is crucial.

[encarter] 04/3/2009 23:47

Udate.

"Whilst the Board is pleased to note that certain of its divisions are performing well in a challenging environment, the costs of the restructure, coupled with the general downturn suggests that the Group's adjusted year-end results may now fall below market expectations. "

[mrdynevor] 04/3/2009 18:13

Down again - hear the Axapta division is trading OK but not sure about the rest of the company.

Consultancies are bound to get hammered in this climate.

[mrdynevor] 16/12/2008 09:26

Any news on this company?

Do they have sufficient resources to make it through the next 24 months?

I like the look of this company but not sure if I should invest now or wait a bit longer. I am worried that they will be taken private at these levels.

[davidosh] 09/11/2008 12:36

I cannot see this whole amount being written off completely. A company must take on all liabilities in a takeover and I cannot see a court being sympathetic under contract law if their only defence is that they no longer needed the software. I can see protracted negotiations or attempts to find 'other reasons' but would expect some further payments and even interest to add on top.

It does make one wary of what has been booked and I was not pleased earlier this year with the warning a full three months after the year end. All these 'own goals' have weakened the share price and considering the company is the European leader in Microsoft reselling that does somewhat suggest that Touchstone is not making the most from its position in the market.

The topline growth is vanity...margins and cash provide sanity. The company needs to cut costs wherever possible and get back to the basics whilst holding its position. Then we will see progress.

[valhamos] 08/11/2008 20:37

Shanklin

I believe stage payments are common practice for bespoke software. Nothing in the release suggests that stage payments weren't used in this case.

We are not told the total value of the contract only that the majority of it was recognised in the last financial year. We are told that the exposure is £250,000 which, if there have been stage payments (and this is probably implied by the phrase "unsettled amounts on the contract will be witheld"), will be the difference between these payments and the value of the contract.


I share your frustrations on your friends' behalf at the current performance.

[shanklin] 08/11/2008 07:12

Valhamos

Point taken but then why wasn't there a schedule of stage payments? The absence of such, which for all I know many be common in the software sector, just seems bad business to me. Compounding this, in the current environment, with many companies short on cash and/or keen to avoid meeting their contractual obligations, it seems suicidally naive to proceed on the basis of trust.

As this example showed, the contract could not be estimated reliably and the stage of completion had not forced the relevant cash out of the customer.

I see TSE had £12.7m of receivables at the year-end and am left wondering how many of these receivables are likely to be unreceived in the fullness of time.

Whilst I don't hold any TSE shares currently, albeit I have in the past, I have friends that do hold shares and am somewhat peeved on their behalf with TSE's serial ability to deliver.

Cheers, Martin

[valhamos] 07/11/2008 18:37

Unfortunate though I suppose not totally unexpected in the current economic climate; let's hope there are no more.

Shanklin - it's quite a common misconception that revenue and profit are only booked when cash is received. In fact, the auditors would not allow it as it against the accounting standards. Revenue for software development is booked when the outcome of the contract can be estimated reliably; and the amount recognised is by reference to the stage of completion.

[jammytass] 07/11/2008 17:43

watch out!!!!! the small long term pi is going to get stitched up here good chance the bod will be rubbing there hands ready for a mbo!!!!

[shanklin] 07/11/2008 17:01

Beats me how they thought it acceptable to book something as a profit if they hadn't received the associated cash. I guess the auditors don't get involved greatly at the interim stage.

[glasshalfull] 07/11/2008 16:20

Fall 21% as I type - mid price 45p =Mkt Cap £5.79m
Spread is a whopping 20%

On a longer term view looks good value - if it were to remain independent.
However, management could take this off the table very cheaply given their controlling holding.

Regards,
GHF

[glasshalfull] 07/11/2008 16:10

Bad news half hour prior to close of play on a Friday....tut tut !!!

Contract termination and Trading update (link above)

"..the Board has prudently decided to provide for the full exposure on the project. The impact of this provision, estimated at £250,000 coupled with previously announced mixed trading in the first half of the Group's financial year, will now result in a small loss at the operating level for the six months to 30 September 2008."

The remaining business appears to be holding up reasonably well.
Share price will show exaggerated fall in current climate and Management buyout looks very much on the cards at a reduced level.

Not currently holding but watching fall closely, as it will of course be overdone.

Regards,
GHF

[davidosh] 16/10/2008 09:20

GHF

Indeed it is for the good that TSE did not take on any debt and have a good cash buffer. I fully expect that the external review will produce a bid or the MBO will happen once the credit markets are open again. I doubt the directors would let it go cheaply but conversely what price would they be willing to pay ?

[glasshalfull] 16/10/2008 09:04

Thanks for the update David.

Certainly has a good track record, and use their boast, "26 years of unbroken growth" but realistically the present conditions may put an end to this.
We both know that this would be the best time for either a MBO or bid when sentiment at a very low ebb.
It was always interesting comparing TSE with MXM.....something I always took a keen interest in when comparing Colin's reviews on TSE to those of Mark on MXM
MXM have increased their offering at the expense of debt while TSE always demonstrated a more prudent approach.
MXM however appear better placed to weather the pending storm via it's recent trading update, probably because of its diversification.

My take FWIW. TSE certainly priced at a distressed level and I continue to watch closely.

Best wishes,
GHF

[davidosh] 14/10/2008 13:09

We asked lots of questions about the strategy review and it would appear that external advisors have now been appointed. A large shareholder has been pushing for action as have a number of large private shareholders. We came away with the feeling that we would not be attending another AGM so MBO or an external bid is very likely in my honest opinion. They are European leaders on Microsoft resales and a good track record so they will be on someones shopping list.

[glasshalfull] 14/10/2008 10:19

Having scoured the market these do indeed look excellent value on an £8.04m market cap.
Are you able to provide an insight as to the tone of the AGM David?
AGM statement itself provided a mixed message as one would anticipate given the macro climate in the UK, but given their excellent track record the rating does suggest "priced to go".

Regards,
GHF

[domwilliams] 24/9/2008 14:05

Didn't sound like the most reassuring AGM statement, David?

[davidosh] 23/9/2008 17:51

Anyone coming to the AGM tomorrow ? 11am at the HQ