-1x Square Discussion Threads

[tudes100] 12/5/2017 01:46

Read a few of the previous posts MCT.
I think some of the concern was that the Co was going ex growth as headline revenue growth was only +2% in FY results. Some commentary earlier about why this happened although PBT & EPS were both still moving forward strongly.
Co have a very low profile (watch the BRR media presn to get an idea of how much charisma the CEO has !) so this has probably not helped. Current management team have very modest shareholdings other than Heinz Bons (who sits on supervisory board) who holds 12%.

[mctmct] 11/5/2017 12:27

Sure - but what caused the fall after the March results and why has it persisted? Any opinions?

[welsheagle] 11/5/2017 12:17

Ex-dividend today for 15c, so no problem

[mctmct] 11/5/2017 10:45

This looks like a decent company that has become very unloved recently. I see it has a dual listing (presumably the other is in Germany - can anyone confirm?)

What's the explanation for the continuing fall?

I wonder why the insiders are not buying. If they are buying on the other exchange, would it be RNSed on AIM?

[tudes100] 08/3/2017 02:26

www.brrmedia.co.uk/broadcasts/58b9a145b21c9975cca46f5e/sqs-full-year-results-2016

[tudes100] 08/3/2017 02:25

Forgot to add global quality assurance service market forecast to grow at 7% p.a medium term

[tudes100] 08/3/2017 02:23

Have had a little more time to do wade through the results/Co presentation and compare to prior reporting in the last few yrs and on that basis I think its worth outlining a few points.
1. Revenue growth - managed decline in professional service division is part of Co strategy (now 29% rev's but expected to decline to 25%), performance of Managed Services disappointing & combination of the two outweighed excellent growth in Management consultancy. Strategy of driving growth from higher margin MS & MC divisions seems sensible.
2. Growth in US - 3 yrs ago Co generated 2-3% of rev's from US market, now up to 16%, €56m. Target is to be largest territory in 2-3 yrs, €95m ($100m). US is the largest software quality assurance market, approx 50% of global rev's.
Given the reduced earn out liability on Galmont its fair to say that performance in the smaller of its two 2015 US acquisitions has been not at the level at which they expected. However Trissential growth has been strong although boosted by exchange rate benefits.

Co are highlighting big growth drivers such as continued US expansion & the growth of digital consulting particularly in areas such as automotive & manufacturing. The move to autonomous vehicles which require significant software (and therefore quality testing) as well as process automation in manufacturing via robotics suggests to me that SQS are far from going ex-growth despite 2016 not being a stellar year.

[tudes100] 08/3/2017 01:53

From proactive investors....
These are testing times for quality control specialist SQS Software Quality Systems AG (LON:SQS), which saw amortisation of goodwill put a dent in profits.

Profit before tax in 2016 fell to €7.99mln from €11.65mln the year before, as the company took a €5.6mln charge relating to the book value of its Galmont acquisition.

Adjusted profit before tax (PBT) rose 17.2%, however, to €24.4mln from €20.8mln the previous year, with the PBT margin hitting its highest level since the global financial crisis in the previous decade.

Total revenue rose 2.0% to €327.1mln from €320.7mln, with the top-line figure not helped by foreign exchange movements, which effectively reduced 2016’s revenue by €7.1mln.

Revenue from the group’s largest division, Managed Services, declined 4.4% to €146.4mln from €153.2mln the year before, contributing 45% of total group revenue.

The decrease in revenue was largely due to a number of products coming towards the end of their life-cycle.

The group expects its Management Consultancy (MC) arm, currently chipping in with 18% of total revenues, to be the main engine of growth as it capitalises on the growing demand for digitisation and automation.

MC revenue rose 56.6% to €57.3mln from €36.6mln in 2015.

Revenue from the Professional Services arm eased 5.9% to €93.4mln from €99.3mln the previous year, contributing around 29% of group revenue.

The group has proposed a dividend of 15 cents, up from 13 cents the year before.

"We enter 2017 with confidence,” declared Diederik Vos, the chief executive officer of SQS.

“The broader industry trends driving our business remain strong and supportive. We will continue to invest in our intellectual property and services portfolio to ensure they evolve in line with key market developments and remain relevant for future demand,” he added.

Shares were down 12% at 550.75p in mid-morning trading.

[orange1] 07/3/2017 13:33

Above average market growth predicted at Techmarketview.com:

¨SQS is positioning itself to benefit from some of the more exciting areas across the sector, such as Artificial Intelligence, machine learning and robotic process automation (key areas highlighted in TechMarketView’s 2017 Research theme of Unlocking the Intelligence) and this should enable above market average growth for SQS, particularly given the general shortage of skills in these areas. The company’s spread of vertical capability should provide lots of opportunity for it to leverage its growing experience and reputation in these high-growth technologies.¨



¨

[ade45] 07/3/2017 10:09

A slow growth year but chances that there is no future growth in software development and testing seem slim

[tudes100] 07/3/2017 09:39

struggling to see, thought results were solid.
Volumes aren't particularly high.

[welsheagle] 07/3/2017 09:33

Anybody see any reason for the drop.

[bbluesky] 19/1/2017 21:51

Hi space I too am happy with the way the business is progressing. Could be a very interesting year.

[spaceparallax] 19/1/2017 16:40

A very solid TS with impressive new business wins. It's hard to see the share price not progressing towards 700pps and beyond

[spaceparallax] 22/9/2016 09:43

sp coming alive again - looks like the half year report has been digested and impressed.

[bbluesky] 08/9/2016 11:17

The point in the presentation that I liked was the increasing market share.

[spaceparallax] 07/9/2016 14:29

Thanks Sophie. I never cease to be impressed by the command of English demonstrated by foreigners - a very reassuring presentation by both men.

[sophiegb] 07/9/2016 13:18

new video at Proactive Investors is here:

[tudes100] 07/9/2016 00:48

Totally agree SP, its a slow burner but if you've got the patience I suspect you will be handsomely rewarded in 3-5 yrs. Results presentation from Diedrick Vos on the link
, they definitely need to work on their intro music !
www.youtube.com/watch?v=GB0cZdfWd94

[spaceparallax] 06/9/2016 21:20

Good half year report, which rather undersells itself as 'solid'. Definitely one to continue holding because it's hard to see their marketplace doing anything but growing exponentially offering rich pickings for companies with established strong reputations.

[mr.oz] 06/9/2016 13:21

full value now?

SQS Software Quality Systems AG Numis
Downgrades to Add
TP 615.00

[spaceparallax] 09/8/2016 20:08

Interesting, as we've said it was due a steady recovery but today's movement suggests a specific prompt, presently unknown to us mere mortals.

[mr.oz] 09/8/2016 14:56

Parabolic on little volume

[spaceparallax] 09/8/2016 10:44

sp seems to be really moving up today.