Accumuli Share Discussion Threads

[igoe104] 11/12/2014 17:56

Manchester evening news write-up.

[apad] 11/12/2014 08:10

Been trying to differentiate Accumuli (2 UK offices, 3 current vacancies) and Sophos (worldwide, 16 current vacancies in UK), which will be having another go at floating in 2015.
They both seem to have some mix of the same sort of products, managed or otherwise.
Anyone ahead of me with this comparison, or other competitors?
apad

[apad] 10/12/2014 18:34

Nothing recent (but interesting history), but The Register is always worth checking out for software companies:

hXXp://search.theregister.co.uk/?q=accumuli

Good thread folks (no holding)
apad

[rivaldo] 10/12/2014 11:37

Finncap retain their 33p valuation today:

[rivaldo] 10/12/2014 07:32

Yep - and it's nice to hear that these are in the "margin-rich" areas of Managed Services and Professional Services:

[sven2006] 10/12/2014 07:17

Nice contracts guys

[gargleblaster] 09/12/2014 14:57

No worries riv - important that we try to "scratch each other's backs"!

[rivaldo] 09/12/2014 11:40

Cheers for the heads up gargleblaster in your post 1233 - here's the link:

[mazarin] 09/12/2014 11:03

I haven't held ACM for very long, but have a longer interest in Eckoh Tech, that I believe operates in the same sector. From experience with ECK, I'm confident that ACM will move rapidly in the right direction at the slightest hint of Contract news. It has recently been knocked back by a steady trickle of 'selling', but all that can change in an instant.

[paleje] 09/12/2014 10:03

Agreed and, in what appears to be a sideways market at best, it can surely only be a matter of time I would have thought before more people start looking at earnings visibility with good management and understandable strategies.

[masurenguy] 09/12/2014 08:17

paleje - good spot. I think this also correlates well with the IC comment from GB's post #1233 above.

"Accumuli derives 64 per cent of its gross profits from recurring sales, giving investors a clear view of future revenues. And only a fifth of its 719 customers use more than one of its products, providing an obvious route to sales growth."

[gargleblaster] 09/12/2014 00:15

out-take of an IC article

A better bet might be Accumuli (ACM), which lets companies outsource their security needs. It provides third-party data analytics and threat intelligence products, supported by its expertise and technology. The industry minnow continues to benefit from the proliferation of unsecured devices. “Lots of people spent ages building castles with really high walls,” says chief executive Gavin Lyons, referring to the companies behind traditional network security. “We’re knocking those walls down.”
Accumuli derives 64 per cent of its gross profits from recurring sales, giving investors a clear view of future revenues. And only a fifth of its 719 customers use more than one of its products, providing an obvious route to sales growth. The group has also made strides into the explosive ‘big data’ space by winning two large contracts for its data monitoring and analytics solutions. The result is that analysts expect both sales and cash profits to rise by about a quarter this year. Yet Accumuli’s shares trade at an enticing 14 times full-year earnings and offer a 3 per cent forecast yield, which should appeal to investors.

[masurenguy] 08/12/2014 00:16

Britain fighting cyberfraud ‘in the dark’ as banks refuse to reveal scale of problem

Britain is fighting cyberfraud in the dark, a senior official from the government’s top crime agency has admitted, as MPs tell banks to explain allegations that they massively understate their exposure to digital theft. Law enforcement authorities have no idea of the true scale of cyberfraud because national intelligence systems are failing to account for swathes of digital crimes, Donald Toon, director of the economic crime command at the National Crime Agency, said.

Mr Toon said that the City of London police had “invested heavily” in Action Fraud and was “doing a lot of work with the public and with corporates about how to report fraud”. The government has had difficulty estimating the annual cost of cybercrime to the UK. Its last estimate, of £27 billion, was quickly dismissed as being based on incomplete evidence. Since Action Fraud was set up, reports by financial institutions of suspicious money movements have risen steadily. Reports of transactions believed to be linked to terrorism or money laundering, which have to be submitted under the law,
rose to 317,000 last year, up from 229,000 in 2009.

Complete article here:

[masurenguy] 05/12/2014 16:02

Some interesting market projections, indicating that the cyber security sector could almost double from $65bn to $120bn over the next 3 years. This could provide some accelerated growth potential for ACM!

Hacking is now a global industry.......this presents a huge problem for governments and private companies, who are investing heavily to shore up their security......there is also a large potential opportunity for specialist firms that are fighting back against cyber criminals. A recent study by the
UK government found that cyber attacks are now costing UK business in the region of £21bn a year.

A decade ago, a company looking to secure its data would simply have purchased antivirus software and a firewall but the growing sophistication of attacks has given rise to dozens of different security niches. One of the most critical areas is in “intrusion protection systems”. These are watchdogs designed to monitor suspicious activity on a firm’s network by identifying malicious packets of data. Another important field is “virtual private networks”. These are secure private networks that companies can install, protecting the data exchanged over them from the rest of the internet.

The true value of spending on cyber security is difficult to estimate......but analysts at Bank of America Merrill Lynch estimate that annual global spending in this area could reach $120bn over the next 3 years. It said about $65 billion was spent last year. Some of this spending will go to cyber security contracts with defence giants. However, smaller companies offer a more focused way to invest

[mazarin] 29/11/2014 09:40

Boadicea - Thanks for effort, explanation and what's more, sharing it with us.

[buffetteer] 29/11/2014 08:18

Now that's cleared up do we agree that Acc is undervalued based on an expected eps of 1.7p adjusted - so a PE of 13x for a business growing strongly in a growth market with a growing recurring revenue stream ?

[boadicea] 29/11/2014 00:15

I have delved and found the apparent answer on the company web-site, AR 2013-4.

From Note 14, at that point in time (Mar 14) the current 'payables' totalled £11.38M made up of
£2.36M Trade payables,
£2.1M other payables including tax, NI etc and 'accruals' and
£6.9M deferred income.
Having read the 'Revenue recognition' explanation on page 33 which states (inter alia)-
"The group generates revenues from managed service, support services, maintenance and professional services. Consideration received for these services is initially deferred, included in accruals and deferred income and is recognised as revenue in the period when the service is performed."
I take it that the deferred income may therefore consist of e.g. annual maintenance contract chargeable at start of year (effectively prepaid as one would pay an insurance premium) but recognised in monthly installments as the year progresses. Averaged over the year the total of deferred income should therefore typically represent about 6 months of annual service contract revenue.
From segmental reporting we find that service revenues (taking Managed and Professional together) amount to £11.7M.
Although deferred income is more than half of this, it would of course arise from contract revenues invoiced for the year ahead rather than the year past so £6.9M could merely imply that service revenues are increasing year on year - an implication which the subsequent half year accounts factually support.
The treatment seems consistent from one year to the next with a rising trend roughly in proportion to the increasing turnover and no wild unexplainable fluctuations in the figures - i.e. the business is stable.

Conclusion: There is nothing here to cause worry; it is merely the nature of the business. However, the lumping together of items under the description of 'Trade payables' and 'Trade receivables' when (imv) there is effectively a large offset between them is liable to generate an erroneous impression of lax treasury control in the unsophisticated reader.

[rivaldo] 28/11/2014 23:47

Boadicea, firstly, current liabilities are £13.47m, not £13.74m - a small slip of the keyboard methinks!

More importantly, it only takes a few seconds to get the Annual Report to 31/3/14 on screen, which show a similar excess of liabilities over assets. From Note 14 we see that the trade payables are only £2.3m. The vast majority of the rest of the current liabilities are £6.9m of deferred income. Incidentally, trade receivables at 31/3/14 are £3.8m, with a further £3.3m of prepayments and accrued income. No doubt a similar breakdown applies as at 30/9/14 (the Interim Report doesn't break down into the Notes, as is usual).

So the excess is merely an accounting entry, and actually pure trade debtors are well in excess of trade payables.

[buffetteer] 28/11/2014 17:40

it is a v good point why not email the CFO ?
Ian Winn ACA - Chief Operating Officer and Finance Director hxxp://www.accumuli.com/contactus.php

[boadicea] 28/11/2014 17:18

The reason for my comment was that the current liabilities (£13.74M) exceed the current assets (£12.25M) in spite of holding £3.6M cash.

This is largely due to trade etc payables exceeding corresponding receivables.
In a business with relatively low bought in materials and an income based largely on software, service and licence(ip?) income I find this a little surprising.
Buried somewhere in the report (or a previous AR) may be a plausible explanation of such a large figure of deferred payables.

If anyone has a quick answer it will save me delving!

[masurenguy] 28/11/2014 16:30

Riv, I would concur with that view too.

[rivaldo] 28/11/2014 16:26

ACM already have a healthy cash pile, which will presumably increase in H2. They also tend to pay for their acquisitions in cash and with contingent/deferred consideration toi minimise dilution, so I disagree that there's any need for a capital injection - unless a particularly good value but large acquisition comes along, which is unlikely since ACM have been nicely conservative in their ambitions so far.

[boadicea] 28/11/2014 14:34

Definitely a largish holder unloading - 3 lots of 200k and a 150k so far today although one of these trades may be a buy, thereby limiting the share price reaction.
It doesn't alter my overall perception of the company but could raise suspicion that a fund-raising/rights/placing is being considered.

The potential size of opportunities which may open up for the company could be a triggering factor in requiring a capital injection.

I would like to buy more but feel caution is wiser until the picture clears. Not that I would expect a share price collapse - just the possibility of a better buying opp on the back of a discounted placing. So time for a half now, half later approach, I feel.

[fillipe] 28/11/2014 14:03

I just now taken some here....time for me to go back in again.

f