Accumuli Share Discussion Threads

[buffetteer] 23/12/2014 09:50

With 65% recurring revenues , strong cash flow , growing organic sales and profits and a forward PE of 13x I don't see it as high risk. The market is growing as is the profile which is like free advertising . This might may a classic case of a multi bagger where the earnings are growing at 20%+ and the rating improves as goes from a £1m profit co to a £10m co. Seen it before with Tracsis . But nothing is assured .my one issue is the low level of management shareholding .the fact that Downing own 10% gives me confidence they've done lots of due diligence. Follow the winners !

[apad] 23/12/2014 08:46

Nice placing in 2010 at 6.5p a share, B :-)

My shorthand view is:
Run by financials, buying up boffins with companies, might make a placing for purchasing more boffins, no current vacancies, proud of recurring revenues (but that's a must), building a strong northern presence, might be sold (Sophos?) if successful. High risk, but seem to be run by competents. Need an insider view to go further.

I have not spent a long-time on this company - can more experienced holders add/delete
apad
I try to write a para like this on all my companies.

[buffetteer] 22/12/2014 15:09

just bought more lunchtime so probably pushed it up.

[gargleblaster] 22/12/2014 14:22

Excellent rise today. Tipped over the weekend anyone? Have Fincapp amended eps projections yet following acquisition?

[buffetteer] 22/12/2014 08:48

Management medium term aim is to double sales to £35m with profits to match.
While I'm wary of buy and build strategies that cost shareholders I like Acc. They must feel v confident since they have not had a rights issue to fund the acquisitions thereby increasing our eps. It's hardly followed so still cheap.
As profits rise it will become more popular and highly rated IMHO.

[rivaldo] 22/12/2014 08:12

Interesting that even just before Friday's acquisition, the chart was pointing towards up to a 35p chart price....

http ://www.directorstalk.com/accumuli-acm-25p-points-near-term-35p-technical-target/

"in the case of Accumuli (LSE:ACM) over recent months it can be said we are trend watching, and justifiably so. This is because it is possible to draw a rising trend channel from as long ago as the end of September 2013. The price action for December to date has consisted of probing towards the floor of last year’s channel, a process which so far appears successful. The RSI has just popped above neutral 50 to stand at 55, a leading indicator on a new leg to the upside. The assumption to make is that as little as an end of day close above the 200 day moving average at 25.35p should be enough to deliver a fresh rally, one which could extend as high as the 2013 resistance line projection at 35p over the next 1-2 months."

[masurenguy] 21/12/2014 10:38

If this IPO goes ahead next year it should also provide some further sector attention on ACM too !

Software firm Sophos eyes £1bn valuation in 2015 London float

COMPUTER security company Sophos, owned by private equity giant Apax Partners, is reportedly planning a London listing next year that could achieve a valuation of £1bn for the business.

Sophos is close to appointing an independent adviser to run a stock market listing in the first half of 2015, according to The Sunday Times. The Oxford-based business, which offers anti-spyware and antivirus software to businesses and consumers, was bought by Apax Partners in 2010 in a deal that saw Apax take a 70 per cent stake in Sophos for $580m (£372m). While a London-listing is said to be the company’s prefered option, a New York float is also under consideration.

[rivaldo] 21/12/2014 07:59

I agree penpont's figures - Finncap have probably bumped this year's forecast up to 1.8p EPS now (from 1.7p), but next year's would now be around 2.2p EPS.

A P/E of just over 11 strikes me as very, very good value for a company specialising in cyber-defence. Plus there's a dividend too!

And the attack on Sony will only have served to increase awareness etc as Mazarin says.

The RandomStorm website is well worth a look, including this news page - good to see their products heavily featured in various industry awards:

[mazarin] 20/12/2014 07:48

World news is currently 'buzzing' over the suspected disclosure of a major cyber hacking operation that has recently emerged involving Sony Pictures and allegedly North Korea.

The serious and disturbing implications of 'Nation-sponsored hacking' has clearly not been lost on the US government and now The White House has taken a stance. In my view this raised international awareness can only lead to significant and added interest in products and Companies, such ACM that specialise in helping commercial enterprises and government depts identify and combating the threat of cyber crime. Companies and Institutions have a 'duty of care' to ensure they have taken all reasonable steps to protect their customers' identity or face the possibility of legal redress, if it is considered they have been lax or complacent.

I therefore wouldn't be surprised to find mention of this issue in the weekend's Financial Papers, with particular regard to Companies like ACM, that function soley to provide effective solutions to complex Cyber incursions. The days of simply relying Firewall and antivirus software have long since passed.

[adamb1978] 19/12/2014 21:24

My own forecasts are 1.6p for this year (Mar-15) and 2.2p for Mar-16. Any other views?

[penpont] 19/12/2014 14:43

Thanks for above info all.

Riv - If the Finncap EBDITA upgrades feed pro rata directly through to eps, would mean 2.2eps or thereabouts for next year, and a PE of 10ish which looks v low for a Co in this sector.

[aishah] 19/12/2014 10:57

Accumuli ‘Prepares’ with RandomStorm

Buy and build managed security specialist Accumuli is adding another company to its roster of acquisitions, putting up £8.9m to take on RandomStorm, who specialises in network security, vulnerability management and compliance, via a combination of managed services and in-house developed IP.

This is the largest of Accumuli’s acquisitions over recent years (e.g. Equalis was acquired for £1.9m, see here, and Accumuli put up £2.6m for Signify Solutions in June, see here) but it does bring capability in the ‘Prepare’ part of the four phase IT Security Readiness framework. Accumuli has a presence in the ‘Protect’ and ‘Monitor’ areas but was weak in ‘Prepare’. While Accumuli is more focussed on proactive threat intelligence and detection, there is scope for acquisition or development in the ‘Respond’ area.

Since it was founded in 2007, RandomStorm has provided services to over 500 organisations and its current strategy is to identifying IT security risks within customers’ infrastructure and environments, then provide the solutions (based on its own IP) to monitor and manage the risks identified. For the year to April 30 it achieved revenue of £3.5m and EBITDA of £1m, and in the five months to September 30 2014 revenue was £1.8m with EBITDA of £0.4m.

This is a big investment for Accumuli (who posted £10.3m in H1 see here) but the integrated nature of the RandomStorm capability will mean it can move forward faster than by buying up several providers with point capabilities.

[rivaldo] 19/12/2014 10:52

Finncap have increased their forecasts for next year by 23% (and this year by 4%).

"Accumuli*: Acquisition of RandomStorm (CORP)

Accumuli has announced the acquisition of RandomStorm, an integrated information security specialist with its own IP which provides scalable managed network security services. The £8.9m net consideration will be funded from existing resources and a new £10m five-year debt facility. In addition to the strategic fit which enables cross sales into the existing Accumuli client base, the acquisition delivered £1m of EBITDA from £3.5m revenue in the year to 30 April 2014: we upgrade Accumuli's FY15 and FY16 EBITDA by 4% and 23% respectively, lifting our target price to 36p (33p)."

[muffster] 19/12/2014 10:50

Paid a lot though, circa 9 times ebitda

[igoe104] 19/12/2014 08:15

Certainly does look a good deal, especially as rivaldo says good recurring revenue business and potential new customers to sell too. excellent stuff.

[rivaldo] 19/12/2014 08:15

Cheers shauney2 - I've updated my post above to reflect the upgrade!

[shauney2] 19/12/2014 08:11

Finncap have upped their target to 36p on the back of that deal.

[rivaldo] 19/12/2014 08:06

Amazed there wasn't more of a mark-up, and topped up at the bell.

Terrific acquisition. Highly material of course, and as Adam says above must be earnings-enhancing given no dilution.

Plus 70% of income is recurring from repeat purchases - wonderful stuff.

And the principal owner is already known to ACM so s/be trustworthy.

And this brings in a load of potential new customers for ACM's other services.

And RandomStorm has its own proprietory IP, which further adds to ACM's intrinsic value.

Given almost historic 1.7p EPS now (only 3 months away), we should start to see Finncap's 36p target approached in even quicker time now imho.

[adamb1978] 19/12/2014 07:39

Yes, from the figures which they gave it looks like its growing and generating decent margins. Should also be accretive to earnings given how they've financed it. Quite a material acquisition as well - somewhere around 20% of the revenues which tehy would have done this year. I would expect a decent bump in the share price this morning

[qs99] 19/12/2014 07:33

no dilution either it would appear....

[multibagger] 19/12/2014 07:19

Cracking acquisition :)

RNS Number : 2505A

Accumuli PLC

19 December 2014

19 December 2014

Accumuli Plc

("Accumuli" or the "Group")

Acquisition of RandomStorm Limited ("RandomStorm")

Accumuli enhances its solutions and services framework with the addition of RandomStorm, a renowned integrated information security specialist that helps organisations to manage IT risk and implement security best practice using its own intellectual property and services.

RandomStorm have developed award winning solutions for vulnerability management and network security along with security services including penetration testing, social engineering, PCI compliance and ISO audit assessments.

Accumuli plc (AIM:ACM), the independent specialist in IT security and risk management, is pleased to announce that it has acquired the entire issued share capital of RandomStorm Limited ("RandomStorm") for net cash consideration of GBP8.9m which is being funded through a combination of existing cash resources and new bank debt secured on competitive terms ("the Acquisition"). RandomStorm is a UK based integrated information security specialist. It uses its own intellectual property ("IP") and services to turn security data into security intelligence in addition to helping to simplify and automate regulatory compliance processes in order to provide peace of mind for network managers that their IT environment is fully protected.

Highlights

-- Acquisition of RandomStorm for consideration of GBP8.9m

o Existing owner managers have agreed to provide consultancy services to the Group for 12 months from completion to ensure managed transition

-- RandomStorm has developed substantial intellectual property which provides scalable managed network security services to enterprise level customers

-- Combination of RandomStorm and Accumuli creates an operation of significant scale, skills and capability unique to the UK IT security market

-- Acquisition provides substantial skills, expertise and revenues to Accumuli's "Prepare" practice in addition to providing opportunities to further develop Accumuli's 'Customer Intimacy' initiative to drive cross selling

-- Acquisition in line with Accumuli's stated strategy of acquiring businesses which complement the Group's existing expertise and capabilities or extend its solution and services framework

Gavin Lyons, Chief Executive of Accumuli, commented:

"RandomStorm is a business which has excelled in providing market leading integrated information security solutions and services to help its customers manage IT risk and implement security best practice. Their expertise and experience in IP creation and security services will add tremendous value to our business and our customer intimacy strategy.

"As a business we remain focused on helping our customers manage IT risk and leverage their IT assets - we are particularly excited about utilising the IP that has been created and combining vulnerability management, penetration testing, compliance and audit services with our 24x7x365 Security Operation Centre to offer our customers a true end-to-end managed service.

"The close proximity of the RandomStorm business to our existing Leeds office provides a significant opportunity to create a substantial base in the Leeds area which will be capable of accommodating all current staff of both businesses and attracting and retaining future talent."

RandomStorm

RandomStorm is a UK based network security, vulnerability management and compliance company, focused on providing enterprise-level, proactive security management products and services.

RandomStorm was formed in 2007 by Andrew Mason and Robin Hill, who have a combined track record of success in the IT Security industry of almost 40 years. Andrew was formerly a director and shareholder in Boxing Orange Limited (a company Accumuli acquired in 2011), and the technical force behind that business before leaving (and selling his shareholding) in 2006. Robin was previously the sales director for Webscreen Systems Limited, again before leaving in 2007 to establish RandomStorm.

The business initially focussed on vulnerability assessments and compliance services around Payment Card Industry Data Security Standards ("PCI DSS"), vulnerability scanning and penetration testing. However, through the technical lead provided by Andrew and a dedicated team of developers they have subsequently built a suite of proprietary systems which are situated on customer site and allow for RandomStorm to deliver managed network security services. The products are branded and include StormAgent (which was highly commended in the 2014 UK IT Security Awards and is a Log Management and File Integrity solution which simplifies and accelerates Network Threat Discovery), StormProbe, iStorm, xStorm, AirStorm and WebStorm.

RandomStorm has provided services to over 500 organisations since inception and its current sales strategy is predicated on assisting customers identify IT security risks within their infrastructure and environment and then providing cost effective solutions which can monitor and manage the risks identified. As the products being used are proprietary, the costs of additional managed services are minimal and simply entail 'turning on' the feature and some initial benchmarking.

The increasing compliance requirements for companies, particularly around areas such as PCI DSS, continue to provide strong external growth factors and RandomStorm is well placed to benefit from this expansion in the market. Additionally, Accumuli has been looking to acquire a business with an established presence in what can best be described as the "Prepare" phase of IT Security 'Readiness'. There are a number of recognised governmental frameworks in the US and UK which seek to establish a formal, staged approach to IT Security Readiness and these broadly break down into four areas; Prepare, Protect , Monitor and Respond. Accumuli's business to date has been strong on Protect and Monitor but less well developed in the Prepare area, and the Acquisition provides a strong entry point into this important area.

RandomStorm's unaudited results for the year ended 30 April 2014 showed revenues of GBP3.5m, EBITDA of GBP1.0m, gross assets of GBP2.0m and net assets of GBP0.7m. In the five months to 30 September 2014 (unaudited) RandomStorm generated revenues of GBP1.8m and EBITDA of GBP0.4m, which was after continued investment in sales and technical resources. Approximately 65% of revenues originate from consulting activities and the remainder relate to managed services linked to RandomStorm's own proprietary products. The nature of the services that RandomStorm sells means that gross profit margin exceeds 95% (as own consultant costs are treated as overheads) and historically there has been a substantial element (70%) of repeat purchases. RandomStorm employs 57 people across its main site in Wetherby, sales offices in London and Glasgow and a development team based in Thorpe Park, Leeds. Andrew Mason and Robin Hill have agreed to remain with the business for 12 months after completion to manage the transition to Accumuli and will continue to provide sales and technical leadership to the business.

Consideration

The total consideration payable by Accumuli is GBP10.0m in cash for the entire issued share capital of RandomStorm. At completion there was GBP1.1m in cash in the company, which means the net price payable by Accumuli on completion is GBP8.9m. This has been funded from Accumuli's own cash resources and through securing a GBP10m debt facility with the Group's bank, 50% of which is on a 5 year term loan and 50% of which is on a revolving credit facility.

For further information, please contact:


Accumuli plc Tel: [phone]
Gavin Lyons, CEO
Ian Winn, Finance Director

finnCap Tel: [phone]
Charlotte Stranner/Christopher
Raggett (Corporate Finance)
Victoria Bates (Corporate Broking)

MXC Capital Advisory LLP Tel: [phone]
Marc Young
Charles Vivian

Newgate Threadneedle Tel: [phone]
Hilary Buchanan
Jasper Randall


About Accumuli

Accumuli is a leading, rapidly growing, UK based independent specialist in IT security and risk management. We provide industry leading solutions and services underpinned by rare skills and capabilities. Our objective is to enable organisations to manage the ever increasing IT risk landscape and leverage their IT assets for business value.

Managing risk created from significant IT Trends (such as cybercrime, consumerisation of IT, Big Data) or business objectives (such as saving money or doing more with less) is the perennial balancing act for any IT department. The ideal outcome is to have an IT infrastructure that is available, performing and visible whilst always being compliant, resourced and secure.

The Accumuli approach is to assist our customers in identifying both the risk and potential of their IT infrastructure and address any gaps with leading solutions and expert services. Accumuli has a culture that is focused entirely on helping our customers and working as one team to deliver tangible results - we can help with a very specific need or a holistic end-to-end solution.

Accumuli is a public company quoted on the AIM market of the London Stock Exchange with offices in Basingstoke, Cambridge and Leeds. Accumuli's global customer base consists of companies of all sizes across an expanding range of industry sectors including financial services, utilities, telecommunications, manufacturing and government.

Accumuli Security

Managing IT Risk | Leveraging IT Assets

This information is provided by RNS

The company news service from the London Stock Exchange

END

[seans66] 18/12/2014 14:03

Think Sony need to give ACM a call.

[rivaldo] 18/12/2014 09:17

Cheers gb (that's a Tip Update from today's Shares Magazine in case anyone's wondering).

ACM's ex-cash P/E is actually nearer 12 or so once you strip out the cash pile.

[gargleblaster] 18/12/2014 01:23

Shareholders will be chuffed that Accumuli (ACM:AIM) is turning its order book promise in to firm contract wins. Last week (10 Dec) the cyber security buy-and-build consolidator unveiled three separate deals worth £600,000 of gross profit covering security information and event management (SIEM), intrusion prevention and a licence sale for the company’s proprietary DDAM web traffic data monitoring suite.

With more than 20% of its 700-odd customers now taking more than a single service, cross-selling opportunities are being realised too. Typically stronger in the second half, interim results (25 Nov) showing earnings before interest, tax, depreciation and amortisation (EBITDA) margins of 14.1% should go close to last year’s 17.2% second half level again, putting the company bang on track to hit £3.6 million EBITDA expectations this year to March 2015.

On FinnCap’s £3.4 million pre-tax profit and 1.7p per share of earnings estimate, the stock is now trading on a price to earnings (PE) multiple of 14.3, with an implied dividend yield of 2.8%. Flagged as a Play at 20p on 20 February, this remains a good opportunity to get in on an emerging quality growth story, with FinnCap sticking to its 33p target price. (SFr)

[rivaldo] 17/12/2014 07:27

Nice update from ACM's Signify - interesting to see that Signify "is the only cloud-based service providing two-factor authentication based on RSA technology":



"Signify Partner Programme Re-launches In A Shower Of Gold

Two-factor authentication services specialist has recruited gold partners to push cloud sales higher

On December 15, 2014 by Eric Doyle

Signify has appointed several Gold partners in a re-launch of its partner programme. The programme seeks to enable partners to meet a perceived growing demand for two-factor authentication security.

The cloud-based supplier, an Accumuli company, said that it is the only cloud-based service providing two-factor authentication based on RSA technology.

Gold standard

The partner programme has been built on developing and maintaining mutually beneficial relationships by aligning the Signify team and resources with partners in terms of technical, commercial and marketing operations, the company said.

Craig Saunderson SignifyCraig Saunderson (pictured), sales director for managed services at Accumuli, said, “Our aim is to support our partners as they go to market and ensure that their security offerings are highly competitive. Signify’s solutions are unique in the market and combined with our focus on providing pre-sales, marketing and technical assistance to our partners, we can help them to deliver highly competitive and appropriate security products to their clients.”

Signify said its services can be integrated into traditional VPN architectures, as well as cloud-based apps such as Google Apps and Office365. The company is also developing a “host of new products and services” to add further options to its partner’s security portfolios.

Global products and service provider MTI is one of the newly-appointed Gold Partners. Its service director for security Andrew Tang commented, “We strive to offer the most secure, reliable products for our customers, with the highest levels of support, and working with partners such as Signify enables us to work together to achieve this.”

Signify sells exclusively through the channel because hosted two-factor authentication services must work with hundreds of different VPNs, SSL VPNs, firewalls and web servers. The company admits that it cannot provide expert support for so many variables and the specialist, local knowledge provided by its systems integrator and service provider partners help to tailor its services to individual requirements.

Accumuli is a UK-based, independent specialist in IT security management which aims to help organisations to manage the ever increasing IT risk landscape."