Adept Technology Share Discussion Threads

[red ninja] 07/4/2021 09:57

Research Tree has the Singer N + 1 note summary for free if you register or you can subscribe to see whole note :-

hxxps://www.research-tree.com/companies/uk/telecoms-equipment/adept-technology-group-plc/research/n-1-singer/in-line-fymar21-update-ready-to-bounce-back/d152c202-0dfd-4fb3-87c6-294d70ea342f

[blusteradjuster] 07/4/2021 07:42

Looks like they intend to go shopping.


New banking arrangement

AdEPT's strategy remains to grow both organically and by acquisition, to consolidate a fragmented market and bring enhanced capability to customers, leveraging the Group's banking facilities which are supported by a strong balance sheet and high cash generation.

The Board is, therefore, pleased to report that the Company has signed a new enlarged banking facility agreement with NatWest and Bank of Ireland, to support its growth ambitions with a declared intention to acquire one or two complementary, earnings enhancing, companies each year.

This agreement is for a three-year term, extendable by one year, and provides the Company with up to GBP70m senior debt, comprising a GBP35m revolving credit facility, a GBP15m term loan, and a GBP20m accordion facility. This new facility replaces the GBP40m revolving credit facility, which was due to expire in February 2022.

The new bank facility is on the same commercial terms as the facility it replaces.

[red ninja] 09/3/2021 18:15

Investor Meets Company - Adept Tech - Capital Day 9/3/21 :-

[red ninja] 03/3/2021 11:34

Downing Strategic Micro Investment Trust, February 2021 investors letter :-

ADEPT TECHNOLOGY has continued to trade robustly through the ongoing pandemic given
that 78% of revenue is generated by recurring managed services. Balance has been affected by the ability of technicians to be on‐site and there has been a reduction in activity by those customers naturally experiencing more difficult trading conditions due to the pandemic. Half year 2020 saw a 14.2% reduction in underlying EBITDA to £5.2 million and EBITDA margin fell to 18.4% from 19.8% in 2019. Management decided not to implement short term cost cutting initiatives to help protect the margin, which should leave the business with sound foundations
to progress as lockdown measures are eased over the coming months.
Reassuringly, AdEPT continued to generate cash throughout the period, with underlying EBITDA conversion to free cash flow (including leases) of 97%, albeit flattered slightly by some VAT deferrals. Nonetheless, this allowed the business to repay £10 million of debt in the period. Cash performance was supported by additional improvements in customer debt collections, improving
to 33 days from 45 days in the same period in 2019. We believe this demonstrates the cash generative nature of the underlying and core managed service business, along with essential nature of these services to customers, despite the ensuing global pandemic. This is acutely evidenced by the announcement that AdEPT has helped the Department of Education transition over 500 schools to cloud enabled digital education platforms since the outbreak of Covid‐19.
Annualising the free cash flow highlighted above places the group on an EV/FCF of 8.5x, assuming no recovery or future growth. Given the high proportion of revenue visibility, low capital‐intensity, and the cash generative nature of business, we believe that AdEPT is undervalued on both a relative and absolute basis. We continue to engage with management to pursue the exercise of deleveraging the balance sheet based on the cash generation within the business model. We assume that the business can unlock £35 million of shareholder equity over the next 3 years, 196% uplift on shareholder equity as of the half year results, equating to 44% compound annual growth rate. Outside of this, we note ongoing and publicised activity with
trade and private equity market consolidators completing acquisitions on multiples far in excess of the current trading multiples of AdEPT. We think that given the robust trading through the pandemic, this low valuation won’t go unnoticed.

Xttps://assets-us-01.kc-usercontent.com/8c961317-6aee-00a7-e4b6-ae38cd847d2d/7c464a55-56e6-4652-874e-64f7ded32e6f/PE3052_DSM_Investor_Letter_Feb_21.pdf

[red ninja] 11/2/2021 12:21

Proactive Investors :-

[energeticbacker] 10/2/2021 17:26

Investor's Champion "...a long wordy update on trading. While this was unfortunately short on detailed numbers, they have reinstated guidance". Debt could continue to put off many

[blusteradjuster] 10/2/2021 14:11

The announcement that Q3 was better than average of Q1/Q2 perhaps suggests that Q2 was better than Q3 was better than Q1.

That said, the liabilities are shifted and they're paying off debt with cashflow.

The One-AdEPT consolidation should make them leaner.

If you (as I do), believe that peak-COVID is behind us, an improvement in trading (and a earnings multiple re-rating higher) continue to seem likely.

[crispfin] 10/2/2021 13:51

Presumably the seller was expecting to use the Mello volume to get out.

Be interesting to see what happens here over the next few months.

There was a notable lack of clear numbers in the trading update which I found a bit suspicious. Operationally though, it sounds like they are making big improvements and I’d expect that to show up in the numbers in the future.

They are also certainly making efforts to drum up interest with Mello and Capital Markets day etc. This marketing will hopefully help close out what I still see as a discount on the valuation.

[red ninja] 10/2/2021 13:31

Well despite the 25k sell, the share price has moved up so not complaining.

The RNS also is reasonably positive so expecting that the results in July to show steady progress.

[wanttowin] 10/2/2021 12:47

Mmmm... a 25k sell order on the bell last night is probably what was suppressing a rise yesterday

[red ninja] 09/2/2021 16:05

Yes, they've not set the world on fire.

[wanttowin] 09/2/2021 15:58

No idea RN, but it obviously did not shine bright..

[red ninja] 09/2/2021 14:06

There has been 5 buys today and one sell.

Anyone know what the Mello Monday view on Adept was and willing to state it here ?

[wanttowin] 08/2/2021 16:19

Well fingers crossed we pick up a few buyers tomorrow, after tonights presentation.

[red ninja] 05/2/2021 20:44

From todays DSM letter :-

httpX://assets-us-01.kc-usercontent.com/8c961317-6aee-00a7-e4b6-ae38cd847d2d/821bc221-ba69-4768-a4d2-4f78a6a531ad/PE3050_Downing%20Strategic%20Micro-Cap%20Investment%20Trust_Factsheet_Feb%20(Jan)%202021.pdf?utm_source=Public+Equity+%26+DSM+Master+List&utm_campaign=7831badd76-EMAIL_CAMPAIGN_2019_07_15_11_01_COPY_01&utm_medium=email&utm_term=0_00c97aeeb9-7831badd76-267005247

Note: change httpX to https to view.

"AdEPT Technology (+14.09%) made two updates around public sector contracts with the Department for Education and the NHS which are positive for the story. We think that AdEPT has been unfairly discounted through the pandemic with the quality of its capital light, recurring revenue business model overlooked. We see significant scope for a re-rating and an option to create equity value through degearing the business via organic free cash flow."

[davidosh] 28/1/2021 09:22

Just to let you all know that Adept will be presenting at the next Mello Monday investor show on the 8th February..



There will be over 600 investors attending and these are very popular shows with company presentations, fund manager and investor interviews and panel sessions including the popular BASH (Buy, Avoid, Sell or Hold)

Not to be missed and use the code MMTADVFN50 to get 50% off tickets or if you have never been before to a Mello evening just send me a message and I will give you a complimentary invitation to join us.

[energeticbacker] 25/1/2021 16:33

Featured in today's Investor's Champion update:

AdEPT Technology on course to win more business in the education sector as it continues its strategic partnership with Google for Education and Microsoft 365 for Education.

[blusteradjuster] 25/1/2021 08:53

Positive news for ADT and an in-line TU from MAI.

[blusteradjuster] 22/1/2021 14:51

Anyway, Daisy have said they won't bid for Maintel (but reserve right to do so).

Presumably they made an informal bid and were told 'not at that price'.

[red ninja] 22/1/2021 14:47

Yes, I accept your point Fishwick should be able to argue forcibly whether a bid is good or bad one based on his knowledge of the business and industry if indeed a bid materialises.

[blusteradjuster] 22/1/2021 13:55

Fishwick can't accept/reject - but he does have a voice.

He's not exactly a shrinking-violet.


EDIT: crispfin, yeah, they might offer different services to similar customers (NHS, public sector).

It might be attractive to a would-be acquirer to be able to offer those public bodies a wide-range of complementary services.

[crispfin] 22/1/2021 13:00

Maintel does look similar but at a quick glance the gross margins seem quite different (adept is quite a bit higher) so presumably there is some difference in service mix.

At the very least, this should hopefully open up some other investors to the potential under priced value in these small cap managed services businesses (Adept amongst others).

[red ninja] 22/1/2021 12:53

3% is not enough to accept or reject a bid.

I can't see the main holders as the pc security (AVG) won't let me access the adept site, but I imagine the main holders are funds like Downings, Slaters etc etc

The funds would basically decide. I would have thought a lowball bid might be £3-3.50.