Advanced Computer Software Share Discussion Threads

[adieadie] 16/11/2010 15:25

Dont see a problem with that rubbadubdub, they are not raising cash or equity to pay down debt, its to buy assets that will (should) combine with the current business to ADD extra value.

The fact that a business plans on raising equity is not bad in itself, what they do with that equity is the important aspect.

For instance, if they add another 10% to the shares, but the purchase adds 20% to EPS, how is that bad?

[rubbadubdub] 16/11/2010 15:10

This is a reminder, from Proactive, last month. It's why, I suspect, the share price will continue in the doldrums for a while; so far, no one has held his or her hand up to "above 42p", I notice. Wedding forecast for next August, according to the bookies. Some of you ramp, but you do not believe!! lol

Quote

In the past two years at ACS, which provides software for the healthcare sector, police forces and banks, she has completed six deals, the biggest of which was COA Solutions, bought February for £100 million.

Murria shows no sign of flagging. In the next three years she hopes to have built a £200-£300 million turnover company and currently has a handful of acquisition opportunities on the back burner.

She is looking at bolt-on opportunities of the order of £5 million and "a couple of larger deals".

By "larger" Murria means takeovers of the order of £50 million. The group has a £55 million debt facility, while investors will back the ACS boss if she wishes to issue shares.

So the major transactions will in all likelihood be a mix of cash and equity.

Unquote

[adieadie] 16/11/2010 13:41

WJCCGHCC, you are right.

But, 54% isnt bad and the increase in gross margin is very very welcome.

[wjccghcc] 16/11/2010 12:59

Actually, contracted recurring revenue is 56%. That 90% figure is revenue from existing customers - a bit of a stretch to call it "repeating".

Also, can anyone find a mention of the forward order book like they had in the finals?

[adieadie] 16/11/2010 12:06

Repeat revenue is "in the bag", so we can expect a minimum of similar going forwards.

From the interims..

"Repeating revenue, being the value of revenue arising from sales to the existing
customer base during the period, was over 90%, underpinned by contracted
recurring revenue of 56% comprising support, maintenance, hosting and contracts
for managed services. This high visibility of future revenue, with a customer
retention rate of 95% and broad spread of revenue across the customer base,
demonstrates the Group's resilience in the face of economic downturn.

Gross margin improved to 82% (2009: 74%), due to the change in product mix
resulting from acquisitions and increased focus on driving down third party
costs."

[jazza] 16/11/2010 11:44

Diluted EV/Adjusted EBITDA a little under 7.

Seems good value if Vim can repeat past successes.

[rubbadubdub] 16/11/2010 11:32

Hands up anyone who thinks this share will trade above, say, 42p before William marries Kate next year - except if there is a bid, of course.

[adieadie] 16/11/2010 11:29

Net debt at the end of the period was GBP33.9m (2009:GBPnil)

[adieadie] 16/11/2010 11:12

If she is buying more and performaing like this already, now is the time to grab them while cheap, as sooner or later there wont be an overhang and they'll head up towards a valuation that reflects this performance.

[rubbadubdub] 16/11/2010 10:55

VM has stated this year, that she is looking at a number of acquisition possibilities, some of them for several tens of millions, to be paid in cash and/or shares. I'm sure the market is weighting that appropriately, nurdin. That should be informing people's expectations for the SP, IMO.

[nurdin] 16/11/2010 10:44

Not if the market considers the fact that they are throwing up cash by the bucket loads!..£11m operating cashflow just for the first half...93% cash conversion.Will eat into that debt in no time at all imo..

[masurenguy] 16/11/2010 10:34

Great interims but the level of debt - an endemic scenario with a buy-and-build strategy - remains an issue in this fragile financial market and this could continue to act as a brake on the share price.

[rubbadubdub] 16/11/2010 10:25

50p, chapman123?

Looking at the wave pattern since May 2009, it may be quite some time before last February's all-time high at 44p is bettered. Heavy resistance resides around 38-40p, for example. And if the company is going to issue new shares for future acquisitions, that will weigh on the share price too.
Currently, the EMAs 20, 50 and 200 are all squeeezed together in the 34-35p range, and it would be good if the share price could now stay above them.

There should be some very positive press to come in the IC, SM, Proactive and SCSW etc., and that ought to help encourage some fresh investment.

Do these interims increase the possibility of an early bid for the group? - that is where a rise in the share price is more likely to come from, IMO. On balance, I wouldn't expect it in the foreseeable.

[bongo bwana] 16/11/2010 10:18

Many thanks for that update brownie and welcome aboard too.

[brownie69] 16/11/2010 10:14

Just put a toe in the water here after following the Company for a little while. Todays results excellent, however as Adieadie suspects my broker filled my inside order immediatly and asked if I wanted more based on the fact that there was an institutional seller of the stock. No visibility on quantum though.

I will buy more but will wait for broker notes to see if they agree with my take on these results. Plus I would like to see the seller cleaned out.

[bongo bwana] 16/11/2010 10:07

It has looked like that for too long now.

[adieadie] 16/11/2010 09:57

Do we have an overhang to clear?

[chapman123] 16/11/2010 09:30

good set of results lets hope for a re-rating north of 50p for a start anyone wonder about 2011 with this sort of growth ???

[bongo bwana] 16/11/2010 08:45

Careful reading of SCSW and careful listening to your sage like mellow utterings and advice.

[share_shark] 16/11/2010 08:41

Excellent results indeed. Well done on your stock picks,again, BB.

[nurdin] 16/11/2010 07:36

Yes excellent results...

Adjusted EPS at 2.5p compares with full year expectations of 3.2p.Repaet H1 in H2 and they will have beaten forecasts by 56% !!

Expect major brokers upgrades after these results...

[bongo bwana] 16/11/2010 07:31

Ive just finished reading them and ur right and they are stunning.

Well done to all and thanks to SCSW crew too.

[pmeldrum] 16/11/2010 07:08

Fantastic Results out

and future looks rosy

"These results clearly show that we are delivering on our promise to build a
strong, growing business focussed on the health, care and business applications.
We are confident that the Comprehensive Spending Review and the move away from
PCTs to GP Consortia will provide us with opportunities for further growth as we
continue to look for new markets, products and businesses."

[adieadie] 11/11/2010 15:59

some fairly large trades swinging through today

[rkjones] 09/11/2010 10:55

Vin Murria is following a proven business model that she has pursued in different sectors time after time. She aquires, assimillates and cross sells.

First time I have heard this staff issue!