Brady Share Discussion Threads

[cyberian] 06/11/2008 11:55

Hope I am not wrong but getting quite excited with the way the new management is taking the company forward. Their web site shows that they have very specific/selective career opportunities in a couple of areas, but believe that they have a good team already in place to achieve sustainable and profitable growth. One poster on here a few months back suggested that their software technology was not quite the bees knees we thought. Well, I have heard that the latest software is unbelieveable, and therefore with the turmoil being experienced in the commodities market we will certainly see a few more contracts over coming months. My main worry is a take-out due to cash and cash generation....but the shares are very tightly held so perhaps the premium would be high...who knows.

[davidosh] 05/11/2008 12:16

I am holding on tight.....my broker was asked if I wanted to sell any so a sure sign there is a buyer in size...maybe director interest again as they do seem to be regular buyers !

The chart looks very strong if it breaks 50p

[cyberian] 05/11/2008 12:11

Hold on guys...a good run is coming as the pipe-line is very strong and cash position is growing.

[davidosh] 05/11/2008 11:37

That Berry Petroleum news is annoying in the header

[davidosh] 31/10/2008 00:40

powwow,

Marben is right. You cannot have looked too closely under the bonnet here as they are profitable already and very cash rich with no cash burn whatsoever. It actually gets even better going forward as all those contract announcements will feed through to even greater profits in 2009 and I think we hope to see a good few more to come yet.

The directors have been buying heavily for the past year and a number of us attended the AGM and like the new management and strategy so there you have it in a nutshell.

[marben100] 30/10/2008 19:55

powwow,

What are you on about? Brady have been profitable for the last several years (apart from a disappointing year in 2005). With their recent contract wins, profitability is likely to rise, going forward. They are generating cash, not "burning" it and have significant net cash.

DYOR.

[powwow] 28/10/2008 17:19

Hi guys just starting to look at this one... any summarized views would be appreciated on forward earnings , cash burn and when do they expect to make a profit.

cheers

[cyberian] 24/10/2008 12:31

Think the Sp move and the 20,000 trade was positive....Brady invoices in US$ in the main and is therefore a net beneficiary of £sterling weakness.

[cyberian] 22/10/2008 20:27

Cash is currently worth over 26p a share, and I believe will be about 32p minimum by year-end. In present market conditions we appear to be in reasonable shape...watch this space (or Company's web site) for some more deals over coming months. If holding...relax with this one.

[hugepants] 14/10/2008 17:49

Mark
Points taken. Its just in this market Im looking for a BIG discount to fair value before buying anything. And I dont think BRY currently qualifies. Not yet anyway. Maybe later.

[marben100] 14/10/2008 14:09

HP,

I agree with your general comments BUT the recent contract announcements (and strong director buying) suggest that there is a good chance that the forecasts won't just be met but could be exceeded substantially.

The number of recent wins is well in excess of expectations and is not yet baked into analyst forecasts. Operational gearing is high, so a fair chunk of these extra sales simply feed straight through to the bottom line (though costs have increased through recruitment of extra sales & support staff).

It is worth knowing that it can be quite some time (sometimes 6 months or more) before a contract win is recognised as revenue, so whilst some of this will be apparent in the the 2H08 figures, quite a bit will only crystallise in 1H09.

Several of the recent wins have not been announced by RNS but can be seen on the company's website (so can be claimed to be in the public domain and not inside information barring director share trading). I'd expect to see a trading update before too long (though their normal pattern would be to issue one in January), indicating that the company expects market expectations to be exceeded.

Looking at the bigger picture, I see two positive factors for the company. Firstly, with high volatility in commodity prices, the value of Brady's software to producers and consumers of metals increases (it starts to become "mission critical"). Secondly with recent and past sales to prestige clients, Brady stands a good chance of becoming the de facto standard in the industry. There has been a very large investment of time and experience (stretching over some 20 years) in developing Brady's software base. Given also the niche nature of the software, this creates a considerable barrier to entry for any prospective competitor.

Brady's clients include:

NM Rothschild
XStrata/Glencore
HSBC
Alcan
Mitsubishi

I hardly need to say DYOR - but you may find it worthwhile to do so ;0)

I expect I'll top up my holding if the share price slips back much further.

Cheers,

Mark

[Edit]PS It is also worth knowing that the company's Board and salesforce have been transformed over the last 18 months. You can see the results in the "gear change" in sales success.

[btb2] 14/10/2008 13:37

Are results due soon?

[joshalexander] 14/10/2008 13:19

HP

Interesting views.

[davidosh] 14/10/2008 13:03

They do seem very confident talking to them and seeing all those director share purchases ! My money is on them beating thiose forecasts not just meeting them.

[hugepants] 14/10/2008 11:27

david,
If forecasts are met then I agree it wont be on a racy rating. But it wont be particularly cheap either in this market unless they are confident growth continuing.

[davidosh] 14/10/2008 01:01

The forecast for 2009n is pbt of £1m ...that is not a racy rating for a company with more than half its market cap in cash and all the other indicators being very positive. I fully expect them to beat the forecasts with all those contract wins and a few more likely.

[hugepants] 14/10/2008 00:09

Director buying is encouraging but this company doesnt look great value.

Market cap is £11M
Net cash is around 5.5M (there is 2M in liabilities)

So enterprise value is £5.5M
But H1 was only breakeven if you ignore interest on cash.

I think it still has a bit to do to prove its worth £5.5M

[marben100] 10/10/2008 21:10

Thanks cyberian. davidosh, I believe the 15th Sep RNS relates to Asarco.

Just one (slight) word of caution: I read today that banks are being forced out of physical (not futures) oil trading, because they're no longer trusted counterparties! May shut down one possible sales avenue (if they also have to give up on metals) but there are plenty of others.

[supatrada] 10/10/2008 12:25

re:this will reap massive rewards going forward

cyberian = pocket talker
How many share options do you have? :)

[davidosh] 10/10/2008 11:42

How do you know the cash is with Barclays out of interest ? Also note the bank interest is useful for the bottom line in more ways than one !!

[cyberian] 10/10/2008 10:17

Director buying continues...see another buy at 41.75p this morning of 5,000 even though share price down initialoly on a 2,000 sell. I know that the Directors feel that there is increasing value in their business despite the ailing markets globally...their cash is mainly with Barclays and none with Icesave and like!! The key issue is that we are going to see more regulations and BRY have perhaps one of the best if not the XXX and this will reap massive rewards going forward. Life/credit markets generally will recover in due course....value is seen up to at least $1.00 and could look very attractive to a predator at that price alone. dyor

[cyberian] 03/10/2008 09:58

marben...understand Xstrata is big at £5 million over 3 years, and others in £1 million plus league. Apparently the company is also being successful in retaining virtually all their clients annual maintenance business which helps the bottom line by up to £100k. So, I agree that the company now looks a real winner with cash balances increasing....think I saw in the A/R that most is with Barclays and £2 million was at a fixed rate. Sure they keep their cash well covered and managed well...hope they don't move it to Ireland as the latters recent move is a bit cosmetic imho. Shares in BRY appear very cheap on basis of contract wins/pipeline and improved management.

[davidosh] 02/10/2008 21:53

Is there a way of gauging how much each win is likely to be worth in revenue terms ?

Incidentally did you miss this vital one and trading update.....

15 September 2008

New Contract

Brady plc ("the Group") is pleased to announce that a fully integrated US
miner, smelter and refiner of copper and other metals has selected Brady to
support its commercial, trading and risk management operations.

This contract is in line with the Group's strategic plans and the Board
believes that it provides further positive evidence of the success of the
recent re-organisation and investment in building its routes to market. The
revenue from this new contract is material and anticipated to be recognised in
the second half of this year and beyond.

The Group's trading continues in line with the Board's expectations for the
full year and the full year revenue outlook has now been under-pinned by the
anticipated revenue associated with this contract, the five other significant
contracts announced since April 2008, and from other revenues.

[marben100] 02/10/2008 20:06

Good grief, another win on the website, no wonder the directors have been buying :0):

30 September 2008, London: Brady plc (BRY.L), has announced today that the Physical Metal Trading Division of AMC Group (AMC), has selected Brady for its trading, risk management and operations activities.

See

To sum up, we have:

4th April - Xstrata win
19th May - BGC win
31st July - Prysmian win
17th September - Asarco win
30th September - AMC win

The new sales team is certainly earning it's keep!

Cheers,

Mark