Bus.Sys.Grp Share Discussion Threads

[patrickviera] 06/9/2005 17:36

why jim slater? nicholas slater has the stake...is that who you mean?

[latifs100] 06/9/2005 10:13

someone offloading, 100k yesterday, 200k today.. possible jim slater??

[latifs100] 23/8/2005 16:34

zak mir is the infamous chartist.. 18p is the bottom.. looking to break out to 25p

[patrickviera] 12/8/2005 21:49

johnny ad..if you looked at the trades it is plainly obvious that both the 18p trades are buyers...750000(roughly) traded at 17p..so can u guess which bargain is the seller??...ps.latifs,who is zak mir and is he shrewd?

[latifs100] 12/8/2005 19:58

zak mir has tipped this in the past.. will breakout like alkane energy

[yump] 12/8/2005 10:48

My feeling is that its pretty firmly into breakout territory if you look back at a longer chart and that if it gets picked up there's a fair bit more steam in there. Its risen recently contrary to many small stocks.

[latifs100] 12/8/2005 10:10

back to 18p.. worth topping up.. has the dividend been paid?

[yump] 08/8/2005 08:13

Think apart from companies that have flooded the market with placing stock or cheap directors stock, the mm's won't have much stock being summer. Be interesting to see if this rise holds today - very significant if it does imo as normally get markup and then down later on tips.

[spitvil27] 07/8/2005 14:35

five years ago this was about £1-59p, then down till recently,

[poacher45] 07/8/2005 08:48

pork belly I agree with what you say about most tips rising and then falling back. However I think this one is very undervalued and I think you will find there is not much stock around.

[patrickviera] 06/8/2005 19:58

pork belly..what was the jist of the tip??

[pork belly] 05/8/2005 17:51

just been tipped in the August edition of RHPS,out at 17:15 tonight.

might be an idea to sell into the monday rise as almost all RHPS tips rise for 1 - 2 days before falling back.

Sell into rise on Monday would be a wise move and buy back in again in about 1 - 2 weeks time.

[vicktor] 03/8/2005 16:37

Was it the AGM today - anybody go?

[johnnyad] 03/8/2005 09:40

MM's have been paying full offer of 19p last few days, but why, I can't understand?

Peeps are still paying 18.94p, where's the mm's profit?

Anyone any level 2 info or views?

J

[johnnyad] 29/7/2005 11:54

Thanks Jessica, it was about time someone else noticed these, however, taking your point on board, can you tell us when this buy recommendation was issued?

Thanks

J

[jessica5] 29/7/2005 11:15

Someone maybe looking to look in some gains.....dont shot the messenger please.;-)

Buy Business Systems Group at 18p
Suggests Bill Johnston of Watshot.com
(Sign up for a two week free trial on Watshot.com. Offer ends today. For more details ring 02070339389)

Business Systems Group (BSG) puts its occupation bluntly - it is about "increasing the efficiency and productivity of IT Departments". Let us be blunt in turn. If the recent record of the company is anything to go by, efficiency, like charity should begin at home, and, although a start has been made, there is a long way to go. Yet we have seen before that when companies move to AIM - which Business Systems Group did about this time last year - it can so often be an outward sign of inward dynamics, and heaven only knows, the market is big enough and ripe enough yet, especially at the service levels which only modestly-sized companies seem able to achieve. But that market is changing - indeed has been for some time.

The value of investments can go down as well as up. Investing in equities can lose you part or all of your capital. Smaller company shares can be relatively illiquid and thus hard to trade. And that makes such investments more of a high risk than larger company shares. Watshot.com is owned by t1ps.com Ltd which is authorised and regulated by the FSA and can be contacted at 49 Rivington St, London EC2A 3QB or on 0207 033 9389.

The Market

Once the earth seemed covered with people and organisations engaged in some aspect or other of IT, all of them making money - but with hindsight, that situation peaked when, with breathless anticipation we waited to see if the additional funds which we had coughed up would prevent global catastrophe as the Millennium hour approached, and those computers, so smart in so many ways, coming to a puzzled halt in the face of all those zeros. Well nothing happened, but we couldn't help wondering if anything would have, anyway. It was in that year that I wrote this:

"The problem of course, with the brutal wisdom of hindsight, was the management's failure to foresee the speed of the decline in the prices and margins attributable to computer hardware and pre-packaged software, and a consequential lack of celerity in moving on to establish itself in the much more stable and lucrative area of IT services, from consultation and installation, through training, internet and intranet needs, to the provision of outsourcing services proper."

Compare that with this:

"....turnover for the year reduced by 14%.... the principal reason for the reduction was a 23% year-on-year decline in hardware revenues."

The point is, that it was the Chairman of Business Systems Group that penned the latter, and he did so in June last year. And the first quotation? That refers to ComputerLand (CPU) another AIM-quoted company. As it happens I have not written here about ComputerLand - successfully tipped at 100p on this site in January 2003 - for I have considered the latter fully valued of late. But the point is that it was a much changed business by then - but Business Systems Group, which lost 3 million pounds in the year to March 2003, looked to have hardly started the process. And the question is - can a similar transition take place?

The Business Now

By March 2004 the loss had been eliminated - just - but with recurring income of 5 million pounds out of a 22 million pounds total (and that total having fallen by 4 million pounds) it was clear that the desired and orthodox solution - transition of the bulk of the business to that of the provision of managed services - to put it at its kindest still had some way to go. In fact drawing in the horns seemed more like the name of the game, the move to AIM which followed publication of the figures being part of a general belt-tightening.

But what of the 2005 figures published about this time last month? Sales, from continuing operations were 25 million pounds - but supplemented by an acquisition, totalled almost 30 million pounds. Gross profits were a touch over 6 million pounds - expenses a touch under - the outcome a near thing, just 200,000 pounds in the black. That acquisition, the Unix business of Global Networks Solutions not only extended the group competence so that all the main operating systems fall within the extended technology remit, but made about one-third of the profit, too. Contractual revenues were circa 8 million pounds, annualised.

As always, the assignments have to be won (like last Christmas, a nice present in the shape of a 2 million pound job from a prominent City legal firm) but with hardware margins in seemingly secular fall, the strategic goal is that of gaining managed-service contracts. Like its peer group, the company argues that it can deliver reduced costs, increased service levels and enhanced capability. Mulling this over, many an organisation will consider too the flexibility that comes from not having to employ non-core staff, and the fact that you have more power over contractors than you ever will over employers. So the market is a growing one. But Business Systems Group itself says that the market is nevertheless competitive, even if it claims that the breadth of its expertise and the depths of its software development skills give it a distinct advantage.

The Investment Case

That last point, is it true? Well, time will tell, although many will think that the process should have commenced a bit earlier. To complete the statistics, adding interest earned meant almost 600,000 pounds at the pre-tax level. There was a tax repayment so that earnings were about 1p per share.

At the present share price of 18p, the company is capitalised at 15 million pounds and sell at 17.5 times earnings of course. But there is 9 million pounds in cash there, 1 million pounds of which accrued in the last financial year, fruits of an established and successful enterprise, even if (some would argue) a characteristic of a non-dynamic one. The Chairman is not given to banging the drum, contenting himself with the observation that the business is growing and that he thinks that the group, as at present constituted has all the technical and commercial weaponry that it needs to prosper.

I find it difficult to believe that the great depths of experience and contact will not allow that contracted income to grow, nor that 30 million pounds of annual turnover is not worth much more than the 5 million pounds at which the company is valued - net of the cash. And that 5 million pounds would take five years to be generated at last year's pace. But these arguments are academic. What is more practical is the fact that if forward way is being achieved - and I think that it is - the City will eventually wake up to that fact and pay proper attention. (I also like the fact that if there is much downward potential, it is hard to discern). After all, risk is the name of the game.

But there are no forecasts, so perhaps this conjecture is wide of the mark. But how much would it cost to buy the business? That's conjecture too, but here's my estimate - 25p, and all points north from that. So that is my target price, and tells you why I regard Business Systems Group as a good risk - and a definite buy.

Share price: 17.25 - 18.75p

Stockmarket: AIM

[yump] 27/7/2005 16:47

What happened here then, went away for the afternoon and its shot up !
Wonder if there's a few summer bargain hunters around ?

[poacher45] 27/7/2005 16:17

I think it is worth 30p based on the cash in the bank and the extra contracts leading to a much higher turnover this year.

[vicktor] 27/7/2005 16:03

Its the AGM shortly (4/8?) so hopefully we will get a trading update.

[patviera] 27/7/2005 16:00

poacher..whats ure price target and does anyone know the gist of the tip?

[poacher45] 27/7/2005 15:55

Just for the record ARGY2 I sold corporate synenergy last week and bought a large amount of Business Systems this week. I was surprised I could buy so many.
I did this based solely on the companies latest accounts.

[hugepants] 27/7/2005 15:49

Is watshot.com a subscription site?

[patviera] 27/7/2005 15:45

i think they may have been tipped before today as well

[argy2] 27/7/2005 15:30

Tip today accounts for the large buy earlier this week that cleared out the market.No doubt the 'crooked insider' will be feeding the rise.