Computerland Uk Share Discussion Threads

[johnroger] 30/1/2004 14:09

Here you are robbie

30 January 2004

COMPUTERLAND UK (CPU)

193p - aim - As a supplier of computers and computer services, Computerland continues to benefit from a ready-made market. Although its share price more than doubled last year, the group's ability to continue growing profits and sales bodes well for the future. And there's still plenty of opportunity for it to grow further on the back of an improvement in project-based revenues and strong contracted sales.

Its recent acquisition of Information Technology Solutions looks a good addition. The £1.7m deal is earnings-enhancing and will complement and boost Computerland's existing contracted-service revenue base by around £2m a year.

Contracted-service revenues remain an important cornerstone of the business, having grown from £21m in the first half of 2001 to £5.5m in the first half of 2004. By providing clients with long-term contracted services, such as running an IT helpdesk, the group continues to benefit from non-discretionary spend as outsourcing continues to grow. Not only does this side of the business provide good levels of visibility, but the operating margins are impressive, too. They grew from 0.6 to 3.3 per cent during the first half.

One-off project-based service revenues also look set to improve, as clients are once-again considering systems and infrastructure upgrades. Although this business grew by 5 per cent in the first half, overall results were hit by price deflation in the IT hardware market, hitting revenues from product sales. This means that sales for the six-month period ended 31 October 2003 fell by 4 per cent, to £25.7m.

Despite that, profits jumped 21 per cent to £895,000, and the group continues to perform well in a tough IT market. It still has plenty of cash in the bank - so it has an enterprise value of just £13.4m - and it remains well-placed to make further acquisitions. Trading on just 13 times earnings for 2005, this is a well-run business with plenty of upside potential. Buy.



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Ord price: 193p Market value: £20m
Touch: 190-195p 12-month High: 206p Low: 94p
Dividend yield: 2.0% PE ratio: 16
Net asset value: 38p Net cash: £6.1m




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Year to Turnover Pre-tax Earnings Dividend
30 Apr (£m) profit (£m) per share (p) per share (p)

--------------------------------------------------------------------------------

2000 28.3 -0.18 -1.40 2.1
2001 36.9 0.30 2.40 2.1
2002 37.6 0.61 4.70 2.2
2003 54.8 1.51 10.50 3.3
2004* 55.3 1.82 12.35 3.8
% change % change +21 +18 +15

--------------------------------------------------------------------------------

Market makers: 3
Normal market size: 500
Beta: 0.45
*Charles Stanley's estimates
Last IC view: 2 May 2003, page 33

BULL POINTS
Strong contracted revenues

Upside from recent acquisition

Improving project-based potential

BEAR POINTS
Deflation in the IT hardware market

Shares are tightly held

[robbiegoodwin] 30/1/2004 13:50

Investors Chronicle tip today. Can anyone give any details of the article ie. price targets etc?

[robbiegoodwin] 22/1/2004 14:19

It would be nice to see a jump from here. Charles Stanley has put a buy on the stock for 1 year and for the long term. The price is now at 13 times next years earnings, this is lower than its competitors despite CPU yielding more and increasing eps at a greater rate.

[johnroger] 22/1/2004 12:44

RNS Number:4262U
Computerland UK PLC
20 January 2004

ComputerLand UK PLC

Acquisition of the maintenance business and assets of Information Technology
Solutions (Maintenance) Limited

ComputerLand UK PLC a provider of Essential IT Services to medium and large
businesses is pleased to announce that it has today, further to the announcement
made on 16 December 2003, completed the acquisition of the hardware maintenance
business and related assets of Information Technology Solutions (Maintenance)
Limited.

[johnroger] 21/1/2004 16:47

Almost back to December's high and ready for the next leg up.

[johnroger] 13/1/2004 14:41

Eaglet shows its confidence!

COMPUTERLAND UK PLC (THE "COMPANY")


ComputerLand UK PLC (the "Company")
Substantial Shareholding

The Company was informed by a letter dated 8 January 2004 that between 24
November 2003 and 7 January 2004, Eaglet Investment Trust plc purchased 105,000
shares and is now interested in a total of 615,000 shares, representing 6.1% of
the issued share capital of the Company. The shareholding is held in the name of
HSBC Global Custody Nominees Ltd.

[johnroger] 17/12/2003 17:47

Shares placed with institutions and acquisation news. The price is beginning to recover despite a weak market.

More Citywire comment today ... irvbox, would you post please?

[diogenesj] 11/12/2003 18:55

Beginning to look good value again after the drop imo. Mind you, Eaglet has made some big mistakes: huge holding in Eurodis Electron (ELH) for example. Over the three year period of the bear market and the current rally, their share price has done rather worse than the FTSE100, with huge extra volatility, so I'm not sure of the value of the AAA rating. :-)

[johnroger] 11/12/2003 14:28

irvbox .... thanks.

CPU looks to be a worthwhile hold,will see what Techinvest makes of the results in January's issue.

[irvbox] 11/12/2003 13:12

Here it is and its good!

Citywire tip ComputerLand is going from strength to strength as more medium-sized businesses outsource the running of their IT infrastructure, and in spite of a 200% rise since we first highlighted the opportunity, the shares still look good value.

The company reported record interim profits this morning up 21% to £900,000 in spite of turnover falling slightly to £25.7 million because of pricing pressure in the hardware supply business.


However ComputerLand (CPU) has seen strong growth in its contracted or outsourced services and in project-based services, and has plenty of interest in its outsourced offering. Earnings per share rose 19% to 6.2p and the company has increased its interim dividend by 23% to 1.35p per share.


ComputerLand targets mid-sized companies, defined as those with 2,000-5,000 employees. Chairman and chief executive Graham Gilbert told Citywire that among these almost all are considering outsourcing their core IT infrastructure management and support at some point. Gilbert said the model has been proven by the larger companies and interest is picking up in the medium sized businesses.


Customers include the UK Atomic Energy Authority, Brit Insurance, Egg, Experian and Manchester City Council.


Project work such as upgrading a bunch of PC's from one version of Windows to another, is an important part of ComputerLand's offering, particularly as a service to its longer term customers. This side of the business has been more subdued in the past couple of years but Gilbert said there are definite signs of a pick up in the sh 111C ort-term order book.


Competitors include Computacenter, Hewlett-Packard and IBM Global Services. However these three tend to specialise in larger, global companies with more than 10,000 employees and Gilbert said ComputerLand's offering is more tailored to the smaller player.


Based on activity levels and the short-term order book, Gilbert was 'confident and bullish' about the rest of the year.


Profit takers moved in first thing to take advantage of the shares' early rise to 211.5p. They are down 10.5p to 195p, valuing the business at £19.8 million. We highlighted the value in the shares a year ago at 69.5p, and reiterated their medium-term potential in April at 108.5p. We advised holding on at 147.5p in the summer.


Citywire Verdict: ComputerLand has held its own in very tough times and continues to look well poised for a bigger take up in outsourced infrastructure management in the next couple of years. The shares look cheap compared with those of its far larger competitor Computacenter.


As Citywire has reported, ComputerLand has attracted some shrewd investors this year, including AAA-rated Peter Webb who founded Unicorn Asset Management. He has been topping up recently and his Eaglet investment trust (EIN) holds 5% of the company. (continued...)


The company's size means it will be below the radar screen for many institutional investors but it offers some interesting opportunities for anyone prepared to wait a couple of years and for those not averse to risk is still worth adding.

[johnroger] 10/12/2003 15:22

Anybody got access to the citywire article?

[johnroger] 10/12/2003 15:18

Strong advance at Computerland
By John Pitt
Published: December 10 2003 4:00 | Last Updated: December 10 2003 4:00

Computerland UK, the provider of IT services to medium and large businesses, yesterday announced a strong rise in interim profits, helped by growth in contracted services.


Graham Gilbert, chairman, said "project-based revenues are showing an improving trend and we expect this market to continue to gather momentum into calendar year 2004".

Pre-tax profit in the six months to October 31 rose from £738,000 to £895,000 on slightly weaker turnover of £25.7m (£26.7m). A dividend of 1.35p (1.1p) is declared on earnings per share of 6.2p (5.2p). The shares fell 12p to 193½p. John Pitt

[cockneyrebel] 09/12/2003 12:08

Little less than I expected too - took my profits on a quick trade first thing.

Diogenes last sentence sums it up imo.

CR

[irvbox] 09/12/2003 11:29

Thank you DiogenesJ

[diogenesj] 09/12/2003 10:44

Compared with what I was expecting (post No. 162 above) the results are very slightly disappointing.

Turnover is down, not up: the continued exposure to hardware price deflation means they have to run to stay in the same place.

Diluted eps 6.00p (fractionally below expectation): higher margin services have almost made up for the drop in hardware sales.

Dividend increase much better than expected: good news, but it's something they tend to throw in when the other news is less great.

Chairman's statement optimistic but somewhat guarded in his comments on the second half, suggesting that they may not quite make the full year forecasts.

The balance sheet is still strong, but cash flow was sharply down due to a large increase in working capital. These things can swing up and down, but it is not quite clear to me where the cash has gone, although debtors are slightly up despite the fall in turnover.

This is a very well run and successful company, but it looks as though the market is still tough and the shares are not as cheap as they were.

[irvbox] 09/12/2003 09:48

Can any one explain to me what is wrong with CPU. It seems to be a successful business, chart is good and it's just produced a set of good results and its sell, sell, sell!!! and the price is stuck at £2

[johnroger] 08/12/2003 16:36

Rise of 5% ahead of tomorrows results. Must be a good sign!

[cockneyrebel] 08/12/2003 13:55

moving up ahead of tomorrows results

CR

[diogenesj] 07/12/2003 15:29

I think we're looking for turnover of about £31.8m, ptp about £0.88m, eps about 6.05p or better, dividend 1.23p or much better, and an extremely positive outlook statement from the chairman.

[denpot] 07/12/2003 15:08

what kind of figures are expected at the interims?

[cockneyrebel] 01/12/2003 09:55

I thought these might be moving up by now - results on Dec 9.

CR

[cockneyrebel] 25/11/2003 15:28

This one should start move swift once we break £2 imo.

Results Dec 9, positive trading statement recently.

Take a look at the earnings growth -1.3p, 2.3p, 4.6p, 10.3p.

These have been achieving 100% pa growth over the last 3 years, scope to beat the current estimates of 12.45p quite nicely.

May be trading on a PE far lower than it appears, cashflow has been increasing too. Eaglet buying - good sign imo.

Fair divi.


I've been grabbing a few the past couple of weeks, just got my final pre-result top up.

Looking forward to the results.

CR

[johnroger] 09/11/2003 17:39

Eaglet Investment Trust now has 5%.Positive trading update.

[johnroger] 13/10/2003 17:04

Big rise today.Any information anybody?