Cybit Share Discussion Threads

[sdavis] 17/11/2009 09:03

CYH have normally announced a date for the interims by now......hmmmmm

[horsepower] 17/11/2009 08:37

L2 tracks both markets.

[sll] 16/11/2009 23:01

nothing on here (LSE), but just one 25k buy on 'plus'. gotta watch both now, confusing! Link provided above. steve.
ps SRT powered on today, brill! must buy some of these before they even show a profit.

[sll] 14/11/2009 16:29

Thanks for mentioning this one, sd and tehart - just had a quick look (at SRT) and have put it on my watch list. Its interesting to see a business in a similar sector (to parts of CYH like bluefinger) with reported sales of just 2.52m, a loss of 1.28m, and a 10.27m market capitalisation. The market must believe that this stock is really going to be 'massive' - maybe even another EIT? similar trading stats and a not dissimilar market capn (at least pre-suspension of the latter). Its a funny old business is valuing companies, correctly that is. steve

[tehart] 13/11/2009 22:12

Just had a look around there.... looks like bluefinger with plenty of bells and whistles.

[sdavis] 13/11/2009 16:47

Does anyone know anything about SRT?

[bonio10000] 13/11/2009 10:34

SLL - for £500k it is a bonus he is working hard for the company (Never mind he also has options?

Noboby is irreplaceable in any role.

Indeed - you could get two of him for £250k a piece.

[sll] 12/11/2009 23:45

CM - Have read your own comments very very carefully throughout this debate re RH and his pay etc., and must add a couple of quick points to (broadly) support your own often stated views: Firstly, I don't get the impression that we are just paying a 'manager to manage' this business like many fairly 'hands-off' & remote (from the real action) CEO's do. I actually get the impression that Richard Horsman is very hands-on and omni-present in all the technical & operational details of this quite technically demanding business. He is probably a 7 day week workaholic contending with this group. Key question, would we better off with ANother in 'his role' - and at a lesser (i.e. more normal) salary/package? I'm really not so sure about that. Maybe that's a luxury we may 'get to' at some point, but as yet we actually need his focused strategic view (in these varied sectors) and his ability to get stuck in and really deliver the goods, year on year. I may have to pop in and see him to test these gut-feel views, now that I too find myself a larger shareholder than might be considered wise. steve

[cheshiremoggie] 12/11/2009 20:37

I will certainly concede that if Horsman was paid only £250k then a dividend of 1p a share could be paid - costing about £275k+costs!

CM.

[sll] 12/11/2009 11:46

interesting pricing right now, buy online at 38.5p (up to 50k!) and sell (smaller quantities) at 38p - tight real spread. not sure what that means. also more trades going via PLUS than main market. steve

ps link to PLUS to monitor trades there:

[tehart] 12/11/2009 08:48

Thanks Steve .....

[sll] 12/11/2009 08:33

Thanks SD and tehart, just to clarify the company grouping definitions. Small Caps are actually larger than Cybit in market terms, so Cybit are not big enough to be classified as 'small' yet. One day maybe. The index they are actually in is FTSE AIM Allshare. Looking at the 3 year comparison, Cybit were a factor of 100 3 years ago and are circa 80 today, therefore an share price fall of circa 20%. The FTSE AIM Allshare has dropped from the same 100 start point 3 years ago to circa 64 today, therefore an aggregate drop of circa 36% excluding dividends. So Cybit has 'outperformed' both the Small Cap (just - as above) and the FTSE AIM Allshare over the past 3 years. Cold comfort maybe, but food for thought.

[tehart] 12/11/2009 08:07

Nice comparative article on Cybit Directors packages.



If in the next year there is no such bonus (250k ish), a divi is paid (as previously indicated by CYH) and we get some decent results of growth....then I doubt there will be many complaints from PI's nor will we get ....'Ohhh Mr H is well worth the package'.
I suspect his large bonus was a KPI which he hit having expanded CYH reach in the industry,increasing customer base, turnover and profit. I doubt we will see such bonuses again for quite a while.

Over 4 years of holding and this is only the 2nd issue with CYH that has concerned me (previous was the accounting change)in this case mgmts direction has proven to be correct for the company irrespective of the effect on share price I still have no reason to doubt mgmt here.

I suspect in a year or 2 we will be saying 'you get what you pay for' in terms of Mr H. Based on his base salary according to the article he is in the salary range of an MD running a #50m company ..... is that not exactly why we are here ?

[sdavis] 12/11/2009 07:22

Thanks SLL: fair point. However, I am sure Horsman would be shocked if we classified CYH as a small company now (how many small company MDs earn £500k). So maybe that is the challenge.... CYH is still perceived as a small company. Time for them to educate the investment communit???? Or am I a victim of my own ambition... is CYH still a small co?

[sll] 11/11/2009 20:39

Thanks all, for some interesting posts - Just to add a bit of wider market perspective here, I have looked at the 3 year share price graph for CYH v SMX (the 'small companies' index) and there is an amazingly close correlation of path over most of the 3 years to date. From a common start point of 'factor 100' some 3 years back, CYH is now on 80 (ie 20% down) and SMX is on 75 (ie 25% down). That's over 3 years, and we know what most of them have been like! Have tried in vain to copy the graph into here, but can't (its from 'digital look' via the BSL site). Now I suspect that CYH (commercially and financially) has made 'even more' progress to the 'small cap index' than suggested by just 80/75 over those 3 years. Yes - overvalued then (more than a tad) and undervalued now (by a tad more, subject to the coming interims update as to current year progress). If you get the chance via BSL, or ANother, worth a look. steve

[cheshiremoggie] 11/11/2009 14:31

Fair enough davidosh....I attended the previous 2 meetings and while I agree that they are paying large salaries and options, I dont think they can have done any more regarding the share price A while ago the company made NO profit and the share price was up near 80p! They are now making £2m+ and the share price is 35-40p.

However, I am not pushing for shareholder representation on the board. Unless the company starts to lose its way on a business front, I think the directors should just be left to get on with it. If anyone else thinks otherwise they should organise themselves and not moan (too much).

After all, if they start producing a dividend of, say, 5p+ then the share price will not be 40p and the options/salary issue will have disappeared.

I would rather the directors concentrated on growing the business than any other issue.

Back in reality.... I am hoping the next results will still show solid progress - I would particularly like to see some more cash in the bank.

CM.

[davidosh] 11/11/2009 13:54

CM....It is the fact that they have minimal director holdings and yet award themselves huge salaries at this stage that worries me. No dividends but huge options packages ...It all feels one sided to me and so much for that claim to be aligning themselves with shareholders.

Shareholder representatives on boards are needed at most small caps for obvious reasons...not least because the small insto holdings and private investors are the only market for the shares in any event so as owners we need to take real interest.

I was at the AGM and there were NO other shareholders there except my investing colleague who attended last year. The directors no doubt feel they have a mandate to do as they please. Why should I be the one who does all the hard work here....I am already active in getting board representation at five companies and I have a very small holding here. I honestly think some of you should stop talking and help to get the action that is required put in place.

[cheshiremoggie] 11/11/2009 13:43

The share price is clearly down over the medium term and of course this is very poor.

But...unless you hype the company with basically false RNS's, which doesnt work in the long run, there is no alternative but to grow the company. 30% growth a year is great and if a big bonus is paid for 30% growth then fair enough.

After all, 30% growth would lead to a £10m profit in 4-5 years. Half of that as dividend (ie about 20p) and the share price would certainly not be 35-40p.

Of course, that is fantasy land, but if paying directors a lot gets them sufficiently incentivised to make that scenario come true then I dont mind.

As for control by the directors - they only hold a few % - not even 10%! Thats hardly a controlling interest. Get real.

If you want shareholder representation on the board, then you have to get a decent set of shareholders together, say around 40%, and select someone suitable to be on the board. I would certainly vote my shares for any shareholder representative you come up with. Over to you Daviddosh....

CM

[bonio10000] 11/11/2009 13:23

anyone got a torchlight?

[sanity] 11/11/2009 12:52

Bonio - spot on.

sergelioutyi -It always tickles me when we get a poster that unexpectedly pops up either from the past or is new to this board. Giving us their wisdom and making suggestion for us all follow their advice for our benefit. I guess we will be getting into silly season with Derampers followed by Rampers leading up to results. Just one example of the disadvantages of today's 'Instant Everything' culture.

[bonio10000] 11/11/2009 12:52

Did they take a pay cut in lieu of the options?

Or just vote them on top of the current deals and "note" shareholder comments?

[bonio10000] 11/11/2009 12:19

David - absolutely

Sdavis - clearly a salary of £250k rather than £500k would have saved £1m over 4 years.

That would have increased the amount of cash available for internal leasing, funded some of the purchases etc.

Never mind the £1m in profit it would have allowed.

Even on a P/E of 6, £250k equates to an extra £1.5m in market cap - or 15% on the current price.

With a small company such remuneration can materially affect the business and its results.

[davidosh] 11/11/2009 11:59

Is it just me that feels the company is slowly but surely being handed over to Mr Horsman ? I think shareholders need to get some control and representation on the board.



Following the grant of these options, the total number of options over ordinary
shares in the Company held by Mr Horsman was 1,290,525, the total number of
options over ordinary shares in the Company held by Mr Lawrence was 193,979 and
the total number of options over ordinary shares held by Mr Wisdom was 198,877.


In addition, on 3 September the Remuneration Committee decided to create a new
Employee Benefit Trust and has accordingly granted the Trust an option to
subscribe for 405,405 new shares at nominal value. Although the distribution of
this option will be at the sole discretion of the Trustees of the Trust, the
Company will recommend to the Trustees that these options will be issued to a
sub-trust for the benefit of Richard Horsman and that they will vest on the
earlier of two years from 30 September 2008, leaving the Company on good leaver
terms or a change of control occurring before 30 September 2010. Such an
arrangement will more strategically align the interests of shareholders and
directors in building long term shareholder value, whilst taking into account
recent shareholder comment in relation to the payment of director bonuses in the form of cash.