D4t4 Solutions Share Discussion Threads

[walbrock82] 27/6/2017 18:18

D4T4 Solutions look promising on the surface but dig deep and you expose some weaknesses by crunching ratios and spotting trends.

Today, results were a mixed bag, which is why the shares are getting sold off heavily (down 11%).

These are the concerns: -
1. Earnings are being slightly distorted by changes in receivables and payables.
2. Recurring revenue isn’t growing meaning projects are “one-off” gigs.
3. Cash Balance volatility.
4. UK operations seeing a major decline?
5. Slow growth from a small software firm.
But, my major concern is they rely on ONE major customer that accounts for 50% of group sales for the last two years. If that contract disappears, D4T4 shares will tank.


On the flip-side, we can say a few positive things: -

1. Business is growing in the last decade;
2. The Celebrus acquisition is yielding positive integration (sales of £5m, up from £2m in two years);
3. Licensing division is growing lightning fast (50% and 25% growth in the past two years);
4. Low debt levels;
5. Despite, slight earnings manipulation, they are much higher than two to three years ago. This is evident from net cash earnings.

For more charts and analysis, click

[amencorner] 27/6/2017 10:11

Must say, I am fairly relaxed with D4t4 and certainly go along with the FinCap note issued today following the results earlier today:
"The FY 2017 results were in line with April’s post year-end guidance; impressive c.20% earnings growth despite a 5% reduction in revenue. In H2, some Project revenues were delayed by political uncertainty in the US and company-specific issues at a high-profile Japanese client. Instead, H2 profit was driven by the data gathering and analysis business offering exceptional margins; on the growth of Celebrus licence fees in particular. We expect to see the delayed projects flow into the current year, delivering strong revenue growth but reducing gross margin to usual c.50% levels. Resulting EPS progression is likely to be mitigated by a higher tax charge this year; however we are excited by huge potential of the data analytics offering which now generates >84% of revenues. The recent tie-up with Microsoft could see the US giant offering Celebrus to its global client base with significant upside potential. We caution the relationship is very new and at this stage we temper our expectations and forecasts with prudence."
As ever, DYOR

[rcturner2] 27/6/2017 10:01

I have bought in this morning.

[amencorner] 27/6/2017 09:44

The turnover was as expected in the forecasts from Fincap in April 17 so can't see any reason for Mr market to be disappointed on that score. Just had a look at the trades and it seems like odds and sods of sales from PI's expecting some extra type of positive headline. Personally, I am happy to continue to hold.

[its the oxman] 27/6/2017 09:30

Seem decent enough results with a positive outlook - high growth market, US presence and pipeline of opportunities bodes well etc - so today's dip gives another chance to buy into a gradually improving story.

[norbert colon] 27/6/2017 09:22

FinnCap price target raised to 200p. Note recent tie up with Microsoft but urge caution due to early stage relationship. Top 5 holding for me and very happy with results.

[gerdmuller] 27/6/2017 09:22

Finncap have raised their target price from 190p to 200p today.

I think when you put out a positive trading statement there is always the chance that people expect too much. But following these results these look like a very good company to me which is going in the right direction. Added a few more this morning.

[dave2608] 27/6/2017 08:57

Regarding top line sales growth. They clearly give the reason and say that it is back on track and expected to bear fruit in the first 6 months of this year. As we're already 3 months into the year, looks positive to me.

"In 2016/17, five of the six KPIs recorded improvement, with the sixth reflecting revenue which, as previously reported, was adversely affected by a lengthening of data solutions sales cycle: this was due primarily to the unexpected election result in North America which caused a number of client initiatives to be put on hold for a few months. These initiatives are now back underway, and they are expected to bear fruit in the first six months of the financial year ending March 2018".

[rhomboid] 27/6/2017 08:30

I'm always surprised with how D4T4 shares trade, today's RNS demonstrates clearly the vastly improved margins and increasing traction of Cerberus, the net cash position will be bolstered still more as debtor days normalise , maybe those who've not been fully awake were expecting top line sales growth🤔

[ayl30] 27/6/2017 08:18

Surprised at price reaction to news

[martinthebrave] 26/6/2017 11:43

Thanks Eagle Eye. Very helpful.

[eagle eye] 26/6/2017 11:32

I've been told by the company that results are scheduled to be released tomorrow morning. Hope this helps.
Cheers EE

[norbert colon] 26/6/2017 11:22

The last Trading Statement from the company noted that results were expected to be released this week but no fixed date was given.

[gerdmuller] 26/6/2017 11:06

I can't see a date for the results. Many on Factiva have today as the date but that seems to be wrong so far at least.

Should be out shortly, maybe tomorrow. Price seems to be starting to anticipate a good set of results.

[mfhmfh] 23/6/2017 11:14

Final year results due next week

[its the oxman] 23/6/2017 09:47

Chart looks ready for a good push higher.

[divinessence] 20/6/2017 00:40

According to Sharewatch May 2017 edition, profits are expected to be "ahead of market expectations with sales up 48% year-on-year at £17.7m." A growing stock and penetration in USA market makes this stock cheap at this price, imho. Should be £2.00+

[gerdmuller] 19/6/2017 12:26

Thanks GHF.

That does explain the EPS slowdown.

Bought these a couple of times (for the first time) after the trading statement as things do seem to be going in the right direction.

I believe that results are out shortly so that should give more of a clue as to how they see trading in the current year and beyond. So if all does remain positive those estimates could be revised up.

[glasshalfull] 17/6/2017 18:09

GerdMuller

D4T4 has been a beneficiary from a lower tax charge (5% v previous 15%) utilising previous losses.

Now fully utilised, the FY 2018 tax charge will rise to c.16% according to the lastest forecasts I have from finnCap. EPS is therefore impacted.


Hope this assists.

Kind regards
GHF

[gerdmuller] 16/6/2017 14:59

Okay, I see what you mean.

The only figures I can see for 2018 have sales up 25% and ebit up 20% but EPS only up 6.6% so maybe there is some charge factored in for that year to reduce eps growth.

[valhamos] 16/6/2017 14:55

I am always surprised by the unquestioning credence given to PEG numbers which depend on brokers forecasts especially those for the 2nd forecast year which are often not updated until the results for the first forecast year have been released.

In the case D4T4 it issued an "ahead of market expectations" (before FX gains) in April for the year to 31st March 2017 yet forecasts have not changed so the percentage increase in 2018 eps that lies behind a quoted PEG of over 6 is meaningless.

Further from the last trading update we know that profits to be announced in the next couple of weeks were further boosted by FX gains which distort year on year growth comparisons used in the PEG calculation.


PEG is a useful concept but often its importance is undermined by the poor quality of the data used.

[aishah] 16/6/2017 12:45

I'm looking at 2018 fcst, not 2017.

[gerdmuller] 16/6/2017 10:59

Are you sure you have not got your decimal point in the wrong place as I make the PEG about 0.6 to 0.7.

[aishah] 16/6/2017 09:41

On a 2018 fcst p/e of 15 and PEG of 6.34.

[thebigshortfella] 15/6/2017 21:32

Its the OXMAN - I agree with you. This seems to oscillate between a set channel.