Dicom Share Discussion Threads

[harrogate] 23/10/2005 11:03

Surprised there has been no comment on the Captiva Acquisition by EMC last week

On a sales basis this deal seems to have been done at about 3 x sales if cash is taken out

If we use this on the data capture sales of Dicom ( exc the Samsung stuff ) we get to a price at around £21 !!!

I used to hold these and may be a bit out of touch so is there any fault with the logic? Also DCM are an even more scarce commodity now

[boadicea] 12/10/2005 10:53

A bit of bounce in the cat. Is it dead or just dazed?

[schober] 07/10/2005 15:04

does anyone know who dcms competitors are? what is the takeover posssibility at these prices bearing in mind their strong positon in their niche?

[mdrans1] 07/10/2005 09:34

From Citywire

Chief executive Arnold von Buren told Citywire that the pipeline of sales is still very strong, and that he views the failure to sign two or three medium sized deals in September as being an 'aberration' rather than a trend, and as such, he will 'be able to sleep tonight'.

He believes the rest of the year will be in line with expectations, but it is unlikely that the company will make up for the poor first quarter.

However analyst Milan Radia at house broker Bridgewell reckons Dicom's management is traditionally conservative, and judging by last year, when the fourth quarter rebounded from a weaker third quarter, he thinks it is possible that the company could recover some ground this year. He has downgraded his forecasts for the year to £200 million of revenues (versus £204.6 million previously) and adjusted pre-tax profits to £16.5 million from £18.5 million, but is leaving his 2007 forecasts unchanged.

Radia retains his Buy stance and reckons 'the short-term share price fall to be a clear buying opportunity on a 12 month view.'

Von Buren feels the same, so it is possible we will spot him topping up his holding in the near future.

[jeffian] 06/10/2005 19:43

No, something's not right and I've reluctantly decided to take my profits today having been in since 2001. I still believe that this is an excellent company with good long-term prospects but today's trading statement suggests to me that there is more to this than meets the eye.

Firstly, the company blames the "increasingly challenging economic climate and general trading environment in its market sector". It's only a month ago that they saw "Good growth prospects enable us to view the Group's outlook with optimism.
Otto Schmid, Chairman, 31 August 2005". That's a bit of a turnaround, isn't it? And if a few delayed contracts in the first Quarter can cause such a hole they don't expect to catch up in the rest of the year, what's to say similar delays can't knock on into Q2, 3 or 4?

Furthermore, I used to believe that the EDC side was reasonably recession-proof because of the fast payback and I seem to remember from somewhere that DCM demonstrated that EDC paid for itself in year 1 through staff savings and other efficiencies ("More and more, customers are looking to reduce costs by streamlining processes and increasing efficiencies throughout their organisation") in which case you'd expect cost-conscious clients to expedite orders rather than delay them!

At tonight's closing price, on an 'adjusted' PER over 16, a fully-diluted PER of over 30 and a dividend yield of 0.78%(!), it strikes me that all the risk is still on the downside. I can't see much reason for them to recover from this level until we see the Q2 statement to confirm (or not) that this is just a 'blip' and you know what they say about profit warnings..........

Regards, Ian

[wjccghcc] 06/10/2005 12:36

Good cashflow generation as well.

[abw] 06/10/2005 12:29

Todays fall seems a drastic over-reaction to the news. There will still be a decent profit and to Dicoms credit they're taking corrective action.
Most corporates looking to implement Datacapture systems have Dicom on their shortlist - however maybe this is first sign of slowing decision making by big clients due to higher energy costs affecting them.
A very steady, well run outfit with a market lead will recover!

[jeffian] 06/10/2005 12:13

Hmmm! 'Profits ahead of last year but below market expectations'. Well last year's eps was 50.8p after stripping out amortisation and non-cash items, so they were trading on nearly 20xPER - fair enough for a high-tech growth stock, you may think - now down to just under 16xPER at current price. That ain't particularly cheap. High ratings are given to companies which persistently match or exceed expectations and DCM has now dented its reputation for that; if it follows the well-trodden path of second (or third!) warnings in the coming months the share price is not going to recover in a hurry IMHO.

Regards, Ian

[wjccghcc] 06/10/2005 12:12

Well I've sold a chunk of mine since I had a good profit on them even after the fall. If it's a one off hiccup then they're certainly good value now. The stronger sales pipeline bodes well for this. Of course, if it's the start of a slowdown in their sector, then it is more of a concern.

[v11slr] 06/10/2005 11:56

There goes the volume. I wonder if those have been worked through the market this morning and we'll see a partial bounce back this afternoon.

[mdrans1] 06/10/2005 11:38

Not much volume for such a large fall . Over reaction ?

[bones] 06/10/2005 11:12

Yeah, bad vibes after bullish results. Fortunately, I sold out on 27th September because of the total lack of action. Sorry, should have posted it.

[v11slr] 06/10/2005 10:21

Not comatose anymore :-(

Bad day to release bad news.

DICOM Group plc:
Trading statement

Basingstoke, 6 October 2005 - DICOM Group plc ('DICOM Group'), the global leader
in the Information Capture market, announces that trading in the first quarter
of the financial year has been weaker than expected. The increasingly
challenging economic climate and general trading environment in its market
sector have led to delays in the signing of contracts, particularly in Europe.

In addition, as outlined at the time of its preliminary results announcement,
DICOM Group is reorganising its underperforming Capture Services business and is
undertaking certain restructuring initiatives. The charges associated with these
measures are expected to be approximately £1.2m and will be provided for in the
results for the first quarter. The Board believes these measures will deliver
improvements in profitability when they are completed later this year.

Therefore DICOM Group's first quarter results will be significantly below the
comparable quarter of last year with the Board expecting operating profits of
£1.3m (before the charges of £1.2m) compared to £2.7m last year.

The Board remains encouraged by the sales pipeline, which is significantly ahead
of the comparable period of last year. However, the outcome for the first
quarter means there is a strong likelihood that the results for both the half
and full year will be lower than planned. At this stage the Board expects
operating profits for the full year before the charges of approximately £1.2m to
be ahead of last year but below current market expectations.

The results for the three months ended 30 September 2005 will be announced on 8
November 2005.

[bones] 20/9/2005 17:33

Comatose or what LOL

[bones] 12/9/2005 14:10

Some 50K lumps changed hands at 1,006/7. Half a mil of shares each time is decent money for sure.

[bones] 10/9/2005 17:33

That's a good move and a patient strategy WJ!

[wjccghcc] 10/9/2005 12:23

I remember buying these at 2.50 after 9/11. Still got'em :-)

[jeffian] 09/9/2005 23:02

Wahey! £10 breached - a happy day for DCMers.

8-)

Regards, Ian

[wjccghcc] 01/9/2005 10:24

I was using digital look consensus which was 53.4p. I guess Bridgewell were at the high end of the range so they've probably downgraded to come more into line with the consensus. 60.8p still sounds a lot better than 53.4p though. PE of 16 for a company the CEO says will churn out earnings growth of 15%+ for the next 3-4 years (Citywire interview yesterday) is pretty good. And if they could just sell the SGA business we'd see a rerating/takeover bid IMHO.

[harrykewill] 01/9/2005 08:59

WJCCGHCC where did you get your 2006 EPS forecast from? Forecasts have been downgraded, according to this:

0940 GMT [Dow Jones] Dicom's (DCM.LN) full-year results reflect "continuing strong growth in proprietary information capture products and services" says analyst Carl Franklin at Bridgewell. Say 4Q performance was helped by two large financial services contracts worth over $1M each. Trims 06 EPS forecasts slightly to 60.8p from 63.3p to reflect costs relating to closure of loss-making Capture Services division announced today. Notes shares trade at an "undemanding" 17.7x 05 earnings and reiterates buy rating. Shares unchanged at 975p. (PBA)

[wjccghcc] 31/8/2005 08:14

Good solid results, 10% ahead of the Barclays consensus EPS forecast. It's nice to see them churning out the cash. Optimistic outlook and a 4 for 1 share split. 2006 forecast of 53.4p should get upgraded. Pe of sub 17 for the global leader in information capture looks solid value to me.


Financial Highlights of the Preliminary Results

Group results
* Turnover up 15% to #179.8m (Year to 30 June 2004: #156.2m)
* Gross profit margins up from 40.3% to 43.1%
* Operating profits before goodwill amortisation up 14% to #14.7m
(#12.9m)
* Operating profits in local currency terms and adjusted for
acquisitions up 7%
* Profits before tax, goodwill amortisation and exceptional item, up 15%
to #15.2m (#13.3m)
* Adjusted earnings per share up 13% to 50.8p (45.0p)
* Operating activities generated positive cash flow of #18.7m (#18.6m)
* Proposed final dividend of 4.26p, making total dividend for the year
of 6.39p - an increase of 15% (2004 total dividend: 5.55p)
* Net funds of #16.2m (#20.9m at 30 June 2004), after spending #20.5m on
acquisitions

[welsheagle] 26/8/2005 21:43

Dicom's broker may be trying to liven up a dull day by flagging up its client ahead of next week's results, but the company has been hugely successful to date and it looks as though it is set to make a dramatic entry into the Citywire BrainsTrust 100 portfolio next week.

The BrainsTrust 100 is a portfolio of the top smaller companies to which a panel of top fund managers is most heavily exposed. Citywire will publish the latest movements next week, and it looks highly likely that Dicom will be among the positive movers.

Dicom (DCM) is due to report figures for the year to June next Wednesday, and the numbers will certainly be worth noting.

House broker Bridgewell today reiterated its Buy recommendation on the stock, which is currently trading up 1.5p at 967.5p, saying that on a forward price to earnings rating of 17 times, this represents a 10% discount to the wider UK software market.

The house broker is not alone however in singing the praises of this information capture specialist. Earlier this week Baird, while cautioning over the slight downturn in third quarter sales, re-iterated its recent Outperform rating and £11 price target. Citywire tipped the shares in May 2003 at 395p.

[mdrans1] 26/8/2005 12:01

Today's Investors Chronicle cover feature - Get Rich Slow – GARP (Growth at A Reasonable Price) - lists Dicom as one of 5 on the "Slater Shortlist" see page 16

"If you are looking for small-caps with great growth prospects and reasonable share prices, Vp and Creston are serious contenders, along with Numis. Dicom and Marchpole are likely to appeal more to value-conscious investors. Dicom's top-line sales growth in recent years has been subdued"

[harrykewill] 26/8/2005 09:37

0710 GMT [Dow Jones] Bridgewell reiterates buy rating on Dicom (DCM.LN) ahead of FY results on August 31. "We anticipate continued progress in terms of larger contract wins, impressive revenue and earnings growth and with respect to the medium-term technology road map." Adds: "Dicom appears to be edging closer towards divesting the non-core SGA distribution business, and we believe this will trigger further rating convergence between Dicom and its international peers. Shares closed Thursday at 966p. (MIC)