Drs Data&Rsrch Share Discussion Threads

[mr. t] 13/7/2004 14:43

Hmmm...if there's one thing I do not like it's directors selling a share I own. Nigel Turnbull, a non-exec sold 55,000 on 6 July. These were snapped up by the company.

I'm starting to agree with you Mark, these share buy backs are very dodgy. I feel very uncomfortable with DRS spending our money to buy shares off the directors, the people who know the company (and its next results) best. Does anyone know of any other companies that have done this kind of thing before?

For those interested, Nigel Turnbull is a non-exec and chairman of the remuneration committee. He was appointed in July 2001 and it appears he already had a substatial shareholding. He then bought 45,000 thousand more in June and October 2002 at 21p and 25p a share.

[mark c graham] 06/7/2004 14:03

One more share buy-back - that takes them to over 1.5% of issued equity. Also a decent sized (15,000 shares) director's buy.

These point to continuing good cash generation and a view from the Board that the shares are undervalued at current levels.

[mark c graham] 18/6/2004 09:17

Mr T,

I agree with all your comments, although given the emphasis on future R&D spend in the last year-end results, I'd expect cash holdings to be trending downwards this year, even before the effect of the MacArthur purchase.

Now the MacArthur overhang is cleared, however, hopefully we'll see the shares recover some lost ground.

[mr. t] 17/6/2004 11:37

Hi Mark,

I mostly agree with you; but I think it's worth making a couple of points.

DRS have been generating lots of excess cash in the last few years. Even taking into account having an extra £1m in stocks at the last year end due to the London Election, they still generated £1.4m of cash in 2003 after paying dividends.

They had net cash (cash + investments - mortgage) of £6.3m at 31 Dec 03, equivalent to over 18p per share. MacArthur's holding was just under 1.4m shares, worth about £850k at 60p per share.

Given they've got more money than they seem to be able to spend I can understand them wanting to buy out his holding and stabilise the share price. Equally, now that MacArthur has moved on you can understand him wanting to reduce his exposure to DRS, if the majority of his wealth is tied up in it.

Of course, I would prefer it if DRS spent all their money on future growth (only at a superior rate of return) and I would rather John MacArthur felt confident enough to keep all his money in DRS; but given the circumstances I'm not reading too much into it at the moment.

T

[mark c graham] 17/6/2004 08:46

The share buy-backs seem likely to relate entirely to providing a market for former Chairman, John MacArthur, to reduce his holding.

This could imply that he was unable to sell his 4% through the conventional market, which is not exactly a positive.

I'd also suggest that a company with a growth profile like DRS has better things to do with its cash than buy back its shares.

[cloggy] 16/6/2004 22:54

The recent share buy backs are having little impact
on the share price,anyone else out there buying?
Hold these at 64 pence so could do with some positive news
as this one seems to be stuck in the mud.

[lafiamma] 18/4/2004 13:35

"Surprised to see that DRS has a recoverable oil of around 600mb"

You gotta laf!

laf :-)

[mark c graham] 17/4/2004 10:05

Keep taking the tablets.

[karateboy] 17/4/2004 08:25

Sorry, that was suppose to be for DGO not DRS...

[liquidkid] 14/4/2004 08:31

This level is a buying opportunity.
- The first half will be a huge cash generator for DRS when the GLC election payments are made. Possibly now - the Electoral register closed yesterday. With polling in june.
- technically has not broken support - still on uptrend
- the investment in technology is good for the long term since the primary asset is the hardware (counting machines) and making that failsafe is essential
- Dividend next week.

[carolineanne] 23/3/2004 10:26

Is this going down so fast for any reason??? I cannot see whyit should....anyone out there know???

[deckergj] 23/3/2004 08:28

why todays drop??????? can not find any rns.

[jainsworth] 23/3/2004 08:23

what the hells going on, have I missed an rns?

[roysta] 18/3/2004 21:45

Well, most views seem to be in line with my own, a share to keep for the long term if ever I saw one. Dont post very often, but read with great interest.Appreciate all research, must take some of you hours ! ( except from just posting ` ! ` , what does that mean?

[urpo] 16/3/2004 10:59

Thanks Mr T. Very helpful.

I've never got overly happy with plain PE (though much happier than EBITDA) since it does little to reflect the balance sheet strength. In DRS's case of course this presents a very unfair picture.

Obviously they seem to want to retain cash and I've no problem with that since the cost of raising it in extremis is not something to contemplate in the small cap sector.

For DRS though, I think it's worth considering the company after stripping its cash out of the balance sheet... then the PE drops to a nicely sensible 10-12 -personally I think 14-15 would reflect a higher growth company. Anyway I am similarly happy with this share once I strip that out and all I can still see some room for capital growth from here, though I'm not expecting multiples.

rgds

[mr. t] 16/3/2004 09:43

Hi,

I've held these for a year or so now and am very happy with their progress. The results look good, but there's a couple of points to bear in mind.

The revenue for the second six half has declined year on year, from 6,033k to 5,769k. The EPS is bolstered by a reduced tax rate, from 29.5% last year to 27.0% this year. Whether this is beacuse they have managed it well or because teh Inland Revenue thinks they've made less money than DRS thinks remains to be seen.

However, to be fair, DRS did flag up the loss of revenue from Edexcel and they've increased their margins nicely. The strong balance sheet leaves the company in a great position and the chairman's statement is more positive than I've seen it in recent times.

I particularly like the £3.9m that we should get from the London Elections in 2004. That's over 28% of their total 2003 turnover! Given that they say 56% of turnover comes from UK education the election will be a significant contribution. For those interested here's a breakdown of the figures for each 6 month period over the last 3 years (hope the formatting works!):

Turnover Op Profit Margin Interest Tax % Post Tax EPS
Jun-01 5235k 208k 4.0% 107k 28.6% 225k 0.68
Dec-01 4819k 330k 6.8% 20k 33.7% 232k 0.70
Jun-02 6749k 733k 10.9% 28k 31.0% 525k 1.57
Dec-02 6033k 994k 16.5% 21k 28.4% 727k 2.17
Jun-03 7759k 790k 10.2% 102k 28.8% 635k 1.88
Dec-03 5769k 1138k 19.7% 74k 25.7% 901k 2.66

Note: The Jun 6 month end is 28 weeks long while Dec is only 24 weeks, this skews the numbers slightly.

All in all I'm very happy with this share - they've got a history of growing turnover, margins and profits, have an extremely strong balance sheet and have fantastic growth potential...all at a modest historic PE of about 14-15.

Just my two pennies worth,

T

[pippin] 16/3/2004 08:43

jainsworth gave the results date here on 22nd Feb - it is on the company's website.

The figures are solid and pleasing. Unspectacular but steady growth with more to come. I particularly like the net cash position which is continuing to grow each year from the company's own operations.

A growth company with net cash, positive and rising net cash flow and earnings - and a modest rating.

Very tasty - a core holding for me!

[lafiamma] 16/3/2004 08:19

In my experience only about half of the small cap stocks issue a notice of results, it's not unusual & I'm very happy to see the company growing profits, investment and future orders.

Nice solid set of results, IMO.

[jadacards] 16/3/2004 08:07

wwhat happened to "notice of results" is this the way this company usually acts??

[lafiamma] 08/3/2004 15:50

It's too iliquid for any spreadbetting company too. I've got several spreadbets with IG on companies that, until recently, had

[jainsworth] 08/3/2004 15:17

Spoke to IG Index about why its not listed with them as a spread bet option, seems they don't list companies which have less than a £20m market cap! Point being if they don't include it then other organisations will have similar benchmarks which may well be holding the price back - I believe DRS is currently on or near this 20m (dyor) so the price may well hot up as the results approach.

[hercules10] 04/3/2004 16:43

mr pig, think this is a winner that the market has not really caught onto. Can only see upside. We should be topping up as pretty sure that the results will be good and market should re-rate. what did you get in at?