Electronic Data Processing Share Discussion Threads

[stewjames] 14/6/2002 09:27

Getting interested again now.

[feedthegoat] 10/6/2002 16:15

held these for 4 years,met ceo,fd etc
these are v.safe guys/biding their time
the b/s is the safest ive ever seen +i'm an accountant
bought properties to save rent
have turned around both acquisitions now
large director holdings
new board directors
for first time ever have granted share options to the fd!
these are asolid buy in difficult times imho

[stewjames] 04/6/2002 11:18

Yep, I checked it out a few months back. From what I remember, I wasn't satisfied the earnings prospects were good enough to make an investment worthwhile when the asset discount wasn't huge. A "close but no cigar" share for me.

[rangers99] 04/6/2002 08:33

Stew, have you checked out Theo Fennel (jewellers).

[stewjames] 31/5/2002 11:37

Purely on an asset value basis I'd favour HST and AON. Perhaps also CPL though I've not checked that since the recent rises. AEP another possibility though earnings are totally dependent on palm oil prices.

If you're willing to sacrifice the assets a little for earnings potential then SLM and CDY might fit the bill better. With all these shares, there are nasty spreads. It's that as much as anything that keeps me out of EDP and similar opportunities - the cost of exiting one and taking a position in another is approaching 10%. To justify that cost the opportunity has to be excellent and I don't see any clear prospects in the market right now.

[rangers99] 31/5/2002 11:20

thanks for the feedback. Im happy to hold these for a couple of years, mainly because of the strong balance sheet. Out of interest what stocks do you think are better value?
cheers

[stewjames] 31/5/2002 10:03

I did write something longer but ADVFN decided to kill my browser before I'd finished! To summarise:

H2 performance last year suggests 1M pre-tax this year is possible though probably toward the upper bound.
Yield is reasonable but not covered by historic earnings and likely to be barely covered this year, if at all. They have the resources to maintain it but I wouldn't rely on it.
Company earnings history is checquered.
On the plus side, purchase price of properties last year at 10 times annual rental is cheap. Good chance with property prices since that these assets have appreciated somewhat in value.

I've been looking at this for several months and have come close to buying on more than one occasion. What's stopped me is there's nothing that good here. Yield is reasonable but unexceptional and it's slightly doubtful whether it will be maintained. Asset discount is good but not that huge. Operating performance of the company over the past few years has been unexciting. PE, even if they have a good year, will probably still be in double figures. In addition, to justify paying the spread a 20% increase in price has to look likely IMO. I just don't think it is. Results should be out soon. I'll be watching with interest.

[rangers99] 31/5/2002 09:21

forgot to add company bought half a million shares recently for cancellation at 39.5p so only 25.7M shares in issue now.

[rangers99] 31/5/2002 08:39

From citywire

11:52, Fri 19 April 2002
Twice bitten, twice shy
Investors would be forgiven for running shy of IT companies but Electronic Data Processing and Business Systems Group offer strong balance sheets, net cash, dividends and a decent chance of share price recovery, believes Jemma George.

Electronic Data Processing (EDP) and Business Systems Group (BSG) both provide computer and software-related services to businesses in the UK. The services include installations, software packages and hosting services as well as the sale and maintenance of computer equipment.

EDP focuses on the UK independent builders and timber merchants market and the wholesale distribution industry, while BSG is a more general ebusiness and ASP software services group.

Both companies have seen their share prices and market capitalisations plummet over the last 18-months, but to levels that could offer significant value.

For the year to September, EDP made a pre-tax profit before exceptional items of £322,000, after spending £2 million on product and service development. Sales rose 24% to £10.4 million.

At the end of the period the group had net funds in the bank of £6.1 million, or 24p per share, compared to a current market-cap of just £11 million and a share price of 45p (EDP).

The group also paid a final dividend of 1.594p per share and has since bought back at least 1.5 million shares for cancellation, at an average price of 35p per share.

Trading conditions were still tough in January but a leaner cost base and better operational performance from recent acquisitions should provide for 'a satisfactory result this year', said the company.

BSG seems to be a step or two behind EDP in the recovery process, having seen a further deterioration in trading at the end of last year and continued pressure on the shares which now trade at 9p.

The group has just closed its books on the year to March but is unlikely to report the figures until May/June. The only positive indicator is the purchase of 200,000 shares by finance director James Wheaton, at a price of 12.5p each, in February. A trading statement would be helpful.

Interim figures showed an operating loss of £4.87 million compared with a loss of £416,000 in the corresponding period. The increase was largely due to a downturn in the consulting business and ongoing losses in its Webgenerics software division.

Overhead reductions, including several redundancies, gave rise to an exceptional charge of £357,000 in the first half. A further charge of £460,000 is expected in the second half.

There was no interim dividend but on a more positive note there was £9.15 million of cash in the bank at the end of September, albeit much lower than the £14.9 million this time last year.

If the group has maintained this position, then the shares are trading at a huge discount to cash but even if the cash is nearer £5 million, there is some value relative to a market-cap of just £4.6 million and sales of more than £25 million.

In June, BSG acquired technology consultants Atomic Tangerine, for £932,000 and a deferred payment of up to £5.75 million although the total is expected to be about £3 million.

Atomic has some decent working relationships in the financial services sector and offers various compliance-compatible products and services. The division is doing well and is starting to offer the same sort of specialisation as EDP has created in the builders & merchants market.

However, BSG is a comparatively more risky bet given its ongoing losses, lack of dividend and the need for some signs of recovery. The shares (BSG) are down a further 0.75p today at 5.5p.

Both these companies have attracted support from shrewd investors in the past and there are one or two who are still lurking on their registers. The shrewd team at Electra Select Performance, led by Nick Ross, actually have a foot in both camps. Electra holds 175,000 shares in Business Systems Group which it originally bought in September 2000 and has not touched since December of the same year.

In January 2001 Electra bought into Electronic Data Processing and last added to its stake in late February of the same year to give it a total of 250,000 shares or 0.96%. Technology and media expert Katie Potts has also taken a stake in Electronic Data Processing on behalf of her Herald investment trust (HRI). She holds 1.88 million shares, equivalent to 7.19%

[rangers99] 31/5/2002 08:04

"EDP is the largest IT solution provider to the UK independent Builders and
Timber Merchants market place and a leading supplier to the wholesale
distribution industry."

From results to end September 2001
Number of shares 26.2M

properties worth 10M

Cash = 6.1M, debtors = 4M, creditors = 3M.

NAV 15.5M after writing off intangibles = 59p.

For the nervous lets assume 50% bad debts but that still gives NAV of 13.5M or 51.5p per share. Thats cash + properties. Current share price of 44.5p

Turnover increased 24% to #10.4 million (2000: #8.4 million)

reported a small loss due to exceptionals (goodwill write-off, redundancies, legal costs)

Profit before exceptional items and goodwill amortisation #332,000. This includes 2M R&D costs that were written off.

Better 2nd half showing profit of 612,000 before exceptionals (due to strong performance from BCT and Disys and costs savings)

Some wag on iii is wondering when they are going to divest themselves of the IT part and become a true property company. hehe. Maybe he was serious.

Looks a good, safe bet with substantial upside for when the markets recover.

dyor etc.

[feedthegoat] 21/11/2001 10:20

i'm also in at 3.73.
price can mov sharply on small vol. sadly like today but keep the faith

[saturn5] 18/11/2001 11:34

I was fortunate to buy at 38p
I am quite happy with the continued rise.
Of course I should have bought more.
May yet do that.

[boucher] 13/11/2001 14:43

i am in at £3.73 anyone got any idea if the will ever regain to this

[mayfly] 13/11/2001 14:38

Beginning to look good

[feedthegoat] 09/11/2001 11:59

This is creeping up nicely

[feedthegoat] 01/10/2001 14:30

Director buys+company buying shares for cancellation.....this share is so cheap

[feedthegoat] 01/10/2001 14:30

Director buys+company buying shares for cancellation.....this share is so cheap

[feedthegoat] 18/9/2001 11:49

SPOKE TO FD a week or so ago.
cant divulge much obviously but things are on track.
better 2nd half than first,lots of recurring revenues etc.
this is less tan cash per share now ie.land/buildings + business valued negatively.Directors hold nearly 30% and have been topping up.
this is Warren Buffet investing

[pugugly] 18/9/2001 11:42

feedthegoat. Thanks. Seems to be suffering from the Cedar effect today. Anyone any views at thsi price or how they are getting on with the integrations?

[feedthegoat] 05/9/2001 15:02

Having gone to last AGM APART FROM FD+CEO REST OF BOARD WERE V.OLD.
So think may be good/new blood.

[pugugly] 27/6/2001 15:57

Grump -- Many thanks for info and link. Only just noticed when came back after EDP share price fall today.

Feedthegoat. Not sure I agree with you about customer paying for manufacturer rectification of faults. In my experience a bug is a fault and the cost of rectification is down to the supplier. e.g Ford/Firestone in USA not the poor sods who bought the vehicles. In my book a computer programme system should work as promised. I know Bill Gates is currently getting away with it - but for how much longer?- Sorry slight digression from thread but very relevant in respect of where costs/charges should be allocated.

[feedthegoat] 06/6/2001 17:04

EDP have had to rectify hundreds of bugs in this system.When you improve the product you expect the customer to pay for the enhancements.Inevitably some baulk at this and walk away.This is a familiar pattern with many customers returning when they have considered the alternatives.

[gump] 05/6/2001 17:23

pug.. Brewers is a concern of 70 depots in the South of England - they were apparently a large user of the BCT system but fell out with EDP or with Jowitt. Brewers web-site is www.brewers.co.uk

Hope that helps.