Financial Objects Share Discussion Threads

[skyship] 08/5/2008 13:13

Techmark - Just downsizing from an overweight investment

[highly geared] 08/5/2008 12:37

Credibility is now the issue with this coming only 2 months after an "in line" outlook statement. It infers either a degree of poor management systems or unpredictability in conversion/pipeline; I'd go for the latter as this is explicitly stated in the RNS.

I thought these were a no- brainer re; downside risk...wrong again! I see little point in selling as the bsuiness is now fully priced for the worst case scenario and I see the chance of an MBO or bid increasingly likely as a £5m cash pile will be attractive in this market.

However, there's little likelihood of a share price recovery until the credibility issue is restored; this can only happen if they secure a couple of decent wins with visible metrics so the sales force need to start earning their corn fast.

[aquilla] 08/5/2008 12:20

Looks to me like the mms are marking up the price to encourage sellers: a buyer in the wings happy to mop up? I wouldn't be selling at this point.

[techmark] 08/5/2008 11:50

Why would you want to dump though?

[skyship] 08/5/2008 11:48

Stunned & disappointed as it is a mere 9 weeks since the so encouraging Prelims. Luckily managed to dump 10k @ 38.5p on the bounce; then another 10k @ 37.125p. Could be that PF has been adding after the AGM; and his buy will be responsible for the rally....

[value viper] 08/5/2008 11:16

recovering well, all things in.

[aquilla] 08/5/2008 10:58

Plus points:
1)The chairman was happy to purchase 100,000 shares recently at 40p
2)He now has a stake of 15.5%
3)Net cash of £4.8 million
4)Dividend of 1.5p
5)Low historic pe
6)One or two major licence deals in second half could balance poor first half

Negative points:
1)This profit warning could be followed by another with further impact on sentiment
2)Over the last several years there have been a number of profit warnings as well as positive statements
3)The company doesn't seem to have got its act together as far as the sales force is concerned
4)Lack of visibility on future earnings

As I bought back in to this company at a low level I'm prepared to stick with it for the moment, with the share price supported, to some extent, by its cash pile and the dividend.
AIMHO

[techmark] 08/5/2008 08:56

Adding at these prices. Way too cheap and way overdone. Business net of cash being valued at £9 million. Pre tax forecast for 2008 was £3.4 million but I'm taking a 40% sledgehammer to that which give £2 million.

£9 million divided by 2 = PE of 4.5.

I'm happy to buy profitable business on those sort of multiples all day long.

Regards

[techmark] 08/5/2008 08:35

No need for hope, just common sense. The business net of cash is now being valued at £10 million. If it goes much lower they will be giving it away. This is still a profitable business.

[mirandaj] 08/5/2008 08:29

Hope springs eternal! They have to pull at least one of these license deals off:

"Whilst the pipeline of opportunities for the Company is strong, the financial
performance for the full year is dependent on closing one or two significant
license deals to make up for the lower than expected performance in the first
half of the financial year."

[techmark] 08/5/2008 08:26

There must also be chance that the chairman, with such big stake, says ok I take thing private and do an MBO if the market is not going to value the company properly.

[m5] 08/5/2008 08:23

Exactly techmark. Wood for the trees and all that.

[techmark] 08/5/2008 08:14

Even if earnings are down 40% then it still only trades on a PE of 7 plus there is £5 million of cash for a £16 million market cap. The sellers are mad, somebody will bid for this company at this price.

Regards.

[cocker] 08/5/2008 08:13

I think we can all agree that the statement has caught many of us by surprise. However, scratching around for a glimmer of hope at this level FIO maybe taken out.

[stegrego] 08/5/2008 08:05

Im out, not going to hang around waiting to see if they get the orders or not.

Could come good but they have let the side down and im not prepared to give them the benefit of the doubt.

Good luck to those that hold on.

Glad to have held only a small holding that made up only about 2% portfolio, still took a 35% loss though. Could be worse i guess

[papalpower] 08/5/2008 07:57

They have left the door wide open for a second warning, so it should be expected.

[davidosh] 08/5/2008 07:55

Well that should double the AGM attendance !!

[papalpower] 08/5/2008 07:55

Glad I sold out of this earlier, a wise move it seems. Perhaps the first of a string of warnings, followed by an MBO perhaps ?????????

[glasshalfull] 08/5/2008 07:29

Had to adjust my filter settings to post this morning.

As per my email off board rivaldo, took the hit on this one despite the excellent results as something not quite right and I was not receiving any satisfactory answers regarding the contingent liability issue.

However, I did not see this adverse development coming so soon;

"financial performance for the first half of the current financial year
will be significantly behind that recorded for the first half of the last
financial year.

Best of luck to all holders, I hope this isn't the first of several warnings.

Kind regards,
GHF

[cocker] 08/5/2008 07:25

Set to drop like a lead balloon when market opens. The statement is not what I expected & must admit that I am a little shell shocked.

[davidosh] 08/5/2008 00:37

Anyone actually going to the AGM ?

[cocker] 07/5/2008 17:58

It also mentions about Fullager lifting his stake & the contract with CAF. Lets hope @ the AGM we get some good news on current trading to lift the shares to a price far & above where they stand now. Fullager's record with Staffware was outstanding. Lets hope he remains "the boy with the golden touch".