Foresight Share Discussion Threads

[greek islander] 12/6/2009 15:12

GHF

Well I sold out completely on results simply because I feel there are even better bets elsewhere - PRL, ALN, AST, HMS and maybe CHNS.

Took a sizeable loss but that will help with CGT and I hope with some big profitable top slicing over the next few months elsewhere.
Will keep an eye on FSG in the meantime and if there is any significant share price reduction may sneak back in.

Good luck to all shareholders - probably my mistake though bought mainly HMS with the money and they have had two pretty brilliant days since.
See you there GHF.

[glasshalfull] 12/6/2009 14:56

Thanks for that update littleweed.

Funnily enough I also reduced by half after spotting the "reasonably" reference. So many other shares showing fantastic value currently.

I feel FSG will re-rate as it is simply too cheap and has a very good B/S, but think that a significant re-rating (bagger) will require software companies involved in the finace industry coming back into vogue and I'd also like to see them annnounce further contract wins.
Although the order book is strong for the current year, January's contract wins seem an age ago.

Regards,
GHF

[greek islander] 10/6/2009 21:25

UK-Analyst tonight:


Tighter regulatory conditions helped financial services software supplier Focus Solutions (FSG) post a 27% hike in annual pre-tax profit following increased demand for its services. "The new financial year has started well and trading remains in line with management expectations," said the firm. Pre-tax profit rose to 1.78 million pounds for the year ended 31st March 2009 from 1.4 million pounds the year earlier, on sales revenue of 9.6 million pounds compared with 8.6 million pounds before. "We are building a solid pipeline of opportunities and following the recent RDR regulatory proposals, we are seeing increased demand for our solutions despite tough market conditions," said chairman Alastair Taylor. Focus said that while it continues to focus on sales in the UK and Ireland, it is also exploring opportunities elsewhere and is interested in expanding the business by partnerships, joint ventures and acquisitions. Shares in the firm surged by 7p to 36p.

[welsheagle] 10/6/2009 19:24

Daniel Stewart reiterated their 'Buy' recommendation today, with an increased target price of 63p.

[penpont] 10/6/2009 18:52

And from the IC:

Focus on good form

Created:
10 June 2009
Written by:
Nigel Bolitho

The share price of Focus Solutions Group (FSG) rose 12 per cent (to 32.5p) on publication of its 2008-09 results and broker Daniel Stewart reckons that they could more than double - and that's some going for a company reliant on the depressed banking and financial services sector. But one area not depressed is compliance work as the Financial Services Authority (FSA) issues more and more rules and regulations aimed at driving up standards of advice and covering more sectors - credit cards, savings and loans become regulated this November.

Advertising

So financial companies big and small are now spending more on compliance work. During 2008-09 FSG won major contracts with HSBC, independent financial adviser Towergate Financial and Bank of Ireland. Indeed the headline results would have looked even better if the company had not moved from an up-front licence fee to a regular monthly fee charging basis as up-front income fell from close to £1m to £300,000 last year. Earnings declined because of the need to recognise a non-cash deferred tax charge of £54,000 (credit £576,000 in 2007-08). Ignoring that, earnings rose from 4.75p to 6.03p. Some large customer payments sent the year-end cash balances zooming up from £1m to £4m.

FSG has a £40m pipeline of work although some clients may delay implementation. But having completed Phase I of a point-of-sale contract for HSBC, the company will shortly be discussing Phase II to link the bank with financial advisers. Daniel Stewart forecasts 2009-10 sales of £11m and pre-exceptional profits rising from £1.9m to £2.2m taxed at 28 per cent.

Tip update
Buy

As we have said before, compliance is a money pot. The shares remain a buy.

Last IC view: Buy, 27p, 2 December 2008.

[penpont] 10/6/2009 18:02

Note from Edison:

[glasshalfull] 10/6/2009 17:51

Quite a surprise....I've been posting exclusively for the last couple of weeks and come back to 20 posts! Where were you all?

Some good debate and on reflection I'm very pleased with results.
I don't invest for a D/V so hadn't given it much thought. If they'd promised though then it would be nice if they had articulated the change of heart with the owners of the business....we, the investor.

Nice 25% rise which has more than wiped out the dreadful 13% spread that I had to endure during the last couple of weeks as I built a holding.

I wonder if anyone else has spotted a very slight difference in Outlook statements of the Chairman and Chief Executive?

Chairman

Outlook

The new financial year has started well and trading remains in line with management expectations. We are building a solid pipeline of opportunities and following the recent RDR regulatory proposals, we are seeing increased demand for our solutions despite tough market conditions.

Although we continue to focus our sales efforts on the UK and Irish markets, we are also exploring opportunities in regions outside the UK, through strategic partnerships and further development of our focus:360° wealth management solution in particular.

As has been previously outlined, the group has a clear strategy for both organic and non-organic growth and the Board is looking to accelerate the development of its business by a combination of partnerships, joint ventures and acquisitions.

Last year, we stated our intention to take the steps necessary to allow the company to pay a dividend. In order to do this we must apply to the court for the cancellation of share premium account to create distributable revenues. Prior to applying for court approval the shareholders must approve the application in a general meeting.


Chief executive

Outlook

We are seeing general economic conditions not known for a generation in the UK. Recent government actions will have an impact on the ability of our clients' customers to save and invest. This makes predictions on prospects for the future difficult. However the new financial year has started reasonably well and in line with management expectations. We look forward to continuing to execute the established strategy and further develop a successful, consistently growing, profitable and cash generative business.

---------------------------------------------

"Reasonably well" suggests to me that the current year has started okay...but perhaps not as good as expected. Yes, they state they are in line with management expectations, but perhaps it is taking longer to close out contract wins?

I would welcome others views.

I remain long as irrespective these are way undervalued.


Regards to all those posters who saw fit to contribute and clear me out of sole occupancy on the thread,
GHF

[kruger2004] 10/6/2009 17:12

ha ha ha

all this fuss over a dividend after they've delivered these results.

Who buys a stock like FSG for the dividend?

Given their track record on delivering top line and bottom line growth, maybe we should trust them that they know whether reinvesting the money in the business or paying a dividend is best?

The cancellation of the share premium account is an expensive business; I know another AIM company who sepnt nearly £100,000 on legal fees to do it. I assume this has held back FSG doing it; as they wouldn't have wanted to spend that then miss their targets.

i'd be surprised if once they've done it, that they don't pay a dividend for a while yet or if they do it will be nominal, say 0.1p.

I am a holder and happy not having a dividend

[stegrego] 10/6/2009 12:55

Re my post re spread etc, still didnt stop me biting the bullet and buying in below 35p.

Hopefully THIS time ill actually make a return on this!

[shanklin] 10/6/2009 10:03

The cash generation suggest they could pay a fairly meaty progressive dividend starting off at at least 2p per annum, without doing the underlying business any harm at all. That would probably do the share price quite a lot of good.

Not a holder but just trying to be unhelpful. :O) ...

...only joking, having lost money on FSG in the past and being surprised at their apparent lack of a coherent plan for their growing cash pile

[liarspoker] 10/6/2009 09:57

davidosh - perhaps a once off divi would be considered as well.

Not a holder but just trying to help. :O)

[davidosh] 10/6/2009 09:55

As it is now a reasonable size holding for me I shall certainly be attending the AGM and will check out the state of play on the dividend etc. Buybacks may also be an efficient way of returning surplus cash

[shanklin] 10/6/2009 09:41

Liarspoker,

Yes, if they told shareholders they had changed their mind about paying a divi for the reason you give that would be fine, albeit one might then wonder what they plan to do with all the cash they are accumulating.

At the moment, they seem comfortably to be able to fund all their development activities from incoming cash, so why not pay a dividend?

[liarspoker] 10/6/2009 09:38

If the internal returns are very high then no divi should be paid really as it makes sense for the company to utilise this cash internally. If internal returns are low then a low covered divi ( ie high yield ) should be paid out.

[shanklin] 10/6/2009 09:37

Davidosh, yes, as discussed it looks very cheap, not that I hold any at the moment.

[davidosh] 10/6/2009 09:34

I spoke to management months ago about the dividend but you may wish to call and establish what caused the delay and to remind them that shareholders are waiting patiently.

The growth here and cashflow certainly pleases me whilst waiting mind you.

[shanklin] 10/6/2009 09:30

davidosh,

Yes the ongoing absence of a divi after such a long period of signalling one either means they have mis-represented their intended approach re dividends or that there's a level of incompetence present in terms of the relevant bureaucratic activities that does not seem to be reflected in the rest of their business.

[davidosh] 10/6/2009 09:25

My broker never has a problem ....this is not one for online trading and in the long term shareholders will do very well here. The dividend has beeen rather a long time coming though i must say as it was flagged by the chairman as deliverable over two years ago

[whites123] 10/6/2009 09:10

Cash. No Debt. Looking to pay divis. Cash equates to half MC.

No brainer. It is so cheap it defies belief.

IMO should be nearer £1 than 30p

As for spread.

Spreads can and are wiped out in a moment.
Spreads are for traders to worry about.

NMS is reduced to a silly 1,000

Call your broker on the good old fashioned telephone if you want stock.

[lqs] 10/6/2009 08:34

My thoughts are low tax charge makes eps look better than it would be - still very good value though but horrid spread.

[stegrego] 10/6/2009 08:20

I really like this share - BUT the spread is always stupid, you can never buy or sell online and each time ive held it ive lost approx 20%....

Really tempted apart from all of the above!! Grrrr...

[greek islander] 10/6/2009 08:11

Have held for a long time and remaining frustrated at the low rating given.
This performance is pretty good and should see it rerated and moving back to its old share price levels. Long way to go though.
One by one my long held stocks are coming back.
GHF, CR, Shanklin - we certainly share the same taste in companies.

[cockneyrebel] 10/6/2009 08:07

Miles too cheap - strip out the cash and the PE is tiny, no debt either - I still hold and still think these should be a lot higher - suspect they will be over the next few months as confidence returns.

CR

[shanklin] 10/6/2009 08:06

Thank you SM

Apologies for perhaps being slow but why haven't they done this previously? According to Sharelockholmes, the consensusbroker forecast (one broker?) was for a divi of 0.2p, so why didn't they correct that?