Gresham Technologies Share Discussion Threads

[richjp] 10/2/2015 17:52

jadeticl,

Thank you.

I did physics a very long time ago at school so I think I just about understood that!

On a more serious note when the share price first went up to 140P back in 2013 it must have been because people thought GHT was up and running as far as decent growth was concerned. That is why I think we need to see more evidence of a decent growth rate to get the share price back up to that level.

[jadeticl3] 10/2/2015 15:56

Richjp, what we physicists would say is we need to see in 2015 potential converted to kinetic!

[richjp] 10/2/2015 14:59

Yes it appears to be a "major" order from a strategic perspective but that does not mean that it is a major order from a financial perspective. Once again no figures were quoted.

We know that the financial results for 2014 are going to be disappointing as that was stated in the profit warning, but I feel the market will need to know exactly what those figures are before hopefully a line can be drawn underneath last year so things can move forward. Companies always have to rebuild confidence following a profit warning and I think definitive financials are necessary for that to happen.

What the profit warning also brought into question for me is the question of how fast will CTC growth be? The first quarter of the year is usually slow for IT companies as often potential clients are still finalising their budgets and allocating resources. Hopefully the gearing up of the sales force and the appointment of marketing director in the first quarter last year, will have resulted in a pipeline of prospective clients, who should have made allowances for CTC in their budgets for 2015.

This year should be the year when we really find out what the true sales potential of CTC is.

[schytalk] 10/2/2015 14:18

Good to see another win but not sure it is 'major' as such since this was not, I believe, a full RNS. I expect that such announcements will come pretty regularly from now on and of course the more customers you sign up then the less significant each one becomes.

I have said before that I think the share price is suffering because of the lack of brokers support. The fund raising at 125p followed by a profits warning relatively shortly after would have caused the brokers serious angst. I think Gresham is in the 'naughty boys' room and needs to demonstrate good behaviour (to plan and no surprises) before the brokers support a higher share price level.

The board have shown their confidence (dangerous word I know) in the longer term with the capital restructure and promise of dividends. The share price will I am sure come back, my only concern is that Gresham is at risk of being acquired on the cheap because of the low share price As always DYOR but I think Gresham is cheap at this level.

Onwards and Upwards.

[schytalk] 10/2/2015 14:18

Good to see another win but not sure it is 'major' as such since this was not, I believe, a full RNS. I expect that such announcements will come pretty regularly from now on and of course the more customers you sign up then the less significant each one becomes.

I have said before that I think the share price is suffering because of the lack of brokers support. The fund raising at 125p followed by a profits warning relatively shortly after would have caused the brokers serious angst. I think Gresham is in the 'naughty boys' room and needs to demonstrate good behaviour (to plan and no surprises) before the brokers support a higher share price level.

The board have shown their confidence (dangerous word I know) in the longer term with the capital restructure and promise of dividends. The share price will I am sure come back, my only concern is that Gresham is at risk of being acquired on the cheap because of the low share price As always DYOR but I think Gresham is cheap at this level.

Onwards and Upwards.

[gnnmartin] 10/2/2015 10:27

Be reassured.

[jadeticl3] 10/2/2015 09:40

My system, ie the one I rely on for minute by minute share prices, must be on the blink today. I got a shock when it showed GHT down 52% and a news item to read. Oh no! Then saw news was Contract Win, so I am assuming the price is wrong. Some others are puzzling also, so I will wait until the system sorts itself out. Please reassure me that even if there is not rise on the news that at least it has not fallen off a cliff.

[amt] 10/2/2015 08:22

Another major client contract and the market remains asleep at the wheel. Great market conditions for buying at a discount at the moment. I wonder how long this can last before interest in small caps revives.

[qantas] 02/2/2015 23:06

hxxp://www.atmonitor.co.uk/blog/post/entry.aspx?post=data-migration-reconciliation-holds-key-to-success&blog=jake-sweeney-atm-co-uk

[qantas] 02/2/2015 23:06

hxxp://www.atmonitor.co.uk/blog/post/entry.aspx?post=data-migration-reconciliation-holds-key-to-success&blog=jake-sweeney-atm-co-uk

[qantas] 02/2/2015 21:59

hxxp://www.atmonitor.co.uk/blog/post/entry.aspx?post=data-migration-reconciliation-holds-key-to-success&blog=jake-sweeney-atm-co-uk

[richjp] 31/1/2015 17:43

jdeticl,

My shares are also held with a nominee so I doubt that I will be notified directly either. This should not be problem as I see this as a legal technicality which will almost certainly go through and I would expect to see an RNS when it happens. The number of shares we hold will remain the same.

[jadeticl3] 31/1/2015 09:57

Thanks to all helpers. I now see that because all my GHT shares are in accounts with on-line brokers I have not been informed personally. Presumably this broker will issue a statement.

[gnnmartin] 31/1/2015 00:34

The share premium account is the difference between the money raised by issuing shares and the nominal value of those shares. For example, the nominal value of the shares is 5p, so when 2.4m shares were placed at 125p in Dec 2013 the result was to add £2.4m to the share premium account.
Nigel Martin

[jadeticl3] 30/1/2015 16:12

Phew, thanks.

[schytalk] 30/1/2015 11:00

jadeticl3

I think the share premium account arose mainly from the acquisition spree that Gresham embarked upon many years ago. Essentially it is the difference between the price paid (in shares as I recall) and the value of the actual assets acquired i.e. the premium for goodwill.

The relevant section from the circular is shown below, essential the share premium account is written off and posted to attributable reserves after eliminating the accumulated losses. If approved, subject to cash restraints/going concern issues, then it will allow dividends to be paid which the company state is the intention.

...........
Cancellation of the Share Premium Account
The Board considers that it is important that the Company has the flexibility to pay dividends and make other returns
of capital to Shareholders when the Board considers it appropriate and desirable to do so, having regard to the
circumstances at the time. Specifically, the Board wishes to commence a progressive dividend policy and the proposal
regarding cancellation of the Share Premium Account will remove the restrictions set out below.
The
Act restricts the circumstances in which a company may pay dividends or return funds to its shareholders. In particular,
the Act provides that a public company may only pay dividends on its shares out of its accumulated distributable reserves.
The Company’s capital reserves including its Share Premium Account are non-distributable reserves. However, the Act
does permit the Company (subject to the approval of Shareholders and the confirmation of the Court) to cancel its Share
Premium Account and to credit the resulting sums to the Company’s profit and loss account.
As at 31 December 2013, the Company reported an accumulated deficit on the Company’s profit and loss account of
approximately £0.74 million and is therefore prohibited from paying dividends.
The amount standing to the credit of the Share Premium Account as at 31 December 2013 is approximately £15.9 million.
Accordingly, to create distributable reserves, the Board is proposing, subject to Shareholder approval and confirmation
of the Court, to cancel the Share Premium Account (the “
Cancellation
”). This Cancellation will create a reserve equal
to the value of the Share Premium Account as at the effective time of Cancellation which will be used to eliminate the
accumulated deficit on the Company’s profit and loss account, creating distributable reserves. Based on the Company’s
audited financial position as at 31 December 2013, the Cancellation would create approximately £15.16 million of
distributable reserves, although the actual amount of distributable reserves created will depend on the amount standing
to the credit of the Share Premium Account and the accumulated profit and loss account position as at the date on which
the Cancellation is confirmed by the Court. These distributable reserves would then be available (subject to approval of
the Court and the protection of the creditors of the Company as described more fully below) for any corporate purposes
as the Board may consider appropriate including the declaration and payment of dividends.
The Cancellation requires the passing of resolution 4 as a special resolution of the Company at the General Meeting
and the subsequent approval of the Court. If the Cancellation is approved by Shareholders at the General Meeting,
the Company intends, as soon as practicable thereafter, to apply to the Court for confirmation of the Cancellation in
accordance with the requirements of the Act.
In order to approve the proposed Cancellation, the Court will need to be satisfied that the interests of the creditors of the
Company are not prejudiced as a result of the Cancellation. In seeking the confirmation of the Court, the Company may
be required by the Court to give such undertakings or other form of protection as the Court may require for the protection
of creditors. These may include seeking the consent of the creditors to the cancellation of the Share Premium Account
and/or the provision by the Company to the Court of an undertaking to treat the reserve arising on the cancellation
of the Share Premium Account (after the elimination of the deficit on the Company’s profit and loss account) as non-
distributable until all the creditors at the time of the Cancellation have been discharged or have consented to the reserve
being distributable or until the Company has deposited a sum of money into a blocked account sufficient to discharge
the claims of non-consenting creditors. However, the terms upon which the Court is willing to confirm the Cancellation
are, ultimately, for the Court to determine and the Company will give to the Court such undertakings as it is advised
are appropriate.
If the consent of the Court is granted, the confirmation will take the form of a Court order and the Cancellation will
become effective upon the order confirming the Cancellation being registered at Companies House but, for so long as
any reserves remain undistributable pursuant to any undertakings to the Court referred to above, those reserves may
not be distributed pending the discharge of any such undertakings.
Subject to Shareholder approval and the Court process, it is anticipated that the final Court hearing in relation to the
Cancellation will be held on 18 March 2015, with the Cancellation becoming effective shortly thereafter, following the
necessary registrations at Companies House.
If approved by Shareholders and confirmed by the Court, the Cancellation will not involve any distribution to Shareholders
but will eliminate the accrued deficit in the Company’s profit and loss account, and will support the Company’s ability to
make distributions to Shareholders should future circumstances make it desirable to do so. Any dividend that may be
paid in the future will reduce the Company’s cash balances and reduce its net assets by a corresponding amount. The
Cancellation will not change the number of Ordinary Shares in issue or the paid up share capital of the Company or
change any rights attaching to the Ordinary Shares.

[4-10] 30/1/2015 09:11

Jadetical3 the proposal for the Share premium account arrived in the post two days ago. Best check they have your correct address.

[jadeticl3] 29/1/2015 17:53

I am a shareholder but have heard nothing about a Premium Account. Where did that come from?

[richjp] 29/1/2015 16:46

I see that the TechInvest update says that market expectations for revenue and profit have shifted “eighteen months to the right”. I must admit that I was hoping for a shift of twelve months at the most. It may be that because orders seem to be taking such a time to come through that market expectations are being lowered for the pace of growth going forward.

I think we also have to consider that revenue from their legacy software is liable to reduce in the coming years. I understand that some of that revenue is very high margin, so they need to increase the CTC revenue before the legacy revenue decreases significantly. How long that decrease will take I have no idea. It might be quite rapid or could run on for a number of years.

Bearing that in mind, I think that the commencement of a dividend would be a great idea. A number of funds for example have rules that only allow them to invest in dividend paying stocks so we might get a bit more institutional interest. One thing that funds hate are companies that cut their dividend, therefore if GHT is intending to start a dividend payment and even more state that it will be a progressive dividend, I assume that means that they believe any such dividend is maintainable. That in turn would send a very positive message to the market about future cash flow and financial stability.

I am not sure I really understand the proposal regarding the share premium account so I will just have to put my faith in the directors with regard to that issue.

[jadeticl3] 29/1/2015 11:37

Have any contract wins been announced in January after the flurry in December?

[schytalk] 29/1/2015 11:01

goldnugget

Your dead right about the options diluting the shares and I am sure the promised dividend stream is indeed to placate the investors. You make a good point about the investors who were 'sold' Gresham at 125p in the fund raising but I think all investors need looking after considering the share price fall. I remain concerned that the brokers are off side due to the fund raising quickly followed by the profits warning, they cannot be happy and do not seem overly supportive.

Rightly or wrongly, the share options will be used to provide incentive to the key staff who will make CTC happen, effectively it is a bonus paid for by the shareholders. Returning to the dividend stream, this makes sense in the long term given the recurring nature of CTC revenues. It is also a clear statement of independence although I still expect, especially with a low SP, a predator will look to acquire Gresham as much for the technology as for CTC revenues.

[goldnugget] 29/1/2015 09:59

I think the carrot of a dividend was put in to placate the investors - especially the ones who bought the issue at 125p. Overall the trading update was as expected, I just wonder if Gresham had to sweeten the deal to secure those contracts post profits warning?

I'm no expert but doesn't the increase in options dilute the shares further...

[4-10] 28/1/2015 17:33

I just got my "Proposals for the cancellation of the share premium account and for an amendment to the share option plans" in the post box today I have read it and on the face of it would appear good. But I am no expert so this board thread seems a great place to start the debate. I guess my question is this... It would appear to benefit shareholders to maybe have a dividend but the quid pro quo means that the share option plans change/increase the maximum - which will motivate management and staff - does this look as good to the investors as it does to the staff?

Discuss lol

[jadeticl3] 28/1/2015 15:41

This is a good article, objective and well balanced. I was not sure whether "market expectations" was "as you were" or downgraded expectations. This article leaves no room for doubt.

But does this mean that the orders won in last quarter 2014 were not filling the gap (due to lost orders) but were expected together with the lost orders?