Gresham Technologies Share Discussion Threads

[4-10] 04/1/2017 16:01

yep pretty sure bought mine on 27 May 99 after Trevor Read took over as CEO as I was tracking his moves. I will double check the purchase agreement and post later.

[jadeticl3] 04/1/2017 15:59

4-10, have you got your price or your dates wrong?? I moved house in January 1999. I know I bought GHT not long after moving at a price of 33p, although I could not be precise about the date. I cannot believe they were 140p anytime in 1999. I recall that they rocketed later but surely not in 1999! Will you check, please?

[4-10] 04/1/2017 15:56

I remember too well D2 greed convinced me to hold out to 500p so I am still in maybe we will get to the magic 500p who knows?

[double double] 04/1/2017 15:40

Well any good news now will get this share price through 140p and the share price tells me good news is coming.

You have to remember this company was at 450p at highest when RTN was being talked about. It was going to join the FTSE350. This time round they have actual revenues from their newest product and growing. Also this time round they have all revenue to themselves where else before with RTN they were a minority partner at 20% with C&W at 80% share!

[4-10] 04/1/2017 15:35

Interesting noble3r 140p is what I paid for mine way back in May '99 so maybe I will be in profit soon LOL.

[noble3r] 04/1/2017 15:29

140p could prove the resistance level again. But who cares - I just hope the Jan trading update provides no nasty surprises.

[double double] 04/1/2017 15:12

Well it looks like good news is out. Boy have we been waiting for a long time for this. 2017 here we go............

[double double] 04/1/2017 11:53

Not a technician by any means but apparently its a good idea for the share price to retest "gaps" before going up again. This occured by the share price crossing 125p on 30 Dec. In any case its always good for healthy retraces to happen.

"Gaps usually represent important areas of support or resistance. A Gap Up will indicate different situations based on the context in which it was formed. A Gap Up in an uptrend may indicate a previous level of resistance has been broken and now forms a support level. A Gap Up in a downtrend may indicate an end to, or a reversal of, the prior downtrend. Gaps provide an indication of a financial instrument's SHORT-TERM outlook."

[4-10] 04/1/2017 11:39

My thought also Schytalk

[schytalk] 04/1/2017 10:58

dd, why does it need to go down before going up?

[double double] 04/1/2017 09:01

Mind the gap!

I think the share price needs to go down a penny or 2 down before it can rise again.

[schytalk] 03/1/2017 13:17

Thanks very much dd, your a gent, reckon the 2016 numbers are a given.

Might be wishful thinking but if the Insurance win is 2016 additional business (reason for the RNS) then we could see £17.65 million or there about, the RNS said roughly one third would be part of the planned revenue for 2016.

[schytalk] 03/1/2017 12:19

richjp, agree entirely that in the end the share price will be based on revenue, profit and cash flow. GHT have been pretty good at the cash flow bit, but revenue generation (and making most of the opportunity) has not historically been a strong point, this is precisely why the new CEO was appointed.

I think we all agree that the H1 figures were ok and nothing more than that. It does seem that the revised and rebuilt sales channel has taken longer to build than perhaps was expected. H2 2016 appears to have been much better (especially the US) with significant progress being made. I have said before on here that those who have met Manocha have been impressed but his management style seems to be pretty low profile and I think the information flow, or rather the lack of it, seems to reflect that.

We do not want a return to the issues of a couple of years ago where business level expectations and delivery became disconnected which resulted in a large share price fall. However, my concern is that we are not being allowed to see the potential (hence my argument with the use of minimum) that is out there. It is easy to quote the minimum and then exceed this. How do we know whether the GHT target revenue for the next 5 years is conservative and therefore far more could be achieved if 'pushed'. So I think the pendulum principle is active here with perhaps too much caution.

On the CTC revenue growth, I think it is wise to extract the services element from software/usage fees and examine it separately. One would like to think that the services revenue continues to build over time albeit it is not a recurring revenue stream. On a pure per seat usage basis I think it is reasonable to expect a year on year growth which is what GHT have assumed in their CLC model. Of course what can really skew this if clients prefer the up front licence fee/maintenance model but even then it is possible to recognise some of the up front portion over time.

I guess what is really winding me up is the lack of information and how difficult it is to find. I confess to being comfortable with detail and like to make my own judgement. I get the feeling that GHT are a little too comfortable at the moment considering the opportunity in front of them. It seems to me that the institutional shareholder is well catered for, no doubt with face-to-face meetings, but us private chaps are somewhat hung out to dry, it makes you think that we are not wanted, sorry end of rant.

[schytalk] 03/1/2017 10:39

amt, I reckon so and this maps nicely on to the Cantor numbers which double double has provided. He quotes 20.3 million for 2017 and extrapolating back (using 15% growth) you get £17.65 million which I think is at the upper range of expectations. I beginning to think the significance of the December insurance win, the fact that an RNS was made, is that £300k has been added to the expected (planned) revenue. I suspect this 'planned' order arrived a little early.

dd - any chance of posting the 2016 Cantor numbers?

[amt] 03/1/2017 10:08

Gottafly and Schytalk. Thanks for the clarification. So for simplicity lets say 17m in total turnover for 2016 would be a reasonable number.

[schytalk] 03/1/2017 09:54

amt just thinking through the CTC revenues again. I was quoting the Capital Markets Day presentation numbers - £5.75 million by my assessment of their chart - but this is software only and no services. So with services being £1.6 in H1, if this were repeated in H2 (and with sales 'flying off the shelf' why shouldn't it be) then that is a full year £3.2, add this to the £5.75 and you getting close to £9 million. If we assume that non CTC revenues are circa £8.5 million (they see to be declining 6% or so) then you get combined revenues of £17 plus million.

Another thought I have had is about the Cantor prediction of a 15% increase for 2017. The above numbers seem to indicate that CTC and non CTC revenues are roughly equally split. With non CTC revenues static or in decline then the entire 15% increase is down to CTC, in reality this is a 30% increase of CTC, much more like it but still in my view on the low side given the Fintech aspirations.

[double double] 03/1/2017 09:06

richjp/all

We all know Gresham have disappointed us before with their products and performance but if they achieve £17m and £20m revenue as forecast for 2016 and 2017 then it will be the highest they have ever since I can remember.

That is proof CTC is succeeding where Cable & Wireless/RTN failed.

[gottafly] 03/1/2017 08:25

amt, just checked services revenue was 1.6 of the 3.2 million for H1, so if this is repeated in H2 that CTC revenues 7.3/7.4 million.

[gottafly] 03/1/2017 08:22

amt, the figures I was quoting excluded services revenue, it was software fees only.

[amt] 03/1/2017 07:54

Clareti Turnover 2014 3.3 2015 5.3 2016 ? I was looking for 7m plus to show a reasonably strong upward trend. Even that would show a slowdown in growth rate.
Gottafly mentions 5.75m. Although up it would show a marked slowdown in the trend and be very worrying. Especially as H1 was 3.2m. So either the 5.75m is a mistake or it shows so far sales peaked in H1 and slowed in H2. It cannot be right?
The excitement here is based on projections but where is the evidence for this type of growth in the reported numbers.
Dont forget some sales are in usd and other currencies so that needs to be adjusted in comparisons which would make things worse but by how much I dont know.

[richjp] 02/1/2017 17:24

GHT's preferred pricing method from questions I have asked at the AGM is usage based. I am not sure if that means per number of users or number of transactions or possibly a combination of both. That means that revenues should build year on year assuming customers deploy the software for more applications and process greater volumes.

They also sell consultancy services particularly around the initial implementation, meaning that revenue from any one client in the first six months is likely to be greater than the second six months. Revenue in the first year can be and probably often is, greater in the first year than the second for that reason. Revenues should then build again from the third year onward.

If the customer insists then they will sell the software the more traditional way with an up front licence, then an ongoing annual maintenance fee. They made it clear that they were not going to turn business away if a customer wanted to do business in a certain way.

I am perfectly happy with them giving a minimum figure when announcing a new contract. I think they have built too great an expectation in the past when announcing some higher values. Over a five year period many things can change within a client account. Other priorities occur, personnel change, financial crisis arise, incumbent suppliers fight to hold on in certain areas, divisions get sold off etc.

They can always state as I think they did recently, that there is potential for growth within an account, but if you quote a specific figure and it does nor happen then the market will punish you. I am not the only one here who has expressed disappointment at the rate of growth in the past and I think that slow growth has arisen because the company's announcements contributed to over optimistic expectations.

I keep saying it, but the share price will ultimately be based on revenue profit and cash flow.

[gottafly] 02/1/2017 15:58

inforprofit, interesting observation as regards previous RNS announcements with a value attached. Also good point about CTC pricing, anybody with any info on this?

I thought I would take a look again at the Gresham half year report and here is a very interesting statement:-

"As anticipated, since 1 July 2016 the Group has signed a North American Tier 1 bank and expects to be able to recognise revenue from this important new win later in the second half of the year once contracted milestones have been achieved."

The wording for the recent Dec 28 announcement states a US Tier 1 bank, so it would seem that GHT have signed two North American Tier 1 banks in H2, one US and presumably one Canadian.

The Capital Markets Day presentation )available on the GHT web site under shareholder information) has a substantial level of detail.

I have been critical of the use of minimum revenues as part of the last two CTC RNS win announcements. Ok minimum is what it says but surely GHT do not expect the minimum, so some form of indication of the potential (whilst still business to be won) is reasonable and would give a far more balanced view of likely revenues, at the moment all we can do is guess. This lack of information is I am afraid typical of GHT. However, page 39 gives us a clue - baseline (presumably minimum) revenues look to be only one third of the potential, as regards Clareti Loan Control..

Page 27 of this presentation is perhaps even more illuminating - Clareti Revenue Growth Potential. It shows expected revenues for 2016 and potential over the next five years. The figure work in the graph is very much in summary form (not a forecast), so precise numbers are not possible to ascertain. My interpretation (suggest you study the chart yourselves) is:-

Expected revenues 2016

CTC £3.8 million
Accounts Receivable Management £1.6 million
Clareti Loan Control £0.35 million
Total £5.75 million

Potential annual run rate in 5 years

CTC £11 million
ARM £5 million
CLC £5 million
Clareti Data Accelerator £10 million
Total £31 million.

The Cantor note was quoting a 15% growth, the above potential is 40% compound. I am guessing but I suspect these projections exclude any services revenue i.e. this is licence/software only.

To finish (I know I have posted this before) these are the GHT Q4 objectives:-

Q4 2016
•
Manage legacy revenues
•
Extend CTC usage in global customer base
•
Close additional Tier 1 “key customer” win(s)
•
Win further Clareti as a Service sales
•
Break out in North America market
•
Build Clareti ARM pipeline in global transaction banks
•
Launch Clareti Loan Control
•
Prepare ground for Clareti Data Accelerator launch
•
Make a success of C24 integration
•
Look for further opportunity to scale on Gresham’s Group business platform in 2017.

The information does seem to be out there if you can just fit the pieces together. I think everybody on this thread is looking forwards to a revised and radically improved GHT communication strategy in 2017, it cannot come soon enough.

Having seen the above anybody care to revise their share price forecast as of the end of this year.

[inforprofit] 02/1/2017 08:53

This is a great forum, lots of postings for a small cap stock. Had a look at the historical contract wins that have been announced by RNS, as far as I can see only one previously had any value attached. This was November 15, a combined announcement for 4 wins with value of approximately £2 million over 3 years. So averaged out this is £166k/$200k per annum per client, very close to the minimums quoted in the two December announcements. Does anybody know the pricing structure for CTC, I believe it is per user based but that is all I know.