Gresham Technologies Share Discussion Threads

[richjp] 20/3/2017 19:59

As far as a takeover is concerned that is always a possibility although I do not think the company is mature enough to make that risk free for a bidder.

When small companies are acquired key staff may leave even if they are given more cash in the short term. Existing major clients will have a relationship with senior GHT management which they will lose if GHT becomes part of a larger organisation. Ideally an acquiring company will want its acquisition to be of a maturity where the loss of key personnel and the loss of some customer relationships does not have a significant impact on the business. I do not think that GHT is at that stage yet.

However if a bid did come then the directors have a legal obligation to look after the interests of the shareholders and can recommend that it not be accepted. It is the major shareholders that will decide of course and it would be up to the board to convince them that selling would not be in their best interests.

The good news is that I can think of three companies of the top of my head, who would be interested in acquiring GHT and possibly more than that, so if a bid did come along there would hopefully be a competitive bidding situation, therefore a lowball bid would be unlikely to succeed.

[richjp] 20/3/2017 19:56

The N+1 Singer report which was given to those of us who attended the presentation last week is actually very positive. There are about four and a half pages of text plus some financial data. As inforprofit has said, the 2018 forecast is “measured̶1;. Ian M did not want to go into that but he did make the point that GHT had created too high a level of expectation in the past and that he did not want that to happen again. The way I interpreted things rightly or wrongly, is that management would have preferred a higher forecast for 2018 but did not want to challenge it because of the past history.

I am in fact happy that it appears that the broker takes an independent view and nurdin, another poster here who also attended and who knows more about these things than I do, thinks that N+1 are generally conservative anyway. Those forecasts can obviously be reviewed as the year progresses and if we get a good half year and a good trading update in the autumn, which is something I said I would like to see at the meeting, I think they will be. The forecast PE ratio for 2018 based on the current share price of 160P is 21.8 which is not that demanding for a growing company.

dd, you seems to know most about charting. The share price has stalled at about 160P. My understanding is that when a price gets stuck like that for some time, if it does not break through it will fall back as buyers think they might get a better opportunity. Also there will always be sellers for the following reasons:

insititutions will top slice or readjust their holdings,

shorter term holders who bought in a few months ago may take profits,

looking at the shareholder list produced recently, as well as members of the Green family you also have Stephen Purchase who I believe was a past director. These people are of a certain age and may need to sell at regular intervals for their own lifestyle expenses.

I think one or two might consider lowering their expectations for the share price in the short term. Six months ago I would have bitten someone’s arm off if I had been offered the share price where it is now. We should not get concerned if some selling occurs.

I do believe the share price can progress later in the year and again early next year. I actually feel more confident about the share price at the current level than I did six months ago when it was around 90P, the reason being that I think the share price is now far more based on substance rather than speculation.

[inforprofit] 20/3/2017 10:57

Some interesting posts over the weekend.

I would just like to comment on GHT as a potential acquisition target. I actually asked this point at the meeting and expressed my concern as regards a potential exposure and that low forecasts could put GHT in play but in play at a low price! This was noted (written down) but not directly commented on, just that the 2018 N1 forecast was 'measured' and that the directors job was to provide shareholder value.

As previously stated, at the conclusion of the meeting when we were saying our goodbyes, IM stated his desire to produce a UK global financial services organisation, but can GHT maintain this independence, I have no doubts.

The company slogan - Challenger to Champion 2017 - is however an encouraging statement of intent from the management team which of course is more than just the directors.

Still it is all about shareholder value and if the price is good enough so be it! As my handle suggests I am looking for the best return as presumably is the case for all shareholders.

[double double] 20/3/2017 09:11

Well something is happening the share price is a bit perky this morning. A few more pence and we are off to the races.

Too early for any bid for us long term shareholders, however its forecast to have £10m cash next year so it is a sitting cash cow for someone.

[gottafly] 20/3/2017 09:05

Could GHT be an ACQUISITION TARGET.

It would appear that the enlarged Misys D+H group will renew their attempts to list the UK company - follow the link to the article on FT.com.

With Clarety Loan Control and the competition that this brings with Misys Loan IQ, could GHT have unwittingly put themselves into play and be the subject of a bid.

The modest financial forecast for 2018 and the drag this puts on the share price would appear to encourage such a move.

Anybody else think that this could happen.

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Misys close to deal to combine with rival DH Corp

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[gottafly] 20/3/2017 08:09

I have signed up for Google Alerts and it seems pretty simple.

He is the first report an articlce from hxxp://breakingfinancenews.com. It came in over the weekend. The shares traded apppears to refer to Friday. I don't understand the 151.50 pricing (Friday it was 157.50) or the potential upside of .19%. Any thoughts anyone.

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Cantor Fitzgerald announced Gresham Computing PLC (LON:GHT), renewing its target at 180.00GBX earlier today
By Al Wild
Updated: March 18, 2017
Having a price of 151.50GBX, Gresham Computing PLC (LON:GHT) traded 0.00% even on the day. With the last close up 22.96% from the two hundred day average, compared with the Standard & Poor's 500 Index which has increased 0.04% over the same period. GHT has recorded a 50-day average of 157.70GBX and a two hundred day average of 128.09GBX. Trade Volume was down over the average, with 7,340 shares of GHT changing hands under the typical 57,110

Cantor Fitzgerald hold steady the target of Gresham Computing PLC (LON:GHT) at 180.00GBX reporting a potential upside of 0.19%.

Recent Performance Chart
Gresham Computing PLC (LON:GHT)

Gresham Computing PLC has PE ratio of 40.38 with a one year low of 88.00GBX and a one year high of 169.00GBX and has a market capitalization of 0 GBX.

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

[gottafly] 18/3/2017 08:53

The GHT report really is a mine of information and it is worth noting the risk analysis section on page 14.

There are seven risks noted - two risks have increased and one risk has deminished, four risks remain unchanged.

Firstly, the positive risk movement, the risk that has deminished is 'Product and Service Delivery failures'. This seems to agree with the statement from the management (provided by Inprofit) that despite services utilisation of 100% GHT are not concerned about adding clients/business.

Economic, international trade and market conditions risk has increased but there is very little that GHT can do about that, it is a market issue and not a GHT resolvable issue. However, regardless of market conditions I find it hard to believe that there not are ample opportunities for GHT products, perhaps more in an unstable market.

The second increased risk is the most interesting and is directly under GHT control - Misdirected product, operational or strategic investments. The action item listed on this is :-
'
The management team has been strengthened and centralised further, which provides greater control and efficiency to operations. Strong communication lines between the relevant stakeholders ensured through regular formal meetings and monthly reporting. The Board reviews and challenges all strategic investments. '

It is clear that new product development is always a risk, particularly servicing a new market, but GHT seem to have the controls in place and the technical excellance to deliver, hopefully the market knowledge also. Nothing is certain of course and I think this explains the low 2018 forecast. According to inprofit Ian Manocha described these figures as 'measured', one contributor described the N1 forecast as absurd.

I have now come to the conclusion that the N1 2018 forecast is not N1 Singer being pessimistic, after all the wording in their note is very positive and apparently at variance with their numbers, but it is GHT BEING VERY PRUDENT. In my view this 'measured' approach comes directly from GHT and Ian Manocha. Essentially GHT have excluded any meaningful revenue from the new product offerings and based forecasts on the current product set only, these are therefore MINIMUMS. To me CLC (Loan Control) already looks like a winner but CDA (Data Accelerator) is at present an unknown.

With GHT already 'rocking' and has been since the December wins then this could be a momentus year for GHT. My conclusion, despite my continued misgivings about N1 Singer (ok I don't like brokers much), is that GHT is a BUY.

As always DYOR and read the GHT report in full.

[gottafly] 17/3/2017 14:49

Clareti Loan Control is one of the new products, I think this has great potential to replace the market leading product - Misys laon IQ - a mature product offering up for grabs?

Just look at what MountStreet said as to why they have done the JV with Gresham.
“
Our experience and research confirmed that there was nothing available on the market that would enable us to make a step change in service quality and process productivity

Gresham shared our vision for technology enabled transformation of the industry
and together we have delivered a solution that will enable us to manage a variety of loans, from single asset deals to large complex transactions, as well as entire performing and non-performing loan portfolios. This partnership is a differentiator
for Mount Street in the competitive 3rd party servicing market”.

Ravi Joseph , CEO, Mount Street

This could prove a real winner and GHT intend to sell the solution directly to banks who do not wish to outsourse to Mount Street.

[gottafly] 17/3/2017 12:27

Gresham to improve communications.

This was on the iii discussion board, looks like GHT are going to provide some kind of update/push service as regards press releases. It is also confirmation of their revised communications strategy.

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

Just received this following on from my email to them:-

Thank you for the feedback. I do recognise that an email/subscription website service would be a very useful enhancement, and I am advocating for this to be implemented as early as possible.

Regarding announcements, RNS is the method for regulatory disclosures only, as you are presumably aware. By contrast, where we have noteworthy news that does not give rise to a regulatory disclosure, we generally use website articles and/or press releases to communicate it. Clearly, website articles and press releases are issued at our discretion, although clearly it is important that we do so in a consistent way.

I hope this helps.

[gottafly] 17/3/2017 11:32

Well the full report is up on the GHT website now, lots of nice pictures but yet more detail.

hxxps://www.greshamtech.com/wp-content/uploads/2017/03/GreshamTechnologiesPlc_AR2016.pdf

If you look at page 38, Remuneration Report, you will see that the executive directors have a bonus plan that would double their remuneration. There are minimum figures of remuneration (no bonus), maximum figures (100% bonus) but more importantly an expected section which shows a minimum bonus level of 8% (last year this was zero!).

This means in my view that there is a higher confidence in 2017 than in 2016 and that logic to me would suggest that in reality the 2017 numbers are expected to be (a minimum) of 8% better than forecast. This would raise the N1 Singer 2017 forecast to revenue of 21.6 million (from 20.0), interestingly this would in itself make a nonsense of the 2018 forecast set at 21.5. In writing this note (I am no forcasting expert) it does seem strange that the N1 numbers are 'round numbers', £20 and £21.5 respectively.

It looks to me like we can expect over performance (against the N1 numbers) in 2017 and this seems to be confirmed in the last note from Inforprofit where apparently GHT is 'rocking' (max utilisation of inplementation services) and that 2017 has had a positive start.

As always DYOR but it does look like the forecast is on the prudent side.

[double double] 17/3/2017 10:24

I think we are getting confused between current and my observation over last few weeks when the price was around 155/165 mid at 160p.

[gottafly] 17/3/2017 09:56

dd sorry for my ignorance but how can you determine a buy trade. Surely there is a buyer and seller in any transaction and from what I can see it is always the sell price (i.e. the lower) that is displayed.

[double double] 17/3/2017 08:31

Whenever the share price reaches that price of 161p you see lots of buy trades at 161p just like sell trades at 157p, but they seem to be met by the large seller. We are in a fight between 157-161p. The company or its broker should be able to manage large buyers and sellers.

[gottafly] 17/3/2017 08:24

dd why do you say a seller at 161p

I see the big/offer spread is back to 1p - 157/158 after the overnight drop, I still say this is very strange.

[double double] 17/3/2017 08:11

So we have a buyer at 157p and a seller at 161p. Come on Grehsam & your broker do your job and sort this out.

[schytalk] 16/3/2017 18:50

Dd I think your correct, yet again at the close the share price spread goes from 157/158 to 147/158 which means sellers are only quoted bottom price. I guess it's allowed but it doesn't sit comfortable with me. The PI always seems to be the looser but there does seem good institution demand for shares at sub 160 so I guess that's a positive.

[double double] 16/3/2017 13:29

Alot of trades going through at 157p for the last 3 days, perhaps someone picking up as otherwise the share price would be falling.

[gottafly] 16/3/2017 13:13

Inforprofit thanks for your posts re the presentation yesterday.

Richjp, you went I believe, have you got any pearls of wisdom to add.

Also, four people went so come on guys post something on here please.

I would like the best possible feedback before boring everybody with my opinion and although confusion still reigns in my view things seem to be a little clearer but dare I say it no more certain.

dd, thanks for the shareholder analysis and very interesting that hold 830k, that is a surprisingly (to me) large number. I have said on here before that brokers are here to make money, so the cynic in me says that a modest forecast and low(er) share price is to their direct advantage.

I still say that the share price movement on the results day was strange and unusual. Yes I know GHT is a small cap stock but the initial rise to 169p (up) seemed to indicate a positive market reaction or more likely the expected positive market reaction. However, the general market did not see it that way and the share price dropped like a stone to 140p, eventually recoving (with some concerted effort I think) to just off the opening number. A short but very violent share price move is surely unusual.

[wh1spa] 16/3/2017 11:33

RG has been buying into RCN me thinks another strong Kestrel hold

[inforprofit] 16/3/2017 11:29

Report of the PI shareholders presentation - another further update.

After chatting this through with my better half I realised I had forgotten something else which I think is informative.

Not sure how the subject arose but we got onto service delivery since CTC is not out of the box software and requires implementation services and 80% of clients are still expected to be 'on premise' which presents the biggest challenge.

IM stated that they had a policy objective to get clients live in no more that three months. He went on to say that GHT was 'rocking' at the moment with 100% services utilisation! When asked whether this was likely to restrict further new business opportunities, he said he did not think so and that they were for example partnering with a US services provider and training them up. The US - well New York/Toronto are expected to be the best markets in the near term.

So it does appear that GHT is running full tilt and confirms the slide titled - Positive Start to 2017.

Anyway, for those interested I would once again recommend going to the GHT website and downloading the presentation, it makes pleasant and thought provoking reading -
hxxps://www.greshamtech.com/wp-content/uploads/2017/03/AFRA2016-Investors-Presentation-140317.pdf

[mick bell] 16/3/2017 11:17

Interesting shareholders list DD, very hard getting a definitive list as each source
I look at is different, I think they all broadly work off data provided by FactSet Research Systems Inc. NY.
I compile my own list from all sources and from RNS notifications, Ian Manocha had 75,000 shares @ 6/6/2016
No 10 on the list is also Green family, Valentina Discretionary Trust (Est S.J.Green) Frank Blevins Managers

[4-10] 16/3/2017 08:31

Great job inforprofit thanks

[double double] 16/3/2017 08:24

So the 2018 N+1Singer forecast remains a mystery. Hopefully there will be upgrade to their numbers over the coming year.