Gresham Technologies Share Discussion Threads

[jadeticl3] 19/3/2021 07:31

Thanks GottaFly and richjp for these encouraging posts. I feel more relaxed now! Over the last 20 years I have had strong ups and downs with this company, but overall have never sold and have added several times. For a small company they are in my top three investments so they matter significantly.

[richjp] 18/3/2021 18:14

According to the London Stock Exchange website there were 12 trades today involving 40,000 shares. Quite a busy day for GHT but not much in the greater scheme of things. All were described as "off book" which I assume means they were matched trades. The latest this afternoon were at 157.5. I think we just have to keep our nerve.

N1 Singer came in for some criticism on this board a couple of years ago because of their cautious forecasting however at the end of the year they turned out to be correct. Let us hope they are also correct with their more ambitious forecast for this year.

[gottafly] 18/3/2021 11:44

richjp - you make a good point about GHT share movement on minimal trades.

jadeticl3 - I believe that some 80% plus of GHT shares are in the hands of institutional/large holders/insiders so the level of freely available/traded shares for 'public consumption' is limited which can cause exagerated movements, both up and down. The good news however is that the underlying share price trend seems to be very much in the upwards direction.

The last major trades I can find, ones which are greater than 100k shares and so are unlikely to be private investor dealings, are back in early March which went through at circa 152p. So I would suggest that the share price rise from that level has been caused of 'day trades' and is therefore potentially subject to some volatility.

GHT is also an unusual beast in that yes it is small cap but it is on the main market. Also, pretty unusually for a tech stock, it is debt free and all Clareti investment has been performed without additional finance, this is something that IM appears to be very proud of! Further, GHT also tends to be fairly conservative as regards press/news so there is not a steady flow of information to continually feed price activity.

However, N1 Singer released a revised note, as per below, on 9th March when the share price was sitting at the 152p level which then jumped to 162p.

"After producing impressive 17% organic growth in Clareti ARR in FY20, despite COVID headwinds, we expect ARR growth to accelerate to >25% in FY21, with 85% plus of this revenue already visible given the recurring revenue model. We introduce forecasts today of a further 20% ARR growth in FY22. Stripping out cash of £9m, valuing legacy revenues at 1x (£9m) and Clareti Services at 2x (£11m), the residual £78m is 4.9x FY21 Clareti ARR, falling to 4.1x FY22 ARR. This looks too low to us: a key reason GHT is one of our top picks for 2021."

So, house broker N1 Singer, believe that GHT is under valued and it is one their top picks for 2021. Personally, I am pretty relaxed about the current share price level and the direction of travel, especially given the N1 Singer support which has not always been the case in the past.

[borisjohnson] 18/3/2021 11:44

I hope they can deliver some share price performance this year or next as some of us are not getting any younger and have been waiting for over 20 years.

What was the share price when IM took over I think it was around 110p so not much to shout about there.

[richjp] 17/3/2021 21:09

Yes but the recorded trades that I saw were minimal. GHT seems to move up or down on very small volumes.

I suppose that is what happens with a small cap stock which does not have much of a free float.

[jadeticl3] 17/3/2021 20:41

Very odd that on the same day that this good news was released the share price took a big tube!

[qantas] 17/3/2021 15:21

Gresham strengthens UK and European team with Harvey Colborne appointment

Harvey Colborne joins Gresham from SEI
Gresham Technologies has appointed Harvey Colborne to lead business development and sales across the UK and Ireland.

Colborne brings extensive knowledge and experience of both the buy and sell-side, specialising in post-trade and data technology.

He joins from SEI where he worked as European sales director for investment manager services.

During his career, Colborne has also worked at J.P. Morgan, Schroders, and BNY Mellon, as well as technology providers such as Interactive Data and IHS Markit.

Gresham explains that the appointment comes at a time of sustained growth for the firm.

Commenting on his new role, Colborne says: “I’m excited to be part of Gresham at such an important stage in its development and to be working closely with the innovators and architects behind the industry’s leading cloud-first, data control platform.”

Spencer Black, head of sales, UK and Europe, Gresham Technologies, adds: “We are seeing exponential growth and demand for our Clareti Connect and Clareti Control Solutions as firms place data accuracy, control and connectivity at the very top of their business transformation agenda.”

“With over 20 years of experience helping financial institutions build competitive advantage and proven success in driving growth, Harvey Colborne is the right person to help us continue our journey and gain even greater market share in the UK and Ireland.”

Earlier in March, Gresham announced that a Luxembourg-based financial group selected its Clareti platform.

Please do your own research as always,.

[gottafly] 17/3/2021 11:21

richjp, thanks for your input, your comments are always of value.

I agree with your thinking that an M&A route to growth is likely to be a plan B and that the hope/intent is that organic growth will deliver the potential that the Clareti product set offers.

To support organic growth focus GHT have completely revamped the sales organisation (much needed in my view) and the board have in their 2021 plans decided not (for the time being) to look for any further bolt-on acquisitions (always a distraction from 'normal' business in my opinion) i.e. we have what we need.

For reference, actual presentation statements re 2021 plans are shown below and are worth careful reading -

"No further bolt-ons envisaged for near term – continue to drive synergies, sales
repeatability and scale

Consider transformative M&A to significantly accelerate product, distribution and
account penetration ambitions in current verticals and geographies".

richjp, I like your comments that shareholders should not sell but hold on and eventually be rewarded.

As for the timimg of any shareholder reward, I suggest that it will be sooner rather than later because these statements refer to 2021 plans and not some point in the future. Seems to me that either we will see strong organic growth in 2021 or a transformative M&A event, either way very good news for shareholders.

I am more than ever convenced that the new board are very focused on delivering real shareholder value, in the relative short-term, rather than just pleasing results.

[richjp] 16/3/2021 18:56

They did say they believed there was the potential to grow the company to an ARR of £100M, significantly way ahead of where they are now.

I keep saying, based on my own past experience in IT sales, that is difficult to break into major accounts no matter how good your product is. They talked about twelve month sales cycles.

The message they may be sending out, is that if they cannot grow fast enough with their own direct sales efforts and take advantage of the opportunity they have, they would consider going the M&A route. I think that actually helps support the share price because they are saying if we cannot get growth one way then we will get it by different means. The message to shareholders therefore is don't sell, but hold on and you will eventually get rewarded one way or another.

[gottafly] 16/3/2021 14:57

Anyone with any further thoughts on the statement about a transformative M&A event -
"Consider transformative M&A to significantly accelerate product, distribution and account penetration ambitions in current verticals and geographies".

I am still very puzzled by it although it has been suggested that perhaps this hints that GHT will become part of (presumably acquired by) a larger entity.

The recent RNS announcement regarding a major new win to 'a fast growing financial group' after a 'rapid yet comprehensive evaluation' would seem to underline the market leading quality of the Clareti portfolio.

It seems to me that since the board changes back in October there has been a significant improvement in the 'mood music'. Perhaps the M&A statement simply reflects increased confidence and a strong determination for accelerated growth by the new board but why the specific M&A statement?

[qantas] 11/3/2021 17:57

Really delighted that we landed the first client in #luxembourgcity for #reconciliations and #connectivity.
Hopefully the beginning of a long serie!

News alert: Gresham Technologies partners with fast-growing Luxembourg based financial group to deliver transparent, real-time #digital solutions to the #assetmanagement and corporate sectors.

Please do your own research as always.

[4-10] 11/3/2021 15:00

Posted on Richard Holways site today

Gresham secures EUR1.4m Clareti banking deal

Financial services data integrity specialist, Gresham Technologies, has announced a significant new win for its flagship Clareti offering, following the release of its annual results earlier this week.

The unnamed European banking entity has selected the Clareti platform to support its activity in the asset management and corporate sectors. The subscription deal was completed on 10 March 2021 and is expected to generate total fees of EUR 1.4m over the next 5 years, in addition to implementation services revenue.

This new win for Gresham is an encouraging result and further validation of its move to subscription-based pricing. Going forward, banking expenditure is expected to become increasingly focused on transformational technologies as institutions look to improve their operational effectiveness in the wake of the pandemic.

[borisjohnson] 11/3/2021 07:18

I can see upgrade to the forecasts during the year as economies recover and GHT wins contracts.

[crazycanuck] 11/3/2021 07:15

we might be hitting 200 sooner than you think. Couple more of these please.

[richjp] 10/3/2021 18:26

I think these were a pretty solid set of results given the Covid circumstances this past year. I thought it particularly impressive that they were still able to provide customer support across an international marketplace. That should help give any new prospective customers confidence in GHT’s ability.

There have been a couple of times over the past couple of years when I felt that Gresham had the foundations in place to kick on to bigger things, only to find out that that was not really the case. To me it looks as though they now really do have those foundations in place with a geographical spread of blue chip clients and successful implementations in different business areas. I also watched the online presentation yesterday and it all seemed very encouraging with a clear vision of where they want to go.

I have never been a great enthusiast for charts particularly for small companies however I do acknowledge that more people these days probably do take notice. I felt previously that around 150 – 160 P would be a resistance level. That is where the price was roughly in late 2018 before the profits warning and again pre Covid in 2020. If we can leave that level behind I reckon there is a good chance we could be looking at around 200P in the summer assuming we get a good first half year, which the management thinks is possible.

[borisjohnson] 10/3/2021 12:45

"Consider transformative M&A to significantly accelerate product, distribution and account penetration ambitions in current verticals and geographies".


Could it be read as for the right price they may sell GHT and allow a larger entity to upscale quicker.

[gottafly] 10/3/2021 12:38

Well a pleasing share price movement today but on relatively low volume, driven presuambly on private investor demand.

I attended the private investor 'digital' presentation yeasterday and for those who are interested a recording can be obtained from (you have to sign up for free access) Investor Meet Company, well worth it in my view. It is an hour long and includes a Q&A section.

The supporting Powerpoint presentation - available from the Investor section of the GHT website - is, as you would expect, used as the basis for the presentation. Overall it was very polished and again there seemed to be a high degree of confidence and that GHT is well placed for significant growth after the challenges of 2020.

One area I was particularly intrigued with, in the 2021 Plan section, was the two statements on M&A. Seems there will be no further bolt-on acquisitions (it was stated that the three already completed were good value, all performing well and provided connectivity and support for the subcription model).

However, the second M&A statement is the intriging part, "Consider transformative M&A to significantly accelerate product, distribution and account penetration ambitions in current verticals and geographies". A specific Q&A question was raised on this and IM didn't really add much in his reply, stating that GHT have and will study the market for a step change opportunity but these do not come along very often. So the question I have is why was this statement made if there is nothing specific in mind, just to make such a statement is very intriguing.

[4-10] 10/3/2021 08:03

Comments from TechMarketView Richard Holways firm

Financial services data integrity specialist, Gresham Technologies, has issued full year results reflecting a steady performance in 2020 in a challenging environment. For the year ended 31 December, revenue fell by 1% to £24.8m, whilst profit before tax from continuing operations was stable at £0.3m.

Boosted by £0.6m from its 2020 Inforalgo acquisition, Clareti revenue reached parity with 2019 at £15.5m, however, Gresham's recurring software revenue grew by 11% (including £0.5m from Inforalgo). Overall, annualised recurring Clareti revenue was up 29% to £12.3m (including a contribution of £1.2m from Inforalgo).

Gresham appears to have weathered the storm of the global pandemic in pretty good shape whilst continuing to invest in future growth. The company has successfully integrated Inforalgo into its operations and fully completed the transition to subscription-based pricing. Gresham has also avoided any significant client attrition and secured several new tier 1 bank deals both here and in the US.

4-10

[borisjohnson] 09/3/2021 13:15

Now its starting to move. A sitting cash cow this is.

[jadeticl3] 09/3/2021 12:29

I am expecting a uptrend tomorrow when folk have had an opportunity to fully consider these results and what some experts, like N1 are saying!

[gnnmartin] 09/3/2021 11:46

I was impressed too, and a bit surprised at the slight tick down.

[gottafly] 09/3/2021 10:33

A summary of the N1 note, very positive indeed.

After producing impressive 17% organic growth in Clareti ARR in FY20, despite COVID headwinds, we expect ARR growth to accelerate to >25% in FY21, with 85% plus of this revenue already visible given the recurring revenue model. We introduce forecasts today of a further 20% ARR growth in FY22. Stripping out cash of £9m, valuing legacy revenues at 1x (£9m) and Clareti Services at 2x (£11m), the residual £78m is 4.9x FY21 Clareti ARR, falling to 4.1x FY22 ARR. This looks too low to us: a key reason GHT is one of our top picks for 2021.

[borisjohnson] 09/3/2021 09:21

N1SINGER are forecasting for 2022 eps 5.1p and forward pe of 29 at current share price.

[jadeticl3] 09/3/2021 07:57

Very informative results!

[qantas] 08/3/2021 14:18

Delighted to share that we have been shortlisted for not one but two categories in the @FTFnews Technology Innovation Awards 2021. Voting for 'Best #Reconciliation Solution' and ‘Best #RegulatoryReporting Solution’ is now OPEN!