Gresham Technologies Share Discussion Threads

[amt] 13/12/2014 07:20

5 contract wins, 3 New customers and a contract extension in a period of 5 weeks is well ahead of anything we have seen before. Despite the wobble all looks very good. I guess the share price has been held back by the general collapse in the market. I have penciled on 15 m sales yr so 9 m in second half vs 6 m for first. So is 20m and EPS of 7 p possible for 2015, very possible I would imagination. Once the market stabalises this could recover strongly, anyway great opportunity to top up in my opinion. DYOR though as nothing is ever certain.

[amt] 11/12/2014 10:53

contract wins coming thick and fast now, it looks like the inflection point we have been waiting for.

[schytalk] 10/12/2014 15:11

gnnmartin

Whilst I agree that this RNS is not a regulatory requirement I still believe it is noteworthy. I do not believe that Gresham would use the RNS service as a promotional medium and yes agree that this is good news.

[qantas] 10/12/2014 12:16

hxxp://assetservicingtimes.com/interviews/interview.php?interview_id=108#.VIg2FslUC2d

Gresham Computing Bill Blythe an Asset Servicing Times Interview

[richjp] 10/12/2014 12:09

schytalk, they have in the past sometimes given forecast revenue over a period of years. The revenue is indeed normally usage based but Gresham will almost certainly have discussed with the client what the roll out will be at the bidding stage. That revenue might not actually materialise but I would expect the client to have gone into any contract in good faith.

So I think this is another announcement to try and keep the market sweet following the profit warning. Five orders in a short period also suggests that the order activity level is picking up which is of course good.

I still await the next trading update with interest which normally happens in early January.

[gnnmartin] 10/12/2014 11:14

RNS Reach are in effect press releases: the information is not price sensitive.

So this is good news, but not significant enough to suggest you should revise your forecasts.
Nigel Martin

PS. Top marks to GHT for putting the fact that it is RNS Reach prominently at the top of the release letter. I've found it very hard to tell with some other companies recent RNS whether they are obligatory RNS or just RNS Reach.

[jadeticl3] 10/12/2014 09:15

Not too long ago we discussed on this thread the meaning of RNS Reach, in terms of the value/significance of the announcement. Can someone remind me what the conclusion was as I can't find that post.

[schytalk] 10/12/2014 08:17

Primatolist

I don't believe that Gresham ever quote numbers but given that it is an RNS then clearly it is determined as significant, what that means for a still small company like Gresham who knows. I presume that revenue is very much based on usage so it will be difficult to estimate and will presumably grow over time, hence the real value in this stock being recurring revenue.

Anyway great to see another contract win this side of the new year given the profits warning only a short time ago - that is five wins since then I think, not too shabby.

Onwards and upwards.

[primatologist] 10/12/2014 07:08

No numbers in the contract win rns?

[schytalk] 02/12/2014 15:33

gnnmartin

I view the appointment of Hamish Purdey as significant and important. He has the vital experience of the market sector and I am sure he can greatly assist in the positioning of the company and winning business, sales has always been a Gresham weak point.

Whilst I might get excited of a potential trade sale at a decent price (200p plus in my view, the key is building the business/new contract wins.

I think the weak member of the board is the CEO - last of the old guard - with little capability to drive the business forwards, a safe pair of hands perhaps but no more than that. Having Hamish Purdey involved will be hugely, as well as Ken Archer of course, will be hugely helpful.

I would point out that the non execs now outnumber the execs so they are in a powerful and very responsible position.I have a feeling that the profits warning might well have been largely down to the non execs instilling some hard headed disciple. In the short term unhelpful (to the share price) but assuming that corrective measures have been taken it bodes well for the future.

Onwards and upwards hopefully.

[gnnmartin] 01/12/2014 14:25

OK, so in post 5286 you did not mean that the entry on the web site was sloppy, just that it was sloppy to fail to update the web site until prompted (in this case, by you). I won't quarrel with that, but I'm not unduly worried. Perhaps a small red flag, to use TW's parlance.

I don't agree that it is misleading though. You seem to read exciting possibilities into the appointment (if I understand you). I would think the board would be very remiss in publishing such hopes and fears, even if you are right that the board share them.
Nigel Martin

[schytalk] 01/12/2014 13:35

gnnmartin

You add a senior non exec to the board and forget to update your web site to include him in the management team. I think a lot of people would call this something stronger than sloppy!

Misleading because not everyone reads RNS messages and clearly this is an important addition to the board. If you are looking to invest in a company then you do some research and it is reasonable to assume that the web site of a listed company would be accurate which it was not.

Given the background of Hamish Purdey I believe his presence on the board adds to the value of the company, particularly as he is a recent appointment, hence his omission from the management team is withholding an important piece of information, hence why I say misleading.

[gnnmartin] 01/12/2014 12:03

Why sloppy? And why potentially misleading?

[schytalk] 01/12/2014 08:18

I see this morning that the Gresham web site has finally been updated with Hamish Purdey as non exec - see below. At the very least this is very sloppy and potentially misleading, any thoughts anyone?

Hamish Purdey
Non-Executive Director

Hamish was appointed to the Board as a Non-Executive Director in June 2014. Hamish has over 20 years’ experience in the provision of IT and software services. He is currently CEO of Intelliflo. Prior to that, he was CEO of FFastFill plc from 2009 until its sale in 2013. Hamish holds undergraduate degrees in law and arts, a masters of law and postgraduate qualifications in finance.

[richjp] 27/11/2014 16:18

goldnugget, yes that is a question I have as well.

[richjp] 27/11/2014 16:17

I don't think that Archer's new role changes much with regard to an opportunistic bid. That could happen anyway from quite a number of companies.

I feel the challenge Gresham faces is that of a small company generating revenue growth competing against much larger and often incumbent suppliers. GHT may have the best product in the world, but that is not always enough. Depending on the situation incumbent suppliers can make a great effort to keep a new company out, even if their own product is inferior. Those who remember when IBM ruled the IT world may be aware of their FUD strategy. Clients also often want to limit their supplier numbers.

If Gresham can overcome that challenge then all well and good, but if not then a sale of the company to a larger organisation might become more appealing. A company like Fedessa, which I am only using an example, would probably be able to generate CTC sales into their large client base quite easily.

So what would sale price might they get? I agree that 125P would be a good base, that being the price of the last fund raising where Kestrel and others participated. I don't think that 200P would be out of the question. With GHT's low market cap, that might not be an enormous price to pay for a much larger player particularly if more than one bidder was interested.

At the moment I would prefer that the company stay independent, however I am getting on a bit and if the share price does not get back where it was in the relatively short term, I am beginning to think I would happy for a sale at anything from 150P upwards.

[goldnugget] 27/11/2014 16:16

Interesting that since the profit warning there has been a raft of new contracts - does that indicate the new deals don't offer much revenue/profit? None of the announcements have come with any monetary value.

I do appreciate any new contract is good news but will they have a profound impact on the bottom line.

[richjp] 27/11/2014 15:53

I emailed Gresham yesterday about the fact that Hamish Purdey was not profiled on the management page of the company website. I had a reply to day confirming that he is still a director and that the website will be updated. As Purdey was appointed in June that seems a bit sloppy though.

I think the news about Ken Archer can be viewed in more than one way, none of them negative. I still think that the appointment of Purdey may be part of a board restructure, which might have been delayed because to make changes with a profit warning around, would look like panic. It is possible that Archer has been persuaded to stay on for the time being to show continuity.

On the other hand although he is a non exec chairman of Gresham, I expect he has had quite a day to day involvement and perhaps he feels that the company has now reached the stage where he now has the time to take on another non exec role. It is at least comforting that Fidessa feels that Gresham's chairman has what it takes to be involved with a much larger company.

[schytalk] 27/11/2014 11:27

amt

Not sure that a £1.50 offer would be that cheeky since it is slightly above the 12 month high of 145p and above the bench mark figure of 125p set when issuing £3 million of new shares in Dec 13. It would still be disappointing though and I would hope that any offer would be 200p plus. The key is the current low share price which hopefully will increase with additional contract wins which Richjp believes are still in the pipeline i.e. those delayed that caused the profit warning.

[amt] 27/11/2014 08:44

perhaps would make a good acquisition for Fidessa. They could make a cheeky 1.50 offer. I would be disappointed since I see this as a 10 bagger over 10 years or so.

[schytalk] 27/11/2014 08:38

Interesting RNS from Gresham (see below) with Ken Archer taking up a non exec role at Fidessa who are very much in the same market space as Gresham.

Any ideas anyone - positive hopefully.

I think it shows that in Ken Archer and Hamish Purdey, Gresham have two well connected non exec. This must help with business/market knowledge (needed to cover off the weakness of the CEO) but perhaps also a trade sale route, not at this share price though.


26 November 2014

Gresham Computing plc
(the "Company")
Director's Declaration



Pursuant to Listing Rule 9.6.14(2), the Company announces that Ken Archer, who is a Non-Executive Director and Chairman of the Company, has been appointed as a Non-Executive Director of Fidessa group plc (LSE: FDSA) with effect from 25 November 2014.

[qantas] 25/11/2014 18:32

hxxp://gresham-computing.wistia.com/medias/79d2kxyks8

How to make real time, straight through reconciliation a reality

[schytalk] 24/11/2014 14:57

Richjp

Thanks for the info on Hamish Purdey, looking at his back ground I would think he was more likely to be executive material to me. I think it would be wholly positive if he replaced the current CEO who I think needs to take the blame for the profit warning but as one of the old guard he has very sloping shoulders!

Well done on Ffastfill lets hope there is a repeat as regards Gresham is concerned.

Your right that there is a thin market in Gresham shares, all the more reason to find some reason to create movement. If your right buying a large chunk will always move the stock upwards but if you can slide it back in the first place then bingo!

I hope you are correct that the delayed contracts in the profit warning are still to come, this in my view will just add to the bounce back rise.

Returning back to Hamish Purley I see there is no mention of him as a director on the Gresham web site. Again I find that very strange, at best this is a serious oversight.

I maintain the view that the share price has bounced around too much and that is because of a poor information flow from the company.

[richjp] 24/11/2014 14:39

From personal experience I know it can take a long time to finalise these type of contracts. Even though the customer may have made the decision to go ahead, it can get bogged down whilst the supplier and customer sort out the contractual details.

I suspect that these deals were well advanced when the profit warning was issued, but until they actually get signed they are still not final. In any event I suspect that these were not the delayed contracts mentioned in the profit warning or they would have said so.

I also suspect that although they have mentioned signing several key accounts this year, that those deals may not have been as large as the term key accounts might imply. The fact that no values were given suggests that to me. In summary I think the profit warning was still appropriate at the time.

The share price possibly overreacted on the downside for various reasons. The tech market as a whole had a difficult period and certain other small cap stocks got hammered, probably rightly, dragging others down with them. I doubt if the share price was deliberately moved down, because with such a small market capitalisation, it would not be possible to pick up a meaning full stake without moving the share price back up very sharply. In fact the share price recovery has been on the back of quite low volumes.

As far as Hamish Purdey is concerned, he was indeed the CEO of Ffastfill, where Kestrel were a major shareholder as they are here, so he is clearly Kestrel's man. Ffastfill were not a competitor to Gresham but had the same target clients and quite a similar sales infrastructure to that which Gresham is now building. The current Chairman is Ken Archer, who I think has done an excellent job, however with due respect he is no youngster, so I thought when Purdey was appointed that he might be the heir apparent to Archer in the not too distant future.

As a final note I should add that I was a very happy Ffsatfill shareholder!

[schytalk] 24/11/2014 11:22

I find this whole thing very strange. A rapid series of announcements - firstly doom and gloom with a profits warning quoting lack of contract wins following very shortly by a series of contract wins! This has resulted in the share price collapsing and now apparently on a strong bounce back and yes any further contract wins will accelerate this.

This would appear to be very poor Board judgement or is it something else like driving the price down to snap up a load of stock cheap! Gresham set a bench mark at the end of 2013 when they raised £3 million at 125p. In hindsight it would appear the profits warning should have been delayed and announced/combined with some contract wins. The explanation that the contract wins, which presumably were only slightly behind schedule (did not meet SIBOS?) would not generate revenue this year does not stack up for me - recurring revenues take time to build!

On a separate but I think related subject what does anybody know of the new non exec Hamish Purdey appointed in June. Until April 2014 he was CEO of Ffastfill which has considerable parallels with Gresham so he seems to have some valuable experience. Ffastfill was acquired by the ION Group at a 33% premium, having previously owned 25%, in early 2013 and also seem very much in Gresham's space. Any thoughts anyone?