Gresham Technologies Share Discussion Threads

[qantas] 17/8/2020 13:26

Gresham Tech
@greshamtech

When dealing with #data gets in the way of successful #trading, something is wrong. Watch the video to find out how Inforalgo, a Gresham Technologies company, is transforming #datamanagement across the pre and post trade lifecycle

Please do your own research as always.

[qantas] 14/8/2020 13:14

Part 2 of our #cashmanagement podcast series is here: What do customers really want? Gresham's
@NeilVernon
and Bill Wrest return to discuss real-life examples and how banks can adapt to meet customer needs. Listen here



Please do your own research as always

[qantas] 10/8/2020 17:38

Please do your own research as always.

[qantas] 07/8/2020 17:55

Please do your own research as always

[qantas] 06/8/2020 11:10

Please do your own research as always.

[gottafly] 06/8/2020 10:55

Interesting with speed of implementation and large savings, how come Clareti business is not booming?

Gresham Tech shared a post: How a tier one bank implemented Clareti Transaction Control in 8 weeks to deliver £3 million savings and process 200 million transactions per day. Watch our short video case study here: #reconciliations #datamanagement #automation #regreporting #cloudtechnology

[qantas] 03/8/2020 12:44

Https://www.greshamtech.com/videos/video-case-study-tier1bank-compliancePlease do your own research as always.

[richjp] 01/8/2020 11:46

geri, I have thought the same myself but kept quiet because I did not want to seem to cause offence.

It's very helpful to have these links, however as with anything on ADVFN, most people are just expressing opinions and not offering advice.

[gerihatrick] 01/8/2020 07:22

Qanta -when you put up a reference to GHT it is really not necessary to then add your proviso DYORAA...honest...we are adults...well some of us!

[qantas] 31/7/2020 22:28

Please do your own research as always

[valhamos] 30/7/2020 19:22

Both. The two statements are not mutually exclusive.

[gottafly] 30/7/2020 15:35

4-10 agree that is a good sign, as for the acquiistion we shall see.

N1 like it because it is cheap (things are often cheap for a reason though), the question is can it drive revenue growth and profitabilty - we shall we. Certainly as a stand alone business it would not appear to the profitable.

I again take issue with the GHT RNS announcement wording, which of these statements is correct:-

The Acquisition is expected to be immediately earnings enhancing although not materially so for FY20

Expected to be earnings enhancing within the first full financial year following Acquisition

[4-10] 30/7/2020 15:10

New chair designate purchased some shares good sign.

[4-10] 29/7/2020 15:38

Yes Rich positive comments from Holway's firm see below

TechMarketView

Gresham acquires Inforalgo for £3.6m
Marc Hardwick, 08:37, 29 July 2020
Gresham Technologies, the provider of transaction control and data integrity solutions to the financial services industry, has agreed to acquire Solihull-based Capital Markets data automation specialist, Inforalgo Information Technology for £3.6m. In the year ended 31st March, Inforalgo made a loss of £500k on revenues of £1.4m.

Inforalgo provides a range of cloud-based, straight-through-processing and automation for financial institutions that give its clients quick integration with exchanges, trading facilities and regulatory reporting. Customers include the major financial players including big banks and asset managers where its products help navigate complex regulatory reporting requirements, such as FINRA TRACE, Consolidated Audit Trail (CAT) and MiFID.

Inforalgo is to be integrated into Gresham's Clareti portfolio adding over 80 adaptors to exchanges and trading facilities alongside existing bank integration and financial messaging capabilities. Ian Manocha, Gresham CEO, commented: "This acquisition fits with our strategy of extending the range of connectivity, reconciliation and control services available to our customers. Against the current backdrop of market uncertainty, the whole industry is calling out for more flexible, service-based approaches to regulatory reporting in order to bring down costs and better manage complexity."

This looks like a good buy for Gresham and may help it get back on track – increasing regulatory requirements place a huge burden on institutions, anything that helps to take pain out of the process and automate expensive manual processes looks like a winner.

Inforalgo will add over £1.2m of annualised recurring revenues (ARR) to Gresham, bringing total Clareti ARR upon acquisition to £11.9m. It will also enlarge Gresham's customer footprint in North America, which accounts for 88% of the acquired ARR.

[richjp] 29/7/2020 14:49

Yes a good acquisition as far as I am concerned as well, with the reasoning well explained in the RNS. TechMarketView are also positive about it today.

For a company the size of GHT, appropriate acquisitions that are the right fit and also affordable might not come along very often, therefore I think it is up to management to find the time to deal with them.

[valhamos] 29/7/2020 09:01

Looks to be a good move with significant ARR with a strong US presence and hopefully will be as successful as the previous acquisitions.

[gottafly] 29/7/2020 08:47

amt

GHT are not growing sufficiently organically because of the sales organisation or rather the lack of sales leadership. I am happy to acknowledge that the sales guys on the ground are presenting Clareti well, after all some significant new competitive sales are being made. However, the low hanging fruit has long been had and we are into the very demanding area of competitive sale and the removing of an established player - no easy task.

IMHO GHT urgently needs an experienced sales/new business director on the main board to provide that leadership and to be answerable directly to the shareholders. With the current chairman standing down there is little (if any) industry specific sales expertise on the board.

The sales strategy seems to me has been 'build it and they will come' i.e. build the best and sales will automatically follow. The one statement from IM that I find rather damning is in the half year report - 'As a niche player within a very substantial global financial technology market dominated by large players, it is important to gain scale rapidly and carefully selected acquisitions are a means to expand our global footprint'. So basically, GHT is a small player and needs to be bigger to compete, no wonder the share price is going south.

As you rightly point out acquisitions can be a distraction and I am sure this was the case with B2 and 'cost us' a profits warning/SP hit. Can't see sales improving until something significant on the sales front is done and I don't think IM knows what to do but as a long term investor I will be happy to be proved wrong. Seems to me (as per IM's own words) GHT is stuck as a niche player and the share price reflects that.


As always DYOR

[amt] 29/7/2020 07:48

Bolt on acquisition without diluting shareholders but the question remains why can't they grow organically rather than be distracted by acquisitions which take management time and resources. Still slightly positive I would have thought.

[gottafly] 27/7/2020 15:54

Richjp, a good balanced and informative view as always but I do not agree about IM, he is at best 'in the last chance saloon' in my view, five years of limited progress. I would also suggest that your 'tone' seems to be somewhat downbeat so I think that even you are somewhat disappointed. And as you point out there is a large mismatch between the written words and the langauge used in the presentation.

GHT should be very concerned about the SP, both if it is too low (something you should be able to do something about) or too high (much harder to handle when the market just takes off). If you had to sell GHT today I would suggest you would be taking somewhat of an enforced bath. The FTSE has dropped around 20% this year but GHT circa 30%, so according to IM a company in safe hands in a strong niche market.

The concern that I have is the communication flow and dare I say secrecy that continues to surround GHT, I think this is becoming damaging, you have to work hard to find the story behind the figures. Sure, you don't want to lay all bare (for competitors to enjoy) but if you unexpectedly lose a big client or your sales force need a revamp (i.e. not performing) then these are matters of interest to the investor.

If Clareti is as good as we all think then the current sales/growth is simply well under par.

[richjp] 27/7/2020 15:27

It may well be a difficult six months, although I am not too worried by the PE ratio. As someone else said last week and as I suggested some time ago, I think price to sales ratio is more relevant for companies like GHT.

[amt] 27/7/2020 15:20

If they miss the forecast though the share price will get hammered and if they meet forecasts then price still on the high side with such an extravagent pe ratio.
I have retained a small holding but I think we are in for a very difficult 6 months.

[richjp] 27/7/2020 14:43

I think the recent results are as good as could have been expected in the circumstances, although GHT is unloved again today.

As far as I am concerned IM is definitely the right man for CEO and I hope he continues. There is also nothing untoward about Ken Archer standing down. That was announced a year ago. As a non exec he is legally obliged to stand down after nine years in office. In fact it will be around ten when he finally leaves. The new chairman seems to have the right background and it seems that the company took it’s time in finding him. I do hope however that he puts has hand in his pocket and buys a decent number of shares.

I was surprised to see how confident they were in the online presentation. If the formal announcement seems a bit subdued I feel we have to remember that they have issued two profit warnings in recent years, although both times it was simply a case where major orders got deferred for a few months and the share price got hammered. In making optimistic public announcements you could say that they are damned if they do and damned if they don’t.

The presentation made it clear how demanding it can be to win new major accounts. It is not just about having a superior product or getting onto to tender lists. From my own experience it’s about getting to know how an organisation works, understanding the decision making process and who the influential figures are. It would be easy to throw a number of sales people out there and having them chase opportunities that will not come to fruition. Historically it has been the face to face contact whereby good professional sales people get to qualify opportunities, which is why I am a bit cautious when they seem to be saying that conducting sales business remotely is effective. Perhaps in that respect it’s because I am an old geezer and not up to date with modern methods of working!

At the presentation I attended a year ago, they were asked if they were concerned about the share price They said it was an issue not only because it might make it difficult to raise money in the market if needed, but also because the employees share scheme is affected.

In the longer term it is always the market that decides the share price no matter what the company may say. The GHT share price moves up and down on small volumes of share transactions. The trading updates last December and this January were upbeat and in fact I bought more. Pre Covid the share price was recovering steadily and I think would be much further ahead if it were not for Covid. When they first turned cautious concerning Covid was when the share price fell.

It is frustrating but it is what it is. Markets get it wrong on both the upside and downside.

The hot money in the market is elsewhere at the moment rightly or wrongly. GHT is not seen as a high growth stock but I still think that consistent growth is there. The business model as far as I am concerned is good and they are generating cash.

[gerihatrick] 23/7/2020 19:46

as was said in the presentation the key KPI is the Clareti ARR-and that continues to move in the upward direction. The other point that I took from the session was that when the banks sign up they increase their commitment over time-significantly. Add to that the issues that have been identified during COVID they seem to be confident that the manual management of information has proved to be a major hassle and that Clareti will help address those issues. The other point I see is that trades are small so probably small holders just looking at the top line figures and selling!

[6gr] 23/7/2020 19:02

In my view the point being made about the loss of the B2 contract and the roll-down of another contract was that they both ended at June 2019. They had therefore been cancelled well before that, but it meant that this was a major factor in why the sales didn’t increase comparing H1 2019 vs H1 2020. However the ARR at end-June 2019 vs end-June 2020 excludes this which is why good growth is shown.

I would be bothered about this if a client had chosen to cancel and move to a different provider as that would be an altogether different signal than a client who shut a business down for unrelated reasons. It is the trajectory of ARR that is important and the net £1m+ added in H1 2020 is the key message that is a little lost amongst some other noise.

Regarding the share price, it is only relevant in connection with acquisitions if the payment is in shares. C24 was acquired with new shares issued, but B2 was paid in cash (and some of the deferred consideration was not paid due to the B2 contract cancellation). Given the current cash position I would expect any smaller acquisition (say sub £5m) to be made in cash and only a larger transformative acquisition or merger of equals to be done with shares.