Horizon Technology Share Discussion Threads

[tole] 06/9/2007 14:44

06-Sep-07 Horizon Technology HOR Panmure Gordon Buy 65.00p 92.00p - Reiteration

[yump] 06/9/2007 10:15

Thanks for that Tole.
Looks pretty cheap to me, perhaps there's also an element of it being not very exciting as a business, which would explain the lack of posts, although there's obviously been some trading judging by the charts !

o/t I see HIPS are back on the agenda including 3 bedroom houses (TNG).

[tole] 06/9/2007 10:04

Hi Yump - Would have thought the Net Debt element must have played its part. Along with their reliance on Sun Platforms. Though as picked up from Goodbody's update today - would have thought that clarity on their business model was what was required.




Horizon (Buy, Closing Price EUR0.95)
H107 First Glance- Positive Outturn
Analyst: Gerry Hennigan

Horizon's H107 results provide, as expected, a greater degree of clarity on the model going forward post a period of significant M&A activity. With the model now concentrated in the network infrastructure and application consulting markets in the UK and Ireland the questions were whether Horizon could:

achieve revenue growth in the competitive UK market; and

deliver the desired expansion in margins and profitability targeted by management.

On a continuing basis revenue of EUR146.3m increased 11% annually and 15% sequentially, albeit with the benefit of the aforementioned acquisitions. 81% of sales originated from the UK, the remainder from Ireland. Gross margin of 18.5% was ahead of forecast (15.8%), which, combined with a revenue outcome 3% ahead of forecasts, and despite a significant increase in the cost base (26% ahead of expectation), resulted in fully diluted adj. EPS by our estimate of 5.2c. That compared with our forecast of 4.9c and the 3.7c recorded for the previous period. Gross and trading margins in Ireland (44.0% and 14.2%) continue to outperform that in the UK (12.4 and 2.4%) and that dynamic, given an expectation that growth will largely emanate from latter, warrants attention. Net debt was eliminated over the period, with Horizon in a net cash position to the tune of EUR1.0m, a considerable improvement on our forecast of EUR12.0m and EUR9.2m at the end of December.

The outlook statement has a familiar ring to it with management indicating that the services markets in the UK and Ireland continue to grow, albeit in the single-digit percentage range. Pressure on margins is described as modest. Based on a previous session-closing price of EUR0.95 and our pre-results forecasts, valuation at 8.3x FY07 and 7.5x FY08 adjusted earnings, particularly in light of the very solid outturn, looks decidedly undemanding. Risks remain, the obvious one being the heavy exposure to the Sun infrastructure market (c50% - c.60% of sales), but the level of discount is hardly warranted, in our view.

[yump] 06/9/2007 09:33

Tole
Is the low rating for this one mainly due to the historic net debt problem ? I noticed creditor levels were very high at previous year end.

[tole] 06/9/2007 08:58

Interims out...

Horizon Technology Group plc
Interim Results for the six months to 30 June 2007


The first half of 2007 was a period of continued and significant progress,
financially and strategically:


Financial highlights:

* Revenue increased 11%; Gross profit increased 44%
* EBIT increased 27% - EBIT margin increased 40 basis points to 3.2%
* Diluted EPS increased 21%
* Strong cash conversion in the first half - 167% of EBITA
* Compound EPS growth of 27% since 2003

Strategic highlights:

* Increasing services orientation within Horizon's business:
* 78% growth in application consulting and services earnings
* One third of group earnings now comes from application consulting and
services
* Delivering earnings growth from acquisitions
* Maintaining high market share with existing key vendors
* Profitably building market share with new vendor partners
* Investing & developing in new partnerships

The results reflect continued earnings improvement, increased financial capacity
and the group's ability to deliver performance and growth.

Gary Coburn, Horizon's Chief Executive Officer, said:

"We are encouraged by the growth in our enterprise application and services
businesses in the six months, which now represent a third of the group's
earnings. Our enterprise infrastructure division continues to diversify its
revenue base and improve expense productivity. The successful integration of
acquisitions completed in 2006 and our increased services orientation is
delivering performance and growth."

Cathal O'Caoimh, Horizon's Chief Financial Officer, noted:

"We are pleased to report another period of progress against every financial
measure. EBIT is up by 27% and operating margins up 40 bps to 3.2%. Very
positive cash flow generated Euro8.8m funds from operations and eliminated net debt
at the period end. Horizon is well positioned, both operationally and
financially, to deliver continued earnings growth."


Update by Davy (House Broker)



Price 95c Target: 140.0c Issued: 15/03/07 Previous: 130.0c Issued: 16/03/06

Horizon has released (September 6th) its interim results for the six months to June 30th 2007. Results are very positive and broadly in line with our forecasts. Revenue was €146.31 (Davy: €144.5), EBITDA €5.58 (Davy: €5.0) and diluted adjusted EPS 5.11c (Davy: 5.1c). An increased focus on higher-margin service-based revenues has led to a 22% increase in adjusted EPS, a 20% increase in EBITDA and generated significant cash.

Management confirmed that 33% of profits are now generated through application consulting and IT services, while the share of UK-generated revenues increased to 80%. The increase in service-based profits is significant and has been driven by the Irish Client Solutions Division, and also by an increased service
constituent in infrastructure revenues in the UK and Ireland.

Regarding last year's acquisitions, management confirmed that Equip, EPC and
WBT were delivering earnings ahead of expectations. In addition, the exclusive UK Oracle partnership is expected to generate profits in H2, as is the recently set up Data Management Division. Horizon Enterprise Systems, which focuses on IBMspecific enterprise products and services, generated its first material profits in H1.

In terms of cashflow, the group had a very strong H1, resulting in net cash at the end of the period of €1m. This is an increase of €8m on the €7m debt on
December 31st 2006.

There will be an analyst briefing this morning which will provide more detail, but we do not anticipate changing our full-year numbers.

[tole] 05/9/2007 11:17

BUY recommendation out today from Goodbody Brokers.



Horizon (Buy, Closing Price €0.94)
H107 Results tomorrow
Analyst: Gerry Hennigan

Horizon is scheduled to release H107 results on tomorrow, a period which will mark the first full six month contribution from all three acquisitions (EquIP Technology, EPC and WBT) completed in 2006. That, along with the disposal of the distribution franchise (wholly confined to Ireland), should give greater visibility on the revised model, which is now firmly focussed on network infrastructure and application consulting. We are forecasting H1 sales of €141.9m and adjusted EPS of 4.9c. On a continuing basis, our H1 revenue outcome would represent annual growth of 8% and a sequential increase of 12%. Within the revenue line points of note will include:

the proportional contribution from the geographic spheres of operation (UK and Ireland); and

the strength or otherwise of each of the two broad revenue categories (infrastructure and application consulting) due to the divergence of margin achieved.

The dynamic will warrant attention, in our view, particularly in light of exposure to Sun platforms, from which 50% - 60% of revenue is derived. A clear objective of recent M&A activity, in our view, was to provide the platform for revenue growth in the UK, while at the same time concentrating the model in higher margin revenue streams. Divestment of the distribution business has partly aided that transition, as has an increase in the relative exposure to application consulting. Past commentary would also suggest the prospect for further dealflow. While the model transition has created a degree of uncertainty over the past year, current valuation at 8.2x FY07 and 7.4x FY08 adj. earnings is undemanding. A solid H1 outturn should, thus, provide a 'floor' for the share price.

[tole] 04/9/2007 17:19

Consensus Estimates Analysis

In EUR # of Ests. Median Est. High Est. Low Est. Std.Dev. Proj.Pr/Est.

Revenue (in Millions) Pr/Sales
FY: 2006 3 248.80 249.30 248.60 0.29 0.30
FY: 2007 4 280.05 287.65 277.30 4.01 0.26

EPS P/E
FY: 2006 4 0.09 0.09 0.09 0.00 10.50
FY: 2007 5 0.11 0.12 0.11 0.00 8.38

[tole] 04/9/2007 15:09

Summary taken from DAVY stockbrokers announcement post final results in March...

Reference to the possibility of opening the way to payment of a DIVIDEND .


Horizon Technology Group reported a 47% increase in revenues to €257.9m with
profit after tax almost 30% ahead at €5.5m in the full year to December 2006.
Growth was driven by a series of acquisitions as well as internal developments.
Further developments will drive growth in 2007, and the company has cleared the
way for the potential payment of dividends.

Organic revenue growth was over 19%, with the balance coming from three key
acquisitions as well as organic developments within the business. All three
acquisitions appear to be performing ahead of expectations.

Gross margins increased to 16.7% (from 16.4%), with a slight decline in the
organic margin being more than offset by stronger growth in higher-margin
consulting businesses.

The rise in the cost base associated with the new developments resulted in EBITDA increasing by 21% to over €10m and profit after tax up almost 30% to over
€5.5m. EPS increased by 11%, including the impact of the 7.4m shares placed in
February 2006.

The outlook for 2007 remains positive with a number of new developments
announced, including a partnership with Oracle in the UK and the expansion of the UK IBM business into Ireland. These should continue to drive revenue and profit growth. Growth will also be augmented as the new UK developments initiated in 2006 start to generate profits.

Interestingly, the company indicated that it plans to eliminate historical losses in its balance sheet which will open the way for Horizon to pay dividends. Based on yesterday's close of 105c per share, a dividend yield of 2% would be covered almost 3.5 times by the 2006 net profits.

Overall, we remain positive on Horizon based on its consistent growth performance. At just over nine times our current 2007 EPS forecasts, the stock
continues to look good value.

[tole] 04/9/2007 14:56

DAVY Brokers BUY recommendation out today.

Horizon Technology

H1 results preview; share of service-based profits is key

Price 94c Target: 140.0c Issued: 15/03/07 Previous: 130.0c Issued: 16/03/06

Horizon is due to release H1 results on September 6th. We are forecasting H1
revenues of €144.5m and EBITDA of €5m with an adjusted EPS of 5.1c. Because
Sun's financial year ends on June 30th, Horizon usually has a higher proportion of sales in H1, with profits weighted towards H2.

As well as an update from the Enterprise Systems group, we will look for news
from the Clarity unit on progress with the Oracle partnership in the UK, which
became an exclusive partnership on June 1st. Also of interest will be management's comments on the integration of Equip, EPC and WBT as well as the recently set-up Data Management unit.

Horizon has indicated in the past that approximately 33% of profits are based on
IT services; any increase in this number will be positive. Recognising the fact that a significant portion of profits are based on IT services, it is the key factor in valuing Horizon.

[tole] 04/9/2007 13:54

Hopefully results announcement on Thursday will provide the turning point here.

Got this on a forecast PER of a little over 8

[tole] 04/9/2007 12:38

A few big trades/rollover today - looks overdone down here.

Results, for the six months ending June 30, on Thursday September 6th.


Recent trading update -

Horizon Technology G Horizon Technology sees 2007 FY results in line with market expectations


LONDON (Thomson Financial) - Software maker Horizon Technology Group PLC said it expects the full-year results to be in line with market expectations.

Ahead of its Annual General Meeting today, chairman Samir Naji said the company has had year-on-year earnings growth across all business segments, because of continued growth in the IT market in both the UK and Ireland to date in 2007.

Naji also attributed this performance to increasing market share in its target markets, focus on higher-margin segments, and the expected benefits from acquisitions.

[tole] 18/6/2007 14:02

New coverage - PanmureGordon BUY 92p Target.

[this_is_me] 10/5/2007 17:28

The positive AGM statement did not have much effect.

[this_is_me] 16/3/2007 13:22

Some retracement is only to be expected after the jump in price.

[this_is_me] 15/3/2007 22:06

Will there be another jump tomorrow? After those results there should be.

[this_is_me] 15/3/2007 22:06

Will there be another jump tomorrow? After those results there should be.

[this_is_me] 15/3/2007 16:07

A great jump in the share price.

[this_is_me] 15/3/2007 12:23

terrific set of results!

[this_is_me] 02/1/2007 14:29

Rising from the bottom; well oversold.

[tole] 11/9/2006 18:10

Admittedly have never held - but watched with interest.

A couple of summary notes -



Horizon
Disposal of the distribution business.
Analyst: Gerry Hennigan

Horizon announced yesterday the sale of its distribution business for EUR6.2m in cash to UK-based Westcoast. Adding the EUR9.1m in associated net debt suggests a take-out price of c.11x FY05 EBIT. The rationale for the deal would appear to be based on: (i) greater concentration on the infrastructure business where growth has been more apparent (revenue up 11% yoy while EBIT increased 13% yoy in FY05, compared to a 24% decline in distribution EBIT); and (ii) a focus on the more profitable end of the business (FY05 EBIT margin in infrastructure of 5.4% v 1.1% in distribution). Distribution, which accounted for 40% of FY05 revenue but 12% of EBIT had struggled of late in part because of general market conditions (price deflation) but also over-exposure, in our view, to HP (we estimate c.90% of distribution sales derived from HP) and tighter credit terms mandated from HP. Distribution trading margin declined by 33 basis points in FY05. Guidance for FY06 earnings is now in the range of 9.0c - 9.5c. At the mid-point that would suggest an FY06 earnings multiple of 10.5x, which is undemanding. We had been forecasting 11.0c, however, with consensus of the order of 10.6c. Hence, while the disposal streamlines the business, guidance would also suggest a transition period to allow for recent acquisitions (EquIP, EPC and WBT) and the disposal to bed down.




Horizon
H1'06 Results Preview.
Analyst: Gerry Hennigan

Developments since the release of FY05 results in March provide ample scope for discussion when Horizon releases H1'06 results on Thursday September 14th. Two acquisitions, the disposal of the distribution business and revised earnings guidance for the year have resulted in considerable change, and, based on the share price direction (down 23%) over the intervening period, a degree of uncertainty. We are forecasting sales of EUR171.6m and adj. EPS of 4.4c. Within that, we are forecasting revenue from distribution of EUR60.1m with the remainder from enterprise solutions. Aside from the EquIP acquisition, non-distribution sales are derived from the integration of Sun systems in the UK and Ireland, application consulting and bespoke development (Client Solutions) in Ireland and initial IBM-related sales in the UK on foot of recent investment. Our forecast for distribution sales represents 9% yoy growth, but a 5% sequential decline. The limited growth in that market, combined with ongoing margin pressure, provided the apparent basis for management's decision to exit distribution in favour for the higher margin and growth associated with its systems integration revenue lines in the UK and Ireland. Earnings for the current year have now been pegged in the range of 9.0c to 9.5c compared to our original forecast of 11.0c, which we have yet to revise. At the mid-point, that would suggest an FY06 earnings multiple of just 9.8x, which is undemanding and thus would suggest value. That said, the recent downward revision to earnings would suggest a period of transition, and in that regard attention is more likely, in our view, to focus on management comments and guidance, rather than on the actual results for the first six months of the year.

[this_is_me] 10/9/2006 17:39

See post 7

[charlie11908] 09/9/2006 09:28

Tole.....This is me....

You guys still in this share?

[charlie11908] 06/9/2006 14:52

30% or revenues according to Davy, or was it Goodbody come from managed services division
leaving the balance to come from the Sun distribution agency in Ireland...
and the equivalent from the IBM agreement in the UK.....
makes you wonder what the revs would be if the company had the same attitude
to Sun "tin" like they had to the "tin" distributed by Clarity??????

[this_is_me] 04/9/2006 11:11

Bought back in this morning. I was watching the share price with the intention of buying when I was confident that the share price had bottomed out and was on the rise, but this morning's announcement caught me on the hop.