Hss Hire Share Discussion Threads

[dougal] 11/10/1999 17:27

I asked Derek and Rajesh to check this out last week and today the price shifted up to 36.5p from the 30p when I asked for info., see below postings. Looks like some interesting things going on............. Dougal - 01 Oct 12:49 - 4 of 11 Derek, Highams systems (HSS), illiquid share, price dropped from a high of 235p 18 months ago, currently standing at 30p putting them on a P/E of 5.36, 1999 turnover 34 million, market cap 5.73 million! Never reported a loss, excellent customer base, A rated supplier with Microsoft et al, just formed a relationship with Siebel for CRM. I can't find anything wrong with it other than an issue with the industry wide downturn on software development impacting on their contrator volumes (down 11% y-o-y). Any chance of checking with their MD on the anticipated impact of the Seibel alliance on revenues, and whilst you are there, what are their feelings regarding the current share price ( CE Mr Highams himself owns 38% of the shares). Grateful for any more information you can gather --> Dougal Spoke to John Higham this morning of HSS: As you probably expected, he put the low share price down to the general market downturn. He said he was confident of an upturn, but did not expect a return to the 'golden years' – as he put it – of the burgeoning IT recruitment market before 1999, fuelled mainly by Y2K demand. "It's just a market thing," said Higham, "As I understand it from our brokers, a number of small investors were selling their stake as a result of some tip-sheet which [we] haven't tracked down." In defence of the company, Higham added that, "[HSS] has never returned a loss and the market forecasts, long-term, are very good." However, when I asked him when he expected this 'revival' in the market, he laughed and said, "Well, you tell me," and gave a non-answer about 'whenever market perception of recruitment sector returns.' He went on: "Analysts are saying that it is only a slow down in the growth rate, and the sector will improve by 2001." He said he would not disagree with such predictions, but seemed reluctant to put his own voice to them. As I said, Higham seemed a little cautious of making his own predictions of recovery however, saying he did not expect a revival in the market to the levels of last year, because those years were "exceptional" as a result of Y2K. On the other hand, he said, "IT is a growing market..." Becoming a little bit more upbeat, Higham went on to say: "A lot of our clients [mainly in the financial sector] do have a lot of projects stacked up for release in due course." The implication being that when these projects do kick-off, there will be a revival, but could provide nothing definite. Higham said he is looking to expand the company's worldwide business in Europe and US. He mentioned some potential clients in the US which were not signed up as yet, but would not say who they are, simply commenting that increasingly HSS is getting enquiries "from wider than the UK." However, specific plans for the means of expansion seemed a little vague. Higham said he would consider acquisition led growth, but pointed to the low share price as a reason not to pursue such 'high-finance' options. "We will look at future acquisitions as and when its more appropriate," he said. This would apply to both the UK and abroad. On the deal with Siebel, Higham said it is too early to say how this would impact revenues, depending on how active the business was. "We are not making any forecasts on this at the moment... in around six months we'll be in a clearer position to comment further on that." Regarding his own share ownership, Higham said he has thought about increasing his stake, "but the market expects to see more share availability rather than a tighter ownership by the directors... [although] some of the directors who have a lesser percentage have bought in the last two months, so you should take some comfort from that." On the whole, Higham did not seem glowing with optimism and the most definitive comments he made were predictions of a slowdown in the short-term. But nor did he seem panicked about the long-term future of the company. He seemed to expect prospects to be sound, but by no means as easy as they have been in the recent past Hope all this helps Dougal, and if you want me to fill in/expend on anything, let me know. Rajesh ADVFN Journalist Team