Maxima Holdings Share Discussion Threads

[stevemarkus] 05/12/2007 15:47

I bought a little earlier - at a slight loss at the moment, but the recent trading statement was good, and it's nice to see these start to move up. Small caps in general seem to have been hit hard over the last month or so, whereas in the summer they held up quite well - might take a little while to recover but I'm happy to wait and hold. Who knows, might buy a few more on the way back up.

[cockneyrebel] 05/12/2007 15:23

2v1 on L2 and chart turning up nicely.

Anyone holding or are you all gonna rush in tomorrow? Some big orders gained here recently.

CR

[cockneyrebel] 05/12/2007 13:28

In today.

That big trade this am is stock clearing imo.

On the firm on L2

CR

[marben100] 03/12/2007 22:17

Thanks for the update GHF. Much appreciated.

[glasshalfull] 03/12/2007 21:13

I had a chat with Linda Andrews, FD, last week.

She intimated that there will be no trading statement in December this year.
I had wondered if a statement may dispel concerns brought about by the 20% fall in the share price and thought it possible that the company may release one as in 2006.
Apparently the company decided against it on the advice of their brokers following the recent trading update and analysts visit in October.

Looks like it's been stock drip-fed through the market rather than via the brokers which may account for the drop.

In conclusion I believe that the company are continuing to trade in line but wonder whether the decision to wait until 2008 to update the market may provide further share price volatility in the short term.

Still looks very good value at the current price.

Regards,
GHF

[peart] 29/11/2007 13:42

My guess is private investors getting out after 3 years since IPO on 9.11.04. EIS timeline is 3 years for income tax relief. JMO. In time the share price should recover as long as the business does ok.

[dills] 29/11/2007 09:33

Any ideas why the share price has taken a dive?

Dills

[marben100] 19/11/2007 15:25

Sentiment amongst smallcaps generally is undoubtedly poor right now. There was an article in the FT over the weekend which might provide some explanation:

Squeeze prompts Tchenguiz in 'radical review'

...Vincent Tchenguiz said on Friday he had sold about £30m of stakes in about 50 small listed companies. "In the wake of the credit crunch, we are currently adjusting our business model and rationalising our portfolio to reduce our exposure to equity market risk," he said.

"We have been selling down, and are continuing to reduce, non-core holdings."

I imagine that Tchenguiz isn't the only investor who is selling down for reasons that have nothing to do with the underlying business.

One feature of Maxima that attracts me is that it focusses on recurring revenues from service contracts. I believe that it is hard for clients to cutback on these, so they provide a defensive aspect to the business that gives it some protection in the event of the widely predicted economic downturn.

I am more inclined to add to my holding, rather than reduce.

Cheers,

Mark

[powwow] 19/11/2007 13:17

As ever its just market sentiment I believe as quite a few stocks are being affected by the current market conditions. Yes sometimes support is lost when you least expect it, but by no means does that mean there is a problem. I guess £2.50 is not support level, most probably shorters doing their bit.

[dixies] 19/11/2007 10:44

The 2 director buys were also initial purchases, so they are both in at 288.5p having spent approx £58k and £25k. Only 4 weeks ago there was a contract win and a trading statement saying a good start to the year and in line with forecasts (30.7p).

[tole] 19/11/2007 09:18

Lol. Of course, Apologies - Marben - you are indeed correct - didnt notice the same holdings figures. (focused more on the SOLD element since it would have been the first time in a long period since I have noticed a director sale)

Wonder what is causing teh drop off here then? Havent held for a while myself since selling out a number of months backs. Always had an avid interest in following thsi one though.

[marben100] 19/11/2007 09:08

Tole,

It's just a swap of holdings. Those shares were bought by the new CEO & non-exec. So just a transfer between board members.

Regards,

Mark

[currypasty] 19/11/2007 09:05

I dont like the look of the chart, there must be something going on that us PI's are not aware of, If there is no support, after 3 years holding, i shall start selling a few.

[tole] 19/11/2007 09:02

Looks like a few following the CEO and Finance director here today -

Kelvin Harrison, Chief Executive sold 20,000 ordinary 1p shares at 288.5p per share.

Linda Andrews, Finance Director sold 8,665 ordinary 1p shares at 288.5p per share

[stevemarkus] 14/11/2007 09:24

I've taken advantage of the dip to buy in today and managed to get an initial chunk at 293p - quite pleased as these seem pretty cheap with decent growth prospects. Thanks to Mark for all the research posted here and on the Fool.

Steve.

[currypasty] 08/11/2007 08:02

RNS Number:2251H
Maxima Holdings PLC
07 November 2007


Maxima Holdings plc

(the "Company")

Annual Report and Accounts

The Company has published its Annual Report and Accounts for the year ended
31 May 2007 and has distributed these to shareholders. The document can be
viewed on the Company's website: www.maxima.co.uk

[marben100] 24/10/2007 15:22

Thx for the highlight CurryPasty :0)

[currypasty] 24/10/2007 12:24

independent research on maxima

[currypasty] 19/10/2007 13:23

RNS Number:9941F
Maxima Holdings PLC
19 October 2007




Embargoed until 0700 19 October 2007

Maxima Holdings plc ("Maxima" or the "Company")

Trading update

Analyst and Investor Site Visit

Maxima is today hosting a site visit for investors and analysts at their offices
in Cheltenham. Case studies will be presented of the activities in both the
Maxima Solutions and the Managed Services divisions, as well as an illustration
of Maxima's approach to the integration of acquisitions. No material new
information will be disclosed in the presentations. At the same time, Maxima
today announces the following update on current trading:

Maxima is pleased to report that since the start of its financial year on 1 June
2007 it has won a total of 39 new clients broadly spread across the different
business areas. Cross-selling is steadily increasing as the acquisitions become
fully integrated within Maxima. Further to this, significant additional business
and substantial numbers of managed service and support contracts have been
renewed from Maxima's existing client base. This includes the sale of four of
its new IT solutions for the construction sector based upon Microsoft Dynamics
AX which was announced in April this year.

The Company is also pleased to announce the successful completion of two
important projects. Firstly, the go-live after a four month accelerated
implementation and full validation of the manufacturing solution for a leading
pharmaceutical company, based upon QAD applications software. Secondly, the
successful upgrade to Oracle version 12G of the systems of a major insurance
company, one of the first such upgrades to be carried out in the UK.

Overall trading remains in line with expectations.

Kelvin Harrison, Maxima's Chief Executive said: "It has been a good start to the
year for Maxima as we continue to extend our existing client relationships and
grow the pool of new customers in our core sectors. We are now able to offer
our clients full end-to-end applications and infrastructure software solutions
and managed services which we continue to develop. We will report our interim
results for the six months ending 30 November 2007 in early February 2008."

[currypasty] 19/10/2007 13:23

Embargoed until 0700 18 October 2007

Maxima Holdings plc ("Maxima" or the "Company")

Major new contract award



Maxima Holdings plc (AIM:MXM), the acquisitive IT Solutions and Managed Service
Company, is pleased to announce that it has been awarded a #3.5 million, three
year managed services contract from Towergate Partnership Ltd. The contract is
to provide Incident, Infrastructure and Problem Management services to over 100
offices and 3,500 staff within Towergate, the largest independently owned
insurance intermediary in Europe. Towergate became a client of Maxima following
the acquisition of Centric Networks in July 2007.

Kelvin Harrison, Chief Executive of Maxima said: "We are delighted to have
extended the contract with Towergate, proving the value in our managed service
offering, as well further strengthening the relationship between our two
businesses. Revenues from this contract will help to underpin expectations for
the current and next two financial years."

Mike Newman, Towergate's IT Director added: "It is an absolute must-have for
insurance brokers to work with a first rate IT provider. I am very pleased with
the service we have already received from Maxima. Their proven experience and
capabilities with both Microsoft and Citrix made the decision to extend the
contract easy for us and I look forward to our continued working relationship."



For further information please contact:

Maxima
Kelvin Harrison, Chief Executive 01242 211211
Linda Andrews, Group Finance Director 0141 880 1000

Cenkos - Nominated Advisor to the Company
Stephen Keys 020 7397 8926

Smithfield
Tania Wild / Reg Hoare 020 7360 4900



Notes to editors:

About Maxima

Maxima Holdings plc floated on AIM in November 2004 at an issue price of 110p.
It was established to acquire businesses supplying IT solutions and managed
services, with the objective of building a focused IT services group. On
flotation it immediately acquired Azur Holdings Ltd, bringing together a
management team with the skill, experience and incentive to deliver significant
shareholder value, through a combination of acquisitive and organic growth. The
business implements and supports enterprise and infrastructure software
solutions for mid-sized, UK-based manufacturing, distribution and service
organisations. These solutions are based upon leading software suites as well as
products developed in-house.

It has since made a further nine acquisitions:

* August 2005 - Ringwood Group plc, a specialist in content and document
management solutions, based on Microsoft technologies;


* September 2005 - Hanston Technology Partners Ltd, a fast growing managed
services business providing applications support and consultancy services to
Oracle users;


* January 2006 - The MFG/PRO business of Seabrook Research Ltd, the sole
Irish distributor of MFG/PRO, a manufacturing package for which Maxima was
already the sole UK distributor;


* May 2006 - QED Business Systems Ltd, which provides managed services for
critical mainframe and mid-range computer systems and applications software;


* October 2006 - Cognition Solutions Ltd, provider of enterprise software
solutions to the construction and facilities management sector; and


* November 2006 - IIL (Intertech Solutions Ireland) Ltd, which provides IT
infrastructure solutions and managed services based upon Citrix
technologies;


* March 2007 - SevenThree Ltd, supplier of customer relationship
management software solutions to the construction sector;


* May 2007 - 3net Limited, an IT Services business, providing consultancy,
solutions delivery and managed services in networking and security
infrastructure; and


* July 2007 - Centric Networks, a managed services business whose skills
lie in operating systems, networking, security and remote access.


Maxima has grown to become an IT systems integration and managed services
company with a proven track record of delivering innovative and flexible IT
solutions and services. Maxima's in-depth knowledge of industry and business,
coupled with its skills and understanding of leading software suites such as
Oracle, Microsoft and SAP ensures its solutions and services deliver real
business benefits. The group prides itself on the quality of its service, which
leads to strong customer relationships and high retention rates.

About Towergate Partnership Ltd

Towergate Partnership is Europe's largest independently owned insurance
intermediary controlling more than #1.5bn of gross written premium (latest
accounts).

Towergate was established in 1997 to provide insurance in niche markets ranging
from holiday homes to cherished cars. Having expanded and broadened their
products range to over 200 - the widest range of specialist and traditional
products in the UK market.

Towergate is now Europe's largest independently owned insurance intermediary.
With over 3500 committed staff operating out of 100 UK offices. Towergate's
reputation for innovation, progression and dynamism is backed up by recognition
from the Sunday Times as a Profit Track 100 company.

[marben100] 28/9/2007 13:25

Your wish is my command :0)...

Maxima is an acquisitive, profitable and free-cashflow generative IT service provider. My own view is that it is an interesting GARP investment and I have written up details most recently on the GARP board, here: .

Introduction

Hmmmm... if I didn't already know and have confidence in the Chief Executive of this company, I would be rather reluctant to invest in them. I am disappointed to have to report that they seem to have grown somewhat "unfriendly" towards private investors – this generally puts me off investing. I say this for two reasons: firstly, on 1t May I requested a copy of the analyst presentation delivered after the acquisition of 3net and have not, to this date, had a response to my request (perhaps my fault for not chasing it). More significantly, it is not usually a problem for PIs to gain admittance to AGMs, whether they are shareholders or not, in my experience. On this occasion, however, I know of another Fool who is not shareholder that wanted to attend and was informed by Olswang's (Maxima's legal advisers), where the meeting was hosted, that only shareholders would be allowed to attend. I raised this matter with Maxima's CEO (Kelvin Harrison) but despite my protestations, he remained adamant that the meeting was "not a free for all" and only open to shareholders. He argued that anyone interested only had to purchase a single share to gain admittance. He also stated that the directors would be happy to answer questions from PIs. I certainly found Linda Andrews, FD, to be very helpful in answering some queries I had recently concerning deferred taxation when the prelims were released. I know that Kelvin can be a bit of a stickler for procedure (which, IMO, is actually a strength in managing IT businesses) – perhaps it's a hangover from his early career with the MoD. OTOH perhaps the company is now sufficiently confident of its institutional support that it no longer feels it needs to go out of its way to please PIs?

Oh well, having got my rant out of the way, the meeting actually proved rather useful and I felt that I got honest and open answers to my questions.

The Meeting
The meeting itself was scheduled for the rather shareholder unfriendly time of 9am, in Central London. That meant that due to the vagaries of the London Underground I had to walk from Kings Cross and arrived a few minutes late. Fortunately the Chairman was also late, so I did not miss the start of the meeting. All directors except Jeremy Prescott attended (I note that he has now retired, ). I think I was the only PI present and mine were the only questions.

Formalities were dealt with and then questions were taken. There was no AGM statement (I guess we'll have to wait for a trading statement, likely in early December, for a formal progress update). All resolutions were passed. I note that resolution 8 disapplies pre-emption rights to a larger-than-usual number of shares, i.e. 10m representing 40% of currently issued share capital. Given Maxima's acquisitive strategy, however, I can understand that the directors require flexibility in share issuance to pursue that strategy effectively and I do not have a problem with this authority.


Formal Questions
Q1. Based on note 7 of the accounts (annual report can be downloaded here: ), I observe that the average cost per staff member has risen from £41.8K to £50.3K, representing an increase of over 20%. What is the reason for this?

A1. Largely a result of acquisitions. Some recent acquisitions have included higher grade staff and are also in locations where salaries are higher than Maxima's average. The average salary increase for existing staff was 4.1%.

I went on to ask whether these salary differentials may cause morale problems. Kelvin indicated that it was issue that Maxima was concerned about but that no problems had arisen so far. Staff locations largely justify this differential, e.g. staff based in Glasgow would not expect to earn as much as staff based in London.

Q2. Note 30 of the accounts states that the Directors do not believe that conditions relating to £325K of earn out relating to the QED acquisition will not be met. What targets are likely to be missed to cause this view?

A2. This earn-out element is triggered when the volume of business with a previously existing client of QED's increases to a certain level within a certain timeframe and the Board does not believe that, whilst sales to that client have grown, they will reach the stipulated level. Kelvin went on to add (as he has mentioned before) that Maxima tries to avoid earn-out clauses in acquisition agreements. They are, however, sometimes used where necessary to break a deadlock in negotiations. In all cases where Maxima has agreed to earn outs, it has insisted that it retains complete management authority and flexibility over the acquired business.

Q3. Do you envisage any difficulty raising debt to finance future acquisitions, in the light of the credit squeeze?

A3. Kelvin advised that Maxima had met with its bankers (Barclays) just last week, to discuss this very issue. Barclays advised that there had been no change in credit policy/terms nor in rates it would charge Maxima.

Informal Chat
There was a good opportunity to chat with the directors both before and after the meeting. This proved useful but I missed one rather important trick and failed to ask how ongoing business was progressing – d'oohh (I hadn't digested the absence of an AGM statement)! Nevertheless, I did glean some useful information from chatting to Kelvin.

Before the meeting proper, I asked Kelvin about Touchstone's recent announcement of a Microsoft Dynamics based contract win from Jarvis Plc ( ). Kelvin advised that Maxima had not bid for this contract. He felt that Maxima was not yet ready to take on a Microsoft Dynamics based project of this scale. The company was working on a software module that would be applicable to such projects but it was not yet complete. Based on our shared knowledge of the industry, Kelvin and I agreed that Touchstone may have "bitten off more than they can chew" with this project, being larger than the scale of work TSE were used to dealing with. I must admit that I have recently disposed of my Touchstone holding due to my concerns about the increased levels of risk inherent in the work that they are now taking on. My personal opinion is that Kelvin/Maxima's strategy is more prudent and lower risk to shareholders – which may, superficially, seem surprising given that higher rate of growth Maxima has achieved through successful acquisitions.

[Side note: when Kelvin says that Maxima is "not yet" ready to take on major projects like this, those outside the IT industry might view this negatively. My own interpretation, as an ex-professional in that industry, is that to undertake such work successfully, you need a "large projects" culture and expertise within the contracted company. It is best to grow stepwise into projects of such scale, otherwise lessons tend to be learnt the hard way, which does not improve the bottom line.]

After the meeting, we first discussed the "credit squeeze" issue a bit further, in the light of an article that I'd read in today's FT on the way down to the meeting:

Bank fears squeeze on companies
Evidence that the credit squeeze will hurt the UK economy emerged yesterday when a Bank of England survey showed companies were likely to be hit hard by higher borrowing costs. This was followed by one of Britain's biggest housebuilders reporting plummeting sales in the wake of the Northern Rock crisis...

...The survey said lenders "expected recent market developments to reduce significantly their capacity to extend corporate credit over the next three months".

A large majority of lenders also expected to tighten "price and non-price terms on loans to the corporate sector"...

We agreed that despite last week's meeting between Maxima and its bankers it was possible that high level changes in bank policy may not yet have flowed down to more junior managers. Kelvin did, however, emphasise that Maxima was viewed as a low risk borrower and hence obtained favourable terms (interest cover for existing debts was > 10x, based on pretax earnings, in the last annual report and gearing is low).

We also agreed that the tightening credit environment could work in Maxima's favour. Kelvin pointed out that poorly financed acquisition targets might show an increased keenness to conclude deals. Also, competition from other potential acquirers might be reduced, improving the terms Maxima was able to obtain.

I asked about the acquisition pipeline. Kelvin advised that due diligence was NOT currently in progress on any potential acquisitions but that discussions were under way. It is unlikely that any further acquisitions will be announced in the first half of this financial year (ending 30th November). There were, however, possibilities for the second half. Kelvin confirmed that with 5 acquisitions within the last 12 months, he was focussed on ensuring that those acquisitions were successfully integrated into the group.

Conclusions
I did not get quite as much out of the meeting as I should have done. In particular I have not formed a clear impression of how the business is progressing currently, though I have no reason to believe there will be any problems in this half. Given the remarks concerning the acquisition pipeline, it seems unlikely that there will be any significant announcements before the next trading statement, likely in December. As a result, I see no reason for the share price to move upwards significantly in the intervening period. OTOH, if we get the usual "October blues" and increasing fears of a UK recession, the market might get hit generally. I currently have a half-sized position in Maxima. My inclination is to leave that and monitor developments. Should there be a significant drop in the share price, for no clear reason, I might use that as an opportunity to top up. Otherwise, if the share price remains reasonable, I may top up closer to the trading update. Taking a long-term view, I am very comfortable with my holding and like Maxima's strategy and execution to date a lot.

As ever, E&OE, DYOR!

Regards,

Mark

[currypasty] 27/9/2007 16:58

still here... can you cut and paste it here ?

[marben100] 27/9/2007 16:38

Helloo??!! Is anybody here? [all a bit quiet :0)] I attended today's AGM and have posted my report here:

Cheers,

Mark

[marben100] 29/8/2007 09:12

I have posted an article on Maxima in "the other place" this morning: