Maxima Holdings Share Discussion Threads

[tsmith2] 05/2/2008 07:20

Not a bad set


Cenkos have EPS of 26p for the current year and 30p for next year even on a PE of 12 that would give us a short term target of £3 and 12 mths tarhet of £3.6!





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

Interim results for the six months ended 30 November 2007

Maxima Holdings plc (AIM:MXM), the acquisitive IT solutions and managed services
group, is pleased to announce its unaudited interim results for the six months
ended 30 November 2007.

Financial Highlights:

* Revenue up 62% to £21.1 million (H1 2007: £13.0 million)
* Recurring revenues represent 56% of total revenues
* Operating profit* up 74% to £4.0million (H1 2007 £2.3million)
* Profit before tax up 43% to £2.0 million (H1 2007 £1.4 million)
* Adjusted*, fully diluted earnings per share up 16% to 10.2p (H1 2007:
8.8p)
* Dividend of 2.0p per share (H1 2007: 1.8p) - in line with progressive
dividend policy

*pre-amortisation of intangibles, share based payments and exceptional charges

Operational Highlights:

* Appointment of Chief Operations Officer, Boris Huard
* 35 new clients won during the period, across all business areas
* Good progress on our Microsoft Dynamics AX solution for the construction
and facilities management sector with 8 sales to date
* Acquisition in July 2007 of Centric Networks Ltd, Infrastructure Managed
Services provider for £6.4million (gross maximum)


Commenting on the results, Mike Brooke, Chairman, said: "The business has always
exhibited seasonality, resulting in a stronger second half. This trend continues
and our second half will also benefit from contributions from the acquisitions
made in July and December 2007. As announced in the trading update issued on 28
January 2008, we have experienced an increased level of caution in our markets,
however we continue to win new business across the group. We are confident that
the diversity and spread of our offerings and client base, together with our
strong operational management and sales organisation, position us well. Our high
level of cash conversion and recurring revenues also give us the robust
financial foundations from which to achieve our objectives for the future."

[tsmith2] 29/1/2008 16:14

cenkos

Despite this set back the company will still exhibit earnings growth and grow profits by a
minimum of 56% this year, with profits and earnings expected to grow at least 14% next
year. It has very good relationships with its customer base and a clear growth strategy. Its
pipeline of acquisition opportunities remains strong . On a current year EV/EBIDA ratio of
4.6x and a P/E of 6.5x the shares are undervalued. BUY.

[tsmith2] 28/1/2008 22:14

I think TW and the brokers would have spoke to the company before putting out revised forecasts and if you were the director you would surely be conservative and cautious given sentiment (incidentally that will also pave the way for cheaper director buying and company share buy backs as the lowered forecasts will hit prices hard in the current swing of things).

I would not at all be surprised to see the directors buying on the day of the results something they can't do at the moment as the co is in a close period.

so a PE of 6 is on conservative forecasts.

[dibbs] 28/1/2008 21:33

Just passing through, I have no position so no agenda. The percentage fall today is pretty typical of any company issuing a profit warning or negatively tinged trading statement in the current market climate.

I find it hard to see how TW can justify a buy status given that the company is already feeling the pinch, especially as it is still early days in this period of slowing economic activity.

TW assumes that this is a blip and that the company will now perform as earlier forecasts expected. I wonder how, given that this is not just the delay or cancellation of one large contract but also reports of more general uncertanties and delays. For me this warning paves the way perfectly for another as they have not really tried to drawn any kind of line under this current set of problems.

Buying on the basis of low forecast PE ratios applied to companies issuing profit warnings is hardly a good way to make money IMO.

All IMO of course. Commiserations to those caught today.

Dibbs

[tole] 28/1/2008 20:39

Also noticed an update on t1ps

"At 164.5p on a current year price earnings ratio of 6.4 falling to 5.9 the growth Maxima offers is far from discounted."

"Average down and buy"

Actually one thing they point out which might tempt me keep a close is "Company Buy Backs" - Should be something they might well consider - and could well underpin the price.

[tole] 28/1/2008 20:34

LoL - Not tempted here i'm afraid quite yet - just like to keep the thread up to date so is easy to look back. Have been an avid follower here over the years as orginally liked their growth strategy. Always held great appreciation to Linda Andrews who had been very helpful with answering any queries I had over the years. One factor that always attracts to me to stay with companies is also how helpful their FD's can be.

Think you'd be right regards the rating not so much as only a few months back - but not currently in my view. All current sector ratings are forecasting a sharp slowdown in organic growth imv. Think Marbens post on TMF sums it up quite well.



Not knocking the company - as am sure they'll pull it out the bag - just might take some time thats all.

[tsmith2] 28/1/2008 20:18

looks like tole trying to buy in

trading on acurrent year PE of 6, growing business and cash generative - not at all demanding even a PE of 9-10 would be a fairer reflection which gives a 50%-66% upside.

[tole] 28/1/2008 19:30

Agreed - one to avoid for the time being.

Heres the update from GCI.



Maxima - HOLD
Companies: MXM
28/01/2008

Buy-and-build software group Maxima has lost a third of its value after admitting a number of large contracts were cancelled and full year results to May will miss forecasts.

Management attributed the slippages, which occurred in the latter months of the half-year, to a 'vendor consolidation exercise' that saw its work transferred to a major rival. Despite strenuous efforts to make up for this loss, the broader market uncertainties have made it difficult to counteract and have seen client delays elsewhere in the business as well.

So even though revenues, profits and earnings per share are expected to be 'well ahead' of the first half of the prior year, Maxima now expects results for the full year to arrive below market expectations, 'although still showing growth in revenues, profits and earnings' on the comparative period.

Management remains confident despite the setback, with the company still expanding and on course to show growth this year. House broker Cenkos reminds that Maxima 'has very good relationships with its customer base and a clear growth strategy'. Independent broker Seymour Pierce has cut its earnings forecasts by 9% and pencils in 25.6p for the full year and 27.7p for 2009.

The shares, recommended originally at 161p, had more than doubled to 329.5p by August last and in October we issued a timely suggestion to reduce shareholdings ahead of a drop to 240p in November and further recent falls. Maxima has hitherto proved a well run and reliable business and if you have reduced your exposure then sit tight, though it might take time before faith is restored. For the time being, newcomers should steer clear

Also commentary from bloomberg.





And FT.



"Seymour Pierce cut its 2008 revenue estimates by 4 per cent, from £50m to £48m in response to the warning."

"Derek Brown of Seymour Pierce added that the update threw Maxima's aggressive acquisition strategy into doubt."

"Linda Andrews, group finance director, said the contract losses were a "large" blow to the company and added that replacing them had been difficult."

"The client chose to combine a number of smaller contracts into a single tender which was awarded to a larger rival, Ms Andrews said."

"Ms Andrews said revenues were also likely to be affected by broader economic uncertainties in 2008."

"In the current market climate companies are concentrating on making sure their own business is doing okay and putting in large applications tends to be a distraction from that," she said."

"As a result, Ms Andrews said, some companies had chosen to delay implementing major software upgrades"

[slapdash] 28/1/2008 17:17

I think not necessarily an over-reaction

you have to bear in mind current market conditions...

if good stocks which have positive trading updates are on say 7X then ones which have negative trading updates should be on a big discount to these...

i.e. look at TMN... no poor trading update but on about 6-5X.... just one example...

so would I buy Maxima... No.... prefer to buy the guys who haven't lost customers and can accurately forecast profits/sales... this will be how the rest of the market thinks..

so a proper reaction..

Slap

[tsmith2] 28/1/2008 16:55

a huge over reaction

[powwow] 28/1/2008 16:52

I bet all the companies they have acquired will be peed of at this latest fall, esp if they have shares at 2.60+, now worth 40% less

[tole] 28/1/2008 15:33

Maxima Holdings downgraded to "underperform"

Monday, January 28, 2008 8:48:20 AM ET
Seymour Pierce

LONDON, January 28 (newratings.com) - Analysts at Seymour Pierce downgrade Maxima Holdings Plc (ticker: VL7) from "buy" to "underperform."

In a research note published this morning, the analysts mention that the company's 1H performance was adversely impacted by the loss of a major contract. Maxima Holdings' CRM implementations are being delayed on account of the economic uncertainties, the analysts say. There is uncertainty surrounding the company's near-term roll-up strategy, Seymour Pierce adds. Going forward, investors would be concerned regarding visibility into Maxima Holdings' performance in 2H and beyond, according to the analysts.

[powwow] 28/1/2008 13:54

will prob bounce from here as at oct 06 low before it started its uptrend

[powwow] 28/1/2008 13:54

its delayed so most prob a sell first thing.

[tsmith2] 28/1/2008 13:00

5k buy at 180P thats hugely over the bid-offer price?

[powwow] 28/1/2008 10:51

shame to see this fall so much. I'm sure it will now start to upset all the directors or sub companies who have stock rather than cash when they brought the company. Are they saying some of the clients during or after the merger didnt want to renew the contracts? They still have a string pipeline though ?

There have however been planty of stocks falling back to mar 07 share price levels.

[whonosewhy] 28/1/2008 10:08

This was tipped in loads of places - I saw it on III tipped by one of their panel of "Experts"

[slapdash] 28/1/2008 08:38

ok so who tipped this stock.. probably the iNvestors chonricle.... also t1ps.com

why are the tipsters always wrong??

[tsmith2] 28/1/2008 08:14

seymour pierce turn negative

Underperform: whatever the reasons for the warning, this news throws Maxima's roll-up strategy into doubt and will undoubtedly hit the shares hard. We expect it to take time to rebuild shareholder confidence. UNDERPERFORM.

[tole] 28/1/2008 08:01

Glad I held off jumping back in - was always on the cards I suppose.

[marben100] 19/12/2007 09:28

Good grief, it's quiet in here. Just what I like to see on a company thread :0).

Acquisition announced today, in case anyone missed it:

[cockneyrebel] 11/12/2007 17:40

Fall looks in line with the market in general imo - not hard to hunt around and find things off 20-30%.

CR

[powwow] 11/12/2007 15:28

does anyone know when the exercise option dates of the directors re the companies they purchased to date are.. Am wondering if and how many shares have been sold recently to see if the fall was attributed to any of them selling.

[cockneyrebel] 06/12/2007 15:57

ticking up again - that's one horny low imo.

CR