Microgen Share Discussion Threads

[greenroom78] 19/2/2010 11:25

I am wondering if the cash pile will be used for acquisitions in the future as opposed to MCGN being bid for.

Rivaldo - where have you moved to from here?

[rivaldo] 19/2/2010 11:17

Greenroom78, thx - appreciated.

The results were decent, but not as good as I'd hoped, and I suspect until something definitive happens with the cash pile the share price may stagnate or slip back. And holding merely in the hope of a bid is definitely not the way to go imo.

The company remains on my watch list though.

[apad] 18/2/2010 15:36

Who are their competitors?

[wjccghcc] 18/2/2010 14:45

Or they get bid for. With the billing services disposed of, 22mm of cash on the balance sheet, very strong cash generation and Aptitude breaking into profit, it would be a good time to pounce.

[truffle] 18/2/2010 09:41

Thought these were pretty decent results by any standards, and probably puts a base level under the price.
The re-rating could come if MCGN is admitted to the FTSE All share index in the near future.

[greenroom78] 18/2/2010 09:05

Thanks Rivaldo, good luck to you and well done on your profit.

[rivaldo] 18/2/2010 09:00

I've sold. I was expecting better than 5p adjusted EPS. Even stripping out £22m net cash the P/E is reasonable value, but not as good as I'd hoped. Cash flow is excellent mind you, but on the other hand there haven't been any major contract wins annnounced for some time and I'm not sure how quickly ADAPT will progress in terms of profitability.

In addition, MCGN is pretty illiquid for a £75m m/cap, so I thought I'd take advantage of the early strength to sell into it and take an excellent profit. All tax-free too :o))

I just can't see a trigger for a decent re-rating from here (unless they announce another acquisition pronto), and I just get the feeling that I may get the chance to buy back in down the line at a similar price to today's if I decide to. Good luck all.

[gswredland] 17/2/2010 13:26

I'd agree Rivaldo!

[rivaldo] 17/2/2010 11:18

Perhaps more the case that investors realise the results are tomorrow and want to get in beforehand imo.

[greenroom78] 17/2/2010 10:30

The drop looks like it has been healthy - stimulated some interest again.

[darola] 17/2/2010 10:10

Onwards and upwards to the results!! ; )

[greenroom78] 16/2/2010 23:06

Thanks Rivaldo - Yes ADVFN monitor, have spotted on the BB header and also on link through shareprice.co.uk on Iphone good job it wasn't anything important as ADVFN is first port of call.

[rivaldo] 16/2/2010 22:36

Greenroom78, just look at the thread header post, or on investegate.com, or on the LSE's web site...don't just trust ADVFn (or whomever your monitor is with)...

[greenroom78] 16/2/2010 22:02

Interesting. I haven't got an 'A' on my monitor highlighting the RNS being available - any reason for this?

[rivaldo] 16/2/2010 18:58

Results out this Thursday per tonight's RNS.

Note that we should be pretty certain the results are good given firstly the lack of detail tonight and secondly the last trading statement:

"In summary, the Board is pleased that the Group is on track to exceed the Board's current expectations, which have, despite the economic environment, already been increased this year. The success in 2009 also provides an excellent platform for 2010 and the Group's strong balance sheet, further enhanced by the proposed disposal of BSD, provides the Board with the resources to consider acquisition opportunities if appropriate."

[greenroom78] 16/2/2010 10:13

Are we seeing a few impatient people heading for the door? Final results were issued on 24th Feb last year so should hear something from MCGN soon.

[rivaldo] 02/2/2010 20:00

Anyone would think shares rose every day and didn't need to consolidate in new trading ranges :o))

I like this news - MCGN achieving a "first" and expanding in the digital media sector:



"2 February 2010
Microgen Named as First Technology Company to join Digital Data Exchange Board
Appointment signifies DDEX's growing influence and Microgen's commitment to the Digital Media Supply Chain

London, 2 February, 2010 – Microgen Aptitude Solutions Ltd (Microgen) today announced that it has been accepted as a Charter Member of the Digital Data Exchange (DDEX), a standards organisation that is working to improve information sharing efficiency for the digital music industry. Microgen is the first pure technology application service provider to gain representation on the board, joining the existing Charter Members, which include digital music service providers, music content providers and music rights societies.

As the demand and diversity of digital media content increases globally, digital content distributors, media content and rights owners have to exchange vast volumes of increasingly complex data, in varying formats. Every time media content is exploited, multiple stakeholders, from composers and artists to collective rights societies and content producers, require payments according to pre-existing contracts.

Currently, management of the data is a labour-intensive, error-prone process that creates a real risk for lost revenue. To streamline the Digital Supply Chain process, DDEX is developing both a single set of standard XML messages for communicating complex information about electronic music usage and a set of choreographies that define how and when these messages are exchanged.

Microgen, whose technology helps some of the world's biggest digital music and download companies manage complex rights management and royalties payment models, will bring this experience and expertise to its role on the
DDEX board.

"Microgen has a track record of delivering successful enterprise class projects
where complexity and high performance are key factors. Having utilised
Microgen Aptitude (Microgen's flagship Business Process Management Suite)
and Microgen Accounting Hub in some of the world's largest financial
Institutions, Microgen has the right tool set and delivery capability to assist
through out the digital media supply chain sector" said Martin Redington,
Microgen Director of Product Management and representative on the DDEX board.

"We are pleased to welcome Microgen as the first pure technology application
service provider to join the board of DDEX," said Kirit Joshi of Sony Music and
Chair of DDEX. "Microgen's strategic focus – providing technology solutions
that give clients greater visibility, control and agility over information
associated with rights, royalties and contracts – aligns well with the strategic aims of DDEX, and we look forward to working together as members start to implement our standards.

"Literally every second, music companies manage massive amounts of digital
transaction data, which presents a real risk of significantly increased costs
due to manual intervention, investigation and correction." said Microgen Chief
Operating Officer David Sherriff. "We are extremely pleased to join an
organisation whose standards will help support fewer errors, better reporting
and stronger revenue management across the global digital media supply
chain.""

[greenroom78] 01/2/2010 15:35

There does seem to be a stand off at the moment between buyers and sellers. I expect we may see the volume return into February as news begins to flow again ahead of the results.

[darola] 01/2/2010 15:28

Anybody would think the shares have been suspended!!

[truffle] 31/1/2010 11:07

Has a date been fixed for the results yet?

[rivaldo] 26/1/2010 07:23

Good to see you're so positive Truffle. It's just a question of patience, which has served investors here well to date.

Positive stuff from Arbuthnot yesterday via UK-Analyst:

"IT services firm Microgen (MCGN) was described by Arbuthnot as its "top pick" for the sector, having had a strong third quarter; the broker expects a good finish to the year. The disposal of the Billing Services division has allowed the company to focus on its Microgen Aptitude Solutions business, which provides data management. Microgen's Financial Systems business, though affected by the economic downturn, has a high level of recurring revenue. Arbuthnot said that it would "not be surprised" if some new contract wins were announced if the move out of recession continues. Increasing earnings, progressive expansion and new contract wins are expected to drive the company forward in 2010. The 'buy' stance and 100p target price was left unchanged. Microgen shares were unmoved at 89p."

[truffle] 21/1/2010 06:33

On the contrary, actually, as am very confident about the prospects for this company.
However, I find share price performance disappointingly slow in some respects.
Failure to get in the FTSE all share index for one, apparently on a free float technicality, and I suspect the company is not on the wider radar of some investors, for another.
Also think the strong cash position and good management is simply not being more widely recognised in the form of a much higher share price.

[rivaldo] 20/1/2010 14:13

Truffle, hope you don't mind me saying, but you seem a bit of a nervous investor from your various posts here! MCGN has gone up 120% in just 9 motnhs from the lows - nothing goes up in a straight line forever. I suggest you relax and re-read MCGN's recent trading statement from only just over 2 months ago :o))



"In summary, the Board is pleased that the Group is on track to exceed the Board's current expectations, which have, despite the economic environment, already been increased this year. The success in 2009 also provides an excellent platform for 2010 and the Group's strong balance sheet, further enhanced by the proposed disposal of BSD, provides the Board with the resources to consider acquisition opportunities if appropriate."

[truffle] 20/1/2010 07:56

Thanks, very interesting article.

It would be nice to see some decent upwards movement here for a change, as it has all gone very quiet recently. Testing the 100p level would be a good objective.
Presumably the company is still doing okay?

[rivaldo] 19/1/2010 09:41

Interesting new article - I particularly like the opportunity to expand into telecoms and government:



"How Is Finance Like Music?
How Is Finance Like Music?
Telecommunications Opportunity
Page 1 of 2
By Tom Groenfeldt

What do an international bank and an online music store have in common?

A very high volume of complicated transactions conducted around the world in multiple currencies, creating an accounting nightmare and making top-to-bottom views extremely difficult. Derivatives increase the complexity, whether they result from a banking operation or a singer covering a popular tune.

Microgen, an English company, has its roots in financial services, especially in global capital markets where firms running large portfolios of derivatives have to account for their value across several centers -- New York, London, Tokyo, and often a few others around Asia and Europe.

A global bank turned to Microgen for its accounting hub, which could sit between front-office transactions and the general ledger in the back office and impose business and accounting rules to provide consistent valuations across the multiple money centers it operated in. To Microgen, it might have been an accounting tool; to Gartner it was a business process management engine that found a spot in the consultancy's treasured upper-right quadrant.

"What differentiates us is that we are data driven and handle high volumes, like 100 million transaction per hour," explained Elizabeth Sipiere, managing director of the banking division at Microgen. The volumes are so high that the company was running out of headroom on Oracle.

At just about that time, a global bank that used both Microgen and Teradata, a data warehousing technology specialist, suggested the two companies work together, which they are now doing with several clients while they develop a fully integrated approach. The joint solution is particularly valuable where a transaction takes a couple of hops between origination and final booking and accounting.

Take a mortgage, says Jeff Lovett, director of finance and performance management at Miamisburg, Ohio-based Teradata. A single payment has to be broken into principal, interest and escrow. A bank will want to keep track of the original payment plus the aggregation of each payment stream, and do it for millions of mortgages. Using Microgen and Teradata, a bank can break apart each payment, store the data on principal payments, interest earnings and escrow funds in a data warehouse, and have the aggregated values to work with in sub-ledgers while feeding the totals into its general ledger. If an analyst notices a change in payment patterns, he can drill into the data back to the individual transaction level.

Or look at an online music store. It will probably generate several million transactions a day in multiple currencies around the world. With Microgen's accounting hub, a uniform set of business rules is maintained and the results can be reported in any GAAP or IFRS (International Finance Reporting Standards) formats.

Music payments are complicated on the vendor side too -- the flow of payments will go to a publisher, an agent, and might be divided between an artist and the writer of the song covered. It is not unheard of for an artist to dispute royalty payments and demand several years' worth of documentation, said Sipiere. To further complicate accounting, mobile phone companies often provide a number of free downloads as part of their marketing. If Nokia offers 10 free songs and a customer has downloaded just 3, it has to show the number used and the number left, potentially multiplied by millions of promotions.

Before Teradata began talks with Microgen, an insurance company customer hand-coded an accounting engine for the data warehouse. The CEO was concerned that if a regulator asked to see a comparison of unpaid claims on the balance sheet against data in the claims administration system, the company wouldn't be able to produce a clear answer.

The insurer could calculate positions on a macro level, but not in more detail, said Lovett. With the combination of Microgen and Teradata, a company will have transactions, business rules, data and accounting all in one place and can then roll the information into an ERP system's general ledger while maintaining the full transaction details.

Telecommunications Opportunity

He expects that telecommunications firms will be the next big opportunity as they cope with multiple payment plans, plus a wide variety of sales such as video on demand and ring tones. When mobile phones are used as payment devices at counters and vending machines, the complexity will only increase.

Faster change will be good for the two companies, he added.

"When things are static you can live with the current environment. You occasionally add a new product, but when the accounting treatments are dynamic and the business models and types of transactions are dynamic, the current way of doing business and accounting for it will just be untenable."

The financial crisis also showed that banks, and many other corporations, did not have the tools to look down to the transaction level of the business quickly to identify problems. "We know what is happening in our book of business but we can't readily discern where or why," they realized, according to Lovett. The ERP system gave total numbers, but not the detailed view required for action.

"Manufacturers were asking if they had a good grasp of where their problems were the worst and where they were just beginning to see some softness in the market," he said.

Government also has high potential because a large agency can have six to eight hops from budget to balance sheet. Many federal agencies have been unable to achieve a clean audit because they can't show a complete picture of their finances from the agency's books to its records with the U.S. Treasury. Given that a budget item may be spread over years and invoices from thousands of vendors may trickle in over the program's life and beyond, that shouldn't be too surprising.

"Being able to manage and maintain the balance and control process is a nightmare because the numbers are so large and they have such high volumes" said Lovett. "We did a demo for one agency and they said they had been looking for something like this for years.""