Patsystems Share Discussion Threads

[bbd2] 18/2/2009 13:57

Well I must say I rather enjoy access to a bit of "Brazilian" now and again ! lol

[bg23] 18/2/2009 11:20

i agree that ION wouldn't have any problems raising cash. note fidessa's results were well improved, citing longterm contracts with customers etc - exactly the same as ION's R&N purchase last summer et al.

it comes down to do they want to carry forward ?

personally i think they continue to cherish the platform and the listing that PATS could provide. however, no-one worth their salt is going to look to carry out a listing in these markets, a listing rather than an ipo would appear favourite, but i don't think they are in a hurry. whilst valuation of an asset might be useful to the vc partner, its not something that is going to create real value in excess of their value estimate - probably.

there may be another potential buyer out there, but i don't see anyone obvious on the horizon.

so i think there will be continued stalemate re the shares.

its all down to the management and what they can do in tihs environment in terms of sales and growth as well as any small bolt ons that might add to the value of the business.

one last question might be what the ceo, webber, feels he can recommend - i'll give him his due, at least he is backing his management ability with share purchases, a total of 50k since the numbers, it would be pleasant to see some of the rest of the board doing the same. given that webber paid something like a high of 29p, i think he'd be a little reluctant to crystalise a loss on his shareholding if a cheeky offer came in, although i am sure he is protected with a few share options !

[maddox] 18/2/2009 10:44

Bugs/eacn,

I agree with eacn, TA Associates certainly have more than sufficient funds to finance ION's purchase of PTS. The question is whether they see better value elsewhere in their portfolio or in the market to invest? ...or indeed do they wish to keep their cash? So the 'do something' options are as I outlined above.

Also, if I was another firm interested in PTS I wouldn't necessarily see ION's holding as an obstacle but they can effectively dictate the offer price.

[eacn] 17/2/2009 13:20

bugs bunny,

TA Associates who bank roll ION, have plenty of firepower in reserve - witness their recent refinancing of Weather Investments. TA have circa $12B under management.

[bugs bunny] 17/2/2009 10:31

Just a thought.....ION could be in a situation where they may not have money line to launch a takeover of PTS now.

[maddox] 16/2/2009 22:21

The question remains - what are ION's intentions? They have been a shareholder for some time having built up a 29.06% stake just below that requiring them to make a full offer. Their last purchase was in June 2008 and I estimate that their average purchase price is approx 25.45p per share.

They have been pretty shrewd in their purchases. If they plan to make a takeover move I predict they'll wait until this June or later when they can pitch it below their current floor of 27.75p.

On the otherhand, if they no longer intend to bid themselves I suspect that they will be reluctant to take a price below their 25.45p average price paid.

Regards, Maddox

[bugs bunny] 16/2/2009 15:43

Patsystems plc ("Patsystems" or "the Company")

Directors' Share Dealings

Patsystems was advised on 13 February 2009 that David Webber, CEO, acquired
25,387 ordinary shares of 1p each in the Company ("Ordinary Shares") on Friday
13 February 2009 at 19.5 pence each.

Mr Webber now has a beneficial interest in 850,387 Ordinary Shares representing
approximately 0.47 per cent. of the entire issued ordinary share capital of
Patsystems.

[eacn] 12/2/2009 17:55

turtle head, Seymour Pierce remain committed to their target of 28p.

[bg23] 12/2/2009 08:25

it would appear that the market has undersetimated the company.

as per above, there are no sellers of stock, so no balancing trades for the market makers.

someone is being a little squeezed - or is there a buyer that can't get in?

[turtle head] 11/2/2009 12:49

Would be nice to see a broker's note with a target share price to justify our continuing patience with this one, especially if the number started with a 3..... is that too much to ask?

[bg23] 11/2/2009 12:42

aside from the above, column inches gained by the public relations company on behalf of pats appears to be nigh on non existant !!

why do they continue to pay these people.

i though the results were pretty good. seymours suggested that excluding the currency gains, the results had beaten their forecast.

no debt, recurring rev with sales pipeline, dividend and relatively low pe.

on the downside, a large incumbent shareholder who will deter other interested parties

i didn't notice any real trade sizes going through. so perhaps the actual trades we have seen yesterday and today are genuine interest rather than the normal shuffling between market makers.

unfortunately, i haven't seen any large trade either, which seems par for the course. no new sizeable investors and the existing holders hold !

still nice bounce in this environment.

i supppose its only 12 months to the next update, we can expect a lack of announcements between now and then if the past year is anything to go by!!

[max euwe] 11/2/2009 00:23

From yahoo finance:

08:22GMT 10Feb2009-Patsystems (LSE: PTS.L - news) up as results beat expectations
-------------------------------------------------------------
Shares in Patsystems rise 12.5 percent after the provider of electronic trading and exchange systems beats market expectations with a 23 percent increase in pretax profit and says it remains debt free and has a strong sales pipeline for 2009.
Analysts at Seymour Pierce say the robust growth delivered by the group -- despite the economic uncertainty -- is down to the strength of its product portfolio and good sales execution.
'The shares are cheap ... this highly cash generative company is significantly undervalued at the current price,' they say.

[eacn] 10/2/2009 16:30

While the results were better than I had expected on an adjusted basis, without the forex gains the figures might have been very different. The good news is that with sterling likely to remain 'weak' relative to the dollar for the foreseeable future, forex gains should also make a positive contribution to the results for 2009.

On a positive note, recurring revenues and cash provide a very solid platform, and it is evident that the product continues to command a loyal and growing following.

On the negative side, increased costs continue to undermine performance of this share, and suggest that without economies of scale PTS is not going to deliver the sort of net margins generated by competitors in the sector.

The CEO is clearly minded to gain these economies through M&A, but whether that will suit ION remains a moot point. Currently the company does not have the authority / means for anything but a minor acquisition.

[turtle head] 10/2/2009 11:05

Interesting to see if the broker can follow these up with a positive note AND get some institutional interest in this stock. It feels like the management team have done an excellent job in managing the company, now the broker needs to pull its weight and get some positive momentum into the share price. If they can't off the back of this positive statement then they need to be replaced for somebody competent.

[geoffg] 10/2/2009 10:40

Yes, an initial scan of these results cheers me no end. I just wish ION didn't hold quite so many shares though. Still overall, considering current climate, I see these as really quite positive.

[dm1066] 10/2/2009 08:22

Just going through the results now - headline numbers look good, particularly pleased to be increasing the cash balance in this market. Forward looking statements are pretty bullish too.

[pictureframe] 10/2/2009 07:57

sold set of results but with a market cap of £23 million fairly priced imo

[dealit] 08/2/2009 14:26

I held this stock some time ago, have just decided to buy again at this price. They still look a solid stock and feel that the results will hold no shocks IMHO.

[bbd2] 05/2/2009 14:11

The article in full:

Patsystems

Patsystems is a very different business from Kalahari but its chief executive is also unusually confident about 2009 and beyond. David Webber was brought into this company three years ago with a mandate to turn it round. So far, he is doing an extremely sound job.


The company provides software for derivatives traders and its clients include such banks as Goldman Sachs, Citigroup and Morgan Stanley. Derivatives allow traders to carry out complex financial deals and derivatives trading becomes particularly popular when markets are volatile, as they are now.

Patsystems offers banks software, which allows traders to carry out their business and provides links to 60 financial exchanges around the world. The company also provides risk software which allows banks to assess how much risk their traders are taking on at any given time.

The system is particularly useful because it provides risk information in real time, rather than at the end of the working day, so banks can stop their traders dealing if they are taking on too much risk.

Demand for this product has been growing and its appeal is expected only to increase in the current environment. Webber confidently believes the risk system business will grow by 40% to 50% this year alone.

The company reports figures for 2008 next Thursday and brokers forecast profits before tax of £3m with a dividend of 0.4p. Profits for 2009 are expected to come in at almost £4m with a dividend of 0.5p.

Patsystems is highly cash-generative because customers tend to take on contracts of at least a year and they pay in advance. Around 80% of revenues are recurring and the company already has a robust order book for 2009.

Revenue this year is expected to be approximately £20m but Webber is optimistic that he can build this business into a £100m turnover operation over the next few years.

His track record inspires confidence - he built up a banking software business earlier this decade before selling out at a very large premium.

Midas verdict: Patsystems shares are trading at 13.75p, having halved in recent months on the back of turmoil in the financial markets. Supporters of the stock believe this reaction misunderstands what the company is all about. This company is not in debt. It is keen to grow organically and through acquisition and it is well placed to do so. Buy.

[bg23] 05/2/2009 12:34

thanks DM, wondered myself.

i would not think that the company would co-operate with a piece like that if there were outstanding issues/concerns etc re the numbers.

it reads like co-operation was forthcoming.

expect the normal 09 business caveats with the results- challenging etc, but nice to (know)/think the results are as expected. with possibility of +40% growth in the risk tool. 0.4p div = 2.86% yield.

100m in a few years !!! maybe he thinks he's going to be buying ION ?

[dm1066] 05/2/2009 12:08

Wondered what the flurry of small buys were this morning. Piece in the mail today......



rgds

dm

[dm1066] 29/1/2009 16:06

Agree bg23, as far as I can see, the last ION purchase was announced early June08 so they are no longer tied into any minimum offer price. Can't really see them rushing anything in the current environment, especially since they effectively have a blocking stake should anyone else have been considering a cheeky bid.

[bg23] 29/1/2009 12:56

i don't think there is anything going on. the market is digesting a tiny bit of business, there has been little trade in the equity this year. positions are being shuffled ahead of the results. down is easy in this type of market, up needs a story or rumour and i am not sure there are to many trading longs around, only 'holders' and they don't want to add until they hear the current story

in addition to the points that i made in my post yesterday, i think the most important will be that the company is carrying no debt, perhaps if they also raise the dividend a little then there will be some upside room.

i was thinking, although i am not sure of the regulations or how institutional shareholders would view it, that we wouldn't be hearing from ION until there has been a six month lapse since their last purchase, i think that they could then come in with a cheeky offer, which, in this sort of market environment might swing the larger holders. as i said, i'm not sure what the big guys might say, but cash is king in this market

otherwise, i hear that ION are IONising rolfe and nolan and i am sure they are pretty relaxed about making any overtures at the moment.

[dm1066] 29/1/2009 12:11

Have been thinking along the same lines. I notice that they issued a warning about 2 months before the interims were published so I'm hoping that when it comes to the finals, no news is good news. Certainly the level of recurring revenues is cause for comfort (although I used to think that the ION stake would put a floor under the share price in the 20s so what do I know!).

Seems to be a bit more activity over the last couple of days. Anyone hear any rumblings?

rgds

dm

[bg23] 28/1/2009 18:04

hi eacn,

not been paying to much attention. there has been no news recently and given the smacking that the markets and mini caps have been recieving i'm nnot surprised to see the move to the lows. although i think its not warranted, i will sound like a broken record if i go on!

haven't heard anything of late. the company stated that the lehmans collapse saw clents coming onto the system via other houses.

$ weakness would have been to the benefit of the company, although previously stated that currency earnings were to be 75% hedged. signings during the year that were announced would have been coming on towards the end of the year for greater reccurring revenues.

if there were any lower outlook we should have heard about it already.

they will no doubt say that the outlook is challenging - normal corporate speak for 2009.

will have to wait and see i suppose. but quietly confident i think