Phoenix It Share Discussion Threads

[tole] 29/1/2008 09:38

Phoenix IT

LogicaCMG's Andy Green is not the only BT alumnus to be trying his hand in the computer services sector. Jeremy Stafford, chief executive-designate of the smaller Phoenix IT – who until last year ran the telecom operator's government services division – is also getting to grips with the City.

Not that yesterday's first outing for Mr Stafford provided too stern a test. Third-quarter revenues were up 90 per cent, reflecting the acquisitions of ICM and Servo, and up 16 per cent on an underlying basis. Meanwhile, operating margins were in line with forecasts. If there was disquiet, it was in the pedestrian like-for-like growth of Phoenix's order book and annualised contract values, of 1 per cent and 5 per cent respectively.

However, with the company describing its new business pipeline as "strong", it is tempting to put an indifferent end to the year down to seasonal effects. Although not immune from an IT slowdown, Phoenix, partly through the provision of emergency back-up services, enjoys a high proportion of recurring revenues and contract lengths of up to five years. Besides, at 249p, down 47 per cent since July, the shares sit at eight times next year's earnings and have already priced in tougher times. Net debt of £114 million, a legacy of ICM, explains part of that slide, but Phoenix's strong cash generation means that it should not be too big a concern: especially given that greater gearing did not stop Northgate Information Solutions from being acquired. Hold.

[tole] 28/1/2008 12:41

Hi Ged - reference to what you said on the FSG thread - did have a few here the other day. Although in the majority of software co's am personally still watching. Market seems to want de-rate these at the moment, although reckon we should start to see some bargains appearing. (If not already). Just reluctant to jump in - especially on small-caps.

Altium released an update here earlier - holding forecasts as is. Pointing out, as is the case in many software co's - that current ratings are forecasting a sharp slowdown in organic growth, though believing that in PNX's case this is unwarranted.

28-Jan-08 Phoenix IT Group PNX Panmure Gordon Buy 250.75p 393.00p - Reiteration



Phoenix IT "buy"
Monday, January 28, 2008 6:49:13 AM ET
Panmure Gordon & Co

LONDON, January 28 (newratings.com) - Analyst George O Connor of Panmure Gordon maintains his "buy" rating on Phoenix IT Group Ltd (ticker: PNX-GBX). The target price is set to 393p.

In a research note published this morning, the analyst mentions that the company has reported its 3Q results in-line with expectations, driven by sustained sales momentum. The integration of Phoenix IT's acquisition of ICM has reached an advanced stage, and the company's new business pipeline and activity levels are robust, the analyst says. The company expects to realize synergy cost savings worth £5 million from the acquisition going forward.

[tole] 24/1/2008 15:38

Somewhat of a bounce today.

[tole] 23/1/2008 16:23

Also this from Panmures the other day -

Phoenix IT "buy"

Wednesday, January 16, 2008 8:14:59 AM ET
Panmure Gordon & Co

LONDON, January 16 (newratings.com) - Analyst George O'Connor of Panmure Gordon maintains his "buy" rating on Phoenix IT Group Ltd (ticker: PNX-GBX). The target price is set to 392p.

In a research note published this morning, the analyst mentions that the company's stock has underperformed the FTSE All Share index by 9.3% over the past one month due to general weakness in the sector. Phoenix IT's operational progress continues to be in-line with expectations, the analyst says

[tole] 23/1/2008 09:21

Update from Altium earlier - summary

Compelling valuation - Following a more than 40% slide in the share price in the past three months, Phoenix shares stand at less than 7.0x March 2009E earnings, with a free cash flow yield of 13% for the same period. Even factoring the group's net debt position of just over £100m, a FY 2009E EV/EBITDA of less than 5x is too low given the high level of recurring revenue and more than 100% cash conversion.

Although we have reduced our target price from 500p to 400p (equating to an
undemanding FY 2009E P/E of 12x) in order to account for the relative derating of the sector, that still leaves upside of almost 80% from current levels.

[m.t.glass] 22/1/2008 15:46

down more than 10% in two days

[m.t.glass] 21/1/2008 14:48

Forget 3%. Now more than 7% down today and - like you say - halved in 6 months. This is more than just drifting down - this is tobogganing

[m.t.glass] 21/1/2008 09:29

Dunno fillipe - but it's dropped a further 20p since you spoke a week ago and falling still.. down over 3% in the first hour today

[fillipe] 14/1/2008 15:07

IS this one just quietly drifting down... to who knows what, or is it only a case of how the market is at the present time?

Down 50%ish from the summer and no newsflow from the company!

Thanks for any info.

f

[moogee] 26/4/2007 08:26

The bidding is getting expensive. I'm out because of that and if they don't get it who wants to be investors in a company in a difficult market?

Good luck all.

[simon gordon] 05/12/2006 15:36

Taken from the above IT Week article:

James Calvert, chief executive of market watcher Regent Associates, said it is not easy in the current climate for a mid-sized outsourcer.

"The drive is very much towards consolidation in this market, hence the need for Phoenix to buy Servo. It is hard for the outsourcers that operate between £40m to £100m in turnover because they are up against the big boys in lots of deals, but they don't have the advantage of having economies of scale.

"It doesn't surprise me that Phoenix's results are flat. The market will continue to be tough for these types of companies for some time to come."

[ged5] 03/12/2006 20:24

The firm posted turnover of £54.4m, which was a decline of 0.6 per cent compared with the £54.9m posted for the same period last year. Profit before tax stood at £9.2m, compared with £8.9m year on year.

The firm said that turnover from its Phoenix IT Services unit was down by 4.6 per cent to £45.2m. However, NDR, its backup and recovery division, which the company acquired in March 2005, contributed £9.2m.

Nick Robinson, chief executive of Phoenix, said: "Revenue and profit from operations were in line with management expectations and were broadly maintained at the record levels that we achieved last year.

[ged5] 03/12/2006 20:21

IT support services provider Phoenix IT Group has boosted its presence in the small and medium sized enterprise market segment with the acquisition of Derbyshire-headquartered Servo Computer Services in a cash and shares deal worth £30.25 million.

[ged5] 06/11/2006 08:36

£42M turnover for £30.

Not too much dilution.

Seems a very good deal to me.

[not manu] 25/10/2006 00:06

Looks like take off has begun again - near 8% move yesterday!

[ged5] 05/9/2006 09:58

Looks like it's beginning to take off. I wonder where it will land this time?

[tole] 28/7/2006 10:37

Ta GHF - should hopefully get a nice update on current trading.

[glasshalfull] 26/7/2006 02:38

Annual General Meeting

The Annual General Meeting will be held at the Group's head office,
Technology House, Hunsbury Hill Avenue, Northampton on Thursday 3 August 2006 at
10.30am.



Regards
GHF

[ged5] 27/6/2006 12:46

Thanks Hectorp. With a prospective pe of 12 for 2007 and 11.57 for 2008 there's a good chance she will rise once market conditions allow.

I still think they have good management and a good business model. The only doubt I have is the pressure on margins. Noticed this little mention the other day.

[hectorp] 26/6/2006 17:19

Glad ai did not take my own advice of post 118 above ( 5th May)! Now its looking much better as an entry point. I'll maybe drip feed into 'her.

[ged5] 06/6/2006 09:39

Thanks for sharing those Tole. Looks like a bit of interest in this company at last. Good to see the share price starting to respond.

[tole] 04/6/2006 11:35

Equity view
Edited by Edward Simpkins
(Filed: 04/06/2006)

Phoenix IT Group

Many companies reporting good results recently have found themselves ignored as investors focus on the volatility and risks of the markets. Phoenix IT Group, the information technology support services business, is a case in point.

The company reported a 62 per cent improvement in pre-tax profit on May 18 to £17.9m from £11.1m in the year before. The final dividend for the year rose to 4.14p from 2.4p, a yield of 1.5 per cent. Despite these strong figures the company's shares are trading at 289p, well down on the stock's February high of 320p.

According to Investec, the broker, at this level Phoenix shares are trading at 13 times expected earnings for 2007 - a significant discount to similar companies. Shore Capital recently said of the company: "Trading is likely to accelerate this year and it has an extremely attractive PER [price to earnings ratio] valuation".

Phoenix has been expanding, with the acquisition of NDR, a disaster recovery company, in 2005. NDR has been doing well since the take-over. It contributed strongly to the 19 per cent increase in Phoenix's order book, which now stands at £148.7m, according to analysts.

In a recent research note Altium, the broker, said: "The outlook for 2007 and beyond is positive and crucially the company has no major contract renewals scheduled for the next three years." Buy.

[tole] 25/5/2006 11:57

Thanks Ged - appreciate the info

Phoenix gets a nice positive half page spread in SharesMag today - summarised in the results round-up.

Concludes with PNX trading on a prospective PE of 13 for 2006 - leaving it trading at a large discount to the broader software sector and which looks undeserved.