Red Squared Share Discussion Threads

[the analyst] 28/7/2007 01:16

There's the rns

Slightly odd the way it was released after hours on a Friday...

Stake-building.

[antonio palocci] 27/7/2007 17:03

looks like some buyers. maybe get rns next week.

[the analyst] 27/7/2007 17:01

No idea, but both large trades around the 3% mark, so there could be an announcment.

My feeling is that we might have to wait for the results until the market begins to take notice of the company.

Ideally they will have another contract win to announce at that time to continue the growth story and visibility going forward.

[lgpixels] 27/7/2007 16:32

lots of volume today, anybody got any ideas?

[antonio palocci] 24/7/2007 18:00

forecast is 400k FY Ithought they would be way out when they posted the interims but they have obviously been picking up lots of business. Id say this is now a bagger in 6mths time. 20p target.

[smarkmmm] 24/7/2007 14:27

IC deduced the figure I guess from the level of tax losses recognised. ie from RDS's final results:

"The net deferred taxation asset (£344k) has been recognised during the year because the directors consider it more likely than not that there will be suitable taxable profits from which the future reversal of the underlying timing differences can be deducted and therefore the profit for the financial year amounts to £141,489 after deferred tax adjustment."

Or IC spoke to the management, and based their figure on what they were told??

[the analyst] 24/7/2007 13:57

Would that be £500k for next year smarkmmm?

Are there any more recent forecasts available?

Would imagine a rating of 10x forward earnings should be about right - company turning itslef around, winning contracts and looking to have a much more visible earnings outlook. They could deserve a higher rating still if they report another contract with year end figures.

As you say, enterprise value is very low - around £2m.

It wouldn't surprise me if they were trading above 20p later this year, or early next year, approx 10x that £500k figure, based on the enterprise value

[smarkmmm] 24/7/2007 13:38

From the Investor's Chronicle 2 Feb '07:

"....while Red Squared's management clearly thinks it can produce a turnover of £3.5m-£4m and profits of up to £500,000"

Profits of 500k could give an eps of anywhere between 1.2p and 1.7p depending on the tax rate, and a valuation of 14p (PE12) to 26p (PE15)

Currently cap'd at 2.83m and with 0.85m in cash giving an enterprise value of only 1.98m; plenty still to go for imo.

[the analyst] 24/7/2007 13:16

Not too many companies publishing trading updates informing they will exceed expectations at the moment.

What a breath of fresh air this is.

[randsys] 24/7/2007 09:05

Excellent! About time we had some action here! :-)

[the analyst] 24/7/2007 07:55

Red Squared sees FY results ahead of expectations

LONDON (Thomson Financial) - Red Squared PLC said it expects its full-year
results to be ahead of expectations.
In a trading update, the IT management and technical services company also
said it has received orders valued at 1.2 mln stg under a hardware and software
supply agreement with an existing customer to supply hardware, software,
consultancy and implementation services.
[e-mail]
rda/jag

COPYRIGHT

Copyright AFX News Limited 2007. All rights reserved.
The copying, republication or redistribution of AFX News Content, including by
framing or similar means, is expressly prohibited without the prior written
consent of AFX News.

[the analyst] 24/7/2007 07:09

RNS Number:7126A
Red Squared PLC
24 July 2007




24 JULY 2007





RED SQUARED PLC

(AIM)



TRADING UPDATE



The Board of Red Squared plc ("Red Squared" or "the Company"), the IT management
and technical services company, today announces a trading update.



The Board is pleased to announce that the Company has received orders valued at
#1.2m under a hardware and software supply agreement with an existing customer.
The orders include the supply of hardware, software, consultancy and
implementation services.



The additional infrastructure will be added over time to the existing hosting
and Managed Services contract though the increased revenues that result will be
partially offset by an expected reduction in hosting revenues with one of our
other larger customers.



As a result the Board expects the results for the year to be ahead of
expectations.

[lgpixels] 03/7/2007 12:18

Small mention on Forbes.com the other day.

Elsewhere, Red Squared perked up 1.38 to 9.50 after the AIM-listed IT management and monitoring services company disclosed a swing to profits from losses at the half-way mark, along with a three-year contract with Cegedim Rx valued at more than 1 mln stg. The contract entails remote systems monitoring and management, and hardware and software supply.

[randsys] 28/6/2007 09:51

A spread of 27.3% is just plain rediculous!

[lgpixels] 28/6/2007 09:48

It sounds like the company has been working on this contract for some time, as it was first mentioned in the January statement. The value will be accounted for over its life which is 3 years, so will start to contribute to earnings in the second half of the financial years. I would therefore expect earnings to be stronger in the second half than the first half, as the impact of recent business wins filter through to the bottom line. If you forecast recent growth into the next 3 years, the current valuation looks very low. Not sure if the company will get any press coverage or a brokers notes, but progress is defently being made.


January 2007:
This momentum has continued post year end with the Company, working together with one of its business partners, being selected as an IT infrastructure partner to support the UK wide roll-out of a hosted electronic prescriptions solution on behalf of a leading worldwide provider of pharmacy dispensary management systems.

[topvest] 28/6/2007 07:32

You are missing the point. This was a £1m contract won before 1 April 2007. In which case, given its size, why wasn't it announced three months ago!!

[aleman] 27/6/2007 23:34

topvest - they announced it with the finals.

This momentum has continued post year end with the Company, working
together with one of its business partners, being selected as an IT
infrastructure partner to support the UK wide roll-out of a hosted electronic
prescriptions solution on behalf of a leading worldwide provider of pharmacy
dispensary management systems.

And this from today:

During the period the Company won a contract with healthcare software vendor
Cegedim Rx Ltd ('Cegedim Rx'), its first major contract in the public health
sector.


Cegedim Rx is a leading quality supplier of pharmacy IT solutions committed to
meeting and exceeding customers' expectations by providing the best pharmacy IT
solutions and services, through consistent design, delivery and support of
client-focused products.


The contract between Red Squared and Cegedim Rx is valued at over #1 million in
total, is for a period of three years and entails remote systems monitoring and
management, hardware and software supply. The contract was won in collaboration
with software house Quicksilva Ltd ('Quicksilva') who first partnered with Red
Squared in delivering a solution to the Northern Ireland Social Security Agency
(NISSA) in 2003.

[topvest] 27/6/2007 21:19

Good results - very encouraging. They could have announced this contract win some time ago though...

"Turnover from Managed Services contracts increased 18% to #768,736 (2006:
#651,762). Notably the Cegedim contract won during the period did not contribute
to this revenue line during the period as the hosting agreement only started
effective 1 April 2007.Consulting revenues increased significantly to #214,775
(2006: #84,944)."

Shouldn't they have announced this at the time?

[antonio palocci] 27/6/2007 16:58

Not bad results but was hoping for nearer 100k - 150k. If they were serious I am sure they could cut costs somewhere . Saving a few grand and cutting down costs would make a huge difference to the bottom line at this stage. The best hope for this is that it gets taken over which I am sure it will do before long.

[split-s] 27/6/2007 13:38

Spreads a bit much though. Do they have to resource the contract with new blood or are they capable of doing with the staff they have already got?. Had this on my radar for some time but not looked at it properly.

[lgpixels] 27/6/2007 13:13

£1 million contract was a good win for this company and shows the sales momentum in the business. It will make a contribution to turnover and profits in the second half of the financial year.

Agree it has taken a long time for this business to get things right, but the prospects now look very attractive. The majority of turnover is recurring with contracts lasting between 3-5 years, giving transparent and predictable revenue. The growth in sales could have a big impact on profits over the next three years thereby giving significant growth to the profitability of the business.

The pipeline of business with new and existing clients is strong so we could expect further contract news this year.

[aleman] 27/6/2007 09:26

Having sold the majority of mine the last time we ventured over 8p, I have now managed to sell the the rump today. My experience is that the shares are too illiquid and the company didn't quite achieve my hopes coming up to what is now likely to be a more difficult period for the UK economy. I hope the orders keep coming for other shareholders and it eventually shows up better in the bottom line. I still think the most likely outcome is a bid as the lumpy nature of contracts would be handled better within a larger business. Good luck.

[langland] 27/6/2007 09:12

If there is indeed a bid in the offing from the likes of Nexus, 15-20p min would have to be paid (IMO of course).

[the analyst] 27/6/2007 08:30

Strong start to the day, the trading update looks promising too with a strong pipeline of potential new business being mentioned. A few more contracts like today's should see a serious re-rating I'd have thought.


"Current Trading

We are very pleased to report on a profitable period and the continued
improvement in the financial results of the business. With a strong pipeline of
potential new business from both existing and new customers we are optimistic of
a successful outcome for the current financial year"

[the analyst] 27/6/2007 08:14

A £1m contract win looks significant to me, so there should see strong rises today I imagine.

Very quiet here given the news, though.