Red24 Share Discussion Threads

[norbert colon] 15/6/2012 07:24

Results out and bang on my target. Net current assets now 4p share and cash of 4p /share. All looks good so far but will have a proper review over the weekend.

[norbert colon] 14/6/2012 09:59

Guys - when are results out - i understood this week?

[cfro] 21/5/2012 13:28

A bit of weakness creeping into the share price over the last several days. Could be close to topping up time i reckon.

[davydoo] 26/4/2012 19:20

Yep :)

I notice a little change to ADVFN, the little arrow beside our names allowing us to check each other out

[cfro] 26/4/2012 18:35

Still creeping up i see. :-)

[cfro] 25/4/2012 10:47

I have been collecting a few shares and building a small holding over the last couple of days since its mention on the zulu bb. Bought another small batch this morning. Getting much harder to buy now, so as you say davydoo looks like a buyer behind the scenes.

[davydoo] 25/4/2012 09:05

Welcome Saucepan.

Could be a big buy or order waiting to be filled today, 3 MMs moved their price up first thing this morning, and I was just quoted at mid to sell a lot.

[saucepan] 23/4/2012 10:55

Made my first purchase here today. Hopefully buying a breakout.

[davydoo] 23/4/2012 09:23

A buy at 14p, new territory here.

[share_shark] 22/4/2012 20:32

I agree entirely Glasshalfull. Great post and many thanks to all for your views and comments.

[norbert colon] 22/4/2012 19:49

Anyone checked out the share price 10 years ago....

....yes you guessed it. 13p

22 APR 2002.

Amazing.

[norbert colon] 22/4/2012 19:41

Nice to see some more great posts.

One small thing I noticed in the Annual Report was that the 2004 Series share options with an exercise price of 18.75p were noted as having only a 10% chance of the option vesting which is quite negative. This compares to the 2010 Series options at 8p which are noted as having a 90% chance of the option vesting.

The 2004 options have 2 years left to run so lets see whether 18.75p is broken during that period.....

Nobby

[owenski] 21/4/2012 22:15

Nice summary GHF :-)

[glasshalfull] 21/4/2012 20:06

Worth looking at the ZULU thread for anyone interested in REDT.



Nice debate going.

Here's a copy of my post with the actual figures for reference.


REDT

Current market cap £6.4 million
Net Cash £1.6 million (30/09/11 - H1)
EV £4.8 million

WHAT DO THEY DO?

Best to click this link to get a flavour...the web site also provides case studies.



Before we get onto the positive cashflow of the company let's looks at the increase in net cash over the last few years;

NET CASH

2009 - £327,836
2010 - £937,885
2011 - £1,196 million

H1 2012 - £1,623 million

In that time the dividend has risen as follows;

DIVIDEND

2009 - nil
2010 - 0.15p (maiden dividend)
2011 - 0.24p (+60%)

2012 - 0.32p (+33% and with shareprice@13p this equates to D/V Yield of 2.5%)

Let's have a look at EPS growth;

EPS (diluted)

2009 - 0.95p
2010 - 1.4p (47% growth)
2011 - 1.5p (7% growth)

H1 2012 - 0.73p EPS
2012 (estimate for full year to 30/03/12 is PTP £900k) - 1.7p (13% growth)

PER

Current PER 8.7
Forecast PER 7.6

CASHFLOW

So, let's return to the cashflow.

In 2011 the positive cashflow was only £404k (2010 - £548k) and was affected by a large increase in receivables (£499k). I believe this was due to the business mix changing and the signing of a number of contracts with US Special Risk Insurers...jump in turnover (+22% or £1 million) which contributed to the rise in receivables.

Worth noting that payables have also increased in line with the receivables. I personally don't have any issue with this and recognise the company as a small cap working in a niche sector with small variances having a disproportionate effect on the balance sheet e.g. currency movement; business mix changing; monthly retainers decreasing; specialist response work increasing during the "Arab Spring", etc.

Indeed in H1 2012 cashflow has exhibited an improvement over H1 2011 with trade receivables showing a slight decrease and payables a slight increase.

Also worth pointing out that the company has not had recourse to the market to raise funds in the period and has focused solely on organic growth.

CONCLUSION

IMHO An excellent small cap share that is trading on an inexpensive rating, delivering decent organic growth (albeit lumpy) in a niche sector.

Their clients include a number of US Insurers with a further press release last week indicating that they had added a further client to the roster.



They also provide HSBC with travel security advice that is provided to HSBC Advance customers.

In concluding, a company on single digit PER that have been cashflow positive for the last 4 years with net cash increasing from £327k to £1.6m in last 30 months and dividend yield of 2.5% based on payment last year, and if year ending 30/03/12 delivers as forecast then we can also add 4 years of consecutive EPS growth.

Well...I like it, even if others don't ;-)


Regards,
GHF

[norbert colon] 21/4/2012 11:48

Guys

I have just been re-looking at REDT and more and more believe its one of gems on the market.

Every metric you look at is text book as a great investment; low/no debt (zero long term debt), strong retained earnings growth, cash on balance sheet, huge interest cover, gross profit margin of 70%+, ROCE >40%, ROE >35%, Sales / employee rising over last 5 years, CAPEX ok, revenue doubled over 5 years, Operating / Net earnings more than doubled over 5 years, now paying a divi, PE around 7 (2012). Yes, the forecast earnings growth figures are modest but I am quite happy with that. Also foreign exchange (USD/RAND) been working in their favour over last 6 months.

Can someone please find some negatives for me as there must be something?!

At 13p these are (IMHO) a great little company to hold.

Good luck to all.

Nobby

[norbert colon] 13/3/2012 18:00

You cant compare REDT to G4S but G4S is trading on a forward P/E of 12 which if applied to REDT would equate to 20p rather than the current 13p (50%+ upside). Just a thought for the day...

[milesn] 10/3/2012 00:56

Good tip in GCI.
I wrote it :-)

[integer] 09/3/2012 20:08

Share Shark,

When you mention that a CEO you know has contacted Red24 to help, in what context do you mean?

[share_shark] 09/3/2012 15:41

Hello Glasshalfull. Delighted to see you here as well.Indeed we have.

Already a CEO I know has contacted the company to see if they can be of help to him. :-).

The more radars we get on the better and spread the gospel.

[glasshalfull] 09/3/2012 11:26

Good to see you join the party share shark...we've had our share of mutual winners ;-)

REDT looks like it's finally starting to register with investors.

Regards,
GHF

[7bore] 09/3/2012 11:04

so faraday and GCI tipped them.
will take another look :0)

[share_shark] 09/3/2012 10:51

Thank you davydoo and I look forward to being an investor here and enjoying the rise/ride !. :-)

[owenski] 09/3/2012 10:46

Picked up a few more today