Redcentric Share Discussion Threads

[boadicea] 19/4/2024 09:27

We are due a trading update in the next week or so (23rd April?) and maybe some are anticipating an ahead statement. More important will probably be the outlook.
While such a possibility exists I am far from predicting anything in these markets!

PS: Perhaps there is another explanation of the rise. It could be (= probably is) the mm's cashing in on automatically reinvested dividends which became payable yesterday.

[petewy] 18/4/2024 17:35

Nice bounce up.

[petewy] 05/4/2024 17:30

definitely

[boadicea] 05/4/2024 11:00

Given bouyant demand in the datacentre field, moderation in energy costs, efficiency savings, an eagerness to expand and a strategic holding by Kestral opps fund, one really would expect more interest here. Additionally, falling inflation leads to an expectation of reduced financing costs within the time-frame of FY25.

We can probably expect an update on basic progress for FY 2024 sometime later this month which should confirm whether or not we remain on track as forecast in the outlook given in the last interim report - "The Board expects to commence FY25 at least in line with its prior expectations. With the integration of the recent acquisitions complete, FY25 will see the return of healthy EBITDA margins approaching 25% and excellent cash generation, both of which are driven by high levels of recurring revenues underpinned by long term customer contracts.".

This prospect is hardly recognised in the current valuation. Is RCN one of the many smaller companies being unfairly held back by a moribund UK market?

[petewy] 11/1/2024 18:59

Redcentric plc (AIM:RCN) Kestrel Partners LLP ("Kestrel") that on 08 January 2024 and 09 January 2024 it purchased, on behalf of its discretionary client accounts, an aggregate of 16,144 ordinary shares of 0.1 pence each ("Ordinary Shares") in the Company at an average price of £1.2635 per Ordinary Share.

Mr Oliver Scott is a partner of, and holds a beneficial interest in, Kestrel. Mr Scott is also a shareholder in Kestrel Opportunities and is therefore deemed to have a beneficial interest in Kestrel Opportunities' entire legal holding in Redcentric.

[petewy] 18/12/2023 17:19

Directors buying in...

[petewy] 13/12/2023 16:12

Just bought in. A case of sit and wait for news.

[boadicea] 04/12/2023 08:56

A sensible quantity purchsed by management - enough to indicate more than a token gesture.

[boadicea] 23/11/2023 16:23

The headwinds, especially since Ukraine and power prices, have been considerable. This will possibly have enabled them to make their latest acquisition on favourable terms and well-timed. Of course there's risk, but strategies take time to develop and they don't appear to have made any serious errors. However, as so often, plans can suffer from delays for which safety margins should have been allowed. They are in no danger of running out of cash - perhaps the most common error in ambitious companies - so I am happy to allow them time.

[fgump] 23/11/2023 15:27

The point you make is a good one for the shares you note and the tech sector generally. Valuations really got away - I believe as a result of there simply being too much cash in the system. I guess the point I was trying to make is that this business has been through multiple acquisitions and the "game changing" sungard deal but at this point the market doesn't believe the forecasts. That being said, I wish them well in proving the market wrong!

[boadicea] 23/11/2023 10:22

fgump - If your shareholdings are all (or mostly) above where they were 3 year's ago you're doing rather well! Compared with DOTD, ECK, D4T4, ARC etc they've been relatively stable.
It's good to se a bunch of director buys jumping in (presumably to catch what they expect to be the low point) as soon as rules would permit.

[simon gordon] 22/11/2023 18:18

Cavendish - 22/11/23

FY25 will complete the integration of complicated acquisitions undertaken from September 2021 to July 2022, which we believe no competitor could have achieved. By 1st April next year we shall be in Redcentric’s fiscal FY25, by which time acquisition costs of £42m will have lifted EBITDA from £20.6m in FY20 to £41m for FY25E; or £18m to £35m deducting run rate capex. At 11.6x FY25E P/E, and on an FCF yield of 10.5%, this successful company is stupidly cheap.

[fgump] 22/11/2023 15:07

For all its transformation and the guidance of kestrel, the share price is now lower than it was three years ago. I guess that's why they feel they need to join the board. It seems to me that the market remains unconvinced by the story and at the very least the value of the sungard deal.

[simon gordon] 22/11/2023 10:14

Was a downgrade for FY24. Kestrel joining the BoD probably means they are unhappy about the share price performance.

[boadicea] 22/11/2023 10:04

Nothing to frighten the horses in the results and the market seems quietly happy with them.
The report reads well with evidence of a firm hand at the wheel. I particularly noted the comments about woe at the third party managed Woking facility where "electricity costs are expected to be GBP0.7m higher in FY24 and GBP0.5m higher in FY25 due to worse than anticipated procurement by the third-party". I imagine there were a few hot words exchanged about that and maybe we haven't heard the last of it!
Broker revenue forecast is for £164m this f-year rising by about 6% into fy 2025.

[sharw] 13/11/2023 10:41

Interims 22/11

[boadicea] 13/11/2023 09:46

It's about time we had an update. Tomorrow perhaps?

[boadicea] 24/8/2023 10:34

A fairly downbeat assessment of the short term future which the market seems to be taking in its stride. In the background things seem to be progressing well. It gives the impression of underpromising and potentially overdelivering, certtainly there is no sign of false optimism.
The picture should become significantly clearer by the middle of 2024. If impatient sellers force the price lower I might be interested in adding in due course.

[simon gordon] 31/7/2023 12:46

Interesting piece...

DAVID HEINEMEIER HANSSON

June 23, 2023

We have left the cloud

[masurenguy] 31/5/2023 07:30

Rising costs putting pressure on Redcentric, says Downing

IT services group Redcentric (RCN) may have reported a jump in revenues, but Downing’s Josh McCathie warns it is still grappling with rising costs. McCathie holds the stock in his VT Downing Small & Mid Cap Income fund, where it makes up 3% of the £43m strategy. "Redcentric, a managed IT services business, released its results for the year ended 31 March 2023 and reported revenues up 52% to £141.8m and adjusted Ebitda up 4.6% to £24.8m. The results reflect the contribution from five acquisitions completed over the last two financial years." the manager said. However, he flagged a warning from the group and said "it continues to experience widespread inflationary increases across its cost base, primarily wage inflation, electricity costs and software licence costs."

[boadicea] 10/3/2023 14:24

Doing well on a down day.

[masurenguy] 28/2/2023 10:28

The gradual rise continues - up 30% over the past 3 months.

[masurenguy] 17/1/2023 10:59

Shareprice up 24% over the past 7 weeks. 😎

[boadicea] 13/1/2023 08:53

An easing of the energy price spiral should be particularly good news for their sites that are not hedged on electricity cost. Similar considerations may apply to their competitors, of course.