Redcentric Share Discussion Threads

[masurenguy] 31/12/2021 16:56

Kestrel have just added a further 661,000 shares, raising their holding back to 18.0%

[masurenguy] 30/12/2021 08:06

RCN also made a buyback of 100,000 shares @122p to hold in Treasury late yesterday.

[masurenguy] 29/12/2021 14:51

Lombard Odier have added a further 1.4m shares to increase their stake to 14.04% (22m shares).

[masurenguy] 24/12/2021 09:26

Virtually no change in the major institutional and other investor shareholdings over the past 9 months. The shareprice fell back circa 12.5% after last years results were published in July but it has subsequently stabilized around 120p since then. My post #992 on 12 April

At 31 March 2021 circa 87% of the shares were held by the 10 largest shareholders.

Kestrel Investment Partners: 18.09%
ND Capital Investments Ltd: 15.91%
Lombard Odier Asset Mgt: 12.44%
Slater Investments: 11.91%
Harwood Capital: 11.65%
Richard Griffiths: 5.5%
Chelverton Asset Mgt: 5.2%
Artemis Investment Mgt: 3.1%
Stephens Group Inc: 2.05%
Granite Associates: 1.31%

At 20 December 2021 circa 87% of the shares were held by the 10 largest shareholders.

Kestrel Investment Partners: 17.59%
ND Capital Investments Ltd: 15.88%
Lombard Odier Asset Mgt: 13.15%
Slater Investments: 11.88%
Harwood Capital: 10.92%
Chelverton Asset Mgt: 5.75%
Richard Griffiths: 5.185
Artemis Investment Mgt: 3.09%
Stephens Group Inc: 2.04%
Granite Associates: 1.3%

[masurenguy] 24/12/2021 08:20

Transaction in Own Shares

Redcentric announces that it has made the following purchase of ordinary shares of 0.1p in the capital of the Company pursuant to the share buyback programme announced on 17 September 2019:

Date of purchase: 23 December 2021
Number of Ordinary Shares purchased: 32,564
Volume weighted average price per Share: 122.593p

Under the Programme, the Company undertook to make share purchases up to an aggregate £2.0m and, including the above share purchases, repurchases to date total £764,180.24. Following the repurchase of Ordinary Shares set out above, the Company's issued share capital consists of 156,991,982 Ordinary Shares, 52,267 of which are held in Treasury. For reporting under the FCA's Disclosure Guidance and Transparency Rules, shareholders should exclude any shares held in Treasury and should use the figure of 156,939,715 Ordinary Shares when determining if required to notify their interest, or a change of their interest in the Company. The Company will make further announcements in due course following the completion of any further purchases pursuant to the Programme.

[masurenguy] 18/11/2021 16:53

Very little reaction to the interims today with just over 50,000 shares traded. Couple of points:
1. Nick Bate looks like a good appointment as the new NX Chairman "Nick is an experienced chairman and non-executive director of a portfolio of companies across the data, communications, software and financial services sectors". He should complement the very capable CEO Peter Brotherton.
2. Interesting to note that Lombard Odier have added circa 1.1m shares over the past few months to increase their position here to 13.15%

[simon gordon] 18/11/2021 09:56

Tech Market View - 18/11/21:

Redcentric first half dips 4%

The sales pipeline at Redcentric is slowly recovering, but not enough for the AIM-listed IT services provider to record any growth in H122 as the “aftershocks” of the pandemic continue. Total revenue in the six month period ending September 2021 declined 4.1% year on year to £44.3m, with recurring monthly revenue (RMR) down by 3.4% to £39.6m and adjusted EBITDA dipping 3.3% to £11.9m.

The results are slightly skewed by the exclusion of an EDF contract disposed on 31st March which had contributed £500k of turnover per six month period going back to H120. Nor do they include any revenue contribution from the Piksel acquisition, with the two months of turnover that would ordinarily apply having been treated as an adjustment to the purchase price. That deal has already delivered £700k of annualised cost savings for Redcentric, with a further £400k expected in the next financial year.

Even so, the numbers are likely to be disappointing for the company which had returned to organic growth in FY21, and it remains to be seen whether a traditionally stronger second half can tip the balance over the course of the full financial year. The good news is that H122 revenue is now ahead of pre-Covid levels after Redcentric saw its revenue dip 6% yoy in FY20. We said then that the benefits of putting the FCA investigation to bed and upgrading its network and platforms to align with healthcare service provision and integration would not be properly reflected until FY21 and beyond, but progress appears more fragmented than first thought.

After deciding against a sale, the company has indicated its intention to pursue expansion through acquisition and organic growth. One of those two ambitions has been achieved, and Redcentric is hoping that the boost to its public cloud migration capabilities delivered by Piksel will help it achieve the other one.

[boadicea] 10/11/2021 10:02

I see some large trades showing for Monday (noon) and Tuesday (yesterday after hours) all at 120p, about 6% below market price. They don't seem to have affected other trading so presumably a pre-arranged deal.

[masurenguy] 08/11/2021 18:33

LOAM added.

[masurenguy] 27/10/2021 07:58

Solid progress !

Trading Update

Redcentric announces a pre-close trading update for the six months ended 30 September 2021.

Financial Highlights

We are pleased to announce that trading for the six months ended 30 September 2021 is expected to be in line with the Board's expectations, with revenues of GBP46.4m (H1 FY21: GBP46.2m) and adjusted EBITDA of GBP12.0m (H1 FY21: GBP12.3m). The Company had minimal net debt of GBP0.4m at 30 September 2021 (31 March 2021: net cash of GBP1.0m), excluding supplier loans and leases previously classified as operating leases under IAS17. This strong position reflects a final dividend payment of GBP3.7m, the disposal of the non-core EDF contract for GBP5.8m and the acquisition of Piksel Industry Solutions Ltd ("Piksel IS") for GBP9.5m.

Operational Highlights

The integration of Piksel IS is progressing well, and we are on target to have the business fully integrated by the end of the current financial year. Good progress has been made in realising synergies and we are confident of achieving cost savings of at least GBP1.1m. The acquisition has been well received by both companies' customer bases and we are already in active discussions regarding several cross-sell opportunities.

Outlook

We expect trading for the year ending 31 March 2022 to be in line with the Board's expectations, including strong cash generation consistent with previous guidance. This is despite a continued lack of largescale IT projects and supply chain issues remaining a feature of the sector. In addition, several of our electricity supply contracts fell due for renewal during the ongoing UK energy crisis and this will add GBP0.5m of costs to H2 FY22 and at least GBP0.5m of costs to H1 FY23. We continue to make progress on M&A prospecting, with several active conversations underway, a growing pipeline of potential targets and a strong balance sheet.

Notice of Interim results

The Company intends to announce results for the 6 months ended 30 September on 18 November.

[simon gordon] 01/10/2021 13:58

Sector peer IOM out with a profit warning today:

[masurenguy] 30/9/2021 07:26

Looks like a good and synergetic acquisition, funded out of existing reserves and anticipated to be earnings enhancing in year one.

ACQUISITION OF PIKSEL INDUSTRY SOLUTIONS LTD

A strategically important acquisition enabling the delivery of cloud-based digital transformation services. Redcentric plc ("Redcentric"), a leading UK IT managed services provider, is pleased to announce the acquisition of Piksel Industry Solutions Limited ("Piksel IS") (the "Acquisition").

Highlights

-- Significantly enhances Redcentric's service offerings in both public cloud and security.
-- Complementary customer base with excellent cross-sell opportunities.
-- Significant annualised synergies of at least £1.1m anticipated.
-- Expected to be immediately earnings enhancing.
-- Consideration for the acquisition of US$13.0m (c.£9.5m) payable in cash funded entirely from existing cash resources.

About Piksel IS

Piksel IS is a provider of IT modernisation and digital transformation services, focussing on public cloud. It also delivers security and IT managed services, and has a strong application development and DevOps capability. Based in York and London, Piksel IS has 93 employees, the majority of whom are highly skilled technical individuals. Its managed IT services are provided across a broad range of industry verticals, with a particular focus on Amazon Web Services and Microsoft Azure.

Strategic rationale

This strategically important acquisition delivers on the Board's stated strategy to assist growth through acquisitions. The Acquisition gives Redcentric leading-edge skills and capabilities in public cloud and security to enable it to immediately provide additional solutions to an enlarged customer base. The Acquisition is expected to be immediately earnings enhancing and the Board believes there is scope to deliver attractive revenue and profit growth over the medium term.

Financials

The consideration for the Acquisition is US$13.0m (c.£9.5m) payable in cash of which US$12.0m (c£8.8m) is payable immediately with US$1.0m (c.£0.7m) being held in escrow for a period of 12 months. The consideration is payable out of the Redcentric's existing cash resources. The Acquisition is effective from 1 August 2021 and, on a proforma basis, the acquired business is expected to generate annualised revenues of £10m and EBITDA of £0.4m. GBP0.4m of synergies will be realised within the first three months of ownership, with at least a further £0.7m of synergies expected to be realised over the following 12 months. As at 31 July 2021, Piksel IS had net assets of £2.2m including an assumed intra-group debtor of £3.1m which will be written off immediately post the acquisition and cash on the balance sheet of £0.3m

Peter Brotherton, Chief Executive Officer, Redcentric, commented:"This is an extremely exciting strategic acquisition for Redcentric and combines the secure, asset light, digital transformation capabilities of Piksel IS with the managed infrastructure, unified communications and connectivity solutions of Redcentric. We are delighted that the combined portfolio will accelerate the Redcentric group's ability to deliver industry leading, transformative solutions to our customers and expands our capabilities in hyperscale public cloud and security."

Paul Mardling, Managing Director, Piksel Industry Solutions, commented:"We are looking forward to being part of Redcentric. The combined expertise of Redcentric and Piksel IS will bring benefits to both our customers and people. We are now part of a successful larger group and that will help us capitalise on the growing and substantial market for advanced cloud services, networks and cyber security."

[pomp circumstance] 15/9/2021 12:54

About time this started to become reality....

hxxps://www.insidermedia.com/news/yorkshire/redcentric-targets-acquisitions-after-extremely-productive-year

[pomp circumstance] 03/9/2021 15:45

good news coming I reckon

[masurenguy] 02/9/2021 16:33

4 x 25,000 Buys @133p today - is someone accumulating?

[masurenguy] 15/7/2021 16:29

Barclays Sharecast News

Canaccord Genuity lowered their target price on software firm Redcentric from 190.0p to 180.0p on Thursday following the group's full-year earnings statement. Canaccord noted that revenues at Redecentric were £91.4m, adjusted underlying earnings were £15.2m, just shy of its £15.5m estimate due to disposals, and EBIT margin increased roughly 450 basis points year-on-year as the benefits of a "major restructuring" programme undertaken in the 2019-20 trading year now being evidenced.

The Canadian bank said Redcentric's outlook statement indicated a flat first-half in 2022 given "a modest Covid-19 tailwind on the horizon due to increased demand for remote access platforms, additional bandwidth and HSCN connectivity. It also acknowledged that another UK lockdown in the first quarter of the 2022 trading year meant that larger-scale IT project decisions had been delayed further. "Overall we forecast c.1-2% growth for FY22E (LFL as a business unit disposed of to Thales is excluded). The current net cash position and the FCF yield over 6% (sector under 3%), combined with debt firepower means 'paper free' acquisitions up to c.£75m are now possible," said Canaccord, which also reiterated its 'buy' rating on the stock.

[simon gordon] 15/7/2021 15:54

Apt piece of music after spending the day thinking about RCN:

Don't Believe the Hype by Public Enemy

[simon gordon] 15/7/2021 15:43

Yes, that's the failure. They didn't get the public sector contracts they expected and now Covid is being used as a human shield.

It ain't a perfect beast!

[masurenguy] 15/7/2021 15:41

Simon, maybe this could have been part of the issue behind it "key roles in public sector new business and account management have been replaced."
The Beast is caged and therefore it has to be well fed by it's minders !

[masurenguy] 15/7/2021 15:02

Simon, I share your misgiving about the CEO and, given the history here, credibility is a very important issue. The latest broker forecast shows a 5% reduction on the previous one so that its now flat with this year. I agree that H2 with be crucial in this respect but I think that the fundamentals here should not be diminished by what maybe a short term blip.

[simon gordon] 15/7/2021 14:03

Mas,

I think of it as a profit warning because the April broker forecast for 2022 was:

EBIDTA - 25.3m
PBT - 14.8m
EPS - 7.6

Today's broker forecast:

EBIDTA - 24.1m
PBT - 14m
EPS - 7.2


And that's if H2 comes through.

I've lost confidence in the CEO. Like I say, Maintel and Adept were fully conscious the market was tough to sell into. I thought, based on the CEO and Fincap that RCN were a cut above. Today they were cut down to size and so were the forecasts.

It'll probably come good but if H2 is weak it could see 100p.

[simon gordon] 15/7/2021 11:34

What's interesting is that I don't think have RCN mentioned customer delays until today.

Here's the Trading Update in April:

"We have returned to growth, operational efficiency programmes have been delivered, the ERP system has been successfully implemented and profits are healthy."

Both Maintel and Adept have talked of customer delays in their historic announcements.

RCN were indicating that they were immune to this and thus the share run up into the 140s.

This is from the Interims in November:

"With the FCA Investigation now concluded, this barrier has been removed and we will deploy additional sales resource in the second half of the financial year ending 31 March 2021 ("FY21") to attract new private sector logo business. Sales timelines are typically six months, with installations taking three months, so our renewed efforts in this area are unlikely to materialise in to increased revenue until the financial year ending 31 March 2022 ("FY22")."

Fincap forecast:

FY 2022 = 90.4m turnover down from 91.4m in 2021, mitigating is the sale of the small unit which did 1m.

Still no sales growth in 2022 if H2 picks up.

Fincap forecast in April was 94m in 2022

I'm disappointed because the talk has not been matched by the walk.