Redstonecon Share Discussion Threads

[spooky] 20/6/2018 10:55

jane deer, your post has me a little confused. The company had net cash at the year end. Cash minus bank loans and overdrafts, leaves you with net cash of 1217.

[jane deer] 20/6/2018 10:27

BN

I don’t think your figure of £20 million is correct. £15-17 million is the figure that I am using. My calculation: company received £19.6m in cash from disposal - in May had £0.4 of cash but also had debt outstanding of £4.3m of debt (which is being repaid following the disposal - other than a £450,000 3year mortgage). So the net cash position as of now should be a touch over £15 million. On top of this should be added the upto £2 m it should receive on the completion of the outstanding project mentioned in the release (but there are also indemnities). But if everything goes to plan net cash would be >£17 million.

There is quite a difference between the net cash position at the end of FY18 and the net debt position prior to the deal closing. Generally the company has in the past shown poor conversion of profits into cash.

Still whatever the correct cash amount to use and what value is given to the remaining software business (invested capital looks around £4m) - the key for me for this stock is do you believe the current management will invest wisely the cash.

[chimers] 18/6/2018 15:50

Back at £1 I notice.

Hey wasn't it consolidated at £1.50

Gosh...............what went wrong!!

[bignads] 18/6/2018 15:47

Good to see you Chimers. Not much else to do I see?

[chimers] 18/6/2018 15:46

You wont have £20m in the bank for long!!

It will be in someone else's bank :)

[bignads] 18/6/2018 15:12

Completion of sale now confirmed. The company now has around £20m in the bank, great products in a growing market and a strong leadership team.

[chimers] 15/6/2018 14:37

He wont work with DB .....guess what yer buying lol

[bignads] 15/6/2018 14:31

Thanks Jane Deer - that's helpful. Ironic MB didn't feel like he had the software skills given that he was at IBM for so long...!

[gleach23] 15/6/2018 14:24

thanks for the clarification jane deer - much appreciated

[jane deer] 15/6/2018 14:19

it seemed quite amicable and business-like - who has the best skills for the task ahead - or at least they gave that impression

[jane deer] 15/6/2018 14:18

No presentation. Just Q&A for around 40 minutes. Decision was a “mutual” one. Mark said he does not have the software expertise required to take the company on its journey forward. Beechinor added that if the Redstone and Commensus businesses had not been sold, it would have made sense for Mark to stay on.

[bignads] 15/6/2018 14:10

Jane deer - was there a presentation or anything at the AGM? Did MB give any info on what motivated him to move on?

[jane deer] 15/6/2018 13:48

Gleach23 - REDS did not present at Mello South yesterday. Last minute cancellation. I was at AGM today - surprisingly friendly show put on by all (inc Mark B and Frank B).

[timmy11] 15/6/2018 12:23

Result of General Meeting

&

Completion of Disposal

RedstoneConnect (AIM: REDS) is pleased to announce that, at the General Meeting held earlier today in relation to the proposed disposal of Comunica Holdings Limited and Commensus Limited (which together comprise the Company's Systems Integration and Managed Services divisions) to Excel I.T Services Limited (the "Disposal"), the resolution was duly passed. Â

Following the General Meeting, the first condition under the Share Purchase Agreement has been satisfied and, subject to the remaining terms and conditions of the Share Purchase Agreement being satisfied, completion of the Disposal will occur on Monday, 18 June 2018.

Frank Beechinor, Chairman of RedstoneConnect, commented:

"Completion of the Disposal will mark the culmination of RedstoneConnect's transformation into a software company. Going forward, our sole focus will be on the continued growth of our higher value SaaS products and to capitalise on the increasing global demand for smart workspace management solutions.

Through further investment in sales, marketing and the development of our suite of applications, as well as seeking complementary acquisition opportunities, we believe we can evolve into a leading international workspace management software company with high margin licence-based revenues, delivering long-term shareholder value."

Further details of the Disposal are set out in the circular to shareholders dated 29 May 2018.

[bignads] 15/6/2018 11:58

Anyone at the AGM today? Be good to get a read-out if possible.

[bignads] 15/6/2018 11:47

These are ridiculously cheap at the mo' driven by nervousness. If you take a calm look at the company, its cash and its growth trajectory and it should be trading at the moment at around 150-175p minimum. The value will show and the news flow is likely to be exciting.

[smart solution] 15/6/2018 11:27

PINN - Ha Ha.

[spooky] 15/6/2018 11:12

I have looked at it every way i can and as long as the disposal is completed they are too cheap, end of story.Disposal completes Monday, so thats in the bag, i have added more.

[timmy11] 15/6/2018 11:07

thanks nads

[bignads] 15/6/2018 11:04

From final report for software division:

"Revenues of £5.3 million (2017: £1.6 million) generated gross profit of £4.4 million at a margin of 83.2% (2017: £1.4 million and a margin of 87.8%), resulting in a positive adjusted EBITDA contribution of £1.9 million (2017: £0.3 million) and operating profits of £1.4 million (2017: loss of £0.02 million after £0.1 million impairment of intangible assets). The performance has been underpinned by a few notable contracts, including the £2.25 million OEM for OneSpace alongside the mandates for a smart city solution and a digital retail solution."

Interesting to not the growth in revenues (>300%), gross margin, and EBITDA contribution (>600%)...

Let's hope this continues...

[timmy11] 15/6/2018 11:03

peeps buying

[bignads] 15/6/2018 10:43

Interesting when you read the material around the transition to onespace - the chairman (now CEO) has traditionally taken a big role in setting out the rationale and logic for the move. I suspect that the current disposal and switch in strategy is largely his doing. I suspect that the departure of Mr Braun is not as much of an upheaval for Redstone as I (and the market) first suspected. Also they had to get the news out ahead of the AGM so that investors could incorporate this in their decision-making.

Positive times ahead in my view.