Regenersis Share Discussion Threads

[stegrego] 14/7/2015 08:04

Surprised people are selling this when pe is only 10. It's hardly on some ridiculous rating.

[brummy_git] 14/7/2015 08:04

New research out today from Equity development. Interesting to see that the board are considering all strategic options.

hxxp://www.equitydevelopment.co.uk/doc/1371.pdf

[macarre] 03/7/2015 10:53

Trading update next week?

[aishah] 03/7/2015 09:21

Equity Development fcst eps 21.9p for 2016 and 26.2p in 2017. Techinvest 2nd half Best Buy tip with a rating of 8.

[onjohn] 03/7/2015 08:47

looks like its going to warn on pbt

[rivaldo] 03/7/2015 08:40

Cheers paleje. Hopefully the IC have had a preview of the upcoming trading update :o))

[paleje] 03/7/2015 07:40

IC made RGS one of their Tips of the Week last night, their conclusion:-

IC VIEW:
Regenersis's pre-tax profit decline in 2014 can be attributed to the £4.4m it racked up in restructuring costs, as well as adverse currency movements. We reckon the market's reaction was overly harsh, given the past track record of the group and its solid balance sheet. What's more, management has its priorities right, focusing on higher growth areas such as data erasure. The group also has the added benefit of being able to cross-sell between its depot solutions and advanced solutions clients. We think investors should buy into the group's growth trajectory while the shares are still cheap enough.

Last IC view: Buy, 194p, 18 March 2015

[rivaldo] 11/6/2015 11:10

Nice move this morning. Peel Hunt getting in gear, or something else - can't see any specific news?

The next trading update is usually early/mid-July, so not long to wait.

[aishah] 10/6/2015 11:23

APPOINTMENT OF NOMINATED ADVISER AND JOINT BROKER

Regenersis Plc, a strategic outsourcing partner to many of the world's leading consumer technology companies, is pleased to announce the appointment of Peel Hunt as the Company's Nominated Adviser and Joint Corporate Broker, with immediate effect.

Panmure Gordon will continue as Joint Broker.

[al101uk] 04/6/2015 12:00

In light of some of the discussion here (not sure if it's just me and Buffetteer), I had a second look at the results to check on causes for concern, found a couple of things to monitor:

Cash conversion is poor, hardly surprising given the amount of acquisitions and restructuring going on, but needs to be monitored. IC's comment that a clean set of results with a clearer picture of the health of the company would be useful is a sentiment I sympathise with.

There is some accrual accounting in there, but it doesn't seem excessive as long as you don't have a zero tolerance attitude to the mystic art.

Debtor days increased at full year and then again at interims. There is an explanation for this, major customers want 60/90 day settlement periods not the 30 day settlement Regenersis was previously working too. Again something to monitor going forward... increased payments dropping outside of the 90 days would be an immediate sell signal.

[al101uk] 03/6/2015 15:18

IC's latest comment on Regersis from a tip update March 2015:

The depot solutions business gained £32m of new business during the first half, going some way to compensate for its now defunct UK mobile business. The shares are trading on 11 times this year's earnings, which considering the growth potential, looks like value. Buy.

Last IC view: Buy, 260p, 24 Sep 2014

[al101uk] 03/6/2015 15:16

I don't tend to believe that the price falls because of over promotion, it tends to rise on over promotion, and continue rising until someone with some sense starts selling, realising that the company is overvalued. The price then tanks back down to more sensible levels (and possibly below). In this case it's a correction of a view probably, as you say, influenced by a fairly major promotional campaign... which got a placing away at a very good price... good for a shareholder who comes in after the event.

I don't have broker forecasts for 2014, so I can't comment on if they hit or missed "market expectations". What I can say is that the fall happened BEFORE the results which is odd if it was down to under performance vs expectations... unless expectations were set higher than official numbers released in their promotion... in other words market expectations were a beat of market expectations ;-)

As I said EPS was hit massively by restructuring costs last year and I put a lot of negative sentiment down to that.

Don't disagree with much of what IC has to say, can only repeat what I've already said on their comment regards guidance.

[al101uk] 03/6/2015 15:16

I don't tend to believe that the price falls because of over promotion, it tends to rise on over promotion, and continue rising until someone with some sense starts selling, realising that the company is overvalued. The price then tanks back down to more sensible levels (and possibly below). In this case it's a correction of a view probably, as you say, influenced by a fairly major promotional campaign... which got a placing away at a very good price... good for a shareholder who comes in after the event.

I don't have broker forecasts for 2014, so I can't comment on if they hit or missed "market expectations". What I can say is that the fall happened BEFORE the results which is odd if it was down to under performance vs expectations... unless expectations were set higher than official numbers released in their promotion... in other words market expectations were a beat of market expectations ;-)

As I said EPS was hit massively by restructuring costs last year and I put a lot of negative sentiment down to that.

Don't disagree with much of what IC has to say, can only repeat what I've already said on their comment regards guidance.

[buffetteer] 03/6/2015 14:58

I don't think 'a market correction' is correct -more management hyping the prospects and not delivering and as I said I remember reducing the target eps I had expected -cant remember the earlier numbers.

24 Sept 2014 Investors Chronicle wrote
Regenersis is no longer the recovery story we identified three years ago (76p, 6 October 2011), and the latest sell-off suggests a serious failure of management guidance. But the market reaction looks harsh in light of the momentum in Advanced Solutions, and an earnings multiple of 14 looks modest compared to the growth profile'

They need to stop all the acquisitions and extraordinary costs so we get a clean set of results for a change .I suspect we will .On a forward PEG of 0.6 it is cheap but with baggage.

[al101uk] 03/6/2015 14:25

Paul Scott (assuming it's the same person) took a position after the annual results according to this webcast... so despite his concerns he still saw value at a little over £2, not far from where we are now.

hxxp://www.smallcapvalue.co.uk/

Admittedly he calls it a trade rather than a long term investment and expresses some concerns over the promotion of the company and it's FD.

[al101uk] 03/6/2015 14:08

The problem is that the fall didn't happen immediately after actual figures were available, it came after a trading update that simply said in line.

I wasn't around back then so I don't know what the rumours or broker forecasts were, but they don't appear to be backed up by any RNS statements I can find. That, to me, would indicate the fall was nothing but a simple correction of a frothy price given the risk.

I had to google Paul Scott, I assume you're talking about this article following the results:

hxxp://www.stockopedia.com/content/small-cap-value-report-17-mar-2015-fccn-wand-pen-frp-rgs-kbc-94636/

I understand his concern and at the time the article was written with Blancco a complete unknown, I would likely have agreed with his assessment.

Certainly some food for thought and I'll go back through the results with his comments in mind, but, as you say, on the face of it they look cheap and I'm happy with my position until someone can find a more specific reason why my rationale is flawed.

[buffetteer] 03/6/2015 13:39

The market was expecting earnings to be higher than they achieved last year-i call that a profits warning .I cant remember the original estimates but they didn't achieve them . The accounts show all sorts of adjustments which even Paul Scott cant fathom -that ought to count as a red flag .
It is not as simple as you are making out and as an unhappy shareholder they have much rebuilding of confidence for me to invest one more panny even though they look 'cheap'!

[al101uk] 03/6/2015 12:34

So no profit warning then?

I think the price "halved" because of one off restructuring costs incurred through the acquisitions and it's effects on EPS.

Looking at the dates, it appears that the selling happened between the trading update which reported "in line" and the results, so I guess someone did the sums and realised the company was overvalued at around 330p (never mind £4) with the acquisition risk and likely reduction in profits for the year. Selling begats selling especially in AIM stocks where there is a proliferation of private investors. A combination of both these factors dragged the price down to these levels and the companies share price has stagnated around this level since.

This isn't an easy company to find using filters when the PE can be reported as 30+ AFTER a massive correction and little in the way of asset backing.

Meanwhile the company has got on with being a company, it's acquisitions look to be performing well, the restructuring (I hope) is in the main finished and we can look forward to a more normalised EPS at next results with a great growth profile, and a respectable dividend yield.

A few months on from the acquisition I personally think the company more than justifies the 330p the stock traded at back in early September and I wouldn't be surprised at a second attempt to break £4 at some stage.

[buffetteer] 03/6/2015 12:09

Why do you think the price halved ?

[al101uk] 03/6/2015 11:51

Announcement of placing 14th Jan
Half Yearly Report 17th March... In line
Issue Of equity 31st March
Trading update 15th July... In line

Other than that just holdings RNS's and Contract wins?

[buffetteer] 03/6/2015 11:32

Just after the placing

[al101uk] 03/6/2015 11:09

Buffeteer,

Could you point me to the profit warning?

[buffetteer] 03/6/2015 10:03

They've clearly lost a lot of trust with institutions having persuaded them to buy into the over-priced placing then to come out with a profits warning -thus the low valuation .
Trust needs to be re-built and only results can do this .
They have bought the recent growth with our capital so we now need to see the fruits of the expensive acquisitions IMHO.
Im giving them the benefits of the doubt and hoopoe the soothing worlds of the CEO are born out in the results.