Regenersis Share Discussion Threads

[stegrego] 14/7/2015 18:29

Diku,

Do you not think that would have already occured to them and thus is factored into their forecast?

[dlku] 14/7/2015 18:09

client loss leaves redundant capacity, empty repair factory and idle staff, and potential losses

[masurenguy] 14/7/2015 16:55

Today's trading update stated that "During 2016, the Board will focus on actions to maximize shareholder value". With the formation of the Blancco Technology Group and the adoption of their "new mission and strategy" on a global basis, I just wonder whether this might be indicative that they could consider disposing of their lower margin Depot Solutions business in order to focus their attention on the growth potential of their higher margin software business.

[manics] 14/7/2015 16:47

Panmure reiterate 403p today.

[stegrego] 14/7/2015 16:41

Client loss after year end.
But still predicting small growth next year so yes its sub 10. Prob about 9x.

[grahamg8] 14/7/2015 16:27

RNS still predicting in line profits at year end even after taking into account the client loss. By my reconning that's 17pps giving a forward PE of <10x. Not bad for company that is growing at a decent rate.

[masurenguy] 14/7/2015 14:05

Is Regenersis PLC A Buy After Today’s 20% Drop?
Roland Head: TMF

Shares in tech support outsourcing firm Regenersis (LSE: RGS) fell by 18% during the first hour of trading this morning, after the firm announced the loss of a major customer contract. The firm’s shares have been drifting lower for most of this year, and this morning’s fall to around 161p means that Regenersis shares are now worth 46% less than one year ago. Is Regenersis a falling knife that’s best avoided, or does the firm offer good value at the current price? What’s gone wrong?

Regenersis says that as part of a process of consolidation, one of its larger clients will shift its European business to another supplier next year. This is a significant loss for the firm’s Depot Solutions business, which provides outsourced electronic repair and refurbishment facilities to major manufacturers and retailers. In this morning’s profit warning, the firm says that while results for the year ending 30 June 2015 will be unaffected, profit growth in 2015/16 will now be “modest”.

How will this affect profits?
The latest consensus forecasts for Regenersis (published before today) show a 21% rise in earnings per share for 2016. In my view, today’s update suggests that most of this expected growth will be wiped out by poor performance from the Depot Solutions, leaving forecast profits broadly in-line with 2014/15 results. That’s not necessarily a disaster. Earnings per share for the year just ended are expected to be 17.5p, implying a P/E of just 9.4 after today’s fall. The firm is expected to pay a dividend of 5p per share, giving a yield of 3%.

The good news.
Depot Solutions accounted for almost half of Regenersis profits during the first half of the year. The remaining 52% came from the firm’s Advanced Solutions division. This appears to offer much more potential. Regenersis reported an adjusted operating margin of 20.0% for the Advanced Solutions division during the first half of last year, compared to just 5.2% for Depot Solutions. Regenersis expects “strong growth” in the Advanced Solutions division this year, Profits should also be helped by growth from a recent acquisition, Blancco, which provides data erasure services for businesses. This is apparently a profitable business. Blancco’s adjusted operating profit rose by 45% during its first full year as part of Regenersis, according to today’s update.

The big risk?
I’m beginning to think that Regenersis could be an interesting contrarian buy, but I do have some concerns. Regenersis raised £100m in a placing in March 2014 to fund the acquisition of Blancco and repay debt. At the time, the firm said that it believes opportunities for growth remained strong. In today’s update, Regenersis appeared to do something of a U-turn on this statement, saying that in 2016 the board will “focus on actions to maximize shareholder value”. This suggests to me that the firm is not expecting much in the way of growth, so will try to keep shareholders happy by hiking the dividend or perhaps disposing of some non-core assets.

Buy or sell?
In my view, Regenersis looks reasonably priced following today’s fall. However, there is a risk that more profit warnings could follow today’s announcement. I plan to do some further research before deciding whether the shares rate as a buy.

[apfindley] 14/7/2015 13:20

IRG IRG £1.2mill market capwith 108mmbbls oilIRG Value should be £350millIRG

[aishah] 14/7/2015 13:10

Rebranded: Announcing Our New Mission & Strategy
Pat Clawson - July 13, 2015.

We’re thrilled to announce that Regenersis Software, which includes our business units Blancco and SmartChk by xCaliber Technologies, is now Blancco Technology Group! This rebrand signals a deliberate move to recast ourselves into a new role — acting as a guardian of electronic assets and mobile functionality for enterprise businesses.

Through Blancco’s data erasure solutions, we don’t just erase sensitive data from servers, drives and devices; we do it permanently, safely and responsibly. For enterprise businesses, our value is delivered in the form of an absolute line of defense against harmful security leaks and a 100% tamper-proof audit trail to ensure compliance with national and international regulations.

Through SmartChk by xCaliber Technologies’ mobile diagnostics solutions, we don’t fight problems with mobile devices; we find the source of the problems and fix them quickly and effectively. For mobile carriers and equipment manufacturers, we improve the customer service/repair experience and reduce the likelihood of ‘no fault found’ device returns, thereby increasing customer satisfaction.

Why Now?

There is nothing haphazard or inauthentic about how we arrived at our new mission and strategy. While our business has traditionally been rooted in Europe – both from a customer base and sales perspective – we’re now ready to address the needs of organizations globally.

This shift in strategy stems from the current state of data privacy legislation – or lack thereof, in countries like the United States. When you look at the types of international regulations and the soon-to-be-launched EU General Data Protection Regulation, it’s quite clear that Europe is miles ahead of the United States in attempting to protect sensitive information. And with such a lack of legislation and information sharing between companies in the private sector and the government, it’s hard to ignore the potential risks in the U.S.

Our goal is to contribute to the larger dialogue about security risks and the negative consequences for businesses. We’re a ready and able advisor and source of expertise to government agencies and officials – in the US, Europe, Asia, Latin America and everywhere in between – to help identify and mitigate security threats and data losses by organizations. And it’s equally important for us to drive open communication between the private sector and government agencies, and ultimately, change the way security is thought of, approached and implemented.

Looking Forward

As we look to bring our mission to life and maximize our impact for the larger good of data privacy, I would be remiss if I didn’t take a step back and recognize all of the tremendous feats we as a business have achieved and all of the hard work it’s taken to get us here. And there’s no doubt just how formidable, fearless and entrusted we have the potential to be – for enterprise businesses, government agencies and consumers alike.

To put it in the words of writer, Nathaniel Branden: “The first step toward change is awareness. The second step is acceptance.” We couldn’t agree more. Stay tuned for what’s to come from us!
Pat Clawson

As CEO of Blancco Technology Group, Pat brings over 20 years of experience in the technology and IT security industry. Because of his deep expertise and knowledge, he's seen as an IT security pundit among CISOs, analysts and press.

[jezza123] 14/7/2015 12:29

apparently the chairman bought 500K worth of shares last sept at 235p - oh dear.

[aishah] 14/7/2015 12:13

ATLANTA and LONDON, July 13, 2015 /PRNewswire/ --

New Identity Reflects Mission to Provide Absolute Line of Defense Against Security Breaches and Faulty Mobile Experiences; Aims to Tighten Grip on Data Privacy Protection and Regulatory Compliance in U.S.

Effective today, the software division of Regenersis, a global provider of device diagnostics, repair and data erasure services, announces it has a new name - Blancco Technology Group (www.blanccotechnologygroup.com). This rebrand signals a deliberate move to recast the company into a new role - acting as a guardian of electronic assets and mobile functionality for enterprise businesses.

According to International Data Corporation (IDC), 334.4 million smartphones were shipped worldwide in the first quarter of 2015. At the same time, shorter life expectancies and replacement cycles for phones are fueling a boom in second-hand smartphone sales worldwide. To be specific, Gartner estimates the worldwide market for refurbished phones sold to end-users will grow to 120 million units by 2017.

That's where Blancco Technology Group fills a pressing and unmet need. Through its expanded data erasure and mobile diagnostics service offering, the unified company maximizes the functionality and resale value of devices, while preventing leaks of sensitive personal and corporate information before devices are traded in, sold, recycled, destroyed or reused.

[buffetteer] 14/7/2015 09:57

The difficulty with trying to value Rgs is that there are two quite distinct businesses - one that is growing strongly and no doubt quite valuable while the other is a low margin commodity service business that keeps disappointing g
. From my point of view the sooner they sell it the sooner the shares will value the business correctly. Otherwise the mixed performance focuses attention on the negative.

[buffetteer] 14/7/2015 09:56

The difficulty with trying to value Rgs is that there are two quite distinct businesses - one that is growing strongly and no doubt quite valuable while the other is a low margin commodity service business that keeps disappointing g
. From my point of view the sooner they sell it the sooner the shares will value the business correctly. Otherwise the mixed performance focuses attention on the negative.

[stegrego] 14/7/2015 09:51

The profit warning is due to loss of a contract not operational weakness. Therefore no reason to see further warnings.

[masurenguy] 14/7/2015 09:24

That is sometimes true but you can't just automatically apply that as a rigid standard formula in all cases. Each particular scenario needs to be judged on its own individual merit and the risk/reward opportunity should be quickly analysed.

[dlku] 14/7/2015 09:12

profit warning in 3s, this is no.1

[masurenguy] 14/7/2015 09:08

Hmmm.........seems to be a rather excessive overreaction on the shareprice following todays profit warning unless there are some more problems that are likely to crawl out of the woodwork. Shareprice has now more than halved from last years placing at 345p and the £100m raised then stands against a current market cap of circa £128m this morning.

If Blancco is worth £115m on a PER of circa 9 (according to Equity Development) then the rest of the business is only valued at circa £12m at this mornings market cap. Good to see that you appear to be a holder here Riv. Shareprice currently looks like a bit of a disconnect with reality to me so I took a modest opening position at 163p, although it took some time for my order to be executed.

[aishah] 14/7/2015 08:14

Techinvest 2nd half Best Buy tip at 216p with a rating of 8. All about Blancco here going forwards. They reckon RGS may start to attract a p/e multiple more in line with the cybersecurity sector. ED sum of the parts valuation at 385p. I've been adding aggressively this am. dyor.

[stegrego] 14/7/2015 07:53

Considering nearly all the market is now on a pe of 15x +, selling something that is now sub 10 and still forecasting growth seems a bit odd to me. The share price reaction would be warranted if it was on 18x or something but it isn't.
Loads of total rubbish out there that trades on silly multiples.

[dlku] 14/7/2015 07:40

freakin disaster

lucky directors sold out last year isnt it

[rivaldo] 14/7/2015 07:14

Agreed Steg, and the price had already dropped before today's update anyway. The contract loss is a disappointment, but Blancco is going like the clappers.

Here's a direct link to the new ED report - 17.9p EPS is now forecast for the coming year, so RGS is on a single-figure P/E.



I can see RGS rebounding, though how high is another matter.

[richtea1701] 14/7/2015 07:07

Not literally...

[richtea1701] 14/7/2015 07:06

Gonna hold myself.