Shearwater Share Discussion Threads

[northwards] 31/7/2021 17:48

Thanks. So appears no more cash considerations for historic acquisitions ?

[tole] 31/7/2021 13:47

https://masterinvestor.co.uk/equities/getbusy-and-more/Shearwater Group (LON:SWG) – This week's final results from the cybersecurity and security services group showed up better than expected. Revenues for the year to end-March were slightly lower at £31.8m (£33m) but it came in with a 9% advance in EBITDA at £3.7m. Analyst Simon Strong at Cenkos Securities rates the shares a 'buy'. Now closing the week at around the 150p level, I take the view that the shares are capable of rising back above the 200p level in the next few months or so.

[boadicea] 30/7/2021 17:55

Try this link for 'Note 17' - HTTPS://xcinaconsulting.com/wp-content/uploads/2021/07/Shearwater-Group-plc-Annual-Report-31-March-2021-Final-signed-version-27.07.2021-1.pdf

[northwards] 30/7/2021 17:07

Thx - can't seem to see that? Can you post? I see in notes several of the businesses are trading materially ahead.

[elsa7878] 30/7/2021 16:48

0. See note 17 of the accounts.

[northwards] 30/7/2021 16:26

Does anyone have info on how much cash is still to be settled for historic acquisitions, and when.

[boadicea] 30/7/2021 15:56

earwacks (2466) - Yes, that's the sort of discrepancy I was pointing to. To maintain such ratios, companies need to have a securely protected income - e.g. ip protection or royalties arising from the turnover of their licensees etc - otherwise it attracts competiiton and extravagant margins come under pressure. The danger of holding companies on a high rating - either of p/e or price/revenue is that is assumes maintaining either a high growth rate or high margin respectively, sometimes a combination of both. A slip up on either metric can cause a highly disproportionate drop in price due to the combination of fact and expectation. There is (imo) a safety margin in SWG based on the current price being adequately supported by current trading and the apparent lack of any higher expectation for the future. There is arguably enough turnover to attract predatory interest if the share price stagnates or declines coupled with the possibility of an uprating if performance encourages market expectations to rise.

[earwacks] 30/7/2021 15:29

hi Elsa, I was going by Stockopeia calculation which was PE of 11 when the share price was £1.80, but not going to quibble over 2%

[elsa7878] 30/7/2021 15:20

If you back out the cash the PE here is 12.

[earwacks] 30/7/2021 15:12

on comparisons with other cybersecurity companies, there is are quite big discrepancies. IGP I also hold has 60 million market cap and revenue of 11 million,a third of SWG. no debt. Darktrace, not sure about debt, not many figures out as IPO'd recently: market cap I kid you not, 5.5 billion, revenue 220 million, . That's barely 7 times the size of revenue at SWG, I can't even work out how many times more expensive that is than SWg, but something astronomical. OK a wild guess 180 times as expensive. IGP has a bit more cash but a bit more sanely twice as expensive. Swg is now on a pe of less than 10. Something is wildly over priced and its definitely not SWG

[earwacks] 30/7/2021 13:40

The fact is the market remains weak with low volumes, It is quite incredible that we are mow hitting 30 million revenue 2 years running.They have made a profit this year thanks to a strong second half. The December update said October and November revenues were up 39% on previous year helping to claw back a 30 % drop in revenue. They forecast this would continue and likely lead to a full year profit. Reiterated this in Preclose statement and confirmed in final results. They paid off 4 million loan note they have 6 million in the bank and an unused 4 million credit facility with Barclay. Somehow the share price is now 10% less than it was in October 2019 when revenue was a third less and in debt. I suspect the market is a little sceptical/nervous about proposed acquisition which has been 15 months without success, although they comment about a pipeline of possibilities. Would be good to get that hurdle out of the way and prove that trading install improving at a decent rate. I have a feeling that the 39% October/November increase could be a bit of window dressing. Why not continue that theme with following months. They caught up on the year and produced the forecast results with 9% profit increase, slightly ahead of expectations.

[boadicea] 30/7/2021 12:25

The price to revenue factor for SWG appears to be around x1.3 (as I write). I hold another share in broadly the same field with a factor approaching x12. I consider the latter to be aggresively high (and have top-sliced it accordingly). However, at its lowly rating - implying a market pereception of poor profitabilty and prospects, SWG must be a candidate for takeover by any outfit that sees it as an opportunity for a cheap add-on from which a significantly better margin can be obtained. On the other hand, the next trading update could radically improve the market perception but it may only have limited time for that. I should add that I don't entirely agree with the market, so view this to some extent as a two-way bet.

[zico01] 30/7/2021 10:55

Last year the company issued a trading update in August before issuing one in October.They might issue a trading update in August again this year.If they do ... we will have a better idea what they meant by strong Q1. To the directors start buying the shares and don't be shy !!!

[husbod] 30/7/2021 09:14

Well the market has certainly reacted to the Berenberg note - a massive 1p rise so far.Glad I didn't average down a few days ago but the temptation grows.

[zico01] 30/7/2021 08:14

Thanks SEV22

[sev22] 30/7/2021 08:09

zico01 This is where I get some of my broker recommendations from but no numbers available. https://www.sharecast.com/uk_shares/broker_views

[northwards] 30/7/2021 07:48

Let's hope we have a better day today. That's some upside from Berenburg.

[zico01] 29/7/2021 21:52

SEV22 Do you have access to their t/o ... profits ... and eps numbers for the current year.

[sev22] 29/7/2021 21:36

Berenberg Bank have reiterated their 'buy rating' on Shearwater Group today with a 380.00p price target. That's a potential 250% uplift from tonight's closing price.

[weatherman] 29/7/2021 21:27

I can see turnover in the range £18m-20m per half, the weighting of last year saw a slow down in H1 and rebound in H2 / 15%+ growth in turnover -> £36m-38m by the end of the year imo.

[zico01] 29/7/2021 20:44

With nearly 4 months of the year gone Phil Higgins the ceo issued a bullish update on Q1 without giving any details ... " trading in Q1 was strong ". We will get a more detailed trading update in October for the 6 months period. Assuming trading momentum remains strong for the final 2 months (my rough estimates) For H1 - revenue could increase by at least 25% to £13.96 million For H2 again assuming the momentum remains strong : - a 20% hike should generate revenue of £24.31 million For full year the company could generate revenue of £38.27 million. At £1.53 the company is valued at £36 million and is trading on a PE of only 12.75 very cheap.With over £6 million cash ... could well get acquired by a bigger rival !

[tradingcoder] 29/7/2021 17:32

I completely agree. The clutching at straws negativity for a lower price point is so obvious. Happened to one of my other shares last week. You can write any bs as long it has a imo at the end.

[igoe104] 29/7/2021 16:40

Only thing I noticed about Q1 22, that the chairman said strong. You would think if it was strong, why not write more detail.? Like is it the same progress as Q3 / Q4 or better, than 20/ 21. The lack of detail from the company means we have more questions than answers...

[lammylover] 29/7/2021 16:38

2lb If the results are that bad - why are you hanging around here, with so many posts? - If a SWG holder and not happy, then sell and move on elsewhere where grass is greener. - More likely you are a trader who is simply looking for a lower entry point....putting out lots of posts to scare a few PIs into selling their shares for a pittance. Rich

[zico01] 29/7/2021 16:11

2lb You are clearly missing my point ... if the results were bad (as you have mentioned a few times) MM's would have marked the shares down at the opening. The fact it opened up by 5p suggests to me and the MM's that the results and outlook were good. Traders and short term investors started to sell. The company has had a very strong start to the current year and i'm looking forward to the next trading update in October ... which no doubt will be very bullish. btw you do get excited very easily just calm yourself !!!