Stilo Share Discussion Threads

[firth] 23/8/2017 12:24

I am very disappointed that you think I am that cynical Clocktower!!!!

[lukead] 23/8/2017 12:23

Where is that well known ramping sad git M' Mouse these days?

[clocktower] 23/8/2017 10:56

One often hears "Buy some more" from folks that want to Sell some more without suffering a price drop.

[firth] 23/8/2017 09:50

Two bullish postings on the trot!!! Its like old times. The timing for me is excellent as I will be speaking to people at the York' Ebor' meeting who have shares in 'Stilo'. 'Buy some more' will be my message.

[mudbath] 22/8/2017 21:32

With a fair wind it looks as though recurring software maintenance revenues might approach or even exceed the milestone £1MILLION mark in the current year;no mean feat considering that these amounted to just £713,000 in 2015.
Add to this David Ashman's final words in his Chairman's statement that,
"the outlook for Migrate conversion services and OmniMark software remains promising for the remainder of the year",and this could indicate that a more than satisfactory outcome will be evidenced,come March 2018.

[stilolosses] 19/8/2017 13:38

The main reasons as to why I am holding Stilo are numerous but amongst these are the following: dividends, growth prospects, unique products, growing list of products, well managed company and its cash pile.

Personally, I was very disappointed to read that having posted their 6 month end results so, so early compared to their previous years, the numbers were not as high as I expected. Especially with this 6 month period being posted post brexit I was expecting revenues to be at least be 10% higher. Disappointing to read that profits have fallen back too. Course, operating costs were up by £68,000 though. However, on the other hand, the fact that cash in the bank has again gone up by a healthy £209,000 and dividends are up is fantastic. The excellent cash generation together with the cash pile means that dividends are more or less guaranteed. A certainty really.

One thing that management at Stilo do not do is waste a penny on unnecessary research and development costs and the pennies they do spend are only spent on quality products, normally unique products where others can't compete. As we all know they normally use Omnimark for this. Going forward, development costs are going to be capitalised from 2017 onwards so these are of course going to hit the bottom line but with the eventual growth in revenue this will look after itself anyway.

Stilo recently announced in their AGM that they would look at making an acquisition and to possibly pay special dividends. Personally I do not see them doing this for quite some time yet. If anything 2019 at the earliest.

The only concern I have with Stilo is the timing of when revenue from the new products is going to start rolling in. If the board had their own way both Jats and Author Bridge would be out there now bringing in some decent revenue. But as we all know, and management have reported on this, development time is taking a lot longer than anticipated.

Stilo have only just taken on new staff so that they can complete the work necessary to get Author Bridge up and running and lets not forget this has been in development since 2014. It is certainly going to take time to get additional revenues rolling in (12 to 18 months) before we can really see what kind of an impact the new products will have on Stilo's bottom line. For me and any other medium to long term investor this should really not be a problem because this additional revenue will certainly come but like I have said its just the timing that is a little frustrating.

Happen it will though! Guaranteed!

We all know that Stilo will continue to issue more shares during in the foreseeable future which is unfortunate for all shareholders, especially long term holders but this is just the way it goes with companies like this. Personally, if I had my own way I would wish if this was done less frequently but its just the way it is. In terms of the company being sold on the cheap I don't think this will happen now. I don't think David Ashman would buy around 20 million shares and throw a few million of these to his kids to then have the company sold on the cheap. I also don't see any outfit coming for a company Stilo's size quite yet, especially as they are still developing new products which as we all know take a very huge amount of time to develop, bring to market and then sell. Author Bridge and Jats will provide this additional revenue but on an incremental basis as time goes on.

In closing, from my perspective, certain aspects of the 6 month end results were disappointing but in other areas I am more than happy. Can't have my cake and eat it but once Author Bridge and Jats are up and running, hopefully sooner rather than later, we can all then really find out what the bottom line is. In the meantime, I will continue to enjoy my dividends!

[slartybartfaster] 17/8/2017 14:35

michaelmouse, its a shame the stl 1.5% annual divi is not closer to 30%, if it were you may have an investment case. Unfortunately for you it is not and will not prevent further double digit falls. Steve asks good questions, why pay a divi at all and at a mc9m why is it even listed. Bailout placing soon just to pay the divi, r&d and plc costs. bod are using divi payment to pull the wool. I am surprised you have not spotted this trick yet. Its been played before.

[slartybartfaster] 17/8/2017 14:16

Shares in Stilo International (STL) currently trade more than 9% lower today, at just over 7p, on the back of the company’s half year results announcement. This follows them also having fallen by more than 14% following the company’s announcement of 2015 results in March. Hmmm.

The latest P&L shows profit increased from a corresponding 2015 period £0.16 million to £0.18 million on revenue 11.5% higher at £0.87 million - and the company notes a 33% increase in the interim dividend per share to 0.04p.

However, a 33% increase in the total annual dividend would still only equate to a yield of 1.5% at the current share price and the latest results show, after particularly £56,000 in dividends paid and £83,000 of “development costs capitalised”, only a £75,000 increase in cash.

The announcement notes “an uplift in OmniMark sales being offset by a reduction in Migrate revenues” - OmniMark being the company’s content processing platform, though it noting “over recent years, the company has made a significant investment in the development of Migrate, the world's first cloud XML content conversion service”. Yet, it is now reporting “a reduction in Migrate revenues”!

The announcement concludes that “trading in 2016 continues in line with management expectations overall… We continue to invest in the development of innovative new products that will serve to underpin our future growth”. Thus, “development costs capitalised” look set to be a recurring feature here – and to be considered in valuation calculations.

The market cap is currently just over £8 million – with the balance sheet showing net tangible assets of £1.30 million, including cash (net) of £1.39 million. I’d thus suggest material growth is required from here to justify the valuation and, indeed, the company bothering being stock market listed – and that the noted share price declines on the results, at least partly, reflect the announcements reminding of these.

This compares to a May AGM update, for example, eschewing profit and revenue information, whilst including the likes of “following extensive testing by a very prestigious client, it (AuthorBridge, a new cloud XML authoring tool) is now scheduled to be deployed by them in full production in May 2016, representing a significant milestone for the company”. At the current stage here, I avoid.

[baa] 16/8/2017 16:34

That is a surprise , as a better look at H1 & H2 2016 , now with H1 2017 added , shows how the fall in underlying sales is accelerating on a constant currency basis . More worrisome than at first glance. Authorbridge can't come soon enough .

[michaelmouse] 16/8/2017 14:42

Perhaps you'd like to start at post 1907:-



This was when last year's finals were released.

Run post 2009 past me again??????

[baa] 16/8/2017 14:16

I only talk facts ...if some have no manners to respect them , more fool them .

I said 7p was too high at the time of the finals, you derided that view and I've been proved correct . Go figure

[michaelmouse] 16/8/2017 14:07

On a serious note making statements like, "no catalyst for re-rating until at least H2 2018, probably H1 2019" suggests that you're either one of Advfn's clown traders or highly inexperienced.

STL is a micro-cap is every sense of the word. Several events could cause a "major" re-rate e.g. special dividends, trading ahead of expectations, bid for the company, major contract win, acquisition, any combination of the factors mentioned........

[michaelmouse] 16/8/2017 13:48

LOL. "no catalyst for re-rating until at least H2 2018, probably H1 2019."

Oh golly gee whizz, thanks Nostradamus. ;)

[baa] 16/8/2017 13:31

No change from the 2016 finals.

On a constant currency basis , revenue would have been down 6-8% and net profit reduced to c £50K . Shame on the directors for not fronting up to the underlying sales performance.

As noted previously a 6-7p price was too high 6 months ago & the share price looks about right at 5p . Upside if authorbridge performs , downside if the f/x reverts before then . Divi is nice , but no catalyst for re-rating until at least H2 2018, probably H1 2019.

[michaelmouse] 16/8/2017 11:58

Market cap. is around £4m minus cash. If they do around £288,000 profit this year (double the interim figure but less than last year) then p/e would be around 14. If they pay a final dividend of, say, 0.05p then that's a 2% return pa (and increasing/not to mention a possible special dividend). That's ok for starters.

However, operational gearing will kick in during 2018 (start is less than 5 months from now) if AuthorBridge and Migrate JATS are ready for full release. That p/e figure will rapidly change from thereon in. Markets are forward looking.

Meanwhile excellent cash generation means progressive dividend policy is virtually guaranteed.

[clocktower] 16/8/2017 11:37

For a company with a market cap of almost 6m less cash, so say 4.5m to only make £142k is not very impressive unless it has huge growth prospects, which STL has proved is beyond its capability based on its history. Bar being sold,when the share rich directors want, in the interim period I can envisage them awarding themselves more options that will dilute other small stakeholders, then selling the business at little premium to its current price. Just looking into the crystal ball based on its past.

Remind me what old highs were many years ago and the issue price?

[michaelmouse] 16/8/2017 09:53

varies - The jam is already on the scone - profitability, cash generation and rising dividends. We're now after the clotted cream that we hope comes in the form of AuthorBridge and Migrate JATS.

[varies] 16/8/2017 09:47

I am struck by the high level of R&D : £290K of which £91K is capitalised, which relates to the development of AuthorBridge, and £199K is presumably set against profits. This latter figure amounts to nearly 22% of sales (£910K).
Whilst money spent on R&D can often prove to be money wasted, several of my more successful investments (eg Delcam and Sopheon)had similar R&D/Sales ratios and I take this as a good omen here.
This looks a good stock to accumulate in the hope that the long-promised jam will materialise in 2018.

[clocktower] 16/8/2017 09:08

That is all well and good but the share price is down from around 8p in Sept 2016 and unless someone makes an acceptable offer for the company, there seems nothing exciting around the corner that will have any marked impact for anyone seeking capital growth, rather than dividend income.

[michaelmouse] 16/8/2017 09:04

Hello mudbath. Nice to see you contributing again.

Yes I do believe it's "excellently managed" indeed. I can't really add anything to my previous post, although I'd just ask the rhetorical question, how many small listed AIM companies valued at £4m (if you strip out their cash) are consistently profitable, generating cash and paying a progressive dividend whilst at the same time developing products that could potentially transform their growth?

Whilst every investment involves some risk and nothing is ever a no-brainer, this is as close as it gets imo.

[mudbath] 16/8/2017 08:47

michaelmouse.
It is good to read your opinion that Stilo is "excellently managed",for this has been my own strongly held view over the past decade.

[michaelmouse] 16/8/2017 08:26

Yes CT something we can agree upon. Profit would be up nicely but of course operating costs are up. That's hardly surprising at this point as they invest in their two new revenue stream contributors - Author Bridge and Migrate JATS. These won't contribute significantly to sales until 2018, but they will be worth waiting for and eventually we should see a significant jump in profitability.

Most importantly this company is being managed conservatively and well.

Overall revenues are up with Migrate sales up 34%. Cash is significantly improved again and that's even without an FX boost. Consequently, the dividend has been hiked by 25%.

A small company but excellently managed with a great balance sheet. They have even got the results out two weeks earlier than normal, just 1.5 months after the year end (as it should be for these smaller companies).

Growth will hopefully kick in further when they are totally happy with their development of AuthorBridge and Migrate JATS. That should begin in 2018 and beyond.

Meanwhile investors can sit back and enjoy increasing dividends from a small consistently profitable and cash generative company with an excellent balance sheet.

[clocktower] 16/8/2017 08:03

Though profit is down, it is a good result with cash up as is dividend.

[monkeyspanker2000] 14/8/2017 07:43

this POS still going? i remember them back a long time ago and thought, what a weak product.

[stilolosses] 14/6/2017 22:58

So, so, so, so, so many silent lurkers lurking around with nothing to add and absolutely nothing to say

So, so, so, so ,so many lurkers hoping that small private investors will get cold feet and start selling their holdings with the hope and anticipation that they will then be able to see the share price fall and then those very, very, very silent lurkers who never have anything to say will hope that they can then jump in and purchase the shares on the cheap! Cheap! Cheap!

Problem is those small private investors just don't want to sell now. They want to sit on the shares and take the dividends! Take the juicy special dividends! and take the growth in the share price as products start to kick in after so many years of waiting!

Silent lurkers! Silent lurkers! Not much to say!

Silent lurkers! Silent lurkers! You want cheap Stilo shares at 2p, 3p and 4p but the shares are going the other way.

Silent lurkers! Silent lurkers! I'm sorry to say you have missed the boat!