Synectics Share Discussion Threads

[davebowler] 07/5/2013 08:20

westhouse;


SYNECTICS*
Buy







SNX.L / 430.0p / £75.60m / TP: 545p






Likely % change in earnings forecasts: No Change






Contract win

Synectics has announced that it has won a new three-year contract with Stagecoach. Synectics has worked with Stagecoach for ten years and the new deal is expected to be worth more than £5m over three years. A key feature of this contract is the demand by Transport for London for higher quality images and increased storage capacity.

Following last week's positive AGM statement we increased our target price to 545p which equates to a FY2013E P/E of 17.0x and an EV/EBITDA of 10.6x. In our view, this contract win helps to indicate why Synectics justifies a premium rating relative to its peer group. Namely, that it should deliver stronger growth and an improvement in margins. We are happy to reiterate our Buy recommendation.

[cfro] 07/5/2013 07:48

A contract win is always nice to have of any size. However this seems to me just a follow-on type contract with Stagecoach whom they have worked with for the last ten years or so. Still, good that SNX have renewed the relationship and new contracts are being won.

[billy_liar] 07/5/2013 07:09

Nice contract win to start the day in the right direction.

[kombimatec] 02/5/2013 11:37

I always think it a bit cynical when they offer 'institutional demand' as an excuse. However I suppose the directors are entitled to take a prfit at sometime

[interceptor2] 02/5/2013 06:51

If a director has sold some shares, then the best reason that I like to see, is the one given in todays RNS below imo.

"The Company has been further advised that the sale was made in order to satisfy institutional demand, and that the holders of Mr Coghlan's remaining interests in the Company's shares have no current intention of making any further sales. "

ic2...

[philo124] 02/5/2013 06:05

Director SALE.

[davebowler] 01/5/2013 08:58

Westhouse;
Buy













SNX.L / 446.0p / £78.41m / TP: 545p from 450p













Event: AGM













Likely % change in earnings forecasts: No Change














AGM statement

Synectics' AGM statement says that the positive trading of FY2012 has continued in the year to date. Two large contract wins were announced in March and with these performing as expected there is a good underpinning to the revenue growth forecast for FY2013. We are most encouraged by the confidence that results for the year will be in line with market expectations.

We have increased our target price to 545p from 450p, which would equate to a FY2013E P/E of 17.0x and an EV/EBITDA of 10.6x vs the weighted average peer group of 18.6x and 11.0x respectively. Arguably, Synectics justifies a premium rating relative to the peer group given its much stronger growth prospects and the forecast improvement in margins. We are happy to reiterate our Buy recommendation.

[interceptor2] 01/5/2013 07:01

I might have been right with the AGM date, but a slight error in the previous post. Should have said interims are due in July, not finals. Since corrected.

Happy with the AGM statement, which sounds confident going forward. Couldn't ask for anything else this early into the new financial year.

ic2...

[cfro] 01/5/2013 06:50

Your dead right ic2, it is this morning. Caught me by surprise actually as i wasnt expecting it quite yet.

Good 'inline' statement which is perfect given the high growth forecasted.

[interceptor2] 30/4/2013 19:15

I have tomorrow in my diary as the AGM date, so hopefully we will see a statement.

ic2...

[interceptor2] 30/4/2013 17:22

It doesn't seem to take much volume to move these either way, I agree that some profit taking was likely. Interims are due in July, not sure when a trading update might be released, but expect it to be a good one.

Edited

ic2...

[cfro] 30/4/2013 12:23

Smidgin of profit-taking now, but there was bound to be after a strong rise in the last few days or so.

One to be patient with imo.

[billy_liar] 30/4/2013 07:27

Onwards and upwards!

[interceptor2] 29/4/2013 18:59

A strong move here in the last few days, once the full year is reported in July, we can look forward to 2014 estimates that indicate a PER 11.30 at todays price.

Last broker estimates were before the 01st March £7.0m contract win, appx 9% of last years revenue.

ic2...

[philo124] 29/4/2013 13:31

Yep, 520p possible.

[cfro] 29/4/2013 13:00

Great to see SNX pushing up higher.

[beaufort1] 29/4/2013 11:17

I am pleased this is going up, but I would dearly like to know why?
B1

[beaufort1] 26/4/2013 09:12

Must have been tipped somewhere?

[philo124] 26/4/2013 08:44

The 25k sell held up progress.

[kombimatec] 26/4/2013 07:48

I think there is so little stock around. Every small buy lifts the price.

[dasv] 26/4/2013 07:45

Year Ending Revenue (£m) Pre-tax (£m) EPS P/E PEG EPS Grth. Div Yield
31-May-08 79.17 4.39 18.90p 7.9 n/a -27% 7.00p 4.7%
31-May-09 70.65 0.47 6.50p 20.2 n/a -66% 7.00p 5.3%
30-Nov-10 91.12 1.17 8.86p 20.1 0.6 +36% 6.33p 3.5%
30-Nov-11 69.08 2.46 16.40p 12.3 0.1 +85% 7.00p 3.5%
30-Nov-12 77.04 4.71 26.30p 10.8 0.2 +60% 7.50p 2.6%

Year Ending Revenue (£m) Pre-tax (£m) EPS P/E PEG EPS Grth. Div Yield
30-Nov-13 84.79 6.80 30.48p 13.8 0.9 +16% 8.00p 2.0%
30-Nov-14 91.56 8.50 38.47p 10.9 0.4 +26% 8.50p 2.1%


It's pretty cheap on 2014 PE of 10.9. If share price traded at 20+ PE as of now then share price would presumably be 769p. Question is whether not 2015, 2016 growth rates will keep pace.

Something's going on though with such a big rise today

[philo124] 26/4/2013 07:11

Look at eps for past 2 years and forward on Digital Look should answer the Question.

[cfro] 26/4/2013 07:06

Dont know but we're smashing into new highs now. :-)