Sysgroup Share Discussion Threads

[tiltonboy] 21/6/2022 14:44

SCAP still offering at 27.39

[hastings] 21/6/2022 14:26

In fairness to him he wasn't CEO at the time of purchasing Rockford, so one wonders whether it's something he would have bought or not. It'll be interesting to see how things progress this year and if the broker numbers which look conservative to me are met or beaten. They're increasing the headcount again too, after going through the pandemic impacted years.

[cockerhoop] 21/6/2022 14:16

I've looked at SYS a couple of times with a view to invest but it appears to me Adam has been unable to grow the top line at any of the companies bought.

Take an example Telford based Rockford IT

It had grown strongly by 129% between 2014 & 2017 with a revenue of £4.45m.
Acquired in Nov 2017.

By March 2020 (last separate CH accounts) revenue had dropped to £3.2m and this year we find the Telford office has been closed with remaining business transferred.

Cash flow has been decent but is as a result of pretty aggressive cost cutting including large headcount reductions. Glassdoor suggests very high staff turnover. It's not possible to take cost out indefinitely, at some point you have to grow the business.

This trend appears to be repeated across the subsidiaries - I'm not convinced they're very good exponents of buy & build in contrast to Mike Creedon or David Cicurel.

[rivaldo] 21/6/2022 12:43

Agreed hastings - the SCSW review makes absolutely no mention of the value here given the forecast rise in EPS to 3.7p this year. Nor of the new (ish) management who are overhauling the company and were stymied by Covid, but with the new acquisitions - and hopefully more acquisitions now to come - have the chance to show their worth.

[hastings] 21/6/2022 11:49

True Jolomo, but then Mike is a one off!Do you have the Zeus note?If not DM me on Twitter and I'll forward on.

[jolomo] 21/6/2022 11:38

Although to be fair Adam is no Mike Creedon.

[hastings] 21/6/2022 09:45

Saw that, very brief and little delving.I recall one of its contributors suggesting SDI as being unappealing some years back when the shares were around 40p!Buy/build model isn't everyone's cup of tea, which is fair enough, but it can certainly deliver.

[the chairman elect] 21/6/2022 09:40

Not my views but those of Graham Neary over at SCVR

[weatherman] 21/6/2022 09:36

"Few attractions"? A PE of under 8, and forecast of growth.

[the chairman elect] 21/6/2022 09:10

From the SCVR yesterday

SysGroup (LON:SYS) - this managed IT services company reports lower revenues but succeeds in maintaining profitability. Looking to grow through acquisitions and achieve success through increased scale. But for now the share appears to have few attractions. The cash balance has been spent on its two most recent deals.

[tiltonboy] 21/6/2022 07:53

Don't know how many they have got, but they were offering at 27.3 yesterday

[masurenguy] 21/6/2022 07:23

Really ! Zeus replaced Shore circa 11 weeks ago so why would they still be offloading stock now?

[tiltonboy] 21/6/2022 07:17

SCAP offering stock after being replaced as advisor!

[hastings] 20/6/2022 20:20

I think it's just indicative of the current climate and market malaise. Remains well under the radar too, which may not be so bad for the mid-longer term!Caught up with the CEO this morning and hopefully add my write up later in the week.

[weatherman] 20/6/2022 19:48

Surprised no movement here following reasonable results in a difficult period, and good growth outlook.

[rivaldo] 20/6/2022 07:52

I note that Zeus have initiated with a 60.1p per share valuation here - 127% upside.

They forecast 3.7p EPS this year, so I was spot on!

They also "believe the company could reach £50m in revenue and 30% EBITDA margins, with the scale provided by acquisitions and organic growth. Valuing this long-term potential EBITDA (£15m) at sector mean multiples (7.3x) indicates an enterprise value in excess of £100m."

That's serious upside against the current £13.1m m/cap.

[jolomo] 20/6/2022 06:46

Morning Martin. Do Zeus give an indication of BS position?

[hastings] 20/6/2022 06:39

Correction on 2023 EBITDA should read £3.3m.

[hastings] 20/6/2022 06:37

Zeus has a lengthy initiation note out this morning and is forecasting a big bounce in revenue for the current year boosted by the recent acquisitions.Revenue expected to move to £20m with EBITDA at £3m, adj pre-tax profit of £2.4m and EPS of 3.7p.

[rivaldo] 20/6/2022 06:30

Encouraging results given the pandemic - turnover well down, yet EBITDA almost unchanged at £2.8m and EPS up to 3.6p.

Recurring revenue is up to 87%....

With a £3m cash pile at the year end utilised for earnings-enhancing acquisitions, and the outlook hinting repeatedly at improving markets and conditions, it's easy to see EPS this year improving very nicely.

I'd have thought initial forecasts would be for say a conservative 3.7p EPS or so with quite a bit of potential upside from there.

Plus there's the potential for further acquisitions - also hinted at in the narrative.

[rivaldo] 08/6/2022 13:07

Good to see today's RNS notifying that SYS are doing an Investor Meet presentation on 21st June:



This is the day after the prelims to 31st March.

A reminder that the £13.11 m/cap at 26.5p reflects rather cheaply (imo!) against a forecast 3.3p EPS to March '22 and a £3m cash pile.

The new forecast for the current year will include the two post year-end acquisitions, which are both immediately earnings-enhancing.

[matthew palmer] 07/5/2022 14:40

Anyone on TECHINVEST, I am wanting to form a group of similar minded people to discuss its views etc and information.

Click my name and send a message.

[rivaldo] 28/4/2022 09:08

Cheers boadicea, good to see you here. Always a quandary as to whether to mention stocks on other threads, but the similarity of SYS to SWG seemed obvious.