Sysgroup Share Discussion Threads

[hastings] 20/6/2022 21:20

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 20:48

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

[rivaldo] 20/6/2022 08:52

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 07:46

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

[hastings] 20/6/2022 07:39

Correction on 2023 EBITDA should read £3.3m.

[hastings] 20/6/2022 07:37

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 07:30

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 14:07

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 15:40

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 10:08

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.

[boadicea] 27/4/2022 14:22

Thanks, rivaldo, for your o/t comment on SWG thread. I had entirely missed SYS in my stock scan due to its inclusion as a media stock rather than computer/software.
It does look interesting and have added it to my watch list - probably best not to delay action for too long.
Very thinly traded, but so are many others atm, so may need to take several smaller bites if entering with the new tax year's ISA contribs.

[rivaldo] 27/4/2022 07:23

Looks like an excellent second acquisition in the last three weeks.

Orchard Computers made £2.1m revenues and £0.3m EBITDA last year, so at a £1m purchase price in cash it's pretty cheap - plus Orchard has 56% recurring revenues and will be immediately earrnings-enhancing.

[masurenguy] 27/4/2022 07:10

Synergetic acquisition.

SysGroup has agreed to acquire 100% of the issued share capital of Orchard, on a cash-free debt-free basis for a consideration of £1.0m in cash. The vendors of Orchard, Ian Terry and Chris Patten, will remain with SysGroup for a minimum period of three months to assist with the handover of customer relationships and integration into the Group.

Adam Binks, Chief Executive Officer, commented: "I am thrilled to be announcing our second acquisition of the financial year. Orchard is a well-established, well-respected business with a loyal customer base in the South West of England and I am delighted that we have been able to bring this business into the Group. "Our enhanced presence in the region will add even more value for the combined customer base and will create a raft of opportunity for all of our team members, including the addition of our 20 new colleagues from Orchard."

[hastings] 27/4/2022 07:06

Bit like waiting for a bus!Another acquisition announced, small but immediately earning enhancing.

[tiltonboy] 25/4/2022 12:42

Thanks Martin.

[rivaldo] 25/4/2022 08:52

Excellent write-up Martin, thanks.

Given 3.3p historic EPS - and that during the pandemic - plus a new earnings-enhancing cyber-security acquisition, with further acquisitions on the agenda, it's easy to see SYS catching people's eyes at some point soon.

Here's a direct link:

[jolomo] 24/4/2022 11:29

Martin, thanks for the write-up & for touching on the staffing side. Fingers crossed for better times ahead!

[hastings] 24/4/2022 11:09

Write up for interest as promised.Https://martinflitton1.wixsite.com/privatepunter/post/sysgroup-shares-look-good-value-g4m-headwinds-24-04-22

[jolomo] 21/4/2022 11:28

Cheers Martin. Quite right, too nice a day to waste.

[hastings] 21/4/2022 10:50

Had a very worthwhile catch up with the CEO this morning (put back from yesterday)Suffice to say, I'll add a write up tomorrow as I'm off to enjoy the sun for the rest of today!

[tiltonboy] 19/4/2022 15:53

Could you also ask at what level they would consider using equity to fund acquisitions.

How are they looking to promote the business in terms of bringing new investors in?

Many thanks

[hastings] 19/4/2022 15:52

No problem, I'll ask that my friend.

[jolomo] 19/4/2022 15:48

Martin. If you get the chance it would be great if Adam could give some colour around wage inflation, staff turnover & the number of vacant positions. Hope you are well. Scott.