Tikit Share Discussion Threads

[orange1] 17/3/2004 20:17

Diogenes

I entirely agree that it pays to be cynical about directors in general. But I still wonder whether it is appropriate here and certainly if the company is delivering the goods, as is the case here, why not just give them the benefit of the doubt?

The write-up by Citywire was available to anyone who has registered at the site. In this case you do not have to be a subscriber to access it only registered, although I think that it is the case that a free for all article becomes aavilable to subscribers only after it is more than 7 days old.

[diogenesj] 17/3/2004 18:22

Hi, Orange. I always think that if you are cynical about the motives of company directors, you will never be disappointed. The effect of the share buybacks is basically to cancel the dilution that would otherwise be caused by the issue of shares to meet the directors' options. Shareholders end up pretty much where they were before: with undiluted shares paying no dividend to speak of. The cash that should have been used for dividends has gone to buying back the option shares, or in other words to the directors.

It rather looks as though they may have sold another stack today, causing the price to drop back.

Thanks for the nice write-up by Citywire (don't think your link is much use except to subscribers). You will notice that their conclusion is much the same as mine.
:-)

[diogenesj] 17/3/2004 11:02

Excellent results and slightly better than forecast. Quite encouraging really.

Assuming we can now expect something like 7.77p eps for 2004 and 9.35p for 2005 (pre-goodwill), we have prospective PEs of 18.71x and 15.56x. That makes the shares a good hold, at least.

The dividend is rather pathetic, of course (prospective yield about 1.24%), and although there is plenty of cash it is used for the benefit of the directors (buying back shares to support their options). Even so, the shares are so illiquid that directors sold last October at 105p, below the then market price. I am still not quite sure why they felt the need to do this. With the price today at 144.5p, it looks an increasingly odd manoeuvre.

Good luck all. There are worse shares in the market. :-)

[orange1] 17/3/2004 08:29

Excellent results announced this morning with all the ticks in the right places so to speak:


* Turnover up 16 % to #9.56 million

* Profit before tax and goodwill up 81 % to #1.18 million

* Consultancy revenues increased by 21 % to #2.92 million
(2002: #2.41 million)

* Revenues from support and outsourcing businesses up 29 % to #2.79 million
(2002: #2.17 million)

* Group remains cash generative
- #1.20 million net cash inflow from operations
- Net cash of #1.94 million after payments of #0.45 million to
purchase ordinary shares and #0.57 million for deferred
consideration relating to the acquisitions of Aurra Consulting
Limited and Granite & Comfrey Limited.

Prospects

* Pipeline and order book at record levels
* Expansion into continental Europe
* Optimistic about future prospects

---
In particular the recurring services side is growing very nicely.
Other highlights:
- increasing dividend
- revenues from outside the legal sphere: 3i
- very good prospects for the sale of its own software: Re-action Server
- new business intelligence software, the 'Tikit KnowHow System' gained industry recognition by winning the top legal IT award in its area in 2003.
- new innovative products to meet clients' demands to be introduced this year
- strong growth predicted: "Our belief is that we will achieve strong organic growth of existing business using the relationships established with our existing client base. In addition, Tikit continues to explore faster growth opportunities through acquisition,merger or joint venture activities."

[diogenesj] 21/2/2004 22:33

Thanks, dealit: nice to see someone thinks they're worth buying. :-)

[dealit] 20/2/2004 06:31

Posting part of an article from FundWatch This is Money site profiling fund manager Carl Stick, dated 16/2/04


----------------------post----------------------

Stick has also run the top-performing Rathbone Special Situations fund for two years and co-manages the Rathbone Smaller Companies fund with Marina Bond*.


Both funds are gambling on the on-going recovery in technology and media stocks. The Smaller Companies trust recently increased its stake in Tikit, an IT consultant to the legal industry, following a positive AGM statement. It also topped up holdings in Aim-listed* software company Codascisys and marketing firm Media Square. It also bought into Scottish Radio Holdings after Emap took a stake at a significant premium to the current price. 'It confirmed our view that the company has some high quality assets and that consolidation in the radio industry is probably not far away,' said co-manager Bond.

[dealit] 10/2/2004 19:56

Big jump north today on no news flow, drop in price following a positive trading statement last month, something good arround the corner I feel.

If we start to see some big share buying, which is not normal for this Company this share could take off.

Interesting few day I feel MM`s must have orders to fill

Be lucky everyone

[diogenesj] 10/2/2004 14:03

This thing seems to be ticking up now ahead of results next month (some would say not a moment too soon). I'm almost beginning to hope that I'll get my money back....

[glennborthwick] 11/1/2004 11:48

looks a buy in my book - dont hold but one to consider

[rarther] 11/1/2004 11:37

Just checked out TIK for the first time.

Figures look pretty good but I can't trust directors who "are pleased to announce" that they are collectively bailing out.

What a crafty little statement that was!

[orange1] 08/1/2004 22:43

I take your point about the discount but the sales represented only a small proportion of their holdings.

As you say should be water under the bridge now, the current news and prospects are good and the cupboard is seemingly free of skeletons.

[diogenesj] 08/1/2004 21:21

It was the big discount that upset me, Orange. You can hardly say that institutions are 'demanding' shares if they insist on an 11% discount before they will even look at them. And in my experience, directors and founder shareholders, who are well placed to know what is going on in their own company, only sell at a big discount if there is bad news on the way.

However, in view of the trading statement, that appears not to be the case here, so perhaps the whole thing was just badly handled.

[orange1] 08/1/2004 20:36

A little unfair in my opinion. The key aspects of the announcement are reproduced below. Look at how much of the total holding of each director was placed. Only 10% in the case of the 2 biggest holders:

"Amongst the vendors were the following directors; Mike McGoun, Tony Pearson and
David Lumsden who sold 100,000 ordinary shares, 10,000 ordinary shares and
30,000 ordinary shares respectively.

Following this placing the interests of these directors in the ordinary share
capital of the Company is as follows:

Name No. of shares % of issued share capital

Mike McGoun 1,390,000 11.57
Tony Pearson 30,428 0.25
David Lumsden 304,000 2.53

The William James Flanagan 2001 Discretionary Settlement, of which Mike McGoun
is a co-trustee, has also sold 101,429 ordinary shares in the placing, and as a
result now holds 57,571 ordinary shares representing 0.48 per cent. of the
issued ordinary shares in the Company."

[diogenesj] 08/1/2004 17:52

See post no. 14 above, which reproduces the RNS announcement. Three directors, some of their friends, and a trust of which the chairman is a trustee sold a large quantity of shares, almost 9% of the company, 'to meet institutional demand'. The institutions were so desperate to get their hands on the shares that they would only pay 105p for them, a massive discount to the mid price at that time (123.5p).

Occasionally the story about 'institutional demand' and 'increasing liquidity' (always trotted out when the directors abandon ship) may be true. In this case, the huge discount that had to be offered before the unnamed institutions would touch the shares seems to have spooked the market and the price has never recovered.

[richjp] 08/1/2004 17:07

Diogenes,

You may know that Techinvest tipped this one about six months ago. I haven't bought but I have been following it.

Can you tell us more about the mass exodus you mentioned. Sometimes individual director sales don't mean much depending on their scale. If lots do it however that is a cause for concern.

[diogenesj] 07/1/2004 10:42

In view of that statement, the shares really do look cheap. But they have never recovered from the mass exodus of directors and friends back in October. I imagine the market will need one or more really good sets of results to get over that.

[dealit] 07/1/2004 07:11

Tikit Group plc
Tikit provides a comprehensive range of IT related services
primarily to leading law firms

PRE CLOSE TRADING STATEMENT

SIGNIFICANT IMPROVEMENT OVER PRIOR YEAR

OUTLOOK ENCOURAGING

Tikit Group plc ('Tikit' or the 'Group'), a leading provider of consultancy,
services and software solutions to the UK's major law firms, announces an update
on current trading for the year ended 31st December 2003, before entering its
closed period prior to the announcement of its preliminary results on 17 March
2004.

Trading during the second half of the year has been encouraging, with continuing
demand for higher margin consultancy and support services. In addition, there
have been a number of important software sales for the Group, signalling a
gradual change by clients in considering and committing to larger scale
projects. As a result, the trading performance of the Group is likely to be in
line with market expectations and will show a significant improvement over the
prior year.

There have been a number of large new client wins in the second half and Tikit
has been awarded contracts to implement iManage in two of the top three law
firms in Spain, including the largest continental European law firm, with over
1600 employees.

The group has continued to extend its portfolio of software application
expertise during the year with the addition of new innovative products for the
large law firm market, including both third party software and Tikit-developed
value-add software. Sales of iManage, a leading document management package, and
InterAction, the leading professional services client relationship management
system have been particularly successful. In addition, Tikit's own Reaction
Server product has been well received by the market, which is enabling law firms
to comply with the new Data Protection guidelines for electronic marketing

As a result of new contract wins at the end of 2003, we enter 2004 with a
healthy backlog of implementation and support business and software sales
activity is also strong. The outlook for the Group is encouraging and the
Directors look forward to updating shareholders on progress when the preliminary
results for the twelve months to 31st December 2003 are released.

[azalea] 04/11/2003 19:39

Based on the Interim figures,its cash holding,current orders at record levels and the take up of 1m plus shares by institutions, I like the look of TIK and would not be surprise to see them tipped fairly soon in the IC. I bought 2500 today (at a significant dip in the price) and am looking forward to a rewarding rise by the time full year figures are announced.

[orange1] 25/10/2003 17:15

Well directors and friends do bail out at various times and it's not always bad news. Take a look at Alba for example. The shares have gone to institutions so to a good home. And the liquidity in this share has been truely awful. Just look at the recent spike to 170p a few months ago.
On the other hand it is true that the sale was at a discount to the current price and that has to be a negative. It is natural that the price should gravitate down to that price but it should not fall any further.
Another interesting feature is that the placing has been done off market ie the shares have gone straight to the institutions by-passing the MMs. The MMs have been lobbed 75k shares though at 105p. The temptation must be to lower the price in the hope of flogging some of them quickly.

[diogenesj] 24/10/2003 23:03

Dealit: it's not usually good news when the directors and their friends bail out, especially if they can only do so at a massive 15% discount to the market price.

[dealit] 24/10/2003 20:20

What I cannot understand is why the MM`s don`t see the announcement as a good thing. Also will the Institutional buying be shown on the RSN board, if they are then the price will hopefully respond North.

I so the drop in price as a buying opportunity and bought some more today.

IMHO the Companies share price will eventually move North but in saying that I have got to say this share takes some waying up, I have never been involve with a share that is so effected by relatively small movements in buying and selling.

[dealit] 24/10/2003 07:40

Tikit Group PLC

('Tikit' or 'the Company')


Placing

Tikit, a provider of a comprehensive range of IT services primarily to the legal
sector, is pleased to announce that Charles Stanley & Co Limited has, in order
to meet institutional demand, today placed 1,043,000 ordinary shares on behalf
of certain directors and other employees/founder shareholders with new
institutional shareholders (the 'Placing').

The shares placed represent 8.68 per cent of the issued share capital of the
Company and were placed at a price of 105 pence per share.

Amongst the vendors were the following directors; Mike McGoun, Tony Pearson and
David Lumsden who sold 100,000 ordinary shares, 10,000 ordinary shares and
30,000 ordinary shares respectively.

Following this placing the interests of these directors in the ordinary share
capital of the Company is as follows:

Name No. of shares % of issued share capital

Mike McGoun 1,390,000 11.57
Tony Pearson 30,428 0.25
David Lumsden 304,000 2.53

The William James Flanagan 2001 Discretionary Settlement, of which Mike McGoun
is a co-trustee, has also sold 101,429 ordinary shares in the placing, and as a
result now holds 57,571 ordinary shares representing 0.48 per cent. of the
issued ordinary shares in the Company.

Commenting on the placing, Mike McGoun, Chairman said:

'I am delighted that we have been able to attract new institutional
shareholders, thereby increasing our institutional investor base and liquidity
in our shares'.

[dealit] 21/9/2003 19:09

Low volume trading that affects share prcie movement, why can`t Directors purchase there own stock and push share price north,

[wjccghcc] 19/9/2003 08:37

Growth limited to UK legal market (some propietary products but most are distributed from 3rd parties + full valuation). Good company but that's in the price.