Tikit Share Discussion Threads

[one for the money] 11/2/2005 09:52

Good news about the takeover this morning - and a good 8% rise in share price at the moment

[orange1] 20/12/2004 13:36

So far an unenthousiastic welcome from the market, probably because of the absence in the statement of the magical words "earnings enhancing".

But the business logic behind the deal is compelling and the size of the acquisition for a company of the size of TIK is also manageable. The finances stack up as follows:

In the year ended 30 June 2004, NIS had revenues of #3.48 million, achieving a
profit before taxation of #195,000. Since Tikit are paying #1 million for the acquisition that's a very good price/revenue ratio.

It is expected that Tikit however will incur additional costs to provide ongoing management services to NIS that were previously provided by MYOB. This is the one financial negative therefore as this could in the short term diminish or wipe out the NIS profit before taxation.

As far as the balance sheet impact is concerned this appears to be positive: at 30 June 2004, NIS had net liabilities of #1.1 million. However, the net assets of NIS at completion will be zero and net cash balances are expected to be approximately #250,000 and tax losses of approximately #850,000 will transfer to Tikit at completion.

[orange1] 20/12/2004 07:39

Acquisition announced today which is important not just for what they are acquiring but also for the doors it will open not only in the legal arena but in the accountancy market as well:



As the Chairman says:

"This is an exciting development for Tikit as we continue to enhance the range
of specialist services that we can offer our clients through the acquisition of
another specialist consultancy operating in our market. In addition, NIS
presents Tikit with the opportunity to secure further business in other sectors
of the professional services markets."

[bergster56] 10/12/2004 15:29

afternoon people. There's a newly listed company called Armorgroup international (arg) with 1 st day of trading today. Its one i've been researching for the past 9 weeks. I've posted all my researchon the ARG thread if anyone interested. Its a private military company with operations in iraq

[orange1] 08/12/2004 21:17

More business and plaudits for Tikit:



To read more about nflow,click here:



Tikit are the the sole UK legal reseller (excluding Scotland) within the top 250 law firms of DictaFlow.

[orange1] 07/12/2004 20:21

Tikit customer DLA is to enter into a mega merger with a US firm:



Will Interaction now be rolled out throughout the entire merged firm or does DLA's briede to be already have Interaction?

[one for the money] 23/11/2004 15:13

Orange1

Yup. Pleased with what I've seen so far - and I am in profit today; bought at 154 = ;o)

Probably exactly what you said in your recent post, but...

Currently growing profits
Confident growth forcasts.
Spectrum of services (inc. Document management, time recording and customer management).
Hanging on to hard-won business through support agreements.
A market where they are working towards being the lead player.
Generating new products every year.

and IMHO, the chart looks good and there is a reasonable dividend which should increase as the size of the company increases.

Probably in for the long term unless it 'explodes' or 'implodes'.

Cheers
john

[orange1] 23/11/2004 14:28

Welcome to the club OFTM.

You are nearly in profit already! TIK is a good little 'un. Niche, profitable, good products, recurring revenues and a solid and conservative (ie will be reluctant to move elsewhere)client base. Hope you enjoy the ride.

[one for the money] 23/11/2004 10:24

Just bought into TIK so a newcomer to this thread.

How about the standard ADVFN 'graphs' and 'news' in the thread title. I find them useful. I assume Dan_bach (threadowner) no longer posts here so cannot edit the header.

Would one of the regulars here like to start a new thread with those details in the header? What do people think?

Cheers
John

[diogenesj] 23/11/2004 09:42

Ah well, Orange, can't win 'em all.

I was struck by the coincidence of Tikit sponsoring the awards and then winning most of them. :-?

[orange1] 22/11/2004 22:48

Diogenes

On 24 June I drew attention to the upcoming Loties.
The Loties were held "in conjunction with Tikit.
Tikit scooped a number of prestigious awards at the Loties.

Can't believe the cynic in you never spotted that one coming!
;-)

Note too how Interwoven won one award in the Loties and two in the e-Loties.
Tikit are .... "Interwoven Global Legal Partner of the Year".

All going swimmingly well for Tikit!

[diogenesj] 22/11/2004 13:24

Oh b*gger: looks as though I sold too soon.

[orange1] 22/11/2004 08:13

Bit of buying interest today.

This may well have to do with Tikit's rather impressive scooping of the awards at this year's legal IT Oscars known as the Loties:

[diogenesj] 10/9/2004 21:46

Hmm, always possible, Orange. Would you care to discuss it further on the BDI thread? I will post a few thoughts now.

[orange1] 10/9/2004 21:16

>Diogenes

As it happens I've been watching BDI but do not hold. And given that I can be as cynical as you (!) how about this: something in the back of my mind says that there is some flexible accounting going on at BDI, capitalisation of R&D costs or something. Have been meaning to investigate further but have yet to get round to it. ;-) Any ideas?

[diogenesj] 10/9/2004 18:06

True, dealit, but when people see that the demand was so intense that the directors had to offer a substantial discount to anyone prepared to take their shares, they become reluctant to pay any more themselves.

Not as big a discount as the last time though. :-)

[dealit] 10/9/2004 17:39

Just don`t understand the drop in price, todays announcement was a placing:-

"These shares were
placed with new and existing investors in order to facilitate liquidity and to
satisfy demand."

[diogenesj] 10/9/2004 15:57

There they go again! But I got in early this time, and sold mine before them. There's something about this company that makes me reluctant to hold for the long term, however good the figures (and they were good). Nice profit anyway.

Good luck, Orange. See you on another board, perhaps. Hope you are holding Bond International Software (BDI), nicely up today on a number of tips, after equally good results.
:-)

[orange1] 10/9/2004 15:21

Today's announcement should get Diogenes salivating (:>):

"Tikit is pleased to announce that Charles Stanley & Co. Limited has placed
636,000 ordinary shares at a price of 140 pence per ordinary share representing
5.14 per cent. of the issued share capital of the Company. 371,000 ordinary
shares were placed on behalf of Mr. M.F. McGoun, Chairman, 110,000 shares were
placed on behalf of BDO Guersney Tikit Group Benefit Trust and 155,000 ordinary
shares on behalf of Mr. WJ Flanagan, a founder shareholder. These shares were
placed with new and existing investors in order to facilitate liquidity and to
satisfy demand.

The holdings of Mr. McGoun, the BDO Guersney Tikit Group Benefit Trust and Mr WJ
Flanagan following the placing are outlined below:


Name No. of % of issued Registered name
Shares share capital

Mr. MF McGoun 1,033,050 8.35% Fitel Nominees Limites
Mr. WJ Flanagan 1,439,480 11.64% Rock Nominees Limited
BDO Guernsey Tikit
Group Benefit Trust
202,456 1.64% Rock Nominees Limited"

[stefield] 04/9/2004 10:01

from the share weekly,

Tikit Group, a company that makes software for law firms, blotted its copybook by issuing a profit warning in July 2002, a year after the previously highly successful business was floated on the stock market. The shares fell to around 80p against a flotation price of 115p. However, they are now firmly back above the issue price as the company demonstrates that the bad times in 2002 and the first half of 2003 were a blip and a strong new cycle of growth has begun.

Market Data
EPIC Company Share Price Market Cap £m PER Dividend Yield% 12-Month hi-lo Company Report
TIK Tikit Group 143.50 17.73 1.05 47.83 111.50-145.50 --



The latest results paint a vivid picture of strong growth. Sales for the first half of 2004, jumped 52 per cent to £5.9m with pre-tax profits up 83 per cent and earnings per share before goodwill amortisation and share option charges up 93 per cent to 5.2p. Chairman and major shareholder, Michael McGoun, didn't want me to become too excited. He said the barnstorming first half growth reflected comparison with a depressed first half in 2003. Second half comparisons will still be good, with the second half the seasonally stronger period, but the increases will be less dramatic.

Another distorting influence, which made the first half leap especially spectacular, was a bunching of support and service charges. In 2003 the company made software sales on the basis that support would not be charged until the systems were fully up and running. This deferred some support charges from 2003 into 2004, which then further benefited as support fees for first half 2004 were levied on the normal timetable. The result was that services and support revenues grew by 65 per cent against a more normal figure of 10-15 per cent.


Business is clearly on a roll
Nevertheless it would be a mistake to be too cautious. Business is clearly on a roll. Software sales increased by 65 per cent to £1.77m and total services including consultancy rose by 39 per cent to £3.85. The group is bidding on some large contracts presently and already has the biggest backlog of business in its history.

Financial Data
Fiscal Year Proj Turnover £m Pretax Profit Change % EPS Change % DPS Change
%
2003 9.56 1.19 NA 6.71 NA 1.50 NA
2004 * 10.9 1.42 19.3% 7.90 17.7% 1.80 20%
2005 * 12.0 1.64 15.5% 9.10 15.2% 2.00 11.1%

EPS - Earnings per Share
DPS - Dividend per Share


The company's stock brokers have reacted by raising their calendar 2004 profit forecasts from £1.4m to £1.5m; that looks cautious to me but is understandable with four months of the year still to come. What looks likely is that profit forecasts for calendar 2005 around £1.64m are going to be well beaten. On that basis the prospective PE ratio for 2005 (one year out) could be significantly lower than the 15.8 implied by the forecast.

Longer-term growth prospects look excellent. Tikit provides software for larger law firms, the sort that make up the top 200 UK firms. The software and services the group provides help firms to deal with document storage and retrieval, time and expense record management and customer relationship management. Larger firms can afford to buy best of breed individual solutions and have firms like Tikit help with the integration. Smaller firms buy integrated packages,which do the whole job more cheaply but compromise on quality.

Historically many large law firms have had their own in-house solutions. As they battle to cut costs these functions are being outsourced creating a huge potential market for Tikit.


International expansion
The group is also taking its offering into international markets. In Spain it began by hiring two employees then went on to buy the business they came from creating a Spanish version of Tikit based in Madrid. This business now has seven Spanish law firms as customers including the country's largest firm. It is also expanding in Ireland where one of the largest Dublin-based firms has recently been landed as a client.

McGoun believes that a new five-year cycle of demand growth has begun. He argues that there was a bunching of work in the run up to the millennium, which led to a collapse in workloads in 2002 and 2003. The demand blip is now passed enabling the group to resume the trend that it has maintained over a decade of strong growth. The shares jumped sharply when the figures came out but are still not too far above the 2001 issue price and should go a great deal higher

[orange1] 03/9/2004 15:22

And from Growth Company Investor:

"Last month we urged readers to buy into Tikit, the legal IT play and Growth Company Investor recommendation, at 80p a share. This proved wise counsel since Tikit has just romped home with sparkling interims to June, ahead of City expectations, and the traditionally stronger second half is well under way. Pre-tax profits ticked up 83% to £429,000 on turnover boosted 52% to £5.9m, and Tikit closed the half with £2.76m in net cash, up 45% - the business is seeing rising confidence and higher IT spending in the legal sector. Tikit is also benefiting from increased software sales, leading to rising professional services income from more maintenance deals to support it once installed. As well as growing sales and profits, Tikit is expanding outside the UK, too. During the half, the firm bagged its first noteworthy business in Ireland and in August acquired Parisian outfit LECSoft for up to €3m, aiding its European push. For the full year, broker Charles Stanley now forecasts a revenue jump to £11.95m (£9.6m), giving profits of £1.5m pre-tax and earnings of 9.3p a share. Upgraded numbers for 2005 suggest earnings rising to at least 10.6p a share on pre-tax profits of £1.9m and £14.1m sales. On a prospective p/e ratio of 15.2, the shares still trade below the 16.4 sector average and deserve their premium rating. Add."

Price wasn't 80p last month though .... if only!

[orange1] 03/9/2004 15:18

From today's Indie:

"Just the Tikit: good value in legal software shares

Tikit is a small group but it is showing its much larger rivals a thing or two about how to run a software business. The group has developed an excellent niche in selling, installing and servicing specialist IT programmes for the nation's top law firms.

It is this simple formula which has helped Tikit raise underlying profits by 49 per cent to £696,000 in the six months to June. The halfway dividend is being hoisted by a third to 0.6p.

Certainly, Tikit went through a baptism of fire in 2000, when an over-dependence on a Microsoft product and spending cutbacks by customers forced management to reorientate the business. However, it has learnt from that experience.

Sales of specialist software to help lawyers manage the reams of documents they shuffle every day, the time they charge out, and the clients they bring in, soared by 65 per cent to £1.77m in the half year.

This is crucial, and not just because Tikit earns a 30 to 40 per cent commission on every product sold. Everyone that buys the software also takes a support contract and may want consultancy. Little wonder that revenues from the former leapt by 64 per cent, while the latter advanced by 19 per cent.

Even though it boasts 71 of the nation's top 100 law firms as customers, Tikit has barely scratched the surface of the £180m-odd the legal profession spends annually on IT staff and software. Tikit has also now established a bridgehead in Spain and has just dipped its toe into France, with last month's acquisition of LECSoft, described as a "mini-Tikit".

Upgraded full-year forecasts of £1.5m before tax would feed through to fully-taxed earnings per share of 8.3p. That gives a forward multiple of 17, making the shares, up 10p to 143.5p, good value. "

[orange1] 02/9/2004 15:12

Well tut tut Diogenes! You could have commented on the high level of debtors relative to turnover (one third or less is deemed to be the norm)to which I would have replied that we are dealing with blue chip clients here (legal firms) who are unlikely not to pay up (unless of course they are unhappy with the product/services - of which there is no historical evidence whatsoever).

;-)

[diogenesj] 02/9/2004 15:04

Sorry, can't see much wrong with them.