Total Systems Share Discussion Threads

[arthur_lame_stocks] 24/1/2007 17:27

Thanks fellowes. The thing that puts me off this a bit is that with a controlling, founding shareholder it´s not possible for some activist or other to come along and force change.

[fellowes2] 24/1/2007 16:43

Arthur

If you are seriously considering investing here,(or already hold).
Give the company a Call. TB has a reputation for telling things as they are
and should be happy to take a call, or it should be possible to arrange a call back. When I held shares I spoke to the Company on a couple of occasions and they are helpful, I think his brother used to work for them at the time and that is who I used to speak with, from memory.

[arthur_lame_stocks] 24/1/2007 16:22

I did a quick search on Yahoo which suggested City Yields were 4.5%. That seems stupid when you consider interest rates are 5.25%.

If this property really is worth even 3 or 4m pounds then it must make sense for them think about selling it and leasing something else. It doesn´t seem reasonable for such a small company to sit on so much in assets.

[rainmaker] 24/1/2007 13:22

10 year gilts were yielding 4.8% a on 17/1/07

regards

[rainmaker] 24/1/2007 13:14

Arthur-still checking but everyone seems to agree that City Of London Property overvalued.All I can ascertain at the moment with regard to Rental yields is that the rate is currently below that of the 10 year gilt yield

regards

[rainmaker] 24/1/2007 13:08

Hi Arthur-I've taken into account that perhaps not a Prime Location though nevertheless in the City and an older Property so knocked off +20% as my research suggests

regards

[rainmaker] 24/1/2007 12:57

Looked into Property value further-from what I can gather prime Commercial Property is selling for £130O per sq ft, almost half that of residential Property which is fetching £2500.

Taking into consideration that their Property, although in the Square Mile, is not a prime location and an older Property, then using £1000 sq ft means if is valued at £5.6 mln(5,600 sq ft x £1000 per sq ft) or 53 pence a share.Comments?

regards

[arthur_lame_stocks] 24/1/2007 12:48

Rainmaker

Don´t you mean a yield of 10%? I would think that City yields are currently lower, more like 5% which would make the value 6.5m. I´ve no idea if this is realistic or not though.

[rainmaker] 19/1/2007 12:53

Should be able to get some further information on their Property asset-common censensus is that it is worth £3mln but feel that £4mln may be closer to the mark!Rents and Property Values in the City Of London, where they are located, are currently experiencing large scale rises, largely thanks to a boom in the Financial Services Sector

regards

[rainmaker] 19/1/2007 12:48

Hi Fellows-As I said in my previous message as a Value Investor,in a nutshell you just have place your faith and judgement in TTS's hands taking comfort from a very large "margin of safety" at the current share price,afforded by their cash balance,Property Asset and long term trading record!

IMHO a definite buy from current levels

regards

[fellowes2] 19/1/2007 07:33

A lot of smaller software comapnies are being re rated currently. There is a certain cyclical element, but as the whole the sector is doing very well . An £800,000 loss does not suprise me rainmaker, they are loosing the Shell business which is a large part of turnover as I understand it - and their costs are largely fixed, so this has a big impact on the bottom line.

I admit that my view may be too cautious, but at that level of loss their cash reserves will be eaten up very quickly. This size of loss may force some coporate action, so there are always two ways of looking at something.
In terms of realising the property value, sale and leaseback would be the most obvious approach, but then TTS occur an additional cost year on year in return for a one off cash lumpsum.

Good luck too all, what ever your view.

[rainmaker] 19/1/2007 01:48

Good question from ALS as to whether this Company is cyclical or has undergone a structural change and would simply state that I'm not aware of a cyclical side although all Companies are obviously subject to the vagaries of the business cycle to some extent.

I feel that the Company's business(which at the current share you are getting for nothing when it is definitely worth something), there exists real value in that TTs have made a profit in nine of the last 10 years and paid a dividend in each of those years-so you just have to give them the Benefit of the doubt! Added reassurance and confidence is given by Mr Bourne who has the majority of shares who obviously has a big incentive to get things right. This isn't a Company with an overpaid CEO with no shareholding just potentially lucrative share options.His shareholding in TTS would have been worth in the region of £10mln a few years ago so he has a big incentive to get things right. As has already been pointed out previously a contract win here and there would make a substantial difference!

Sorry a slight aside-If you remember Time Products(TIP),aside from distributing the high volume /low margin Sekonda Watch Brand-the UK's number one selling Brand and a profitable business, it also had exclusive distribution rights on seven super luxury Watch Brands eg Piarget, Audermars Picquet, Franc Mueller etc etc

This Company was so cyclical (in general luxury goods are very cyclical)that you could take the last five years of trading and stack them on the previous five years and clearly see that 1997 and 2002 were exceptional years with large increases in turnover accompanied by high margins and high returns on Capital employed contrasting with very poor years in 2000 and 2005-now there's a cyclical business as the CEO pointed out a year or two before he took them private "there is nothing fundamentally wrong with our business" and "we have constantly warned that our business is cyclical" Shortly before they were taken private they opened a Retail outlet(actually given the nature of their business, that sounds a bit shoddy so call it an emporium)in New Bond Street in Mayfair. With between 4 and 7 thousand Employees in the City receiving £1mln+ Christmas Bonuses they must be making a lot of money now!!

regards

[rainmaker] 19/1/2007 00:46

Hi Fellowes-I have just seen a forecast for the current year of approx £800k loss which seems way over the top. However it has not changed my mine about TTS's value at current levels!Conceivable that the share price may move down slightly from current levels but over a two year view, feel that TTS represents excellent value.

Would appreciate some feedback about their Property that's in the current price for nothing

regards

[fellowes2] 17/1/2007 18:16

Its all up to TB at the end of the day Rainmaker, he controls the company with his shareholding as well as runing it. He does not seem to be in any great rush to me to realise value, remember TTS has been listed for a long time now, so it could be a very long wait. I agee 100% though, that if they win some significant new business there is upside. But as you are more than aware they are losing the Shell account with their move overseas and that represents a signifiacnt parth of their business as I understand it. I think losses will escalate and fast, they need some new business and quickly.

[rainmaker] 17/1/2007 12:48

Glad to see that I have stirred up some interest in this Company. By my calculations their Property is worth more than their current market Capitalisation-I fed in their purchase price of £760k in 1986 into the Nationwide Calculator and if it moved in line with UK Property prices it is now worth £3.85mln. However I feel there is a strong case for "Square Mile" Commercial Property being worth even more because of strong demand and limited availiability.

Current trading is not great and there is forecast of a upturn in business in the near future but as far as I am aware there are no great losses to come from current trading.Obviously if they win a contract or two then there is huge upside.Rumours that they will unlock some of their hidden value in their Property abound but all I can really say is that I think they are terrific value at current levels-is everyone disagrees then so much better, as I will be able to get even greater value.I think there is potential for the share price to go lower as there are quite a few Investors who are losing their patience

regards

[fellowes2] 15/1/2007 18:58

I think that is why TTS have tended to trade at a discount even when trading was buoyant a few years back. I held these at the time and did very well, in fact i remember when all the talk was about moving to larger premises to accomadate their growth. But things look dramatically different now, and without some new contract wins there is more downside in the share price

[arthur_lame_stocks] 15/1/2007 18:40

The company appears to be controlled by Terence Bourne who has a majority stake. It could make realising the value dificult.

[fellowes2] 15/1/2007 17:35

Just having had a quick look at the accounts they are already starting to eat into their cash. My guess is that there is a warning of worsing tradng on the way, I would not touch this, all IMO, DYOR etc.

[fellowes2] 15/1/2007 17:28

When was the last contract win announced??
Net asset backing is all very well, but this is not a property company, this value will not be ralised. You have to question just how good
the companies products are. If they do not sign up new customers soon they will begin eating into their cash reserves as well.

[arthur_lame_stocks] 15/1/2007 17:21

If net cash is 30p a share and the property is worth 20p a share the value argument seems to rest on what the business is worth. It´s interesting that a few years ago they were making eps of nearly 10p a share. Is their business cyclical or is their main product out of date or what?

Also they apparantly have a full listing. Why don´t they transfer to AIM? That would help keep costs down.

Interesting one anyway.

[egoi] 15/1/2007 12:34

From interims:
'Zero gearing and net assets of 37.16p per share (2005: 37.86p) of which 29.53p
per share (2005: 31.70p) is represented by cash continues to demonstrate our
financial strength during this difficult trading period.'

And: 'Trading since the half year continues at a reduced rate and our prospects for the full financial year reflect this. Sales and marketing are pursuing all
possible opportunities and the Board expects positive results in the medium to
long term.'

[weatherman] 15/1/2007 11:37

Perhaps they should become a cash shell. Sell the business, and property and give money back to share holders.

I reckon on that basis would be worth nearly £1.00 imo