Total Systems Share Discussion Threads

[hugepants] 15/2/2009 20:47

Revalueing the property is a possible outer. Would they be faced with a tax charge if they did this?

[davidosh] 14/2/2009 13:04

Egoi...I am not holding a large number and they have clearly bottomed IMO but will probably not go very far either without that outer. No need to sell but equally new money is targetted elsewhere with large dividends or significant growth in business or both as the attraction.

I have held for three years...Would you be a seller now ?

[egoi] 14/2/2009 12:51

Yes I could easily see a bid here; people would buy up the assets for virtually nothing and perhaps run the business more actively. The cash could actually be a god-send to a bidder!

At least this company has a history of paying dividends so there is hope there too.

Not sure why you are bothering holding from your comments!

[davidosh] 14/2/2009 12:37

Egoi.....When did I say I do not hold TTS ? I simply cannot see the value in adding to my position in the current climate with no real growth, no outer and no dividend whilst holding.

At LOQ there has been phenomenal growth so I can cope without a dividend and in fairness others have seen it too...hence up by 120% over last few months and that is the sort of longer term hold I can relax with and knowing it is still on a p/e of three. Plenty of cash at LOQ too.

GLD has been a special case with the bid approach providing the outer. Do you see a bid approach here at TTS ? I cannot see it myself and investors should never depend solely on that for a return. Anyone who has held GLD or TTS for the past three years as I have done will have seen no return for their money and most likely will be down on paper unless they have been somehow trading their position but the spread and costs make that a terrible strategy.

I am a realist but please do not knock me for telling it how it is in these markets.....What are TTS doing with all that cash in your view ?? How are longstanding shareholders to be rewarded ?

[egoi] 14/2/2009 11:56

LOL @ Davidosh. -:)

Bit like LOQ and GLD eh Davvidosh, which I believe you hold, lots of cash and not paying a divvy!

Agree with you they should, but stocks don't come cheaper than this, business they say is better than anticipated and cash is about same as share price just by itself, with a property above and a valuable product suite, while the p/e is in single figures. One contract win and this share price will double imho. Reasonable chance a bidder will simply buy them for the assets at above this price.

[davidosh] 14/2/2009 10:54

As I mentioned a few months back the real problem here is the lack of an outer for shareholders and without that no new investment will come in especially when every other company is on a very low rating allowing some to pay huge dividends.

For many years the operating profits have been tiny and somewhat hit and miss. The cash has provided a windfall gain on the interest payments but that will also now be very minimal in this low interest environment. They really should have returned to paying a dividend to show confidence as this company just trends downwards and shareholders have had absolutely nil return for years.

Why do they need to retain so much cash ?

What is going to kick this one upwards in these horrible markets ?

So any move up is likely to meet resistance and a possible fall later. A dividend would at least give me a reason to hold on until the economy improves or an outer comes from somewhere but I cannot see it on the horizon in all honesty. If they wanted to take it off market then it could have been done many years ago and a price now would not benefit holders who have held for years.

[hugepants] 14/2/2009 10:20

Cant complain though. The business is growing in a recession. And has 30p per share cash and the London freehold (not revalued for 20 years).

Forecasts are for eps of 3.2p. Id guess TTS will beat that since they are pretty reliable in down playing things.

[joshalexander] 13/2/2009 19:57

Are you the only Bull left here Raninmaker?.
No sign of any future dividends yet I note - never mind there is always the capital growth here to go for ;).

As I have previously posted .. its easy to spot just who's benefit this is being run for, nice growing pension pot - oops I meant cash pile.

All IMO of course - as always.

[rainmaker] 13/2/2009 10:54

Total Systems Interim Management Statement


TIDMTTS

RNS Number : 2801N
Total Systems PLC
13 February 2009


Total Systems plc


Q3 Interim Management Statement

Total Systems plc ("the Company") suppliers of cost effective and flexible
software systems to the financial services industry, primarily in the insurance
and warranty sectors is pleased to provide its Interim Management Statement for
the quarter ended 31 December 2008.


The Company's trading over the period from 1 October 2008 to 31 December 2008 is
much improved against last year. Turnover is well ahead for this period due to
unanticipated business being received. This has resulted in a satisfactory
profit being made for the third quarter.


The last quarter of our financial year is likely to see a lower level of
activity than the third quarter but the full year performance should exceed
market expectations at the turnover level.At the profit level performance for
the year will be diluted by the expense incurred in carrying out essential
repairs to our office premises in the last quarter of the year but should still
be around market expectations. The cash position at the end of the third
quarter has improved further since the publication of the Interim Report.


Our asset base remains healthy. The Company has no debt, reasonable cash
balances to support its operations and owns its office premises outright. With
existing client business and a reasonable level of sales prospects the board
believes that the Company is well placed to cope with the likely difficult
market conditions over the next year.



Website: www.totalsystems.co.uk
For further information please contact
Terence Bourne, Chairman, Total Systems plc 020 7294 4888
Granville Harris,
Finance Director, Total Systems plc 020 7294 4888









This information is provided by RNS
The company news service from the London Stock Exchange
END

IMSKXLBFKLBZBBV

[rainmaker] 05/12/2008 01:20

Very good!

regards

[sussexseagull] 04/12/2008 21:38

Just so long as the stockmarket has converted to metric measures?

Can't say that I've noticed it yet - but 'they' know what they're doing I suppose - which is why Lehman's went bust.

Obviously?

:-)

[rainmaker] 04/12/2008 11:31

In the end Value will always out. To quote the reverred Ben Graham, "In the short term the Stock Market is a voting machine but in the long term it is a Weighing Machine"

regards

[sussexseagull] 02/12/2008 14:30

TTS have always had 'plenty of cash in the bank' but the muppets that control the share price always seem to forget that *fact*

The same 'thinking' still applies.

TTS's business is valued 'at nothing'

No debt. Cash @28.96p per share. Assets at 40.23p a share.......and yet the share price is........?

'The market' just likes 'names' that they've heard of with loads of debt and making a loss.......and they'll bump their share price up (if you scratch their backs and buy them a 'coke')

'The market' (when it comes to TTS) just sucks.

........Or snorts coke.

:-)

[rainmaker] 01/12/2008 20:04

Yep, there's definitely from the glass half empty school of management.Still a bargain though

regards

[hugepants] 01/12/2008 15:29

As regards no dividend Id guess the management are preparing for a decade long depression. They are a highly pessimistic bunch. As an example the house broker earnings forecasts have been too low by between 3p and 4p per share each of the last 3 years.

[rainmaker] 01/12/2008 13:42

cfb2-I would beg to differ that TTS majority shareholder would have trouble raising the finance for a MBO.I know the credit crunch and Banking Crisis are newsworthy but the management already control the Company that is profitable and cash generative, has cash that covers the share price and the freehold Property(+land probably the Car park)that must cover the share price again. Finance would definitely not be a problem IMHO.

regards

[davidosh] 01/12/2008 12:11

The problem is that they are actually using the property and they have missed the top in any event if they intended to do anything with it. Inevitably the situation will just continue as it is now with lumpy profits and no obvious outer. If profits only come in at slightly ahead of H1 then the H2 comparison with last year will be considerably lower and seen as a negative year on year for H2 only. Has anyone asked if they intend to pay a full year dividend or just labour on without any return for shareholders?

[hugepants] 01/12/2008 12:02

TTS are usually extremely cagey as regards forward prospects (just check last years interims). For them to predict an increase in profits for H2 says to me they have contracts already in the bag. I think full year earnings will be 4p or more (last year H2 earning were 4.5p per share).

Re: the central London freehold. Its in the books at £540,000. They bought it for £740,000 twenty years ago and theyve been depreciating it by £10,000 every year. So this property is now being valued in the accounts at 40% less than it was 20 years ago. It must be built on toxic waste.

[egoi] 01/12/2008 10:31

It reminds me in many ways cfb2 of a company called Trace which had an MBO and doubled overnight as a result.
I agree with many of the points you make, nevertheless one key new contract and I predict TTS would nearly double too, even without a bid. Lack of a dividend I too have mentioned many times, and it is disappointing - I expect them to put that right at finals and they should do so imho.

They've been around way too long to suddenly go private - (Josh has been predicting this for donkeys years, as long as I can remember on this thread and it simply has not happened, nor has there been the remotest indication that it might) and if they did go down that route they'd have to pay shareholders at least 50-60p for anything like fair value imho to take it private - something that gets conveniently forgotten by people who say it might happen lol.

However those points said, and your's taken, the balance sheet remains a strength that most companies in the current climate would die for and with 5.5p or so year on year eps, I maintain these shares are too cheap.

When dealing with small companies I have often made the point that you are very unlikely to find one with 'everything' you would want in an ideal world (increasingly as bank shareholders would agree I'm sure it is hard to find 'everything' in the biggest companies too) and right now given my personal investment criteria TTS fills a lot more of them than the vast majority of small caps I look at.

However it is good to get more balanced and wider discussion of TTS and hopefully people will bring their views to the table. -:)

[joshalexander] 01/12/2008 10:12

I would agree with the consensus that there is little downside from around this level or about the 25 pence that Rainmaker mentions.

I am unsure about how much upside minority shareholders will benefit from IMO.
Lets see.

[cfb2] 01/12/2008 09:24

Ahh, I forgot to mention. That property that gives the aroma of money in their assets, it'll be falling in value as unemployment rises. Thankfully it's well undervalued in their balance sheet.

CFB

[cfb2] 01/12/2008 09:22

JoshAlexander: As a holder of TTS, I'm also concerned by the possibility of them being taken private. I have three reasons why that might not be true:

1) Raising the money, the management don't seem to be well off and money is difficult to raise from external sources. When raising external money you need to prove your track record and give a good story about future growth. Raising it in the market would be laughed at.

2) They've been a public company for a long time. Their laid back approach to sitting in a comfortable office, tapping away on their bit of software, while getting enough cash in to pay their wages show lack of competitive spirit.

Their earlier employment of a sales director, followed by his sacking, followed by the announcement that he won't have any material effect on turnover is the hallmark of a company that is prepared to sit on their backsides and wait for sales to hunt them down rather than the other way round.

3) The lack of dividend says to me that they're battening down the hatches waiting for lean times in a recession. They think they'll need that money over the next couple of years. This agrees with my point in 2).

I think I understand where you're coming from by saying that by not paying any dividend it ensures the price stays low. You're saying that investors won't touch TTS because they're unlikely to get a dividend. I'm sure you understand that dividend payment come straight off the share price.

If Total Systems were a car it'd be an old Volvo, sensible, boring and well cushioned against accidents; happy to watch the world change around them from their safe car. It'd probably have fluffy dice too. Yawn.

CFB

[joshalexander] 01/12/2008 08:54

Rainmaker

Because TTS will be taken private IMO, as I have previously posted.
At a price largely determined by the majority shareholder.

The lack of any dividend ensures that the price stays nice and low.
This has strong echoes of NRG in my view, which thankfully I did not hold.

Wake up time.

As always all IMO, DYOR etc.

[rainmaker] 01/12/2008 01:43

David-I found your post both interesting and thought provoking. I never take it personally if people don't agree with my comments.Maybe you'll post something which will make me change my mind.Of course I have my own ideas but try to keep an open mind.

Still don't understand why TTS haven't paid a dividend, say 1p, which would have cost them just £150k. Nevertheless they made 1.39p in the first half and they expect a better second half so maybe 3/3.5p of earnings for the year.

regards

[davidosh] 30/11/2008 15:55

Just to make something clear....I have posted here many times in the past so certainly DID NOT post yesterday just because of anything being debated on the GLD board. I am not a petty minded individual and I like to post sensibly and thoughtfully. If anyone disagrees with my view on outlook or general opinion just say so....no need to make an excuse linked to another company.