Touchstar Share Discussion Threads

[arthur_lame_stocks] 10/11/2021 12:47

On what basis is the business undervalued?

PSR: nope
PTNBV: nope
p/e: nope

Anyone think of any other ratios which show this is overvalued let me know.

[cocker] 09/11/2021 13:29

The answer is simple Rivaldo, the business is undervalued and sooner or later it has to rerate.

[rivaldo] 09/11/2021 13:22

New four-year highs now after three buys this morning totalling almost £20,000. It seems someone's quite keen (if from the same buyer).

Good to see the spread reduced to a mere 5p too.

[rivaldo] 22/10/2021 14:34

Good news today:



"22 October 2021

QE Facilities select EPOD system from Manchester-based Touchstar Technologies

QE Facilities is a well-established wholly owned subsidiary company of Gateshead Health NHS Foundation Trust, based in the North of England. The company is a separate legal body set up to provide a range of non-clinical Estates and Facilities services.

Due to its ongoing success, QE Facilities has also expanded into a number of exciting projects that are delivering significant savings and efficiencies. In this very difficult economic environment the expanding business is providing a unique alternative to traditional full third party outsourcing....

......Initial dialogue took place with Touchstar business analysts to develop a detailed scoping document that identified QE’s specific requirements. It was apparent that a high level of integration with existing NHS systems would be required, a stipulation that would have been impossible with a standard ‘off the shelf’ product. Fortunately, one important facet of the PODStar offering is the Evo-link integration product. Designed as a dynamic interface tool, EvoLink can link the PODStar software to almost any other system, enabling the automatic transfer of data from a separate system into the EPOD software. Supporting the population of multiple systems, errors are reduced by the removal of manual re-keying of data. Utilising the power of Evo-link, Touchstar personnel established a secure flow of data between several legacy NHS systems....

.......Following a robust trial the PODStar system is now fully ‘live’ and delivering the key benefits. Overall we're very pleased with the system and, as we continue to expand, we look forward to continuing our relationship with TouchStar and contemplating further bespoke enhancements”

[rivaldo] 20/10/2021 14:13

The Millingtons could have been at anywhere under 3% already and been buying a few more recently to take them above 3%.

There's no implication necessarily that anyone's been "dumping" at all, though of course a major holder may have reduced a little in the knowledge that there are buyers out there, especially given that this is a relatively illiquid stock.

[jeevsje] 20/10/2021 14:05

Who is dumping though? Chelverton?

[rivaldo] 20/10/2021 13:36

RNS - Robert & Virginia Millington are new major shareholders, with 3.1% or 8.48m shares:



They appear to be these guys - a rather impressive background:



"ROBERT MILLINGTON
FOUNDING PORTFOLIO MANAGER

Robert has over 30 years experience in financial analysis and portfolio management including with BZW, Credit Suisse and Government of Singapore Investment Management. Robert has a BA in Philosophy, Politics & Economics from Lincoln College, Oxford"

"VIRGINIA MILLINGTON
CO-FOUNDER

Virginia has extensive experience in the Retail industry in Europe and Asia and played a leading role in the expansion plans of a major UK multiple in Japan"

[cocker] 15/10/2021 19:37

Well on the 30th of September they sold down 3.75% so not really sure what you're getting at. Their 2nd largest holding is TST @17% and why would they want to throw that to the lions as it stands a great chance of a rerating within the next few months.

[varies] 15/10/2021 15:14

thanks, Jeevsje

[jeevsje] 15/10/2021 14:43

Hard hats required if CGW decides to dump. They hold 10% of the shares.

[varies] 15/10/2021 11:39

The price of Chelverton Growth Fund (CGW) shares has been falling recently and I have had a look at its recent announcements.
I cannot remember how many TST shares CGW owns but I believe that CGW is one of our biggest shareholders.
As at 30 Sept 2021 CGW had a NAV of 70p and its shares stood at 53p; today they stand at 49p.
CGW had 64% of its funds invested in CEPS and 17% in TST.
Mr. David Horner is a large shareholder and prime mover in both CGW and CEPS. He and his associates have also provided CEPS with large loans and the prospects for CGW depend heavily on CEPS.
It looks to me as if CGW might need to sell its TST shares soon unless CEPS comes good.

[rivaldo] 17/9/2021 16:00

HotStockRockets says Buy this afternoon (subscriber-only):



"Touchstar – interims and expects full-year ahead of expectations: BUY

By HotStockRockets | Friday 17 September 2021

Mobile data computing and managed services company Touchstar (TST) has announced results for the first half of calendar 2021 and that it “has traded well in recent months, as a result we now expect full profits to be ahead of our previous expectations”. Sounds good......"

[rivaldo] 15/9/2021 15:15

Finished listening to TST's H1 results presentation via WH Ireland.

Glad to hear a certain underlying tone of confidence coming through. A few quotes from the CEO:

"comfortable with" WH Ireland's newly increased forecasts
"there's a confidence in the business I've not seen"
"stronger team than we've had in a number of years"

Also worth noting that Ian seemed happier with the possibility of making acquisitions than in the past imo.

[rivaldo] 15/9/2021 09:42

Perhaps someone who's read WH Ireland's latest research. As I posted earlier....

WH Ireland have raised their fair value to 115p. They now see
3.5p EPS rising to 5.5p EPS next year, and £1m EBITDA rising to £1.3m next year.

And fo course TST have £1.3m net cash - almost 20% of the £7m m/cap.

They summarise:

"Interims illustrate continuing momentum – FY 2021E forecasts raised

Touchstar is a supplier of mobile data computing solutions and managed services to a variety of industrial sectors. This morning, the group has released interim results to 30 June 2021, which illustrate positive momentum across the business. In the six-month period, revenue was 8.9% lower as expected but the meaningful 640bps increase in the gross margin reflected the growth in recurring software income, while a tight control on costs remained.

Looking ahead, the order book is reported to presently stand at £836k and despite the well-flagged wider supply chain challenges, the Board now expects results for the year to 31 December 2021 to be ahead of current market expectations. As such, we now look for FY 2021E PAT of £250k (previously £100k), while at this stage maintaining our FY 2022E forecasts of £500k for the time being.

Although the shares have performed well, an FY 2021E EV/EBITDA of 5.2x falling to just 4.1x illustrates the potential for multiple expansion and further outperformance. Reflecting the uplift to forecasts, we increase our fair value estimate for the shares to 115p (from 100p), which would equate to a current year EV/EBITDA multiple of c.8x."

[russman] 13/9/2021 19:06

Well a bigger divi please.

[pavey ark] 13/9/2021 13:11

varies, I hope so, it has been so far.
The figures look good and the prospects look very promising .....not much more an investor can do or ask for.

[varies] 13/9/2021 11:21

Thanks, Pavey Ark.
I hope your confidence is vindicated

[pavey ark] 13/9/2021 10:30

Well that was an easy "filter".....best not to engage.

Further to Access Control I feel that their government contract will be much more valuable than the contract on its own.
The kudos of installing in a government building/property does look very good when you are going after further contracts.
Easy to see the long term ,recurring revenue from checking and maintaining these installations.

Working back from the broker's note, they are expecting an EBITDA of £1.1m in 2021.

With almost 20% cash the broker is quite rightly using EV figures.

The broker and the market will see the 40% recurring revenue as very important/valuable

With almost 40% recurring revenue ,20% cash, excellent prospects and resilient performance under the most trying of circumstances I certainly consider this to be a company that will advance further in a comparatively short space of time.

[varies] 13/9/2021 10:26

I am old-fashioned enough to look at EPS before EBITDA. Whilst today's results are re-assuring and I am glad to see the recent increase in the order book, we are still at the stage of guessing at the amount of jam tomorrow.
It will be disappointing if the EPS for 2022 do not exceed W H Ireland's forecast of 5.5p as this is the year when everything is expected to come right. On this basis TST shares are selling at a prospective PER of about 15 which is hardly cheap.

[pavey ark] 13/9/2021 09:50

Very solid set of figures.

Recurring revenue heading for 50%, net cash getting close to 20% of market cap, order book rising very nicely (and continuing to rise) and the quick ratio up from 1.2 to a very solid 1.3.

When all this is added to the very positive update and forward looking statement I don't think any investor could ask for much more.

The heavy lifting has been done here and additional order/revenue should fall to bottom line quite quickly.

I'm pleased with the progress in Access Control as I did think that the changes in working patterns brought about by Coronavirus would benefit this unit.

9th August I posted

"Access Control business looks to be in a very good space at the moment.
One thing to have everyone in ....a desk at the front door ....business as it has always been....things are very different now."

EDIT: Rivaldo, thanks for that broker's update

[rivaldo] 13/9/2021 09:43

TST have £1.3m net cash against a £7m m/cap! More practise needed reading a Balance Sheet methinks.....

WH Ireland have today raised their fair value to 115p (from 100p). They now see
3.5p EPS rising to 5.5p EPS next year, and £1m EBITDA rising to £1.3m next year. They summarise:

"Interims illustrate continuing momentum – FY 2021E forecasts raised

Touchstar is a supplier of mobile data computing solutions and managed services to a variety of industrial sectors. This morning, the group has released interim results to 30 June 2021, which illustrate positive momentum across the business. In the six-month period, revenue was 8.9% lower as expected but the meaningful 640bps increase in the gross margin reflected the growth in recurring software income, while a tight control on costs remained.

Looking ahead, the order book is reported to presently stand at £836k and despite the well-flagged wider supply chain challenges, the Board now expects results for the year to 31 December 2021 to be ahead of current market expectations. As such, we now look for FY 2021E PAT of £250k (previously £100k), while at this stage maintaining our FY 2022E forecasts of £500k for the time being.

Although the shares have performed well, an FY 2021E EV/EBITDA of 5.2x falling to just 4.1x illustrates the potential for multiple expansion and further outperformance. Reflecting the uplift to forecasts, we increase our fair value estimate for the shares to 115p (from 100p), which would equate to a current year EV/EBITDA multiple of c.8x."