Touchstar Share Discussion Threads

[cocker] 20/5/2022 10:33

I suspect agm next month will give a clear indication of where we are and also how cash will be distributed to shareholders, all very exciting in what is uncertain times

[rivaldo] 20/5/2022 08:24

Another new logistics client and contract win:



Extracts:

"Hedges select 'PODStar' EPOD system from Touchstar
19 May 2022

"Manchester, UK. 19th May 2022: Hedges Chilled Distribution select EPOD system from Manchester-based TouchStar

Technologies Hedges Chilled Distribution is a rapidly expanding UK-based, independent logistics and warehousing company. With an 8,000 sq/ft chilled warehouse capable of maintaining a temperature of 2c to 8c and an additional 8,000 sq/ft ambient warehouse, Hedges Chilled Distribution offers a number of short, medium, and long-term storage solutions. Other services include E-Commerce fulfilment, pick & pack and re-pack services. The company offers chilled, frozen and ambient (full load and groupage) distribution services throughout UK, and Europe, via its own fleet and network of European Haulage partners."

"They began a search for a ‘best of breed’ planning and delivery system that led the management team to examine the PODStar system from Manchester-based TouchStar Technologies. Hedges rapidly reached the conclusion that the Touchstar solution offered the full required functionality when compared to alternative systems."

"Ciaron Reynolds (Managing Director) comments: "Our rapid growth saw an exponential growth in paperwork which was a nightmare until the new system enabled us to effectively go paperless. TouchStar Technologies have been fantastic in how they’ve tailored the software to meet our exact requirement. The pace at which they adapted the system to meet our need has been instrumental in optimising our delivery operation. The trial implementation went exceedingly well and the PODStar system will shortly be rolled out fully so that our entire organisation can accrue the benefits."

[cocker] 12/5/2022 12:51

Pod star contract won with Allan Stobart Carlisle. I'm not sure how big a company they are but still nice to see contracts being won

[dolittle1] 06/5/2022 13:18

Just a matter of time before general market sell-off starts hitting this illiquid share.

[dolittle1] 27/4/2022 12:31

AGM is normally late June and based on previous years, unlikely to get any news till then.
Until then, company likely to be exposed to market weakness.

[varies] 27/4/2022 10:44

I add my thanks for your summary, Rivaldo.
The shares look greatly undervalued to me at about 70p. TST is one of my larger holdings already but I intend to add from time to time if and when I sell other more successful investments. It does look as if the opportunity to add at these prices may be available for some time !
There should presumably be an AGM in a month's time and our chairman will have an opportunity then to tell us whether any progress is being made towards making a payment to shareholders possible.
Unlike some others here, I would like to see a regular dividend.

[the oak tree] 26/4/2022 15:41

Thanks Rivaldo for your excellent summary, as usual.

IMO I cant think why someone would sit on the side lines re this one. Sure they have to increase the top number ie turnover, but its likley given how much progress they have achieved so far. Alot is falling to the bottom line and that looks like it will continue.

GLA

[cocker] 26/4/2022 14:41

The presentation certainly had an air of mega positivity and one in which looks like we shareholders will soon be rewarded. It has been a long road with many bumps, but what's another 12 months if all what they spoke about comes to fruition.

[rivaldo] 26/4/2022 14:21

An encouraging lunchtime presentation from TST. Highlights in no particular order:

- the strong Q1 trading is "ahead of original budget". IM played down the market uncertainty mentioned in the results, noting that this is already "baked in" to WH Ireland's new forecasts of 5.5p EPS this year, rising to 6.7p EPS and then 8.4p EPS
- margins for Q1 are "considerably higher", having risen from 50% to 62% in the last four 6-month periods
- he's expecting "strong progression" in EPS, PBT etc (see above)
- software development fees have gone from almost nothing to £268k last year, and are already at £184k for this year after just one quarter
- a number of new products and product enhancements and additions lined up for this year
- the new products have greater software inclusion, so higher recurring revenues and higher margins
- lots of pilots are underway for fleet expansion roll-outs
- TST can sustain annual double-digit top line growth from the existing businesses
- TST could have £3.5m net cash in two years time. They're hoping to obtain Court approval in the next few months, enabling either share buybacks or special payouts to shareholders
- TST are "in a good place"

[smithie6] 26/4/2022 12:19

I wouldn't be surprised if the co. is bought by a bigger co.
...especially one wanting a foothold in the UK...& where the buyer might obtain chances for cross selling.

[varies] 26/4/2022 11:56

EezyMunny
Making money in this share is certainly not easy !
It has taken the new board over 5 years to return the company to respectable profits after drastic write-offs and a change of course but I take the view that our prospects are now good even allowing for a diminished level of activity that I hope to see prove temporary.
Each to his own, as you say, but today's figures are very re-assuring.

[microscope] 26/4/2022 11:56

Been watching these for a while now, and missed my target price of 70p a few weeks ago which it touched briefly intraday. With the strong cash base and solid results they still look good value, indeed stripping out cash the market cap is only around 4 million I think. Nevertheless this is a much more cautious statement than previously, and it does feel like orders have slowed down quite significantly since the start of the financial year, and that may remain the case for some time.I think 120p will be hard to obtain myself. Still good value at this level, don't think people will go far wrong and wish you well, but for now a watching brief continues for me.

[eezymunny] 26/4/2022 11:31

"Short-term prospects are being tempered somewhat by a level of inactivity which we believe is a momentary reaction to the present economic and global uncertainty, with some orders being held up, not lost. "

"Whilst we have tempered our enthusiasm in the short-term"

etc etc

This really has been a pretty pointless company for investors. Share price almost exactly where it was at the end of the last millennium.

Sell up and stick it in something better? Each to their own I suppose.

[rivaldo] 26/4/2022 09:31

WH Ireland today introduce a fair value of 120p for TST - the EV/EBITDA is just 2.7:

"Full year results in line with expectations; positive start to FY 2022E

Touchstar is a supplier of mobile data computing solutions and managed services to a variety of industrial sectors. This morning, the group has released a strong set of results for the year to 31 December 2021, in line with our expectations and demonstrating positive progress against key strategic targets. While revenue increased by 3.7%, EBITDA rose by an impressive 25.5%, principally driven by a higher proportion of recurring software sales that led to a 750bps rise in the gross margin.

The balance sheet remains strong with £2.4m net cash at year-end, and the order book at year-end end stood at a healthy £646k. On the back of the results, we have left our FY 2022E earnings expectations unchanged, while we introduce FY 2023E and FY 2024E estimates for the first time.

The shares trade on an FY 2023E EV/Revenue multiple of just 0.6x, EV/EBITDA of just 2.7x and PER of 11.9x. With approaching 40% of revenue now derived from recurring software contracts, we believe there is the potential for the shares to re-rate as the strategy continues to be successfully executed.

Ascribing a 1.0x FY 2023E EV/Revenue multiple to the shares would imply fair value at 120p."

[varies] 26/4/2022 09:15

I have bought a few more and so, it seems, have others. The deficit on distributable earnings may perhaps result from a decision some 5 years ago to write off all the Goodwill on the balance sheet.
like others here I expect that this problem can be resolved and I am glad to see that the directors would like to pay us shareholders in one form or another.

[elited10] 26/4/2022 09:13

Dont feel too foolish, their are many companies out there with x5/10 valuations which would love to have TSTs cash generation

[varies] 26/4/2022 08:58

I feel a little foolish about my purchase at 85p yesterday but the results strike me as even better than predicted in the recent update and the markdown to 72p is hard to understand.
The market is very thin and the jobbers may be playing games with us.

[bio_tango] 26/4/2022 07:44

Numbers look promising but I still have the same complaint with Ian. They need to demonstrate that they can consistently grow the top line. The bottom line will follow.

[hastings] 26/4/2022 07:39

I see the broker has pencilled in EPS of 5.5p for the current year increasing to 6.7p next year. Certainly looks to be in a much better place and progressing well.

[rivaldo] 26/4/2022 07:31

The results are out and show a company definitively on the up.

TST have a £4.4m EV (net of the £2.38m and rising cash pile), and made a £341k PAT (uo from £87k) - or a £233k PBT before the R&D tax credit.

The 38% and increasing recurring income, which the City loves, is another big plus.

TST had a "strong" Q1, tempered slightly by a hesitancy in April for obvious global reasons, but are still confident of "growth in revenue and EBITDA continue in 2022".

TST are considering buybacks and dividends, but with the holding company having negative reserves from prior year losses it should be a simple matter to get a Court ruling to utilise the £1.1m share premium account and pay up dividends from subsidiaries to get the reserves into positive territory.

Very happy to continue holding here.

[cockerhoop] 25/4/2022 17:00

I've not received any communication delaying the results presentation scheduled for lunchtime tomorrow so suspect the results will be released tomorrow at 7am.

[varies] 25/4/2022 14:52

You are so right, dolittle. If the results are disappointing or long-delayed, I would have great difficulty getting out again.