Touchstar Share Discussion Threads

[cocker] 29/4/2023 23:11

Tipped in shareprophets today!

[rivaldo] 28/4/2023 11:10

Smithie6, you just have to read the Annual Report properly. It's explained on page 49 in 2.16 - essentially it's a very healthy amount of deferred income:

"Any revenue received from customers in advance of the Group satisfying its performance obligations is classified as a contract liability and carried in the Statement of Financial Position until it is appropriate to recognise the corresponding revenue (see note 23 Contract liabilities)."

[smithie6] 28/4/2023 10:24

looking at the AR

note 23. contract liabilities, for 'performance commitments'...

~£2 million

Wat'sat ??

[smithie6] 28/4/2023 09:54

..nice to see the news about overseas expansion/growth

personally I wld like to see some overseas sales of the developed qualified tough hardware. Tough hardware that is approved for use in explosive environments (for fuel delivery/use areas) is a specialist area & with not many different models available. And the TST models are doing well for sales in the UK so the models are good, competitive in price & desirable.

[smithie6] 28/4/2023 09:50

The company might have ~£1m it can use in a buy-back or as a special divi (which can only be paid from the accounts of the holding company)

but
the group has perhaps £3-4 million (check) it could use

How difficult would it be for subsidiaries to pay cash up to the holding company so that it has more cash available for a buy-back or a special divi ?

[smithie6] 28/4/2023 09:45

& thanks to Rivaldo from me as well.

very interesting/useful info

[varies] 28/4/2023 09:18

thank you very much, Rivaldo.

[rivaldo] 28/4/2023 08:30

TST gave a really encouraging and optimistic presentation yesterday via WH Ireland.

My notes in no particular order (hopefully transcribed correctly in haste!):

- the order book at 28th March is now £2m, up from £1.74m at 31st December
- they're "comfortable" with expectations per WH Ireland's forecasts through to 2025
- they're "seeing an uplift in new customers"
- there are "high barriers to entry"
- ARR is expected to grow a further 14% this year via increasing software revenues
- they're "gaining traction" with export opportunities. Expansion into Cyprus & Turkey has begun - they've met with two suppliers and one in the distribution sector has already committed to a £200k order. Greece is also on the agenda, and DCC in Denmark have also agreed an order recently
- these countries are "low hanging fruit" as their markets are less developed, whilst France and Germany are more dveeloped and less easily entered. However, TST are having conversations with companies to partner in the USA
- margin improvement should continue
- the fuel sector is in the middle of a sector upgrade and is "buoyant". This is largely due to the need to upgrade outdated Windows systems/software. TST have a 70% share of the UK fuel delivery market. Half of their customers have already upgraded, and the other half will do so in the next 2-3 years
- each upgrade tends to double prior revenues, i.e one customer is moving in June/July from £160k per annum revenues to £320k per annum as their software is upgraded. And TST are also growing non-fuel related business
- there's a "lot of organic growth" at present, so whilst they've looked at acquisitions and will continue to do so for reasons of geography or new sector entry, these are not a "must-do"
- there could be a return of surplus cash to shareholders after the AGM (no further details given)
- Ian is retiring (and is stepping back from his other interests too) when he finds a suitable successor as (1) he's old! and (2) his speciality is the cloud etc, whereas he sees the next gen of software as being intelligent/AI-governed and he sees a younger person with knowledge in this area as being more useful to TST
- Ian noted that TST has "incredible potential"

[smithie6] 27/4/2023 12:49

the cost to do a process of a pro rata buy-back might be visible in lse:ING accounts

since they did it in Nov. 2022.

The process is quite quick btw.
At ING it took just 3 weeks start to finish including a GM.
At ING the co. spent ~£2m to do the buyback.

------

unused 'rights' can be taken up/used/apportioned as the bod decides is suitable
..but such an initial offer must be to all shareholders, pro rata.....(by law. ;-) )

(unless shareholders voted in a gen. meeting to allow a buyback to be just from 1 shareholder, but phps need >75.0% vote; & I have never seen it happen)

[smithie6] 27/4/2023 12:47

Riv

...imo just take a look at Company Act 2006

equal treatment of all shareholders is in black & white

[cocker] 26/4/2023 15:33

Riv, why should any shareholder have president over another. Possibly but doubt it and i guess pending how much, an open offer to sell but suspect costs in doing so would out weigh normal broker method.

[rivaldo] 26/4/2023 14:55

Good to see TST is much more liquid at present, and looking encouraging online - you can only buy a maximum 10k at 106.85p, whereas you can sell 25k at 96p.

Smithie6, we'll agree to disagree re the share buybacks from specific shareholders :o))

[smithie6] 26/4/2023 11:39

Rivaldo's post 1970...
good info about the data for the company's financial reserves

but

imo the co. can not buy shares just from 1 shareholder without doing it as part of a general equal offer to all shareholders

by law all shareholders must be treated equally, (although that is phps sometimes broken; such as when CLNs are issued)

(except if the shareholders have voted to bypass that rule of the Company Act for a specific action. (eg. the common AGM item to allow a co. to issue 5% of its number of shares as new shares without observing the pro rata reqt. or first oferring to existing shareholders ....has to be approved by shareholders otherwise it is not permitted)

[cocker] 26/4/2023 10:53

I dont see how TST can offer any holder preferential treatment in selling their stock, as even I wouldn't be able to place my holding without disrupting the market. If its done it will be via a broker as normal as with most other stocks. Share buy backs ultimately give value, but we all know that if you want to buy or sell sometimes even a 1000 shares there is no firm quote available in TST. So for me I would prefer a divi and if i was CEO, buy a warehouse where one keeps the initial investment but would be rewarded with a regular income as well.

[rivaldo] 26/4/2023 10:31

TST can only pay a dividend to the extent that there are distributable reserves in in the top (holding) company of the Group. There were £2.37m retained losses in the topco at the end of Dec'22. Today's £1.12m transfer to those reserves reduces that to around £1.25m. This year's likely profit will therefore get those distributable reserves closer to positive levels, but will likely be supplemented by additional intercompany dividends/management charges to enable a dividend this year.

Share buybacks are certainly possible, particularly for buying out the likes of Chelverton in one swoop. The broker could simply enquire of Chelverton if this was appealing and arrange the share transfer at the appropriate price.

[cocker] 26/4/2023 09:20

As far as im aware they can not pay a divi higher then eps per share but possible could pay a special divi as a one off. So i assume a divi will be put in place but would likely be no more than 2.5p max. With regards to Chelverton, why does evryone assume they would be such willing sellers, in fact i would say quite the opposite and any buy back would be though the market for sure.

[smithie6] 26/4/2023 09:02

by law they can't just buy shares from Chelverton but wld have to do a pro rata "offer" .....where Chelverton might take up unused parts of that.

----

My guess is that no way will IM be selling any around this price. I expect he will prefer to cash in all his shares in 1 go, at ideal moment.

[elited10] 26/4/2023 08:56

I dont think they'll pay that high a dividend, more like half that (or less). They will also likely get the stock for a buyback from Chelverton who have circa 10% and then IM has a further 10%. Either way it benefits all shareholders. Im looking forward more to news of new territories being announced. Shame the agm is so far away otherwise id go.

[smithie6] 26/4/2023 08:39

'if' payout 1m as a divi be about 12p/share

be nice

-----

a buyback in the mkt looks impossible since there is negligible volume.
A pro rata buy-in is an option, if not too expensive to do.

They did that at lse:ing.

[smithie6] 26/4/2023 08:36

The co. HQ is in sunny dry Manchester but the RNS talks about approval by court in Scootland & registering at register in Scotland for companies.

Anyone understand that ?

[elited10] 26/4/2023 07:56

Agreed, sooner than I thought as well. The negative retained amount is smaller than I thought...looking stronger by the day. Do you think they should eliminate the bank overdraft before commencing a buyback?

[rivaldo] 26/4/2023 07:19

Great to see news of the Court approval which opens the way for dividends and/or share buybacks here.

And the AGM update on May 22nd should read well given the "buoyant" order book and trading momentum: