Touchstar Share Discussion Threads

[davidosh] 12/3/2024 15:04

I am trying to get them on our next Mello results show which will certainly help raise awareness and even better if they could come and meet the investors in Chiswick in May at Mello24.

I am a large holder here already and to be honest I probably have 15 or so stocks that are even cheaper in these markets. Highlighting that you are selling may means others hold off from adding at this point but equally may help some build a position as very illiquid. Takes buyers and sellers to make a market.

[cocker] 12/3/2024 12:38

It took around 4 emails and as many calls to get them to reply as to why there was no TU . So as far as I'm concerned albeit most of my holding was built during covid at a suppressed price , I'm happy to drip feed as and when and take a decent profit each and every time. Their lack of investor interaction leaves a lot to be desired imho and from past experience, almost all companies who are on the up like to shout it from the roof tops. What doesn't surprise me is those who claim that the TU was so good, are not adding to their holding, just all hot air as per usual from a few.

[cocker] 12/3/2024 11:28

Thank you Varies and I to have been here for some time and in that time have accumulated a decent sized holding that will take time to shift. TST is a well run good little business that needs to re think who is on the front line selling its products as I want more than less than inflation growth coming through. I'm sure long term all are in safe hands, but there's better out there and YU group being a prime example of explosive growth coupled with huge returns for those invested there

[smithie6] 12/3/2024 09:21

Post 2231 from Rivaldo

An excellent summary imo.

I especially liked this text.
(The +40% PBT envisaged for 2024, good info, I didn't know that)

"Further, TST managed to raise margins such that PBT increased 60% and is expected to increase another 40% this year, to give a £1m PBT against an £8m m/cap.

TST are now on an ex-cash P/E of just 7.0 for this year. Jim Slater's PEG is only 0.48.

These indicate that TST is now on a bargain valuation"

======

But !

£1m PBT for 2024 should imo be PAT & not PBT, after adding in the expected tax credit.

----

I make the 'real' nett assets ~£5m (since I count the intangible assets as a real value since those assets produce real profits, recurring revenue & the hardware designs have real value imo)
Giving an enterprise value of ~£3m.
With £1m PAT pencilled in for 2024 it makes the shares/company look very cheap. And hence a takeover target imo.
Possible buyers
- Zebra (USA)
- Journeo (UK). Lse:jneo
- any European competitors

But probably best if TST keeps going as it is & keeps growing & give time for the opportunities (USA & Europe) to be delivered. (Some existing contracts are with big companies with operations outside of the UK, hopefully those clients will, over time, wants Touchstar kit on their installations outside of the UK as well as in the UK (tomorrow I might try to look back at past contracts won to see the links/opportunities/wins outside of the UK).

[smithie6] 12/3/2024 09:14

Rivaldo
...I've corrected my post to remove the reference to WH Ireland, now credited just to you.

For Touchstar I think we have very similar opinions/evaluations.

[rivaldo] 12/3/2024 09:04

Smithie6, the paragraph you quote in 2229 was entirely my own work, not from WHI!

On this occasion (not always!) I'm fully in agreement with Smithie6.

TST is a transformed company, with rising sales, profits, a £3m+ cash pile, new software and other products now commercialised, substantial recurring revenues, international sales prospects and a vision led by an experienced Chairman.

Plus a very positive outlook statement for this year.

The 7% sales increase last year is pretty creditable imo given the macro situation which left many, many companies issuing profit warnings.

Further, TST managed to raise margins such that PBT increased 60% and is expected to increase another 40% this year, to give a £1m PBT against an £8m m/cap.

TST are now on an ex-cash P/E of just 7.0 for this year. Jim Slater's PEG is only 0.48.

These indicate that TST is now on a bargain valuation.

[cocker] 12/3/2024 08:42

We can all see and most of us have read the WH Ireland update, unlike the unfactual Post that you have had to delete smudge. If you were that impressed and think the market should be aswell, why on earth are you and others not buying into this superstar AIM listed company?. Simply because its average and not much else. Also its worth noting that investors invest for returns, ie if there's decent amount of cash ,then give it to those who have backed you , like PLUS have done over many years, Inc buy backs. However, the latter serves no point when you can barely sell or buy a 1000 shares at anytime. Probably TST buying up the stock that's being sold into the market now, but not many left for them, so there's your chance Coco to impress us all!

[smithie6] 12/3/2024 08:11

Well done Touchstar.

A small British company that has been very well run imo in recent years & has impressive products & skills (especially impressive for such a small company).

For me, as a shareholder, 10/10.
And I wouldn't give 10/10 to the majority of UK listed companies.

And PBT is up 60% versus the previous year, which was up on the year before.

[rivaldo] 11/3/2024 23:02

Ian Martin has done a tremendous job in turning TST around. He's not the type to make outlandish statements. Yet today's outlook is reasoned and likely the most confident outlook shareholders here have seen for a long time.

One might conclude that perhaps he's in a position to know a little more about what's happening at TST than anyone else.....

"Ian Martin, Chairman, commented: "Touchstar entered 2024 in good shape. In the market sectors in which we operate activity continues, which gives reassurance for the outlook in 2024. The medium-term prospects for the company have improved. The team is now focussed on making such opportunity a reality, enabling a long term continuation of the positive trends in financial performance, building upon the solid platform we have developed and making Touchstar a better business."

[cocker] 11/3/2024 22:01

Looks like smudger has got the hump, or perhaps he read the TU with Rose tinted glasses on. Either way, I have been here for years and as much as covid de-railed us when we were looking sharp, if you deliver 7% growth when most other businesses have been flying, then at the very least you need to ask yourselves why. Also to be confident of 2024 when we are only barely 3 months in & possibly a lot of belt tightening ahead, says it all really., either slightly deluded or complacent imho.

[cocker] 11/3/2024 19:27

Unaudited revenue up 7% yoy, what's inflation again?. If it was such a good update why has the market not shot the share price north, because its nothing more than average, that's why!. As far as my holding goes, I'm sure the stock won't collapse as its doing just enough, but happy to sell into any strength and if you like you might just be able to add to yours through my generosity.

[cocker] 11/3/2024 18:04

Given inflation running high, T/O basically flat and yes eps will look good as buy back will window dress it. With regards to acquisitions, why are so many so obsessed with it? Clearly TST have excellent products and have the personel to install them, but I go back to the underlying problem that has been the elephant in the room for too many years, they don't have the right people selling them. I hold a considerable amount of stock and have decided to drip feed the sells as and when , started this morning with 5k at 98p and suspect it will be in small chunks over a long period of time.

[rivaldo] 11/3/2024 11:44

Agreed. I'd also prefer to go for acquisitions, although even small buybacks at this level should prove to be highly earnings-enhancing as TST grows.

WH ireland summarise today as follows FYI:

"Today’s full year trading update demonstrates the progress that has been made in the business, with the execution of Touchstar’s multi-year strategy coming to fruition in a material improvement in profitability in FY23.

While our forecasts imply further organic growth as the group continues on its trajectory towards higher margin software licence and recurring revenues, we also note the very healthy net cash position (making up ca. 39% of the market cap), which brings the potential for bolt-on acquisitions, value being realised through further share buybacks, and further internal investment opportunities.

With the shares currently trading on a FY 2024E EV/Revenue of just 0.6x, EV/EBITDA of 2.4x and PER of 10.8x, we continue to see significant upside for the shares. We see fair value for the shares at 140p (previously 120p), which would imply a FY 2024E EV/Revenue multiple of 1.0x."