Touchstar Share Discussion Threads

[superbobo] 06/11/2024 13:38

I think we shouldn't underestimate the fact that the leadership of the company has announced that they intend to leave(Ian at least, and I can't see the CEO hanging around for much longer)(which is a big deal for any company, let alone a small one). The original plan was to find a replacement for Ian, which probably they couldn't find hence the plan B of a sale. The reality is that such process introduces a lot of uncertainty both for employees(who know what is coming if a takeover) and customers alike. While I was quite positive on the story pre the going up for sale news, I am no longer as positive if a bid doesn't materialise(which is bad) and the management leaves(which was already announced with no successor in sight). So there could potentially be substantial volatility in the near term.

[varies] 06/11/2024 10:43

Pavey Ark
As l read the Budget, the higher rate of CGT is already in effect.
Prospective buyers of the business, if there are any, may have held back to see how the Budget would affect it. The rise in Employers' NI contributions is the most obvious negative factor but this should be easy to measure. I do not see anything in the proposals specially damaging to TST.
I agree that the shares look attractive but we might see a fall in the price if no offers are forthcoming.

[pavey ark] 05/11/2024 13:12

Well my buy this morning was enough to push the offer price up to 100p.

My purchase price was less than my four sales from April-August 23 but lower than my four recent buys (av 103p after dividend).

I see very little downside from here with the company being very cash rich, profitable and with a probable 3.5p div .

What is really strange is that all of the above makes the current price look very reasonable but rather ignores the fact that the company has put itself up for sale.

It is difficult to see the direct result of the recent budget on the major shareholders without knowing their precise financial circumstances but there would almost certainly be more tax to pay after April 25.

Any takeout price will be higher than 100p.....good if it comes....no disaster if it doesn't.

As ever "you pays your money you takes your chance"

[cocker] 29/10/2024 18:43

Tend to agree with what you have said having just re-read the TU Pavey. However, the quicker the conclusion to a deal or no deal for the company, the better as far as I'm concerned, albeit I would hate to see anything less than 150per share. With regards to new contracts, placing an order with someone who basically is up for sale, surely will put off the sort of companies TST deal with. Once again though, the lack of quality salesmen speaks volumes as far as I'm concerned and has done for many a year, great products that save you many dollars and yet here we are.

[pugugly] 29/10/2024 17:43

Had a look after the fall but spread far to wide and limited stock available. Maybe lower after the Budget.

[cocker] 29/10/2024 15:37

My take on the order is that whoever it is, wants to see who they are dealing with before committing to such a deal, thus the new year once its sorted. Putting one self up for sale causes uncertainty, which will be reflected in possible contracts.

[pavey ark] 29/10/2024 08:40

Disappointing but unlikely to bother any potential buyer.
"a significant order due to be delivered in 2024 has now been rescheduled for rollout in 2025."
Always best to read carefully "delivered"," rescheduled" "rollout"

Obviously any number of reasons for a 2/3 month slippage.....delay could come from the customer but it rather obviously looks like an advanced and confirmed real order.

A small company like this will have lumps in their order/cash conversion stream but not a good look when management is surprised by it......but as I said the customer could have asked for the delay if they were not ready.

It is just a month since the interim statement so most of this must be down to the delayed order completion.

Happy to hold.

[grabster] 29/10/2024 08:35

And there was I about to increase my token holding today. Change of plan!

[cb7] 29/10/2024 08:16

I have guestimate of 10p eps for next year

[pugugly] 29/10/2024 08:13

That is provided the delayed order actually is confirmed as a firm order - If not then further to fall.

[rivaldo] 29/10/2024 07:53

Certainly the prior forecast of 11.5p EPS for 2025 is supported by the delayed order, so we may find that forecast remains unchanged - and today's RNS states to that effect:

"Management's expectations for trading in FY 2025 remain unchanged"

[rp19] 29/10/2024 07:49

Shouldn't the outlook for 2025 be increased if the delayed 2024 order has been rolled into 2025?

[trombone_89] 29/10/2024 07:39

what do we think, down 30%?

[rivaldo] 29/10/2024 07:22

A disappointing trading update today. H2 revenues will be broadly similar to HI, so likely to be around a £500k PBT, although H2 will also be "strongly cash generative".

Nevertheless, against an £8.6m m/cap at 105p, the cash pile could be say £2.5m, leaving £6.1m of EV against a £500k PBT, which isn't unreasonable. Especially given that we're approaching the new year, which should start well given the "significant order" now being rolled out in 2025.

Presumably there'll be a decent MM markdown, although the upcoming completion of the strategic review and the cash pile/PBT/good recurring income may mitigate against the fall.

[cocker] 29/10/2024 07:18

Well after today's TU you might be able to pick up cheaper stock. The delay in the big order may well be due to the customer seeing whether TST is staying as a stand alone or a bigger part of something else.

[pavey ark] 26/10/2024 10:18

I have been in and around here since the BVM days.
Since Ian Martin I've been happy to buy into any dips and sell on any uptick but retaining a core holding.....these have been my easiest trades as I always had confidence in the management so if the profit took some time I was happy to hold.
I have also used TST as a bit of a cash source if I needed money for other trades.

It looks like this cosy arrangement is about to end so after the announcement I increased my relatively depleted supply by increasing my holding by 40%.......this was not easy and took four buys with an average cost of slightly under 105p/share.

A few rather obvious points:

1 Martin wants out and the market in TST is rather illiquid.
2. Hardy ,the guy who runs the company day to day, is over 60 and has been with BVM/TST for over 30 years !!
3. Major personal tax changes look likely (from April 2025)
4. The figures are there for all to see .......pick a number for a buyout and it will be well north of the current price,
5. 4-6 weeks was mentioned for the review ......they have offers or know of people wanting the company and four weeks have passed since the announcement.

As I pointed out the real plus for me is that I'm happy to hold my 40% additional shares (103p after dividend)if no sale but more than happy to take 130p (+?)if TST is sold.

"You pays your money you takes your chance"

[rivaldo] 17/10/2024 21:57

Appreciated davidosh, I've also edited my original post. More detective work is necessary then.

[grabster] 17/10/2024 12:42

Ah. Thanks. Have amended my Post 2384 accordingly.

[davidosh] 17/10/2024 12:22

Michael Taylor of the IC is a regular on the Mello show and has confirmed that he is not the MT large holder suggested in this thread but he did not deny having some interest in the company just not that large.

[varies] 17/10/2024 10:07

It seems unlikely that any parties interested in taking Touchstar over will commit themselves before the Budget.
This also seems likely to affect our potential liability to CGT as shareholders if a cash offer is forthcoming. My cost per share is about 76p and I suspect that this will be similar for many others. Mr.Martin has done well with TST but there were years of poor performance before he took over.
Having held most of my shares since 2012 l am, of course, out of pocket in real terms but would still have CGT of about 6p per share to pay if l sell at 106p even if the CGT rate is left unchanged.

[grabster] 17/10/2024 09:22

Lifting his stake from sub-3% to current level in the past 4 weeks will itself have likely cost him around £160k.

[rivaldo] 17/10/2024 07:55

IMO Michael Taylor's stake has to have been more long-term than speculative. To build a stake of £400,000 in a microcap like TST would have taken quite some time, and to dispose of it quickly would be incredibly difficult, even with a price surge, without some form of corporate action or specific institutional interest.

There may of course be a small speculative element included in his stake given the current strategic review and potential bid/corporate action.

[grabster] 16/10/2024 22:23

Got wind of a takeover bid perhaps - or thinks he has. Company did say they're open to bids. If it's a purely speculative stake on just the possibility of a bid it is a lot to risk. He does some fast trades - so could sell within days if his move triggers a surge.