Touchstone Grp Share Discussion Threads

[welsheagle] 14/4/2007 19:14

Shares magazine also mentioned the new contracts and the low PE ratio this week.

[glasshalfull] 14/4/2007 09:15

Buy tip in yesterdays IC - 13/4/07

Touchstone shares soar

Touchstone Group's shares leapt 10 per cent to 209p after the software company said revenues would be ahead of market expectations. It signed deals worth £1m with childcare provider Busy Bees, £2.3m with a business services company, and £4.5m with construction equipment provider Speedy Hire. Broker Brewin Dolphin forecasts EPS of 17.7p for the 12 months to end March 2007, rising to 22.4p in 2008.

Touchstone boasts a record order book so, trading on a modest 9 times earnings forecasts, its shares are cheap for its sector. BUY.


GHF

EDIT - Headers updated accordingly.

[glasshalfull] 14/4/2007 09:14

Excellent update this week.
Reassuring to see that the order books are so buoyant at year end.

As the No 1 Microsoft Reseller.....sorry Partner :-), in the UK, they are currently in pole position to capitilise on the blossoming Microsoft CRM market.
Lets not forget that their own developed solutions appear to be assisting them in winning these contracts.

They also seem to be doing quite nicely from SunSystems and Proactis project wins.

As the market digests the outlook statement and earnings estimates for the forthcoming year - back to single digit PER - together with the earnings enhancing acquisition of ETC Global Solutions last month, I would hope this leads to a more modest rerating that I see both MXM and KBT have enjoyed recently.

IMHO a 22p EPS estimate for the current year suggest a share price around 250p as fair value to me, given the growth consistently demonstrated and prospects for the Group.
Last years investment in staff/recruiting and product develpment will hopefully fall to the bottom line in the current year.

Kind regards,
GHF

[freaknomad] 13/4/2007 12:37

daidosh said: "
I suspect a re rating will happen to around twelve but patience and more institutional weight needed."

2007 forecast, which TSE confirmed in their trading update, is on a p/e of 11.5, so you almost have your 12.

It is far from certain yet that the 2008 forecasts and the p/e of 9 will actually be achieved.

As a Microsoft reseller...er...sorry partner, it seems TSE is benefiting from the fact that Microsoft has finally got their CRM package right and is riding on the coattails of the resulting MS hype. This is a pretty good place to be, but it means growth will slow down when competitors start fighting back which they are bound to do.

[tole] 13/4/2007 09:31

Can confirm Brewin Dolphin Figures for next year - and as stated they have upped forecasts for next years 2008e

Consensus forecasts below -

Detailed Broker Forecasts - 2008
Broker Date Rec Pre-tax (£) EPS(p) DPS(p)
Brewin Dolphin 11-04-07 BUY 3.70 22.40 4.40
Hardman & Co 10-04-07 None 3.80 21.90 5.00

PE Prospective 9.08

[tole] 12/4/2007 12:43

Here's the link to the new Hardman Update 10.04.07 (mentioned previously) for anyone wanting a read.

[tole] 12/4/2007 09:31

Anybody able to confirm the full Brewin Dolphin forecasts here? Cant see any revised figures as yet myself through TDW. Would be nice if they've upped EPS to 22.4 as is stated.

Still way to cheap in my eyes and way off the original price target set at 250p when Brewins originally started coverage last year.

[tole] 11/4/2007 09:03

There are a few onboard and well with a 8% free-float they'd have trouble getting any...

Major Shareholders %
Birch, Keith Gerard Joseph 24.48
Birch, David Philip 13.99
BNY SG Nominees 9.66
P Birch 9.43
HSBC Global Nominees (UK) 9.12
Gartmore Inv 7.78
Giltspur Nominees 5.79
Societe Generale Asst Mgmt UK Ltd 4.47
KAS Nominees 3.78
Chase Nominees Ltd 3.61

[thefurryone] 10/4/2007 23:42

With a £25m mcap I wouldn't have thought there'd be too many institutions interested just yet.

[davidosh] 10/4/2007 15:43

Very high volumes today .....looks like the house broker must be getting a few institutions interested after such a solid update and also the strong order book flagged up

I understand the house broker Brewin Dolphin has also updated forecasts for the current year to 22.4p eps which suggests a p/e of barely above 9 for a company with no debt/net cash and proven growth above 20% for the last three years including current one.

I suspect a re rating will happen to around twelve but patience and more institutional weight needed.

[tole] 10/4/2007 13:51

Good volume today (close on 400k traded) alongside the excellent trdaing update should well confirm this breakout. Hopefully now see a re-rating here.

[edcrane] 10/4/2007 11:29

Tole .... your e-mail address or PM me as I think I have seen your name over the other side ....

[tole] 10/4/2007 09:33

Excellent - thanks for that edcrane - (any chance of a copy? if in electronic form)

Notice they have upgraded then already for 2008e from Turnover 30.2 to 33.3 and EPS from 21.4 to 21.9.

Their comment regards the potential for a re-rating seems spot-on.

[edcrane] 10/4/2007 09:24

Some research from Hardman & Co following this morning's announcementr .... in summary they now have numbers as follows .... Turnover '07 £29.9m and '08 £33.3. Earnings of 18.1 (10.4x) and 21.9 (8.6x) respectively. The yield is 2.4% and 2.7% in '08.

and here is a summary of their comment ....

We believe that the growth of Microsoft Dynamics provides TSE with a platform for profitable growth. Dynamics is growing at 20% according to industry sources, and some have put this as high as 30 percent. Within this total Sharepoint and CRM business has been particularly strong and that is true of TSE too. Overall, Microsoft appears to be well ahead of growth in the sector as a whole. By comparison, SAP increased software sales by 10% (12% in constant currencies) in preliminary results for FY 2006. TSE shares have performed well this year rising from around 140p to the 180-190p level.

However, this has merely tracked earnings growth – there has been no sustained rerating as yet despite TSE's success in establishing a firm track record of sales and earnings growth. The shares remain on a single figure PER for
FY 2008 and offer a respectable yield.

[weatherman] 10/4/2007 08:41

Surely it warrants a fair price of 300p + ?

[tole] 10/4/2007 08:02

Excellent update this morning... and the breakout :)
Onwards to 250p now in my book


Touchstone Group plc

Major Contract Wins and Trading Update


Touchstone, the AIM listed provider of business software solutions and
consultancy services is pleased to announce a number of significant new business
wins and provide an update on trading.

The Group's broad solution portfolio has enabled the signing of a number of
contracts in recent months. Notable has been a #1m project that combines
Microsoft Dynamics GP, CRM and SharePoint technology to solve a number of
business issues for Busy Bees, one of the UK's fastest growing childcare voucher
and nursery organisations. Additionally, the Group has won a number of
SunSystems and Proactis projects in recent months which together are valued at
over #1.2m. Collectively, these projects highlight the Group's increasing
strength in solving a variety of business issues across a number of general
markets.

The Group has also developed or acquired software to help solve business issues
in a number of specialist market sectors, including Construction & Managed
Services, AgriTrade, Hire & Rental and Wealth Management. In-depth expertise in
these market sectors combined with the Group's specialist solutions has helped
secure a number of new projects.

Of particular interest is a project valued at approximately #2.3m in the
Construction and Managed Services sector. This project will see the Group's
Construction Manager and Microsoft Dynamics AX being implemented at a leading
building services organisation. This project will replace an ageing legacy
solution and should take approximately 20 months to complete.

CommTrader, the Group's solution for commodity trading organisations in the
AgriTrade industry, has been selected for a number of projects in recent months.
This success can be attributed to the functional strength of CommTrader and
its underlying Microsoft Dynamics AX technology. Together, these CommTrader
projects are valued at over #1.4m and are expected to go live within the next 12
months.

The Group's Hire & Rental unit has been working on a number of projects
including the original ground-breaking #4.5m Speedy Hire project. The Group is
delighted to confirm that the initial phases of the Speedy project have been
successfully completed with a number of regions now live on Touchstone Rental
Solution (TRS), the Group's Microsoft Dynamics AX-based Hire & Rental solution.
TRS was selected to provide Speedy with a leading-edge, rugged and scaleable
platform for future expansion. TRS is now being rolled-out to all remaining
Speedy regions and is expected to be complete in the next 12 months.

The Group's fiduciary management solution continues to secure exciting projects
from both existing and new clients. Touchstone Wealth Management, a solution
based upon Microsoft Dynamics NAV technology has helped secure additional work
from Barclays Private Bank during the year valued at over #500,000.
Additionally, the Group has also been selected by a major Geneva-based
international trust organisation to supply a solution to administer its
operations over three separate jurisdictions in a project valued at #200,000.

As a result of a buoyant final quarter, the Board expects turnover for the year
to be ahead of market expectations with year-end order books at record levels.
Additionally, and despite the increased costs of resourcing and developing our
specialist market solutions, year-end profits will be significantly ahead of
last year and, subject to audit, in-line with market expectations.

Commenting, Keith Birch, Chief Executive of Touchstone, said:

"Six years ago we set out a strategy that would help broaden our appeal to
existing clients and also develop new clients in new markets. The Group is now
reaping the benefits of these investments having upgraded skills, broadened
portfolio, developed new markets and extended regional offices. These
initiatives have fundamentally transformed the Group and are expected to
continue to provide exciting prospects for future growth."

[tole] 02/4/2007 11:13

Surely will start to close the gap in relation to Maxima soon. Suppose we are waiting for that trading update...last years the 24/4 so only a few weeks to wait now.

2007/2008
TSE - PE Prospective (x) 10.02 8.77
MXM - PE Prospective (x) 11.26 10.44

[jakleeds] 27/3/2007 10:55

Interesting fall, still can't buy too many online though.

[tole] 26/3/2007 09:13

Nice to see it getting picked up by readers over on Chart Breakouts.

[tole] 24/3/2007 13:49

More good news out on their website today...

RMB Asset Management International Ltd centalises finance system with Touchstone Group


23 March 2007: RMB Asset Management International Ltd (RMB), a wholly owned subsidiary of the FirstRand Group (one of South Africa's largest financial services institutions), has engaged the IT consultancy and software solution services of Touchstone Group to implement an integrated Infor FMS SunSystems procurement and finance system.

The new finance and accounting software will allow RMB to centralise its finance function to achieve stronger management information, greater visibility, increased flexibility and efficiency to the business while the procurement functionality will support centralised purchase ordering processes.

Jonathan Barnard, a Senior Accountant at RMB comments, "We currently have three offices across London and Kent that liaise on a regular basis with each other, as well as South Africa; this requires a significant amount of manual coordination to ensure administrative accuracy and efficiency. Having opened our third office in the West End in February 2007, the need to centralise the purchase ledger within the finance department was increasingly unavoidable. Infor FMS SunSystems allows us to control our processes in-house across our different businesses and offices - thus maintaining our level of central control and visibility whilst increasing our opportunities to work flexibly."

RMB selected Touchstone Group following a competitive three-way pitch process on the basis of its expertise in the financial services industry and experience in implementing and supporting Infor SMS SunSystems, as well as its focus on flexibility. As Barnard explains, "It is very important that we are able to transfer all financial data across our international offices as and when it is needed; Touchstone Group recognised this and offered a solution that was tailored around our flexible needs, ensuring that we have a system which will allow us all the benefits we are looking for, at a highly cost effective price."

Barnard continues, "It was very clear to us from the outset that getting the technology and the administrative processes across the entire organisation correctly implemented would be key to ensure we continue to meet our customers' expectations on an international level. In addition to our experience in this sector, our relationship with Touchstone Group and through the implementation of the Infor SMS SunSystems' technology we have ensured that all of these expectations have been achieved."

Barnard concludes, "The implementation of any new product or solution is never entirely smooth, however Touchstone Group's understanding of our business objectives has assisted in moving the project forward at crucial times. Working with Touchstone Group has been a positive experience and we are enjoying real benefits since rolling out the entire solution in January 2007."

Adrian McNay, Divisional Managing Director, Touchstone Group, adds, "We believe that our expertise and acute understanding of the financial sector and the new regulations arising within it, can fundamentally aid RMB's operations to deal with today's demands as well as its future requirements and business growth."

[tole] 23/3/2007 15:48

Thx Hazelton - Yes a very small free float should well see these move higher with the continued interest and increased volume seen here since the aquisition and contract news these last few days.

[hazelton] 23/3/2007 13:36

Tole , I was looking at the shareholders from their 2005 accounts and came to a similar conclusion a few days ago. There are not a lot of the shares in circulation.

[tole] 23/3/2007 12:30

Monthly update on Hardman indicating the bouyant Microsoft CRM market.



TOUCHSTONE

"We are coming up to the company's year end and expect to have a trading update in the next month. So far this year news has been positive. Other companies
involved in the Microsoft Dynamics marketplace also report good market conditions and strong customer interest in Microsoft CRM."