Touchstone Grp Share Discussion Threads

[weatherman] 18/4/2008 15:32

Just bought a few more at 95p. Last time TSE were this price their turnover was only around £15m. Arguably now they are twice as big assuming they can maintain margins on £30m turnover.

Look forward to announcement on 'unlocking value.'

[davidosh] 16/4/2008 13:03

Well certainly significantly below £13m mkt cap now ....about £11.5m at the mid price and that is only about 4.5 times the revised expectation of PBT. This company has drifted downwards relentlessly for nearly a year now and if management were serious about the strategic review unlocking some shareholder value we need another announcement soon.

When they announced the review the share price was 25% higher than here so any improvement from the early February level will be extremely significant..

[campbed] 15/2/2008 16:23

davidosh

l I make the market cap well under £13m

The last voting rights announcement at 28 Dec showed 12,235,787 shares so at £1.05/share that is £12.85m market cap which is under but not in my view well under £13m

2 profits now indicated at slightly below £3m before tax
Last year's EBITDA was £3133k with depreciation of £229k that gives EBITA of £2904k which is the adjusted profit figure as net interest income is immaterial. The trading statement says they will be slightly behind last year and I take that to mean 10-15% so I think the expectation is ca £2.5m adjusted PBT.

3 no less than (another) £3m of cash likely to be sitting in the bank at the end of next month

As I said net interest income was immaterial last year and in H1 interest expense at £34k exceeded interest at £31k. So they may have reported £2.6m cash balance at end of H1 but I don't think they can have that as an average available balance during H1.

However £2.5 EBITA on a mkt cap of ca. £13m (equal to enterprise value assuming immaterial average cash balances) gives a pre-tax return of close to 20% which is rather better than the building society 6% (likely to decline) and so I have bought a few more TSE shares based on their expectation for growing sales, profits and cash over the next 3-4 years by which time hopefully normal market multiples of 10X EV/EBITDA will be assigned again to software microcaps and the share price will be ca. 300p.

[davidosh] 15/2/2008 11:50

Well at £1.05 I make the market cap well under £13m and the turnover should come in close to £35m with profits now indicated at slightly below £3m before tax and no less than another £3m of cash likely to be sitting in the bank at the end of next month.


The strategic review will be interesting and lets face it at this price it should not be difficult unlocking some shareholder value.

[bigwig] 15/2/2008 10:55

I bet they would!

[weatherman] 15/2/2008 10:23

The controlling family might accept an offer from another group if the price is right.

[bigwig] 15/2/2008 10:03

For what its worth...
In my experience 'strategic review' often means something like mgt buyout or sale. Over 60% is already owned by the Birch family. When you take the odd pension fund and investment trust into account there are not that many shares available for trading, so the price swings are magnified by small trading volumes. Judging from this morning's move and number of sellers, there are probably not that many sellers left now. Everyone else will hang on and wait. (me included) The market cap is now only £14m, with turnover at £30m, profit of over £1m, eps of around 14p and pe of about 7, yield of 4%. I'm hanging in there.

[mrdynevor] 15/2/2008 09:21

I am not sure but I think that they are refering to the development of nfp modules for the Microsoft CRM application and rental ad-on for Dynamics AX.

This effectiviely gives them unique IP but the revenue/profits will take a while to materialise after the investment is made.

This is what they need to do to differentiate themselves from being a pure consultancy operation to allow to charge higher day rates/atract sustainable business but some short term pain is being experienced on the way.

They appear to be doing the right thing strategically.

However, the question is are these investments going to pay off?

In term of unlocking shareholder value I suspect that this is around divesting their interest in Sun systems and become a pure play Microsoft house.

Only guessing.

[weatherman] 15/2/2008 08:44

Statement comments that management plan to find a way of unlocking shareholder value.

Could this be? Higher dividend, takeover, or management buy out?

This stock is surely worth 200p.

[weatherman] 15/2/2008 08:35

TSE to report only slightly below forecasts. Last year made 17p eps, a slight fall might be 15p eps.

So the market keeps selling it down way into single PE figures.

[tole] 29/1/2008 19:21

Sentiment against Maxima's profit warning the other day in part I suppose.

[mrdynevor] 29/1/2008 10:53

Anyone got any idea's for the price erosion?

I suspect that there is some bad news that has not yet been released on consultancy rates, new business etc.

At this price they look good value with potential to double the share price once the current difficulties have been cracked.

[davidosh] 16/1/2008 17:21

I am rather surprised that the company are not buying back stock at these levels if the forecasts are likely to be met. It would be a good use for the spare cash and extremely earnings enhancing whilst at these depressed levels. The dividend was not increased so why not give shareholders the benefit and buy up the loose stock and then increase the final divi too.

[tole] 07/12/2007 10:42

Hardman note taken off TMF - still following this one, though no position.

[welsheagle] 06/12/2007 20:09

Considering the first half is the weaker half, they look reasonable results - share price looks cheap.

[hywel] 06/12/2007 14:11

All gone quiet here. Interim results and market not keen:

Touchstone Group plc
Interim results

Touchstone Group plc, the AIM-listed provider of business software solutions and consultancy services, announces its interim results for the six months to 30 September 2007.

Highlights

• Turnover increased by 15% to £15.5m (2006: £13.5m)
• Fee-based revenue growth of 18% to £7.2m (2006: £6.1m)
• Microsoft Dynamics solutions growth of over 38% now representing 66% of
total operations (2006: 56%)
• No.1 Microsoft Dynamics partner in the UK for third consecutive year
• Adjusted pre-tax profits* £1.04m (2006: £1.34m)
• Basic Earnings per share 4.31p (2006: 7.19p)
• Cashflow from operations £1.0m (2006:£0.1m)
• Interim dividend maintained at 1.5p per share (2006:1.5p)

* Profit on operating activities before depreciation, amortisation and share
based payments

Commenting, Keith Birch, Chief Executive, said:

'Despite a disappointing start to the year, subsequent trading, including the
current trading period, has shown a marked improvement on the comparable period
last year.

'With strong order books and sale pipelines, the Group anticipates continued
good levels of trading in its traditionally stronger second half.'

Enquiries to:
Keith Birch, Chief Executive Officer
Touchstone Group plc 020 7121 4700

Samantha Robbins/Adam Leviton
Redleaf Communications 020 7822 0200

Matt Davis
Brewin Dolphin (NOMAD) 0845 270 8600

[welsheagle] 03/11/2007 20:21

From November's 'Company Refs', when price was 170p:-
a/ Prospective PE ratio of 7.99 (based on two broker forecasts, one recommending 'overweight').
b/ Forecast growth in eps of 18%.
c/ Price to sales ratio of 0.64.
d/ Dividend yield of 2.75%.
e/ Net asset value of 59.7p.
f/ Net cash per share of 19.1p.
g/ Positive cash flow per share of 6.59p per share.
h/ Turnover up from £14.2m to £30.2m in last five years.
i/ PEG ratio of 0.44.

[welsheagle] 30/10/2007 08:12

RNS Number:5648G Touchstone Group PLC 30 October 2007

Touchstone Group plc (the "Group")

Notice of Results

To accommodate the additional requirements of complying with IFRS guidelines, the announcement of interim results will be slightly delayed this year. Subject to the IFRS review process being conducted in a timely manner, the Directors expect the interim results to be announced during the early part of December. The Directors can also confirm that the Group continues to trade in line with management expectations.

[valustar1] 18/9/2007 10:30

and H2 2008 and H1 2009!!

[scburbs] 18/9/2007 08:51

Rather tame response to a contract worth over c.7% of TSE's sales last year! Perhaps not unexpected in current circumstances, but encouraging that H2 seems on track to be a strong half. This contract will benefit both H2 this year and H1 next year.

[domwilliams] 18/9/2007 08:37

Significant Contract Win for Touchstone

Touchstone Group plc, the AIM-listed provider of business software solutions and consultancy services, is pleased to announce that it has won a significant
Microsoft Dynamics contract.

Touchstone has won a contract for the supply of a £2.2 million ERP software and
services solution to Jarvis Plc ('Jarvis'). Jarvis has selected Microsoft's
Dynamics AX technology together with specialist software and services from
Touchstone's Rental & Construction Services division. The first phase of the
project starts immediately with the majority of the project expected to be
complete by April 2009.

Commenting, Keith Birch, Chief Executive, said: 'We are delighted to have won
the Jarvis project. It was won against stiff competition and illustrates the
growing demand for Microsoft Dynamics; and also underlines the benefits of the
Group's recent investment in specialist market solutions.'

[masurenguy] 10/9/2007 15:07

Very quiet - only around 80,000 shares traded over the last 2 weeks !

[weatherman] 22/8/2007 13:14

I've bought back in. Time will tell whether wise or not, but this statement today seemed to be good news compared to the last one of delayed contracts.

[domwilliams] 22/8/2007 11:27

AGM Statement

Touchstone Group plc, the AIM-listed provider of business software solutions andconsultancy services, announces that at the AGM held today at 11 a.m. all
resolutions were duly passed.

At the AGM, the Chairman, David Thompson, made the following short statement:

"We referenced in our preliminary statement in June that the Group had
experienced unavoidable delays with a number of large projects and that these
delays have had an impact on trading. As a consequence, Interim Results are
expected to be lower than last year. However, I am pleased to confirm that
these delayed projects are now in progress.

"I am also pleased to announce that the Group has recently been confirmed as
Microsoft's No.1 Dynamics partner in the UK for the third successive year, and
its 6th largest partner globally.

"Sales activity in a number of Group divisions is most encouraging and this,
together with a recent review of certain Group-wide costs, enables the Board to
look forward to a return to growth in earnings in the second half."

[gavis] 22/8/2007 09:14

AGM today. Accompanying last years AGM was a trading update, we will see if any update is released.