Triad Share Discussion Threads

[sunshine today] 03/7/2024 12:56

Reasearch.

Investing lessons from the UK’s first ISA millionaire
Lord Lee of Trafford turned £126,000 of ISA contributions into a million in just 16 years. So what can we learn from his investing strategy?


Lord Lee likes investing in companies with:

“Family representation on the board, together with a stable board that holds meaningful personal shareholdings”

[netcurtains] 03/7/2024 12:55

OK could be.....

[sunshine today] 03/7/2024 12:54

No tax is due if Dr Rigg is alive in 7 years time.

If Labour up the IHT rate, or introduce bands, the chances are if a transaction took place prior to Friday it will come under today’s rules.

No need to sell any shares, it’s just planning, and playing safe, in my view.

[netcurtains] 03/7/2024 12:48

sunshine Today: True..... But if there is a big tax bill doesn't that imply they will need to sell loads to pay the bill? I cant see that happening... So I'm not convinced this is the reason.

[sunshine today] 03/7/2024 12:14

My take :

IHT is 40% but i think, at one time in the past, was near 90%.

Labour Govt Friday.

[netcurtains] 03/7/2024 11:56

Its a bit unclear as some names missing om the RNSs.

But shares moving around the family could imply all sorts of things....
Interesting movements....

[arthur_lame_stocks] 03/7/2024 11:54

It looks like John Rigg has decided to gift some shares to his children. It may be that he's expecting both a significant rise in business for TRD and changes to the Inheritance tax regime.

[mr.oz] 03/7/2024 11:47

What's the upshot of the four RNSs just now, please?

Emily Rigg now has 6.38% of the company and is an initial notification?

[sunshine today] 03/7/2024 11:12

Good spot 1maxreward,

“It is a family-orientated business. We are growing quickly,”

Yes they are, i estimate 40% could be on the cards for this year based on new hires, and solid utilisation rates.

Put that up against the sector projected growth, of just 15%.

[1maxreward] 03/7/2024 09:19

https://www.triad.co.uk/news/a-day-in-my-life-by-naheed-vyas/Worth a read about one of our delivery managers.

[sunshine today] 02/7/2024 11:42

Having discussed Gross margins perhaps it’s time to move onto revenues. (Turnover).

Triad has in past years seen more than double last year’s revenues, using contract staff, (with resulting low gross margin.)

This year we can look forward to an increase from £14M to perhaps £20M followed by more of the same in 2025 - 2026.

After 3 months of the new year fee earning consultant numbers have already hit 130,(116 as of 31/03/24 ) As Per per recent Linkedin post.

Last year’s average was 95

7 vacancies can be found on the Triad careers page today.

New staff are joining at the rate of one a week


At a minimum at this hiring rate the average number of fee paying consultants this year should be a whopping 40% up on last year.

[netcurtains] 01/7/2024 14:53

The lawyer is great news especially as some of TRIADS biggest clients appear to be the Ministry of Justice, the CPS and the Police.

[sunshine today] 01/7/2024 14:33

As the accounts for 2023 - 2024 ( second half ) have already shown us gross margin was 25%.

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“Our recruitment process is operating at full steam ahead with great success. I should point out that the costs of setting up the new projects and hiring will be absorbed in the fourth quarter;”


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Now a little explaining.

All those costs are direct costs and fall into gross costs, (not the general overhead of the business.)

Add back in the setting up and hiring costs. That bumps up the gross margin very substantially. The other part of the equation is staff utilisation rates, through the length of the £25M worth of new contracts. These are set to be way higher than the year just reported.

[netcurtains] 01/7/2024 14:03

PS - last year the AGM was at the end of JULY..

It is worth going to these events......

I might (or might not) see you there (depends on the exact date)..

[netcurtains] 01/7/2024 13:32

UK IT recruitment growth averages at about 5-10% a year.
This means that TRIAD can grow at about 5-10% a year and its growth will only be considered average.
HOWEVER, if Sunshine Today is right and Triad can get 45% margin (the average margin) we should see Triads profits "explode" at some point.

Demand for IT work is growing.
Demand for TRIADS IT work is growing faster.
TRIADS margins are improving...

Generally speaking, the future looks good...

The only cloud is a lack of supply of labour....
Hopefully AI might help in this area...



I think there is a place in the industry for more apprentice developers (eg 18 year olds)

[sunshine today] 01/7/2024 12:05

A quick look at the competition shows another glaring issue most appear to have.

Those that achieve the required Gross Margin, fail because the net margin is totally unsatisfactory for decent shareholder returns.

Going forward i am of the view the city will rate Triad highly as they latch onto growing revenues, with fixed costs, growing at a slightly lower pace.

Simply Wall St calculates the UK IT consultant sector on a PE Ratio of 30 with growth this year of 15%.

Triad does not have a PE Ratio today, but it will, after the interims have been published.

Triad is growing way faster than 15% but hey, that's for another day.

[sunshine today] 01/7/2024 11:22

Arthur:

Thanks for posting those gross margin numbers from previous years.

They clearly show that if you start with low gross margins, net margins will never be anything to write home about.

The average sector gross margin has always been out of reach for Triad, set by this flawed formula.

This was acknowledged by the company 6 years ago and it’s been a long haul since not helped by Covid on the way.

The very best in the industry obtain gross margins of C: 60%, longer term, thats just where Triad should be aiming.

Triad are now finally in a position to reach the going rate of around 45% - 48% gross margin.

This should be being delivered right now, hence why the Chairman, can, as is, the most upbeat in 20 years and predicting a transformation of future results.

[apox123] 01/7/2024 10:09

Stocks look to the future, and the numbers show strong potential. Gross margins are on the rise, and cash conversion has been excellent over the years. This has allowed for consistent dividend payments, and despite recent hiring expenses, cash reserves are still strong.

The shift from contractors to in-house consultants should further boost margins. The company has secured over £25 million in government contracts and around 20% of its revenue comes from private sources. Additionally, alternative income streams like G-Cloud and DOS brought in £7.07 million last year.

With these factors in play, the company should exceed its 2017 figures of £30.9 million in turnover and £1.53 million in profit, thanks to higher margins from in-house consultants. The market understands these strengths, as seen in the latest share price.

[arthur_lame_stocks] 01/7/2024 09:30

Here are some alternative facts:

2012: turnover £19.4m: gross margin 16.7%: profit £0.2m
2013: turnover £18.9m: gross margin 14.3%: profit £0.03m
2014: turnover £19.7m: gross margin 14.5%: profit £0.01m
2015: turnover £23.5m: gross margin 14.1%: profit £0.35m
2016: turnover £28.3m: gross margin 15.0%: profit £1.21M
2017: turnover £30.9m: gross margin 16.2%: profit £1.53m
2018: turnover £27.8m: gross margin 17.0%: profit £1.62m
2019: turnover £22.7m: gross margin 19.3%: profit £0.89m
2020: turnover £19.4m: gross margin 14.7%: loss £0.8m
2021: turnover £17.8m: gross margin 21.4%: profit £0.7m
2022: turnover £17.0m: gross margin 28.1%: profit £1.2m
2023: turnover £14.9m: gross margin 23.6%: profit £0.0m

Hardly been a great success over the last 12 years.

[apox123] 01/7/2024 08:40

Arthur, here are the facts:

1. Significant Contract Wins: The number of contracts won has increased significantly. Notably, a further £4.3m contract was secured in April 2024, shortly after the financial year ended.

2. Improved Staff Quality and Headcount: The quality and headcount of staff have significantly improved. For further evidence, check the company's LinkedIn profile for recent headcount updates.

3. Shift to Permanent Staff: The company has transitioned from contractors to permanent staff, which is expected to increase margins.

4. Chairman's Optimism: The Chairman is highly optimistic, even more so than in 2015 when the company more than tripled its profits. This demonstrates that management delivers on their promises.

5. Financial Strength: The company has zero debt and strong cash flow. The primary hiring costs have been fully realized, and no large expenses are anticipated in the near future. Additionally, they recently cancelled their Lloyds invoicing facility, indicating confidence in their financial stability. A company wouldn't make such a move if they foresaw trouble ahead.

6. Future Prospects: The company is well-positioned for the next two years and is already bidding on contracts for that period. With minimal downside and potential upside from further contract wins going forward(especially post-election), the outlook is very positive.

My previous point was that most investors are impatient, seeking instant year-on-year growth. There will inevitably be good and bad years, but substantial investment returns often come from patience and long-term holding.

[arthur_lame_stocks] 01/7/2024 08:37

Good call, entirely predictable.

[bluemango] 01/7/2024 08:31

Go easy on poor Arthur. His short position, placed 26th June or earlier, is not going quite to plan.

[sunshine today] 01/7/2024 08:28

The research was from

Forbes.