Triad Share Discussion Threads

[netcurtains] 04/6/2020 16:22

Well results sooooon.
I take it you're here for the dividend and the hope that the share will not fall further after ex-dividend...
Or other alternative, you're here for recovery play ?
Its just a matter of time before Triad land another profitable government order like last time... These things are cyclical ....

[cjohn] 03/6/2020 11:43

As for the update on future trading at the half-year results, they do seem to have been moving forward on a series of new initiatives.

But COVID will undoubtedly have had a negative impact on business. I'm certainly expecting another loss.

But as I said before, I didn't buy in either because of the new initiatives, or because I hoped current trading was profitable. So I'm not holding my breath.

[cjohn] 03/6/2020 11:37

Hi Melton John,

Sorry not to reply sooner.

You said this, "The first I've answered myself. The changes in working capital ( late payables and late receivables) shown on the statement of cash flows on p6 total about £1M but won't obviously reduce to zero. There'll always be working capital. Maybe why the financial director left for letting customers get away with unpaid bills, quite a jump between year end march 2019 and H1 sept 2019."



So both receivables and payables were down.

In the case of receivables we know that £1m of overdue debts were paid after the period end.

In the case of payables, they are not late. (They are down, remember.) If anything TRD has accelerated its usual rate of payment. This is sometimes done to obtain better terms from the relevant creditor(s). But it may be that a big payment has just fallen within the six month period.

I doubt whether the resignation of the FD is linked to the late payment of debts. With a small company like this, there can be quite marked shifts in levels of receivables, just on the basis of one or two contracts.

You'd need to see a repeated pattern of poor debt collection before you could conclude that.

[netcurtains] 02/6/2020 13:55

Pretty nerve wracking waiting for results... Will it be thumbs down (as expected) or thumbs up (surprise).... No idea at all.... Absolutely none.

[netcurtains] 28/5/2020 16:20

MJ: Re: FD: There is a long story on this thread (if you go back a bit). No one here wants to raise it again but if you go back a bit you will find it - its nothing wrong in the sense you mean.
Second half might to be better than first half as potentially new contracts coming through (there can be a low point when contracts end and new ones not yet started).

If you read the last statement it says this:
It is a mark of the robustness and resilience of the Group that we have succeeded in delivering the results we have, and we continue to work tirelessly to develop new opportunities that will replace concluded projects.

So if the sales reps have done a good job its quite possible second half might include some won orders (they never announce beforehand if they win anything, we have to find out when report comes out)...But its quite possible last half was bottom of a cycle - but of course not certain ... We'll find out soon

[melton john] 28/5/2020 14:54

Hi CJohn,
Looking back, a couple of queries.
The first I've answered myself. The changes in working capital ( late payables and late receivables) shown on the statement of cash flows on p6 total about £1M but won't obviously reduce to zero. There'll always be working capital. Maybe why the financial director left for letting customers get away with unpaid bills, quite a jump between year end march 2019 and H1 sept 2019.

Net is saying H2 might be better than H1. Certainly no evidence in year ended 2019 to that effect as shown for comparison in the interim statement.

[netcurtains] 28/5/2020 11:41

PS CJohn, for example, if the £1M was late payment then it will appear in the second half so the second half will have the extra one million in it. Thats a lot of money to a company just valued at £5m

I'm at least taking a gap year, see how it goes. Plenty of work around (about 350 java jobs posted in the last week on jobserve):

[cjohn] 28/5/2020 11:39

Hi, Net Curtains,

Yes, a moderate loss would not affect the investment case here. I think you laid out reasons to believe that the business might be more resistant than most to COVID. And, if they surprise on the upside, the share will fly.

I took your prediction of a FY profit as indicative of your optimistic disposition - I wish some of that could rub off on me.



PS Are you retiring soon?

[cjohn] 28/5/2020 10:49

Ok, Melton, you may be right, that it's got a way to fall. I'm really poor at predicting short-term movements.

Also we can't rule out a serious falling away in trading. But I'd guess the nature of its business - at a distance - means that it's likely to be more resistant to COVID than many other companies.

[melton john] 28/5/2020 10:44

At last, a grown-up in the room CJohn, not convinced we are at bargain price yet though although not near-bankrupt

[cjohn] 28/5/2020 10:44

Hi Melton, the half-year report says this, "Cash as 30 September 2019 is £2.96m (at 31 March 2019: £4.60m). The decrease during the period is due, approximately, to the operating loss for the period of £0.3m, the dividend paid during the period of £0.3m and the impact of overdue debts of £1.0m as at the period end, all of which have now been cleared."

So the implied level of net cash is £4m, post half-year end.

[melton john] 28/5/2020 10:39

You are dreaming I think to suggest a change from a 300k pre-tax loss to a 800k profit. Still fantasising about £5M cash when your chairman says in his interim statement: "Cash as at 30 September 2019: £2.96m". Maybe if you stopped whatever you are smoking reality would dawn on you.

[cjohn] 28/5/2020 10:35

Hi Melton John and Net Curtains,

I'd expect a loss at full year.

But the balance sheet is very strong. Implied £4m net cash, post half-year end, plus a few hundred thousand of other net current assets compared to a market cap of about £5m.

This really leaves a decent margin of safety, assuming trading has been further worsened by COVID.

I personally don't mind that trading has been poor recently. If it hadn't been, the share price would not have reached the present bargain level. If you look back over TRD's history, trading is choppy. If there is a reversion to improved trading, the share price will appreciate significantly. If trading remains poor, the balance sheet provides considerable underpinning to the share price.

If I look down my current list of holdings - half in UK, twenty percent Japan, 10% US, 20% other - 80% of the companies were loss-making when I bought in. There is a wealth of research data that shows that buying shares in loss-making companies that are trading at bargain levels - ie at a discount to tangible asset value - is a strategy that very significantly out-performs the market. It's certainly been my personal experience over many years too.

To me, TRD fits into this category.

PS Melton, thanks for reminding us to always use latest results.

[netcurtains] 28/5/2020 10:12

the previous Finals came out on 10th June and in 2018 on the 11th June (both first Monday of second full week of June) - so if that is the case, it will be 15th June this time (but outside chance the 8th).

2019 results had:

· Profit before tax: £1.02m

From banner at top of their website (nearest thing to a Covid Update):

Despite the current challenges Triad continues to offer our full range of services to clients.
Being digital by default, our teams are operating as normal albeit working in a highly distributed manner. Our development teams are building great software, our consulting teams are running virtual workshops, and our resourcing teams are fully geared up to support online interviewing and selection processes.

It reads to me that results will be a bit down due to this phrase: "Despite the current challenges..." but more or less inline with expectations... Nothing dramatic as surely they would have issued a trading update?

This being the case I would expect pre-tax profit of about £800k (or there abouts), final dividend 2p, interim dividend 1p (3p in total for year or about 8% yield),
With net cash of about £4.6 (£5m) and a market cap of about £5m then one really must assume this has been well oversold. I would have thought a share price of about 60p to 80p would be more fair which still equates to a heafty yield of about 4% and pre-tax profit of £800k - anyway that is how it seems to me.

[netcurtains] 28/5/2020 09:08

Hi weatherman (I said that to Melton John THREE times (now you've added a forth)) - sometimes you can take a dog to water but you cant force him to drink. Let him be.
I'm sure he means well.

results in a few weeks. No TRADING UPDATE due to COVID so assume its not going to have that big an effect (IT people can easily work from home). I see normal large dividend , large cash pile and a miles over sold stock... (obviously probably bottom line a bit less, Covid must be having some affect but probably not much).

In effect CASH about £5m (4.6m), Market Cap £5m - Yield (at current price) about 8% a year.

[weatherman] 28/5/2020 08:36

There was a debt at year end of £1m, now cleared. So cash at YE was effectively £4m.
"Cash as 30 September 2019 is £2.96m (at 31 March 2019: £4.60m). The decrease during the period is due, approximately, to the operating loss for the period of £0.3m, the dividend paid during the period of £0.3m and the impact of overdue debts of £1.0m as at the period end, all of which have now been cleared. "

[cjohn] 27/5/2020 16:56

The company is trading at a 10% discount to current assets.

Very very cheap.

[netcurtains] 27/5/2020 16:21

Actually I got that wrong - I think the annual Dividend (with current share price) is about 8.5% not 7.5%......
I think profits/turnover will of course be down but they all seem to be working so I guess not too bad, I think they'll be doing OK.

I mean subtract the cash pile from Market cap and the entire company is valued at more or less nothing!!!!

You get the company thrown in for free.

[netcurtains] 27/5/2020 15:23

Final results in June. I suspect they be OK and you'll get the dividend.. (the one industry where people can all work from home is IT).

[netcurtains] 27/5/2020 10:36

see above ....

[netcurtains] 27/5/2020 10:28

How come TRIAD have about £5M in the bank (make a bit of a profit) but their market capitalisation is just £5M.
Doesn't that mean the market thinks TRIAD is WORTHLESS???????

From Chairman's statement:

For the year ended 31 March 2019 the Group reports
revenue of £22.7m (2018: £27.8m). Profit before tax has
decreased to £1.02m (2018: £1.66m) and gross profit as a
percentage of revenue has increased to 19.3% (2018: 17.0%).
The Group’s year end cash reserves have increased to
£4.6m (2018: £3.8m).

And it also has a thumping massive YIELD of 7.69%

Come on! This has to be the bargain of the century.

[netcurtains] 05/5/2020 08:40

garth: of the nine that were up - those with significant rises were BBSN, CCC, TEK and ALT

BBSN: Brave Bison Group (flat)
CCC: Computacenter (up again)
TEK: Tekcapital (down)
ALT: Altitude Group (flat)

So no pattern alas at present... Unless something in Computacenter rise.