Vega Share Discussion Threads

[tole] 09/11/2005 12:18

The GCI note from last week worth a mention if nobody has seen it...

VEGA's star-studded appeal
Companies: VEG
01/11/2005


Consultancy and software services play VEGA smashed forecasts last year after focusing hard to win increasingly valuable business in the aerospace, defence and government markets.

The group (which actually floated on the London market back in 1992 at 122p) is a pivotal programme and system assurance company to these industries. Operating in both Europe and the US, it helps clients manage major, mission-critical business programmes and system implementations.

Its speciality is its focus on slashing the risk of system failure, which naturally drives up the success rates on the various high-profile programmes it is engaged in.
In the space sector, VEGA supports scientific and military satellite programmes. It has been involved in 'almost every' European Space Agency mission over the past twenty-five years and its other clients include commercial satellite operators and manufacturers like Inmarsat and Alcatel.

In defence, it boasts a lengthy track record of support work with the likes of the Defence Procurement Agency, European MoDs and system manufacturers like BAE Systems. VEGA also provides support and project management to the UK government, such as the Department of Health, the Foreign & Commonwealth Office and the Inland Revenue.

Final figures to the end of April, reported in July, were exceptionally strong, with pre-tax profits vaulting 42 per cent north to £3.7 million on a 19 per cent sales rise to £52.6 million. The dividend doubled to 2p per share and chief executive Phil Cartmell (who is largely responsible for VEGA's reinvention as a serious growth stock) announced net debt of £2.4 million, half the level pencilled in by City analysts, thanks to handsome cash inflows.

The numbers were driven by a strong showing in the government and defence business, where sales soared 19 per cent higher to £30.4 million, while analysts warmed to an in-line performance at the space business.

One of the year's major highs was VEGA's selection as a prime contractor on procurement consultancy for the MoD. Its selection for a C70 million ground data systems programme for the European Space Agency was another significant event.
Recent encouraging wins include confirmation from the European Space Agency of VEGA's selection for a seventh consecutive contract providing operational support services to its space operations centre in Germany. Cartmell says this work will be worth about C6.5 million to VEGA in the first year alone. Another deal he highlighted was work worth over £4 million with the UK government; VEGA has responsibility for building 'a secure information system for the UK intelligence community'.

Forecasts for this year, upgraded on the 2005 figures but issued before recent contract wins, suggest profits of £4.6 million and earnings of 15.2p. For 2007, investors might expect a £5.3 million surplus and 17.5p of earnings. After a good run, VEGA has suffered a recent share price correction, which means the shares are changing hands for only 12.3 times 2006 earnings, a rating that falls to 10.7 the following year. Given contract wins, strong growth prospects and Cartmell's reassuring hand on the wheel, we feel there is plenty of upside for investors here.

[wjccghcc] 09/11/2005 10:21

Agreed, and results here will be good.

[johnrxx99] 09/11/2005 10:16

But may give a bit of confidence of the IT market. Let's face it, the share price needs something. When a sector is seen to be doing well it spreads to other companies and investors start to consider again. Look at retail. Anyway, imo actual results count for a lot more than hot air.

[wjccghcc] 09/11/2005 10:07

johnrx99? AVV results were excellent (one of my biggest holdings) but don't see they have anything in common with VEG. These are cheap on their own merits.

[fellowes] 09/11/2005 09:40

This should signal the start of a significant re-rating,
Looks like a large institutional buy this morning.

[johnrxx99] 09/11/2005 09:18

Excellent results from AVV today should help no end.

[cravencottage] 09/11/2005 09:17

Fellowes

Looks like you were right about the seller being cleared out!

8-)

[tole] 09/11/2005 09:17

Looks like we are off after that 70K cross trade this morning.

[fellowes] 08/11/2005 12:16

johnrxx99

I think there has been a recent seller which may have now ended.

If this is the case, VEG should now move strongly ahead and I also look for about a 20% uplift to results on the 13th of December.

With the recent confident trading statement and significant contact wins,
we know the results will be very stong.

[johnrxx99] 08/11/2005 11:12

Good buying yesterday and today with little price rise.

There must be quite a lot of stock still around looking for a long term home but after such a good trading statement I'd be suprised if we were not a good deal higher come results in early December.

A per of 12 and it pays a divi. Wont excite too many but should see 20% growth from here to results imo.

[fellowes] 08/11/2005 10:48

Strong buying starting, just over one month to results.

[johnrxx99] 03/11/2005 12:10

A buy repeated today in Sh@res mag. Still confused by the fall but a bit of a no brainer at these levels.

[fellowes] 03/11/2005 11:32

Bought some today, Iam convinced of a strong run Up to results.

[wjccghcc] 01/11/2005 09:35

Nice statement. PE of 12 ain't bad for their specialist niche.

[johnrxx99] 01/11/2005 09:25

Back in the other day as imo the fall was over done. Mind you I was stopped out earlier on!

[wjccghcc] 28/10/2005 11:13

Likewise. That's life :-)

[johnrxx99] 28/10/2005 10:18

Probably should have waited for it but just bought 1k at 182p anyway.

[wjccghcc] 26/10/2005 11:52

Trading statement usually last week October/first week November.

[hambi] 26/10/2005 11:40

i'm not worried and view the price as a buy oppportunity. i an just trying to increase my research and knowledge of a company i don't know a huge amount about before deciding on strategy. however, have enough confidence i will not be selling present holding.

do you know a date for the trading statement/interims

[wjccghcc] 26/10/2005 11:38

Well, if you're worried then it's usually better to sell.

AGM statement on 8th Sep said everything was in line and they've won some good contracts since then. PE of 12 on latest forecasts with little debt. Also at the forefront of battlefield IT. Wouldn't be surprised if they get snapped up by a US company at some point. I'm looking to add when the chart firms up a bit.

[hambi] 26/10/2005 11:33

thanks. i'm in afd and there was a serious shake over the last couple of weeks and a major jump today. the drop in veg's share price just does not seem right.

[wjccghcc] 26/10/2005 11:18

No company specific reason. Just the general selloff in smallcaps. Suspect it will pick up after the half year trading statement which should be released this week/next week.

[hambi] 26/10/2005 11:10

hi. I hold and wondered if anybody had any views about the drop. it seems to be without any real reason but i don't know a huge amount of detail. However, two contract wins and buy recommendations (IC in Aug at 215p) for a growth company don't seem to justify a heavy drop.

[wjccghcc] 24/10/2005 08:22

me too. PE of 12 and Ev/FCF of less than 9 looks pretty good value given the long term nature of their contracts.