Vero Software Share Discussion Threads

[rainmaker] 30/6/2008 22:00

Hi Varies-We already know that the results(ie interim results for six months to June 30) will be decent thanks to the recent de facto trading update.Ben Graham once said that markets were driven by fear and greed. We're obviously seeing the former at the moment. And another BG quote, "Let the Company's underlying fundamentals not the share price be your guide to value"Marvellous stuff!

regards

[varies] 30/6/2008 17:51

Valhamos and Rainmaker
Too true; this is a wretched time for sellers of shares in very small companies.
Let us hope that these are forced sellers (and I am sorry for them) and that those of thus who hold on will be vindicated by decent results in a few months time.

[rainmaker] 29/6/2008 19:30

Valhamos, I think that £100k sale at just 11p says a great deal more about general stockmarket nervousness rather than anything else

regards

[valhamos] 26/6/2008 20:09

Tyranosaurus - Can't think it can be anything sinister; everyone sounded confident at the recent AGM.

Did someone really offload 100k at 11p? Talk about being desperate; that's a current year exit P/E of less than 5! Anybody else out there thinking of doing likewise do let me know, I'll give you 12p.

[tyranosaurus] 26/6/2008 19:54

Sorry to butt in but the share price is taking a dive.
Is this due to the 100k sale or market conditions or something more sinister ?

[valhamos] 16/6/2008 07:29

Rainmaker - I appreciate that 2.9p is the average, but the point I was making is that that figure does not represent the market expectations referred to in the recent announcement. This is because the Blue Oar forecast as reported (and possibly the W H Ireland one ?), is not on the same basis as the company reports its profit (see the discussion on this board a few months ago). The forecast for that will I suspect be somewhere in the broker's note, but as I do not have that I can only guess what is meant by market expectations. If pushed, my guess would be 2.4p or just under.

[rainmaker] 14/6/2008 17:46

Thanks Valhamos so Vero is making good progress.As i've said before the Company's high operating leverage makes for exciting growth.They have recently said they are on course to met Broker forecasts so we can conservatively expect the share price to reach 23/26p-+40/60% from current levels in the next 12 months.

I'd heard that they will be relocating to Cheltenham but as i understood, it isn't a done deal yet, although the site has been identified

regards

[varies] 14/6/2008 15:15

Valhamos
Thank you so much for your report

[valhamos] 14/6/2008 11:29

I attended the AGM. There was a presentation before the formal business. The business seems to be growing quite nicely with no signs of any adverse impact caused by the wider picture of the credit crunch and slowdown in the world economy. In fact there are a number of factors invigorating the mould & die sector, and in any case there will be a requirement for such tools regardless of any reduction in unit volumes those tools produce. These factors include a trend towards a greater range of models any company offers, improvements in moulding technology and material science, and energy saving aspects (e.g. recycling)

Customer revenue can be analysed as:
Maintenance agreement revenue 22%
Existing users buying new software – extra licences or additional modules 43%
Business from brand new customers 35%

Although the SME sector is its principal customer base, Vero seem to be successfully building the amount of business done with large customers – Ford, Foxconn, Canon, Fiat and Flextronics were mentioned. In particular the Smirt product has been taken up by Ford Germany, Fiat and Honda.

In terms of opportunities for 2008 and beyond, having broadened the product range through acquisitions over the last few years, it is expected that future acquisitions will be aimed at expanding distribution channels. The new version of VISI being released this year is said to be a leap forward in new product content.

The existing offices at Stroud and Malvern will be relocated to Cheltenham.

[rainmaker] 14/6/2008 00:43

"Both companies are now successfully integrated in the Vero Software structure and the combination of the two UK offices into one will be completed by the summer."

Ab is a quote from the Annual Report and Accounts, released in April this year. Apparently Camtek's Office in Church Street,Malvern is still occupied and that both that Office and Vero's Office in Stroud will be vacated and sold to move to (as yet unidentified) new Office in Glous.

regards

[rainmaker] 12/6/2008 22:08

Vero Software Plc (AIM: VERO), a leading supplier of CAD/CAM software to the mould and die sector, is pleased to report that all resolutions were duly passed at the Company's Annual General Meeting, which was held earlier today.

Current trading for the Company is proceeding in line with market expectations, continuing the good progress made over the course of 2007.

That puts them on a p/e of just 5.43 for the current year(see previous post 82 for a list of price objectives using different p/e). The resolutions included a Capital restructuring to reduce the Share premium account by £4mln to offset a £3.8mln accumulated deficit on their Profit and Loss a/c inorder to facilitate the payment of a dividend.

regards

[rainmaker] 12/6/2008 21:59

Anyone?

regards

[rainmaker] 10/6/2008 23:44

Here we go, braving ridicule and public humiliation but someone here must be able to must be able to assist.Serious replies only please! LOL!

regards

[rainmaker] 10/6/2008 23:41

A few buyers nibbling at current levels

regards

[rainmaker] 10/6/2008 00:37

All gone very quiet but would put money on an announcement of the sale of Camtek's office between now and 9 July

regards

[rainmaker] 02/6/2008 01:43

In Dec 2006,Vero Software PLC(VERO) bought rival Camtek for £2.7mln.With this acquisition came Camtek's office in Malvern, located at 117 Church Street and valued at £368k. According to the latest annual report released in April this year, it should have been vacated by Summer.

Can anyone living locally tell me if the Office has been vacated and whether there is a For Sale outside?

Your help would be much appreciated
Thanks

regards

[rainmaker] 31/5/2008 16:56

Technically speaking, the share price has been forming a triangular pattern since November last year and although it may edge slightly lower from current levels to 15p where it should(not just from a technical but also a fundamental prospective)find support, a break of 18p should lead to 27/28p objective

regards

[rainmaker] 31/5/2008 16:48

Earnings Estimates for Vero have been cut from 3.4p to 2.9p and 4.5p to 4.15p for the years ending ending 31 Dec 2008 and 2009 respectively. That's still an increase of 62% and 43%, which means they are on a miserly rating of 5.43 for the current year and just 3.79 for 2009.Thought it might be worth applying p/e of 8, 10 and 15 times-

2008(2.9p est) released Apr 2009
8 times 23.2p +47%
10 times 29.0p +84%
15 times 43.5p +176%

2009(4.15p est) released Apr 2010
8 times 33.2p +45%
10 times 41.5p +62%
15 times 62.2p +98%

2009 are compound rates of return. A Company growing at that rate can easily expect a rating of at least 20 times historic eps which would give a share price of 36p. Nevertheless it is hard to imagine/ unthinkable that Vero will command a rating of anything less that 8 times so on that basis the share price will move up 47% in a year.However if this share captures the imagination of the market and trades on a prospective p/e of 20 times(not impossible) then the share price will appreciate 268% over a year.

regards

[rainmaker] 31/5/2008 16:22

Can't help but have a little laugh. WH Ireland are apparently now covering Vero. Of Course, Vero's House Broker Blue Oar recently tried to buy WH Ireland for £20mln

regards

[rainmaker] 27/5/2008 01:55

Note from the Annual Report and Accounts recently received that Vero will be reducing it's share premium account by £4mln to wipe out an accumulated £3.8mln deficit in it's profit and loss account. Are Vero going to pay a £200k/approx 0.6p dividend in September?I note that their results are heavily skewed towards the second half and they make very little in the first half(ie six months to 30 June)

With regard to free cash flow. House Brokers Blue Oar state that they do not believe that Vero will be able to afford to pay a dividend until April 2010 or April 2011(ie the twelve months for the years ending 31 Dec 2009 or 31 Dec 2010)but I feel that they have overlooked the sale of Camtek's head office-see previous message which will surely be sold shortly-from memory it is valued at £365k-i've looked at free cash flow and the sale of Camtek's Office in Great Malvern IMHO creates a surplus once taken into account.Can we expect an announcement soon about it's sale considering that Vero said in their Annual report that they expected it to be cleared by Summer?

regards

[rainmaker] 19/5/2008 01:06

Copied from the 2008 Annual Report and Accounts-"The plastics flow analysis product is now integrated within the VISI mould and die offering and the Camtek PEPS products have been introduced to all of the major Vero Software markets. Both companies are now successfully integrated in the Vero Software structure and the combination of the two UK offices into one will be completed by the summer."
So suggest that Vero will moving out Camtek's staff out their Office in Great Malvern about now into their own in nearby Stroud and that they will be a sale of Camtek's Office, plus a dividend to go with the Capital restructuring in September.

regards

[rainmaker] 17/5/2008 01:31

Emergin-When do you think Vero will pay a dividend?- I mean they have announced a forthcoming capital restructuring specificially to pay a dividend but their Brokers Blue Oar say they will not pay a dividend until the year ending 31 Dec 2009 at the earliest BUT then they will have the distributable reserves to pay a dividend so a Capital restructuring won't be needed!I don't think they have thought things through.Sorry to repeat myself but this is an important point

Free Cash Flow - FCF is the amount of cash the Company could theoritically payout from earnings after all obligations are taken into account without digging into reserves.So it is calculated by taking Net Income(ie post tax profits-the eps figure) and adding back non cash charges such as depreciation less changes in working capital minus Capital Expenditure minus loan commitments( ie Vero is paying off a loan taken out for the purchase of Camtek at £500k per year).

I feel the answer to dividend question is 1) Vero is high operational gearing ie vast majority of costs are fixed so further turnover has a disproportionately positive effect on profits ie as their costs have been covered additional sales add to profits and 2)The sale of Camtek's HQ valued at approx £350k

regards