Vero Software Share Discussion Threads

[rainmaker] 12/1/2009 12:15

Good for you. Company has already announced their intention to pay a dividend hence their capital restructuring for that sole purpose-so a dividend is on the way but I wonder if it will come in April?I'll have to check and let you know what I think. However why have a capital restructuring in September last year if they aren't going to pay a dividend in April. I need to look at working capital requirements and research and development etc.Mind you they acquired an office with the Camtek acquisition worth £368k that is surplus to requirements. Worth ringing the Company to see if it has been sold.

regards

[spec12] 12/1/2009 11:33

Hi Rain ... That's my 32,000 @ 14p

[rainmaker] 11/1/2009 13:51

Thanks fruitloops, Their technical team and their software have an excellent reputation.I don't believe the "market" understands that their products are specifically designed for greater efficiency and productivity. I think the key points for Vero Software(VERO)and what makes this share very exciting at it's current (historically v low levels)are the following-

1) As a service industry, it's highly operationally geared business ie it's costs are fixed and not variable so any increase in business goes to the bottom line.This means that with increases in turnover profits are magnified. Compare this business to say Uniq a Food processor where some of the costs are fixed and some are variable.If Uniq increase their turnover their variable costs increase ie they buy in more raw foodstuffs to turn into value added products .In this context it's important to stress that Vero have had in the order of 17 CONSECUTIVE YEARS OF INCREASING TURNOVER and they're kept costs down as well.This means they are growing their profits at 34% a year yet there're only on a prospective p/e of just 5?just crazy given their reputation and track record.EPS as follows-
EPS
2005 0.99p
2006 1.51p
2007 1.79p
2008 2.58p(est)
2009 3.33p(est)


2) Synergy created through acquisition-they make an acqusition and whole effect is greater than the sum of the parts. There're able to offer enhanced capabilities of their product to more Customers. Furthermore they are able to make significant cost savings eg selling the Freehold Office of the Company they've acquired, cutting staff etc. and gain significant economies of scale in sales, distribution etc. It's also very important to stress that the markets they operate in are fragmented with plenty of opportunities for further earnings enhancing acquisitions of smaller rivals at considerably reduced prices.All the acquisitions they've made have been successful, there's been no unmitigated disasters, after all the Company was founded by four software Engineers and they really know their business. IMHO Beautiful, Buy.

regards

[fruitloops101] 10/1/2009 13:16

This article is from 16-12-08 but I think it's relevant:

[rainmaker] 09/1/2009 16:14

IMHO Vero Software(VERO)a strong buy and has exactly the same kind of major trend change signal that Uniq(UNIQ) had before it took off from 4p to 19p in one week.

regards

[rainmaker] 10/12/2008 13:04

For anyone interested in Technical Analysis/Chartism, I've just spotted a powerful reversal indicator on the VERO Software (VERO)weekly charts. It's called a key or acute reversal and it's where the share price trades below the previous weeks low BUT finished above the previous week's high. Have a look at the weekly chart on www.bigcharts.com

regards

[rainmaker] 10/12/2008 12:38

Sterling fall against the Dollar from $USD 2 to just $USD 1.44 gives this Company a large windfall. There has been buying recently and I expect more as the price reaches 22p short term

regards

[rainmaker] 09/12/2008 00:38

EJ-I feel that a maiden dividend is a lot closer than everyone(including their Brokers who IMHO don't have a particularly good grasp of this Co,believe)probably with the release of the finals in April next year.

I note there has been further buying today and suddenly the offer has gone skyward from 12.5p to 13.75p.I' don't think the MMs want a short position in this share as I believe we can reasonably say Vero are currently, conservatively speaking about 50% undervalued. I'll qualify that statement by stating that historically VERO usually trade at a multiple of 9 so taking the prospective eps of 2.46p for the 12 months to 31 Dec this year gives you a price of approx 22/23p. Ok, so market conditions aren't great at the moment, however this is far outweighed by the superior growth prospects of Vero(Estimates for 2010 are 3.56p) and the forthcoming maiden dividend(this shouldn't matter but will give them a higher rating than would otherwise be the case)

If Vero makes it's 2009 forecast of 3.56 and trades on a historic (and undemanding)p/e of 9 then it will trade at 32p which would give you an approximate annual return of 250%. However in recent years it has traded at a historic high p/e of 17(not too demanding for a fast growing tech stock, growing at 30/40% a year) which would give a share price of 60p and an approx 460% return in just over a year.

regards

[rainmaker] 06/12/2008 17:30

Just found some encouraging news-



regards

[rainmaker] 06/12/2008 17:07

In the interest of balance, the three major US Car Manufacturers(GM, Chrysler and Ford)has just gone cap in hand to the US government for US$36bln of loans. Apparently GM are just 2 weeks away from going into bankruptcy though the situation with Ford is thought to be far less serious and they are expected to continue to trade for at least a couple of years.I'm checking but I believe most of their US business is with Ford and overall I understand that US business is around a third of total turnover.

regards

[rainmaker] 05/12/2008 01:44

Hi EJ-As stated previously, I'm hoping for a trading update soon. Sterling's big drop against the US dollar is very good news for Vero.I feel a dividend is not too far away with £500k of annual cost savings. There was a 50k purchase today worth £6k. Have you taken advantage of the low price to add to your position?I feel the share price should make further ground as a prospective p/e of 4.9 is far too low. Certainly the technical indicators are pointing to a good rise in the share price near term.

regards

[rainmaker] 01/12/2008 02:04

It's really about time something happened here. We're 11 months into their financial year and no profit warnings. Aside from, being increditably cheap, there are a further two things well worth mentioning-

1)The weakness of the Pound v US Dollar will suit this Company as they have significant Dollar earnings-they had a large increase in earnings last year but the high £/$ exchange adversely affected them as their base currency is obviously Sterling.

2)They are making annualised cost savings of £500k. To put that into some kind of perspective in the last financial year(12 months to 31 Dec 2007) they made pre-tax profits of £1.1mln.

regards

[rainmaker] 18/11/2008 01:45

I note with interest the technical indicators. RSI is below 20 and the share is sitting on the lower Bollinger Band which both suggest there is plenty of scope for upside.

regards

[rainmaker] 18/11/2008 01:33

Time to start buying again?I've noticed the Buyers have returned recently and it's not too hard to figure out why with VERO trading on a forward p/e of just under 5.Sterling is very weak which is in their favour and there are annualised cost savings of a whopping £500k to come through so I don't think they will have any trouble hitting their earnings targets. This Company normally trades on a p/e of 9 which equates to a share price of around 22p in April next year about. However as Vero has far better growth prospects a higher multiple is more appropriate-in recent years I've seen this Company trading at 15 times historic earnings which equates to 27p pre results and 36p other.I would expect a trading up date in the next few weeks/1 month.Surely a re-rating is imminent?

regards

[rainmaker] 05/9/2008 01:04

They've sold the Office from their Italian acquisition for £228k which is in the accounts and will have the proceeds of the sale of Camtek's former Office in Great Malvern which has been valued at approx £260k and their former Office in Stroud to look forward to.

"Exceptional costs of £276,000 were incurred during the period as a result of the consolidation of the UK based Group companies into a single location and the restructuring of our Italian and Chinese operations. There will be some additional restructuring costs at a reduced level in the second half of the year but this will leave the Group on a better footing going forward with annualised cost savings in excess of £500,000.


Tax includes a deferred tax charge of £131,000 (2007: £131,000) and has benefited from an Italian tax credit against our research and development expenditure"

regards

[valhamos] 04/9/2008 19:54

To get the right perspective on the stated £500,000 annualised cost savings going forward, it's worth pointing out that had they been available last year it would have increased profit before tax by 50%

These savings alone net of tax will add 1p to the eps for next year.

[valhamos] 04/9/2008 11:37

A positive statement and outlook though the exceptionals cloud the immediate picture.

Vero looks set to beat forecasts on a "before exceptional" basis with 0.87p eps for the first half, but it's difficult to work out on a fully expensed basis for the full year with the unspecified "There will be some additional restructuring costs at a reduced level in the second half of the year". Also there has been an Italian tax credit on R&D of an undisclosed amount. Nonetheless allowing for these items Vero should well exceed last year's basic 1.77 eps.

[lpf] 04/9/2008 07:43

tyanosaurus - the interims only say that dividends will be paid: "when future profits and cashflow allow" which seems prudent enough.

[tyranosaurus] 03/9/2008 19:13

I wouldn`t expect a dividend with the interims but hope they mention a final dividend.

[rainmaker] 01/9/2008 01:36

Interim results out this Thursday, 4 September. Company in a June trading statement has already said that their trading is in line with Brokers forecast.Which Broker's forecast they are talking about, I don't know as House Broker, Blue Oar's figure is much higher than WH Ireland's but consensus is 2.46p for the year so at current bid of 14p, Vero is trading at less than 6 times prospective p/e. Normally they trade at between 8/9 to 15 times historic eps.

Since their year end is Dec 31, and the first six months ends on 30 June they are effectively saying, earnings wise at least, that there aren't going to be any nasty shocks with these results. Expect share price to move up early this week ahead of the results. It's also going to be interesting to see if they declare a maiden divdend.I think they will but their Broker thinks not. I don't think that Blue Oar have taken into account their former Office in Stroud and Camtek's(their acquisition) Office in Stroud which are now both surplus to requirement since they have moved into their new Offices in Cheltenham.

regards

[nick faldo] 14/8/2008 13:17

Ive also got a 101 better things to be doing than posting on here, so for now, goodbye.

[nick faldo] 14/8/2008 13:17

Ive got a ton of these, I have, me.

[rainmaker] 14/8/2008 13:08

Ah some buying at last!Way too cheap imho

regards