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We know that Castleton is a successful and growing company. It's products are valued, obtained as a result of the acquisition of other companies and their best in breed solutions. It has grown to be the largest pure social housing IT provider from a virtual shell company, in the face of competition from large and established providers.
The recent RNS and FinCap comment when read together indicate that the company was in a sense the victim of a change in market conditions, which has resulted in associations not buying one off solutions and carrying on with what they have whilst they consider the move to the cloud, full managed services, and what I can call ' bigger' and more integrated full suite technology. The one-stop shop. Castleton has prepared for that. I had expected one or two larger deals to be coming through, based on the referenceability Castleton now has from it's first movers. They may still be. In any event, associations have a need for modern technology and someone has to provide it. But there is something in the pipeline. I doubt Dean Dickinson would otherwise have spoken of 'material' improvement in the second half. In any event, associations have a need for modern technology and someone has to provide it. I believe Castleton has positioned itself well for the future.
recommends Castleton by entering 3 year partnership for its housing association members
That puts them and Nigel WRAY as joint largest shareholders.
Cannacord a buyer - averaging down and went from 10% to about 13% yesterday
I prefer Estrella. This posted after the low opening yesterday....
Hehe yes g; that what the San Miguel talking I'm taking it back no more posts on here from me after drinks; 60p on the ask here now! ATB M
Now, about that bet Majorboy :-)
Just got a quote for £4k worth
NT to buy at 55p.
Thanks for that explanation Aphrodite. I confess, they had me scratching my head. Never seen the likes before but what you say makes perfectly good sense.
Some very large trades continuing with no change in sp. This is not new here - they have been occurring over the last year or so plus with no change in sp. In the 90p + range. We have taken them to be inter party trades, probably through FinnCap, without the mm system, and notified to the market. ie a sell and a buy.
I think it appropriate to repeat one of my earlier posts, which I think goes to putting Castleton into perspective in the sector. ( though the last sentence now appears odd )
The National Housing Federation is the professional representative body for housing associations. I think they can be credited, through their members, of knowing what is going on in the sector. It was only on the 2nd. September that they announced their new partnership with Castleton, and named them as preferred supplier. Castleton are not one of a number of relevant preferred suppliers. The company is 'the' preferred supplier amongst its peers. Not Aareon, Northgate, Civica, Capita, or anybody else. Castleton alone is named in their field of expertise.
Tier 1: Preferred Supplier
This is a bespoke multi-year partnership with commercial organisations, created to deliver preferential terms and conditions for products and services for our members.
The product or service offered needs to meet housing association members’ requirements, while delivering exceptional customer service and value. Preferred Suppliers can connect with specific member groups through our digital channels.
Castleton was not granted this status without proper enquiry. It puts them top of the tree. Provided Mr. Dickinson and Mr. Haywood make the figures work, and I have no doubt their minds are on costs, margins and the future, then Castleton should be doing very well, in contradiction of the current price.
I'll have you a bet this SP does not move in an upward direction from this point g;
Majorboy, those big four trades going into the COP cost £2.6m. None was heavily discounted - indeed, none was discounted at all. So, either the mm's have, uncharacteristically, taken a major punt or there's a big buyer in the background. Can't see any other explanation for it tbh. They sure as heck weren't day traders dumping. Let's wait and see what transpires.
Anyway, back to the company. Business as usual for them. They put out a newsletter today. It's a sort of summary of products and things, for customers.
Today's price , overdone or not, is a reflection on today's news, which is scarcely of the terminal variety if the RNS is to be believed. It will soon be yesterday's news, particularly if the company's confidence that the second half will show material improvement proves well-founded.
Exactly one week ago somebody bought 50,000 shares at 93p for £46.5K. This morning a 50,000 sell went through at 50p which brought £25K. Can you imagine losing that much cash in one week GL M
I take your drift, Aphrodite. However, I am unaware of any reason to doubt the integrity of the Castleton board, and believe things to be exactly as stated.
On these big drops like here today you often see a bounce for maybe 10% that's due to the day traders mostly piling in and checking out that's what happened today. Many SPs that have tanked recently have not recovered well after the initial bounce. The SP flatlined after the bounce today. If this goes up tomorrow or next week I'll be surprised but if your a devoted holder you should hold maybe GL M
Yes. That's life.
I see you mentioned Redcentric today. We can really only go on what we're told, true or not, though research may help and suspicions will arise at times. When that scandal broke involving MXCP posters suggested the contagion would spread to other MXCP companies. It didn't. But it's at times like this we can say if need be that Mr. Dickinson replaced Smith of MXCP fame October 2016, and any influence they may have had finished certainly August 2018 when they made the good decision to sell the last of their Castleton shares. I have no reason to believe Mr. Dickinson is other than straight up honest, and so I am inclined to believe that things will turn for the better this half, and onwards.Just a thought.
It's all quite arbitrary of course. The mm's make their own assessment of what is likely, in their estimation, to be the response to the News, set the opening price accordingly and, hey presto, it becomes something of a self-fulfilling prophecy as some do, indeed, panic and sell. The trick is to spot those stocks which really don't deserve to be treated thus and this appears to me to be one of those.
I'm holding til it sees a significant recovery or some predator happens along and makes an irresistible offer. Received wisdom is that any offer would have to be at a premium of 50% of the prevailing SP in order to be treated half way seriously but even that would, IMHO, represent something of a steal here. The sooner that the Interims are out (5th November), the sooner that management can buy and, in so doing, give the SP a fillip which might serve to deter a hostile bid.
These kinds of events are a nightmare for LTH's and I've been on the receiving end of a few it must be said. Nothing to do, really, other than take advantage of the situation, if one's funds permit, and average down. I'm reasonably confident that the market will correct and we'll see the SP up into the 80's in a relatively short time frame.
Ha! I think the panic already happened! And somebody's buying all those shares or we wouldn't have gone through most of the day and seen it out at this price. Question is, who is it?
I cannot see any reason to panic. An inordinate 40% has been wiped off the value on the basis of ( it is reported ) 3 months trading ( trading previously reported as being in line with expectations on 18th June ) against a background of continuing progress and consolidation of Castleton's market leading position, which I and others have followed closely. To me, this is a temporary, though ugly and extreme price movement.That is only my opinion, but I backed that opinion with cash today.
I cannot know, but on what has been said on future prospects cannot foresee management accepting an offer without an enormous premium. If that is correct, again having regard to what has been said, I believe that any attempted takeover would have to be hostile, and 50% plus vote control would be required. We shall see what holdings notifications are published. FinnCap set that particular hare running. In a perverse way, it is pleasing that they say "as a growing and focused one stop shop for public sector Housing, and having reorganised to drive greater focus, Castleton’s main risk is now being acquired in moments of share price performance weakness. Target 130p (140p) a 5% free cash flow yield target for FY21." So on their published information FinnCap see the main risk as an outfit wishing to acquire our investment. Effectively, Castleton is doing so well it is cheap. I can agree with that. But we are where we are today, with new shareholders, and can only look forward and take the company at it's word - "The Company is confident that revenue, EBITDA and cash generation will show a material improvement in the second half of the year."