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Can’t believe bod and ii such as herald have backed this low ball offer. The company has just turned profitable and the recent launch delivered £600k of recurring revenue in the first 5 weeks. The share price is just recovering from 7% of the company be8ng dumped by city financial and they have just won a framework contract. I suspect Thomas is being offered some juicy numbers by the acquirer ....thought he was better than this. Sad day for long term investors !
I was looking at EUSP a few months ago when the price was 9-10p but I didn't buy because of the low value of the contracts they were getting. But well done to those who are holding. Hopefully you have or you will make some decent profit.
Well thats a nice finish to the week...
I was hoping for 20p in 18 months but 18.25p in the pocket now is not a bad deal
In case anyone isn't aware of David Newlands' track record - it's encouraging to see him investing privately in EUSP to this extent:
"David Newlands is a chartered accountant who has had an extensive business career. He is currently chairman of HellermannTyton plc and various other private companies. Previously, David was a partner in Deloitte, finance director of GEC plc, chairman of Tomkins plc, Britax International plc, PayPoint plc, Darty plc and Impress Cooperative UA. In Scotland, he was deputy chairman of Standard Life and a director of the Weir Group plc. His philanthropic interests included chairing the trustees for The Royal School for the Blind (SeeAbility). He was educated at the Edinburgh Academy."
Nice - David Newlands has bought 4.1% of EUSP with 2.95m shares:
It was looking good until those 3 sells knocked the wind out of the next tick up. It really shows how micro caps can be impacted by low levels of liquidity and the necessity to play the long game. Hopefully the AGM statement gives us some more contract wins!
Good to see the price ticking up on relatively small volumes, and the full 13p offer price being paid.
Today's RNS notes the AGM will be on 30th May, so only a month until the next trading statement.
Commentary from Richard Holway's respected Techmarketview:
"Friday 26 April 2019
EU Supply on the up
EU Supply, the Swedish-headquartered but AIM listed public sector tender management platform grew revenue grew by 10% to £5.1m (2017: £4.7m) last year. Its SaaS focused strategy is now seeing 70% of revenues of recurring or repeatable nature up from 66% in 2017.
Having achieved its maiden profit in 2017 (see here) management will be pleased to have delivered another profitable year (operating profit of £0.4m for 2018).
EU Supply looks to have benefited from the requirement for mandatory e-tendering provisions at milestones before November 2018 in EU/EEC states. To take advantage of this limited window of opportunity the business raised a further £600k of investment in May last year primarily to further enhance its e-sourcing platform. The platform is now being used by some 8,000 European public sector bodies across 9 Member States."
Rivaldo yes H2 profit was much higher, could the H2 capitalisation partially support this? I suspect it relates to the full year as costs in H2 are around 350k lower than H1 so you may need to apportion the capitalisation across both halves.
But I'm more interested in the cash flow, which it doesn't impact.
Revenue improved by 200k half on half which drops straight to the bottom line, which explains the rest of the H2 improvement.
Financial performance for the last 5 years is very encouraging. The numbers below set out the change in YoY revenue compared to the change in EBIT. In total over 5 years revenue has increased by 3.29m and EBIT by 3.86m.
2018 marks the 5th consecutive year of organic revenue growth and improved EBIT. The company has continued to add revenue while keeping admin costs flat.
2014: 0.72, 1.07
2015: 0.33, 0.70
2016: 0.61, 0.61
2018: 0.55, 0.57
Total: 3.29, 3.86
The really interesting part of today's results is the growth from H1 to H2, masked by the overall results.
EUSP made a £451k PBT in H2, compared to a £91k loss in H1.
Operating profit was up to £600k in H2, compared to just £48k in H1.
If you completely exclude other operating income (grants), operating profit was £442k in H2 compared to just £17k in H1.
I don't remember EUSP saying there's any particular seasonality to the business (happy to be corrected).
Annualised, the H2 results would equate to a £0.9m PBT this year, without any growth at all (or a £600k PBT this year excluding any grant income).
With around £1m cash in the bank and high recurring income, and compared to many companies on m/caps of £50m-£100m or more which still dream of making a profit, an £8m m/cap looks pretty good value to me.
My target short term is 25p - - - but DYOR
Positive cash flow in Q1 confirms the strengthening working capital position of the Company
â€¢ Exceptionally strong growth is currently being experienced in recurring revenue, with annual recurring revenue run rate estimated to be up approximately Â£620k, representing a 17% increase in the year to date, leading to a substantially increased proportion of SaaS revenues in 2019 and beyond
Agreed ragnarlothbrok. Quite apart from the maiden profitability, cash pile and high recurring revenues, it's the very confident outlook commentary driven by regulation which is so striking for a mere £8m m/cap:
"David Cutler, Chairman of EU Supply, commented:
"A profitable platform for growth was achieved in 2018.
Our highest ever rate of increase in annual recurring revenue run rate has been secured already in 2019 with annualised values of contracts in aggregate of approximately £620k being signed this year, and this without any higher staffing levels. We anticipate continued growth in annual recurring revenue during the coming months which gives us confidence in further profitable growth beyond 2019.
The Board is also confident of securing further revenue from both other existing contracts and new markets."
During 2019, the Group will continue to build its base of SaaS revenues in order to continue to grow its recurring revenue base. The Group also has a strong order book and pipeline from paid-for enhancements, which will complement the SaaS revenues during 2019 and further strengthen the competitiveness of the Group's CTM™ platform.
In 2019, the Group anticipates further increased activity by public sector organisations which do not currently have an e-Procurement solution meeting the new requirements, or which work via consultants and advisors having solutions to address their needs above the EU thresholds, but which may not yet have any solutions to address their needs for lower value contracts and requests. With our CTM™ platform, we are well positioned to gain market share in the countries where we are active.
Growth in Business Alert services and other supplier side services is expected to pick up in 2019, particularly in Norway, Denmark and Sweden with added sales resources in this area. In Germany, we look forward to improved results from our additional reseller approach which was adopted in 2018. New opportunities are also being developed in other EU/EEA markets where the Group is well positioned with its own sales and/or sales via distributors.
Additional mandatory requirements in the EU public sector have led to additional software functionality being demanded by our customers which provided project implementation revenues in 2018. The future recurring revenues from these completed contracts should provide a sound foundation for the continued growth of the Group.
Recurring revenues are growing to date in line with the Board's objective of increasing the proportion of SaaS revenue with fewer one off projects. The Board looks forward to continued profitability in 2019 based on stable organic growth leading to the potential for accelerating revenue in 2020 and beyond."
Smells like a 2019 upgrade doesn't it Rivaldo? I was expecting a 700k increase in 2019 revenue v 2018, which they seem to have already achieved in Q1.
This comment is the most interesting for me, it seems like they have a pretty solid pipeline of new business:
"We anticipate continued growth in annual recurring revenue during the coming months which gives us confidence in further profitable growth beyond 2019"
Pleased with the results, all looking very positive.
A share off the radar of many but I’m very excited to be in at the beginning of this :) ( makes a change for me ! )
Impressive increase in recurring revenue in 2019. It demonstrates the exact reason why I took a position here, which is the scalability of the platform leading to strong operational leverage. They have added revenue with no headcount which means a huge part of this revenue falls straight to profit. The current market situation seems to be converging favourably with recent news flow all very positive. Always hard to say what the short term market reaction will be but I'm pleased with today's announcement. GLA
On first read the results are very good and the outlook even better.
A £7m m/cap for a company with a maiden £0.4m PBT, with more pretty odds-on this year plus very high recurring income, seems somewhat bizarre.
And cash must be well over £1m now judging by the significant receipts this year.
You could quibble that this year (unusually) £0.3m of R&D was capitalised, but this is perfectly legitimate, or that small grants are included in other income, which is also fine.
But this is obviously a company on the rise which has a chance of very serious share price gains from this very low base imho.
Final results released tomorrow.
Hopefully all in order and a positive indication the company is moving forward and it starts getting reflected in the share price :)
The series of upwards moves hopefully suggests that City Financial's stock is largely or completely cleared.
Jonas Lundstrom from EUSP's Swedish homeland continues to buy - he's bought another 830,000 shares since his last RNS, and now owns 3m shares, or 4.18%:
I came across this excellent series of articles analysing EUSP from a holder of the stock - although they're a year old they shed a lot of light on the company and are well worth reading:
Good to see a quality investor like MG saying on Sunday he's taken a position in EUSP representing 4.1% of his portfolio:
"6/n EUSP (4.1%) -Rebought end March 2019 up 0%. Feel the price at this level offers good risk/reward. For £6.7m mcap you have: possible inflection point? Profitable, sticky rev has been growing consistently 70% recurring, part of framework agreements. CEO founder holds sig amount"
Ticking up today on a healthy 360,000 shares traded. Hopefully the City Financial overhang is cleared or nearly cleared.
The final results on 26th April should provide a healthy boost to sentiment and the share price given all the info we have.
Dodger777, I think your timing will prove to be very good indeed :o))
Taken a few of these today. Let’s see if I’ve bought at the right time for a change :)
FYI, following the framework agreement award Stockdale Securities reiterated their Buy and 25p target.
They forecast 0.7p EPS this year and 1.2p EPS next year, and said:
"EU Supply (EUSP) has announced that it expects to release its FY2018 final results on 26 April 2019. It has also reiterated that it expects to report a maiden adj. PBT of £0.4m, as disclosed in the trading update on 8 February 2019. As such the share price fall due to the movement of a significant stake yesterday presents an excellent buying opportunity, in our view. We are encouraged that the development of the company’s supplier side services is proceeding to plan as these should increase recurring revenues in due course."