The latest Investing Matters Podcast episode featuring Jeremy Skillington, CEO of Poolbeg Pharma has just been released. Listen here.
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Ragnarlothbrok, forget the published spread as it's misleading, you can almost always buy (and sell) well within the spread - just do some dummy trades online to get the true position.
This is particularly true at present whilst the party who took on the City Financial stake at 8.5p rolls them out at a small profit. Given yesterday's news and the upcoming maiden profitable results, this shouldn't take long hopefully.
Yesterday's framework agreement news is obviously non-specific in revenue terms for EUSP directly. But given the £20m value over the next four years, and impact at all for this microcap is likely to be highly material, and that's what the CEO's comment was meant to put across:
"We are pleased to announce the signing of this significant framework agreement following a competitive tender process, in which we achieved a very high score for our proposal. This may lead to substantial business growth across the UK in 2019 and beyond. We also see substantial value added possibilities with new modules and sub-modules, including for micro-procurement, being developed, adding potential further recurring revenue for the Company."
In hindsight the announcement today was pretty watery, the revenue opportunity isn't clear at all as they have just been granted access to a panel. Probably fair that the SP ended up back where we started. i hope those who bought into the spike today have a long term outlook. The spread is nuts. I know its a micro cap but 20% is outrageous considering the free float is pretty reasonable.
I picked up a few of these on the recent City Financial drop, after having my eye on this for a while. I would like a few more but the spread is 20%. I think I'll wait until it settles down.
I don't think we are sure what is the revenue implication of the news today if any? I think they are saying it could be nothing but they seem hopeful that it's good news over the medium term.
Impressive news just out - no wonder the share price has surged from the recent artificial lows:
Https://uk.advfn.com/stock-market/london/eu-supply-EUSP/share-news/EU-Supply-PLC-Framework-Agreement/79619491
Conclusion:
"We are pleased to announce the signing of this significant framework agreement following a competitive tender process, in which we achieved a very high score for our proposal. This may lead to substantial business growth across the UK in 2019 and beyond. We also see substantial value added possibilities with new modules and sub-modules, including for micro-procurement, being developed, adding potential further recurring revenue for the Company."
Good to see EUSP reiterating their maiden £0.4m PBT and confirming everything else is going to plan, despite City Financial's forced share sales yesterday which caused the share price to slide for no good reason.
Results will be out on 26th April. City Financial's woes have created a buying opportunity imho:
Https://www.investegate.co.uk/eu-supply-plc--eusp-/rns/notice-of-results-and-share-price-movement/201903280700242481U/
Presumably small in financial terms as an RNSNON, but good to see a maiden contract win in the O&G sector - with the promise of "considerable additional business" to come:
Https://www.investegate.co.uk/eu-supply-plc--eusp-/rns/contract-win/201903180700070820T/
"We are pleased to announce the signing of this maiden agreement in the oil and gas sector. It is a sector with significant needs in both qualification, tendering, contract management and risk management. We believe this first inroad in the oil and gas sector may lead to considerable additional business in the next three years."
Good to see more contract wins whilst I was on hols, particularly with new clients in both Denmark and Germany - and the involvement with the huge Femern Tunnel.
EUSP are so far off the radar I noticed that ADVFN's Monitor didn't even pick up the 5th March contract as a news item! So some may have completely missed it.
Not long to next month's results and a maiden £0.4m profit and around £1m net cash.
From Stockdale's new note FYI:
"Maiden PBT for FY2018 above expectations
In its FY2018 trading update, EU Supply (EUSP) has announced that it expects to report adj. PBT of £0.4m vs the SSL forecast of £0.1m and a loss before tax of £0.2m in FY2017. The anticipated revenue of £5.1m was slightly below our £5.4m forecast and was up c.10% on the £4.7m reported for FY2017. Importantly, the recurring/repeat proportion of revenue was maintained at c.70%. The investment in the micro procurement solution is likely to increase recurring sales in due course. We retain our 25p DCF-derived TP and Buy rating.
FY2018 was a watershed year for EUSP as it is going to report its maiden PBT of £0.4m. Part of the reason for the overshoot was that there was £0.3m of capitalised development vs our forecast of £0.1m. However, even allowing for this the adj. PBT was still around double our forecast. This was despite revenues of £5.1m coming in below our £5.4m forecast. We are encouraged that the percentage of recurring/repeat revenue was increased to c.70% in FY2018 vs 66% in FY2017.
We highlighted both at the time of the fundraising in May 2018 and with the interim results in September 2018 that the micro procurement solution would not deliver any meaningful revenues until FY2020. As a consequence of maintaining our core revenue growth rate forecasts on the lower FY2018 sales base, we have reduced our sales forecasts to £5.6m (£6.0m) and £6.7m (£7.7m) for FY2019E and FY2020E respectively. However, partly because more of the additional development costs are being capitalised, we have increased our adj. PBT forecast for FY2019E to £0.5m (£0.1m) and only edged back the FY2020E forecast to £1.1m (£1.4m). As the vast majority of the micro procurement sales will be recurring, in our view, the quality of revenues will improve further in due course.
We have argued consistently over the last 24-30 months that EUSP’s share price should improve as there is greater confidence in its ability to become sustainably profitable. With the move into adj. PBT profitability confirmed today, we believe that this is now the case, yet the share price has underperformed the market over the last 12 months. Even with the tweaks to our FY2019 and FY2020 forecasts, we are happy to maintain our conservative DCF-derived target price of 25p and our Buy rating."
Stockdale have also now issued a new Buy note. They have a 25p target, and have raised their forecasts to 0.7p EPS this year and 1.2p EPS next year.
New analyst report out - upgraded this year's forecast to £0.5m PBT and a closing £1.1m cash (£0.8m net of debt). Not bad for a £7.7m m/cap company:
Https://www.progressive-research.com/research/
Summary:
"Profitable and scalable platform for growth
First annual pre-tax profit, for FY2018
In today’s trading update, EU Supply (“EUS”), the e-procurement software provider, has indicated that it expects to report its first annual pre-tax profit, for recently ended FY2018. We forecast continuing growth in FY2019, with potential for EUS to benefit medium term from its investment in developing new services and its scalable SaaS business model
? Continuing growth EUS has advised that FY2018 revenue grew by 10% to approx £5.1m, of which approx 70% (FY2017: 66%) is expected to be of recurring or repeating nature. Final results for FY2018 are subject to audit and are expected to be released in April 2019.
? First annual pre-tax profit Importantly, EUS expects to report its first annual profit before tax, expected to be £0.4m profit compared to a £0.2m loss FY2017. In the latter part of FY2018, EUS capitalised £0.3m(FY2017: nil) in IT development costs (net of amortisation) as required under IFRS.
? Recurring revenues in new services During H2 FY2018, EUS developed new modules and services for buyers and suppliers to support growing recurring revenue in the medium term. Development of its micro procurement solution (to assist with low value or short-term procurement) is progressing in line with plan, to further aid recurring revenue growth.
? Improved forecast profits With EUS indicating FY2018 revenues slightly behind our previous forecasts, we have reduced FY2018 and FY2019 revenues forecasts to £5.1m (was £5.4m) and £5.6m (was £6m). Following the indication from EUS of clear profitability in FY2018 above our previous forecasts, we have increased our forecast PBT to £0.4m for FY2018 (was nil), in line with today’s trading update, and to £0.5m for FY2019 (was nil).
Having focussed in 2016 and 2017 on moving towards and now achieving its target of profitability and in 2018 on developing additional services for recurring revenues, EUS is well placed to focus on adding sales to its profitable platform to deliver its growth plan. With its software-as-a service model, EUS has potential to benefit from operating leverage with growth."
Excellent - 2018 will be the first profitable year for EUSP.
And £0.4m PBT is "materially above market expectations", which were just £0.1m.
Recurring revenues are up to 70%.
And EUSP have almost £1m net cash to play with - against a £7.7m m/cap.
Things are going very smoothly here.
RNS - EUSP have a new 3% holder, with the Swedish Jonas Ljungström & Seglatsen Consulting buying 2.17m shares:
Https://www.investegate.co.uk/eu-supply-plc--eusp-/rns/holding-s--in-company/201812121111172699K/
Good to see buying interest from EUSP's homeland.
Another (RNSNON) contract win. But again this is meatier at €200k. Hopefully EUSP are now eschewing the tiny €50k wins they used to announce.
Alongside being for a decent amount, this is high recurring income too and benefits the next 12 months:
Https://www.investegate.co.uk/eu-supply-plc--eusp-/rns/contract-wins/201812050700044390J/
Another day, another (RNSNON) contract win....this one seems more meaty though, being governmental, covering a range of sectors, a welcome SaaS long-term win - and taking business from the competition:
Https://www.investegate.co.uk/eu-supply-plc--eusp-/rns/contract-win/201811300800039790I/
"Contract Win
EU Supply (LSE AIM: EUSP), the e-procurement software provider, is pleased to announce that the Company's position in Denmark has been further strengthened following a new contract signed with the Danish Government, covering multiple sectors, including a new contract for the licensing and support of CTMTM with the Danish Ministry of Taxation, including its 10 agency procurement departments, of which 3 were previous licensees of competitors' solutions. The new contract is for the delivery of CTMTM as SaaS and related services and runs for a period of 2 years with the option to extend by up to a further 2 years."
More contract wins announced today. Today's news reports continued sales traction in Germany - a relatively new and large market:
Https://www.investegate.co.uk/eu-supply-plc--eusp-/rns/contract-wins-in-germany/201811210700079630H/
Today's RNS is for a £190k contract win - much more like it, and which will bolster the current year results too:
Https://www.investegate.co.uk/eu-supply-plc--eusp-/rns/contract-win/201811190700046821H/
The customer must be pretty satisfied since this is the sixth such win under the framework agreement.
Another contract win, and although this is an RNSNON it sounds pretty impressive and a great reference point:
Https://www.investegate.co.uk/eu-supply-plc/rns/contract-win/201810311201258867F/
"Contract Win
EU Supply (LSE AIM: EUSP), the e-procurement software provider, is pleased to announce that the States of Guernsey has entered into an agreement with the Company to license its CTMTM service platform as SaaS with support and related services. CTMTM will become the States of Guernsey's national eProcurement service.
The contract was awarded following a competitive tendering process with the award criteria including ease of use, breadth and depth of functionality and speed of implementation. EU Supply's CTMTM platform will go live early in 2019.
Thomas Beergrhen, CEO of EU Supply plc, commented: "This contract is of particular significance to the Company as it highlights demand for CTMTM, an advanced competitive tendering service platform, also from a jurisdiction outside of the EU and the European Economic Area."
An encouraging general business update today - though of course no actual numbers to go on, which I suppose we'll get in a year end update.
Anyway, it sounds like things are nicely on course:
Https://www.investegate.co.uk/eu-supply-plc--eusp-/rns/business-progress-update/201810170700052636E/
"EU Supply (LSE AIM: EUSP), the e-procurement software provider, is pleased to announce that it has recently seen a pick-up in orders of deeper integrations and value added services from its existing customers, particularly in Norway, where, in the last three months, fourteen new orders for integrations of the Company's CTMTM service platform and central authority journaling systems have been received. Pleasingly, the Company has also received its first order for an integration from a customer in Germany.
Authorities, particularly within local government, are also still contracting at a high rate to use CTMTM while suppliers are also continuing to subscribe to value added services at a high weekly rate.
All bar two small CTMTM licences with the Company's customers, which were otherwise due to expire during the year to date, have been renewed and/or extended.
The Board believes these continued orders and renewals and/or extensions are evidence of the growing perceived quality of the Group's services and expects this to result in increased longevity of its customer relationships."
A constant drip of new and renewed contracts. Steady progress , half ahead both engines, steady as she goes. .
I only bought in a couple of months ago after tracking EU for about six months. Its proved to be one of the better investment options . I'm going to sit in for the long haul, this is a very well run company.
Does anyone know if there is some more big orders coming out soon?
Another good contract
A really good company. I've been following EU Supply for some months and bought in yesterday.
Rns
couple of trades there.