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the 75% EBITDA to divi is a significant commitment already......I would not be surprised to see any surplus cash going on acquisitions (if they spot any suitable ones)
and if they are still generating strong cash which I expect they should be then we cannot rule out a special divi,given the existing cash pile
yes excellent results and the EBITDA numbers, and commitment to pay 75% of this figure to dividend means a strong divi payment to shareholders this year......happy days
Revenues at top end of expectations and EBITDA nicely in line. Plus a whopping dividend:
https://www.investegate.co.uk/safecharge-int-grp--sch-/rns/pre-close-trading-update-and-notice-of-results/201901100700036639M/
Most importantly:
"With robust current trading, an expanded client base and strong sales pipeline, the Directors look forward with confidence to the 2019 financial year and beyond."
The share price should continue to rise very nicely from here - and the statement doesn't even mention the huge cash pile.
Safecharge extends partnership with Gett to streamline payment reconciliation across all its payment partners globally.
https://www.thepaypers.com/online-payments/safecharge-extends-partnership-with-gett/776746-3?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+thepaypers%2FcfKW+%28The+Paypers+Headlines%29
Pleased to see this moving up once again, there didn't appear any obvious reason for the fall in the first instance.
Thanks Rivaldo, my top up other day seems well timed then, and with few sellers after this ridiculous fall I can see the sp going from strength to strength from here
SCH are the Telegraph's Tip of the Year today - from no less than Gervais Williams himself (funnily enough I also own his previous successful tip IGR, also mentioned here).
Susbscriber-only, so if anyone has full access....
Https://www.telegraph.co.uk/investing/shares/questors-tip-year-fast-growing-software-firm-yields-almost-6pc/
"Questor’s tip of the year: a fast-growing software firm that yields almost 6pc
9 January 2019 • 5:58am
Questor share tip: Aim-quoted SafeCharge has technology that enables retailers to trade securely online – and its shares are ‘superbly’ cheap
It’s time for Questor’s share tip of the year.
As we did last year, we have approached the fund manager responsible for this column’s best-performing tip and asked him which stock he feels most enthusiastic about today.
That fund manager is Gervais Williams of Miton, who in March 2017 put Questor on to IG Design, which gained 120pc before we sold it in September last year.
For 2019, Williams has high hopes for Aim-quoted SafeCharge, whose advanced technology helps retailers to process card payments.
“Accurate processing of these payments is extremely important..."
Encouraging trading statement:
- revenues above expectations
- EBITDA nicely in line even given additional investment
- new contract wins
- confident outlook with a "strong pipeline"
With a huge cash pile as well, this should reassure the market.
Berenberg reiterate their Buy and 350p target....
Https://citywire.co.uk/funds-insider/news/the-expert-view-cybg-experian-and-diploma/a1177442?ref=citywire-money-latest-news-list#i=6
"SafeCharge margins shake-up will calm
Payment solutions provider SafeCharge (SCHS) is increasing exposure to higher-quality merchants which is impacting margins, but Berenberg said this will stabilise.
Analyst Tammy Qiu retained her ‘buy’ recommendation and target price of 350p on the stock after interim results ‘provided clarity about the progress of its transition towards being a higher-quality and high-growth payment solutions provider’.
She said the shift ‘came at the expense of pricing and margins’ but ‘management expected these declines as exposure towards higher-quality and lower-risk merchants increases and the focus is to grow in scale’.
Qiu said this should ‘stabilise’ and the margin declines were expected, and should be ‘offset by selling value-added services and increasing scale in its off-the-shelf acquiring solution which targets the mid-market’."
Playtech has announced a good trading update this morning, in line with expectations, but also states encouragingly re Snaitech - a new customer for Safecharge in July....
"The momentum reported in H1 2018 by Snaitech has continued into the second half of the year with the business continuing to trade in line with the Group's expectations":
Https://www.investegate.co.uk/playtech-plc--ptec-/rns/trading-update/201811120700049756G/
Director sold a shedfull which I guess is the overhang. But to whom? Doesn't some entity have to buy them?
There's been a bit of good news recently and hopefully the sp will creep back up to over £3.
A LTH and hoping for a takeover.
Naked Trader bought more:
"Safecharge (SCH) looked well oversold even in a down market so made a top up. The price kept coming down and I scratched my head going through it carefully to see what I missed. Looks like there was a shares overhang (a bigseller needed shares placing). Now that is outof the way looking for it to head back up to300 and more. It has a giant dividend of near 6% which I got last week which certainly helped to cover some of the weakness"
Intriguing to see Sagi reducing his Playtech stake and going "all in" on SCH:
Https://www.financemagnates.com/forex/technology/teddy-sagi-boosts-safecharge-stake-with-13m-investment/
"Teddy Sagi Boosts SafeCharge Stake with £13m Investment
The Israeli entrepreneur decided to cut back on his gaming and trading ventures, but he is all in on SafeCharge
Israeli entrepreneur Teddy Sagi has increased his stake in SafeCharge. According to a regulatory filing, he has purchased another four million shares to bring his total stake in the company to 68.34%.
The move comes as the Israeli magnate has been reducing his stake in Playtech, a company which he founded.
The other side of the transaction was a company related to the CEO and co-founder of SafeCharge, David Avgi. This is the first time he is cashing out of the company.
SafeCharge Growth
In recent years, SafeCharge has been expanding its reach way beyond gaming and trading. The company has several big clients such as Israeli Airline El Al, Sagi’s own Camden Market, Domino’s Pizza and others.
Sagi has executed his investment via Northenstar Investments Ltd; an IOM company fully owned by him.
Commenting on the move, he said: “SafeCharge is an excellent payments and technology company with strong growth potential. It is an important part of our investment strategy and focus.”
Sagi’s company expanded its SafeCharge stake at a strike price of 325 pence per share. The stock is currently trading at around the same level, which is close to its all-time high marked earlier this year at 355 pence per share.
Globe Invest
Teddy Sagi has been diversifying his business ventures via his family office Globe Invest. Aside from Playtech and SafeCharge, he is deeply vested in London’s second most popular tourist attraction, Camden Market.
Back in 2017 he also acquired a stake in Brack Capital Property. The company is developing several big real estate sites in Germany.
A spokesperson for Sagi’s family office Globe Invest said: “The additional shareholding in SafeCharge shows Northenstar and its shareholder Teddy Sagi’s commitment to the company. This latest move reflects his confidence in the future prospects of SafeCharge."
RNS - Sagi/Northenstar Investments have increased their holding to 68.34% from 67.49%:
Https://www.investegate.co.uk/safecharge-int-grp--sch-/rns/holding-s--in-company/201809261557100562C/
The last disclosure I can see was in Nov'17, when he/they had exactly 100m shares, so they've bought another 3.995m shares - i.e all of those sold on the option exercise by the CEO. Well, that's certainly supportive....
A lot of stock to shift before it can move out of this 3-3.30 range though!
explains director share options movement
It goes ex-div tomorrow so expect a drop of 6 or 7p then.
Anyone any ideas as to the large volume and no sp movement?
SCH have been tipped as a Buy in the IC:
"Tip Update: Buy at 318p
There was little to bemoan within SafeCharge’s (SCH) half-year results, with transaction numbers and values up by more than half to 118m and $6.7bn (£5.1bn), respectively. Of these volumes, more than a quarter were processed via SafeCharge’s own acquiring platform – representing $1.8bn, more than double the prior year's.
In turn, revenues and gross profits enjoyed strong momentum, although the gross margin declined from 57.3 per cent to 54.8 per cent. The payments group attributed this to the “higher-quality and lower-risk” nature of the overall customer base, as it focuses on winning new clients and entering new markets. Brokerage Shore Capital thinks this will “wash through in due course”.
Admittedly, pre-tax profits declined – the result of both higher amortisation and depreciation costs, and currency-related finance expenses. By comparison, a year earlier the company benefited from $1.4m in finance income. But on the bright side, cash conversion – denoting SafeCharge’s ability to convert operating profits into cash – improved from 79 per cent to 82 per cent. While net cash fell from $113 to $86.1m, the group remained debt free and proposed a generous dividend hike.
House broker Shore Capital forecasts adjusted pre-tax profit of $29.6m and EPS of 17.1¢ for 2018 (from $29.2m and 17.8¢ in 2017).
IC View
Encouragingly, SafeCharge won various higher-quality 'tier 1’ customers during the respective six months, including Uber competitor Gett. And it has gone some way to prepare for Brexit – obtaining authorisation as a Payments Institution from the UK’s Financial Conduct Authority (FCA). The shares trade at 19 times consensus forecast earnings, in line with their five-year historical average. However, we think that's an undemanding rating given the transaction impetus and income on offer. Buy."
Excellent - Barclays Capital have raised their target price significantly to 420p (from 335p) and say Buy:
Http://investing.thisismoney.co.uk/broker-views/
Incidentally, the forecast divi for this year was previously 13.12p, but that might have increased now following the whacking great increase in H1. So the yield is likely to be at least 4% at the current price.
I'm a long term SCH holder, remain positive on the LT investment case and agree that the results were not too shabby. Growth in transaction volumes and value was pleasing. However, I do not find it slightly concerning that the company is continuing to struggle to convert rising transaction volumes / revenues into rising profits. I have no doubt that today's indifferent SP reaction (not even retracing to the roughly 320p level that was common just before the results) has much to do with the lack of profit growth. The rising dividend whilst nice is a red herring IMHO. Looking at the cash statement the company would have had no funds for Capex / new equity investments without dipping into its cash pile, which duly fell from $108m to $86m. Now there is nothing wrong with putting surplus capital to (value-added) work. But its just slightly concerning that in a year of such significant transaction volume growth operating cash flow before working cap was actually down.
I really hope that in the quarters ahead the company finally reaches a scale which allows some operational gearing to start to come through and profits to rise. Otherwise, except for a bid (which I assume we all agree is the end game here and a large part of the holding attraction) the SP will struggle to make much headway from here in the ST. All IMHO...
A nice positive review of SCH, their results and board level changes.
https://www.financemagnates.com/fintech/payments/safecharge-yet-again-reports-strong-financial-and-operational-results-in-h1/
Bryan Garnier say Buy, and have increased their target price to 380p (from 354p):
Http://investing.thisismoney.co.uk/broker-views/
Solid results, and an excellent outlook:
"The Group has enjoyed a good start to the second half of 2018, benefiting from continued growth from our existing customers and the launch of new clients. The Board remains confident that the outcome for the year will be in line with market expectations, with revenue at the top-end of market expectations. The Directors look forward with confidence to the rest of 2018 and beyond."
Great 15% increase in the dividend too, with an 8.86 interim divi.
The $18.5m additional investment in Nayax explains the cash pile moving to $86m now. I note that SCH are still looking for more acquisitions.
Look OK to me, outlook fine with guidance on upper end of expectations. Nice dividend. GLA