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BodRuncie, I agree that TST's liquidity isn't exactly ideal - of course that should exacerbate share price moves upwards given the positive trading!
However, I hope that TST will do what MWE are doing and have done for some time. Firstly it takes large blocks of shares from sellers off of the market - and it may be that Chelverton will want to top-slice some of their large holding at some point - , and then those shares can be re-sold to institutional buyers who want more stock but can't buy in the market in an illiquid (for them) stock. Not only that, but along the way TST may be able to re-sell those shares at a profit.
Great news today. I like the cheeky trading update they snuck in there to give investors confidence.
Assuming interim dividend is at least equal to the final dividend, then we're looking at minimum 2p annual divi to begin with.
Share buybacks show great confidence in their own business, but my only concern is that the stock isn't hugely liquid at the moment so soaking up some sells might further decrease liquidity in the short term.
Excellent news today:
- confirmation that "Trading conditions and trends remain positive and are consistent with market expectations"
- the commencement of dividends. The 1p interim suggests an overall 3p dividend for the year at the usual interim/finals proportions
- £300,000 of share buybacks, which will help to take out any sellers out there (Chelverton?). Of course it's possible that TST could then re-sell the shares in blocks to other institutional buyers, thus improving liquidity and perhaps netting a nice little profit in the meantime.
Tican Chilled Foods select Podstar - quite a large global company too:
Https://www.touchstar.co.uk/blog/ticanchilled
Given TST's overseas expansion I wonder if this may lead to further substantial business?
"Tican Chilled are part of the Tönnies Group a family owned company that has its head office in Germany. Tönnies operates a highly diversified international food business and is active around the world with its eight divisions of Meat Pork, Meat Beef, Convenience, Sausages, Ingredients, Logistics, International and Central Services."
"The work that Touchstar has done for Tican has been fantastic. We presented them with some feature requests that they had not encountered before but they came up with viable solutions to ensure the use of Podstar was as simple as possible for all concerned. The proof of delivery system immediately reduced our paper usage by at least 70 per cent. The PODStar mobile app is very easy to use with very minimal driver training on the handhelds required. I have rolled the system out to all my drivers with very minimal disruption to our operation and I would highly recommend the PODStar solution to anyone looking to move away from a paper-based delivery system."
Yes. All very encouraging. It feels as if an RNS is imminent.
On relatively large buying by TST's usual standards.
After £8k of buys today, so hopefully not much stock around. There should be news of the decision on either buybacks or dividends soon.
It might need another couple of pieces of good news to push up to a £15 mil valuation, but surely it deserves to sit at £10-12mil mcap at present.
Excellent new article on TST from AIM Prospector - free to download. A £15.6m m/cap would give 90% upside from here:
Https://www.aimprospector.co.uk/
Conclusion:
"Before post-COVID interest rate hikes, when sentiment was elevated, software companies were typically valued at three times recurring revenues plus non-recurring income. To that we can add net cash. Using the most recent full year figures, gives a rule-of-thumb valuation of £15.6m. While Touchstar isn't an outright software play, it is growing, suggesting my quick appraisal isn't outlandish."
Many thanks to the Private Punter for this excellent new write-up - great to see TST attracting some attention now. Here's a direct link:
Https://martinflitton1.wixsite.com/privatepunter/post/touchstar-is-aiming-high-19-05-23
Both dated 12th May:
https://www.touchstar.co.uk/blog/ngfeurope-upgrade
https://www.touchstar.co.uk/blog/nymas-upgrade
Sounds like the rollouts of both contracts are are set for the near future, so should likely benefit both this H1 and the forthcoming H2.
The rate of contract win news announcements has certainly increased recently!
Low volumes of shares traded, so MMs put up a wide spread. No reason to worry.
Any idea why, odd!
Excellent news just out today. Looks like a relative biggie - DCC are a "a nationwide energy company distributing massive volumes of fuels every day".
Great to see the expansion to Denmark, and this should nicely benefit this year's results:
Https://www.touchstar.co.uk/blog/dccenergi785
"DCC ENERGI MAKE SIGNIFICANT INVESTMENT IN TOUCHSTAR’S ANDROID FUEL DELIVERY EPOD TECHNOLOGY
09 May 2023"
"The company currently operates with a fleet of ninety vehicles, all of which will be upgraded to the new solution"
"CONCLUSION
The DCC Energi move to TouchStar’s Android solution signifies their intent to stay at the forefront of innovation in the fuel delivery space. The partnership will provide ample opportunity for continued development, streamlining of processes and the elimination of paperwork leading to a more agile, efficient service for customers. Roll out of the new system will begin shortly.
Michael Olesen, DCC Energi Distribution Manager, concludes: “TouchStar’s Android solution provides DCC Energi with a highly flexible, streamlined and cost-effective operation, eliminating mistakes which arise from a paper-based system and ensuring staff spend their time providing excellent customer service.”
Hi STL, sorry, I can't see the presentation anywhere on TST's web site. Perhaps in a few weeks' time.
Hopefully my post distilled most of the useful info!
Useful info R. Thanks. Is the full presentation available for general viewing anywhere?
TST gave a really encouraging and optimistic presentation yesterday via WH Ireland.
My notes in no particular order (hopefully transcribed correctly in haste!):
- the order book at 28th March is now £2m, up from £1.74m at 31st December
- they're "comfortable" with expectations per WH Ireland's forecasts through to 2025
- they're "seeing an uplift in new customers"
- there are "high barriers to entry"
- ARR is expected to grow a further 14% this year via increasing software revenues
- they're "gaining traction" with export opportunities. Expansion into Cyprus & Turkey has begun - they've met with two suppliers and one in the distribution sector has already committed to a £200k order. Greece is also on the agenda, and DCC in Denmark have also agreed an order recently
- these countries are "low hanging fruit" as their markets are less developed, whilst France and Germany are more dveeloped and less easily entered. However, TST are having conversations with companies to partner in the USA
- margin improvement should continue
- the fuel sector is in the middle of a sector upgrade and is "buoyant". This is largely due to the need to upgrade outdated Windows systems/software. TST have a 70% share of the UK fuel delivery market. Half of their customers have already upgraded, and the other half will do so in the next 2-3 years
- each upgrade tends to double prior revenues, i.e one customer is moving in June/July from £160k per annum revenues to £320k per annum as their software is upgraded. And TST are also growing non-fuel related business
- there's a "lot of organic growth" at present, so whilst they've looked at acquisitions and will continue to do so for reasons of geography or new sector entry, these are not a "must-do"
- there could be a return of surplus cash to shareholders after the AGM (no further details given)
- Ian is retiring (and is stepping back from his other interests too) when he finds a suitable successor as (1) he's old! and (2) his speciality is the cloud etc, whereas he sees the next gen of software as being intelligent/AI-governed and he sees a younger person with knowledge in this area as being more useful to TST
- Ian noted that TST has "incredible potential"
It's certainly the most liquidity I've seen since I've been invested. Having said that, the only reason I'd want to see buybacks rather than dividends would be if Chelverton wanted to liquidate their position (Not that I'm suggesting they do). The good thing is they have options now without cratering the share price, which should help increase the share price.
Certainly good news, clarity on future dividend policy will be welcome, i.e cover level. I expect this will be prudent, rightly so, and buyback will be dependent growth plans, we will find out more shortly. All good though it been a long road to recovery!
Good to see TST is much more liquid at present, and looking encouraging online - you can only buy a maximum 10k at 106.85p, whereas you can sell 25k at 96p.
Great to see news of the Court approval which opens the way for dividends and/or share buybacks here.
And the AGM update on May 22nd should read well given the "buoyant" order book and trading momentum:
Https://uk.advfn.com/stock-market/london/touchstar-TST/share-news/Touchstar-PLC-Capital-Reduction/90855332
News today of an upgrade contract win which will benefit this coming H2:
Https://www.touchstar.co.uk/blog/carnegiefuels
Extracts:
"Carnegie Fuels - upgrade to Touchstar Android devices
25 April 2023"
"Carnegie began its relationship with TouchStar in 2017 when they were looking for an improvement to their paper ticketing system. TouchStar focuses on providing practical and effective business solutions, through its FuelStar hardware and software technology to eliminate paperwork and streamline communications between drivers and administrative teams. Carnegie Fuels adopted software from Fuelsoft as their back-end administration package and utilised Touchstar’s Fuelstar app and Windows-based Hawk devices to provide a real-time data feed from the vehicle fleet.
Every vehicle in their fuel distribution fleet uses TouchStar technology as an integral part of their delivery processes."
"The Upgrade
TouchStar has now been commissioned to upgrade the entire Carnegie fleet from the Windows operating system to Android. The vehicles will be equipped with the latest generation TS3300 device. Suitable even for the most rigorous use in the most extreme conditions, the TS3300 is fully compliant with the ATEX IECEx directive, allowing safe use in potentially explosive environments.
The TS3300 also utilizes front and rear-facing cameras and a glare proof 7” high-resolution screen, suitable for use with gloves. Slimmer, smarter and stronger than its predecessors, the TouchStar TS3300 is now the most widely adopted mobile device in the fuel delivery sector.
The Carnegie transition to FuelStar for Android will commence in July 2023."
Chelverton Growth Trust have a £680k investment in TST as their second biggest holding, and in their interims today they state:
"Touchstar, the second largest investment, has made excellent progress in the past six months with a very positive trading statement at the end of January. The company now has a very strong balance sheet with some 40% of its market value represented by cash."
Agreed, they do seem very cheap. Free cash flow was £1.3m on an EV of £5m (26% FCF yield). Cash flow was flattered a bit by the increase in deferred income, but that seems likely to continue if they keep growing, and tax received will flip to tax paid at some stage, but 26%!. Anyway, bought a few chunks of 2,500. Be interesting to see where they pitch the first dividend.
Good to see the full 100p offer being paid this morning by buyers at these 5-year highs.
WH Ireland's 120p target is too conservative imo, especially given the 41p per share of cash - at this point, and with the confident outlook, I'd say 140p-150p is more appropriate.