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We've had quite a good run here sp wise, though we were sold down over a long period before that. Resting now.
I do entirely agree with that in Raleigh Tues. post.
"It is very early days in terms of the company benefitting from it's long term strategy."
The whole idea of the buy and build was to put the company into a position so that it could cross-sell it's best in breed, further developed solutions, and then get on with selling. It's only recently reached the stage, having integrated them all on top of the mobile, of achieving referenceability for the full suite and the same for managed services, on the back of those few who have so far taken the lot,enabling it to better compete for contracts.
Costs of acquisitions and problems with integrating the companies are behind. The heavy, costly, background work is done, enabling the company to concentrate on sales mainly into it's 670+ customer base.
You could be right, but I think it'll broadly follow the LTIP aspirations - both presumably set on the same information/Finance Officer's forward assessment.
The fact it is a slow business works both ways - slow but steady cumulative revenue, with cross selling coming in cheaper than new customers, but once they're in under contract all being well they'll stay - limiting room for sudden downside shocks. And they are getting new business as well as the cross selling going well.
Next up the divi. Institutions may find that attractive - if they do, there'll be MXCP shares to pick up if they sell up completely. That may already be in hand - no shortage of buyers for them so far.
Thanks for sharing. My guess but I’d say the broker targets are likely to be upgraded again soon.
The ultimate aim is by cross-selling to sell the complete suite of solutions into the existing somewhere near 700 customers, and migrate them to full managed services. The nature of it's market makes it a slow business, but it is proving to be a steady one, with Castleton at the same time moving to longer contracts. Penetration of the full suite is building but is still very low, and Managed Services has taken a back seat to solutions until now. The company has now reached the stage when there is full referenceability for both sides of the business, and I anticipate they will move forward together. It is very early days in terms of the company benefitting from it's long term strategy.
Here it is, from TechmarketView, stressing the strategic importance of the contract as opposed to the cash on this one particular contract.
Castleton Technology signs managed services deal
Kate Hanaghan, 09:57, 21 August 2018
casFollowing swiftly on the heels of its deal with Dumfries and Galloway Housing Partnership, CastletonTechnology has announced its managed services deal with Circle Voluntary Housing Association. The association was already a Castleton hosting customer (signed January this year), but the service provider has expanded the contract into a fully managed service offering including a cloud managed desktop-as-a-service (hosted in Castleton’s Tier 3 datacentres) with support delivered via its service desk.
The contract value at £364k over five and a half years is not as large as the Dumfries deal, but we think it’s notable as it shows Castleton is able to migrate customers from single solutions to more wide-ranging managed service deals. Furthermore, and provided it is of benefit to the customer, there should be opportunities to grow the revenue value of the contract over time.
In instances such as this, the technology provider becomes absolutely critical to the delivery of core services. This is absolutely the position Castleton is pursuing and wins such as Dumfries and Circle will help build its reputation further in target sectors and create more momentum.
The managed services side is gaining traction. This, recently on the website indicating some of the ( rather obvious ) benefits.
https://www.castletonplc.com/2018/08/20/case-study-housing-solutions-implementation-of-host-it/
Techmarketview published an article on Castleton Managed Services coming into spotlight just on 9th August, posted here previously. May follow that up today.
And this is another managed services win in competition.
" Castleton demonstrated to us the best offering in the tender process and the best pricing. "
Likely to be more, and larger with full suite, with Mr. Dickinson saying they now have the referenceability to tender for the larger contracts they previously let pass.
The shares have been swapping for a while now and still rising slowly. Plenty more rise to come imo, slow and steady but more than happy to hold if this can continue and keep the targets of 40% each year. The progressive Divi will make this company very attractive to funds whose main sources of increases always come from dividends. I was just speaking with a fund manager the other week who confirmed to me that history shows dividends are the main source of increases. As well as becoming profit making and dividend paying CTP is reducing debt fast now. All in all CTP is looking very good. Low debt - getting paid off Profit making Divi paying -progressive Growing company
Price a bit out on the decimal points shown on trade as opposed to RNS. Still, same difference.
Actually, a bit surprisingly at that price for the day, that £308k was a sell on Friday by MXCP. So, anyway, somebody picked up that lump.
http://www.lse.co.uk/share-regulatory-news.asp?shareprice=MXCP&ArticleCode=atku5auk&ArticleHeadline=Sale_of_Castleton_Shares
Kestrel down 730982 since last notification.
Some have achieved what they wanted, such as MXCP and are moving to pastures new. Others, such as Nigel WRAY, have added or bought in. It is very healthy for us smaller shareholders.
£308k buy at 104.4. Another lot of shares starting again.
on 1st. November. 'Castleton Community'. Whatever it does, it seems geared to bringing the smaller associations that they have not previously targeted into play.
"Castleton is looking forward to launching our new solution, developed specifically for Smaller Housing Associations’ at the Smaller Housing Associations’ Conference & Exhibition 2018!
We will be showcasing our new ‘Castleton Community’ solution and the rest of our products and services on our exhibition stand.
Together, smaller housing associations make an enormous contribution to UK housing. However, too often your story goes untold."
pricing gone through a change for now. 104 to sell, 104.125 to buy.
Specifically, a maiden dividend.
It is still very early days from an investing standpoint.
Castleton is consolidating its position in the sector, still has a very long way to go with cross-selling, has yet to fully benefit from full suite sales, and is bringing new products to market. The cost base is stable, and will reduce. This will all flow through into earnings.
The future dividend, whatever that might be, and LTIP terms are of themselves evidence of anticipated continuing strong performance.
As with all investments, one is reliant on management and events - but Dean Dickinson and his team have proved competent, and it is hard to conceive of any identifiable realistic negative occurrence. Companies do not announce dividends if there is any fear that ability to pay in future years may be compromised.
At the moment, the price is consolidating at this level, pending events and announcements.
We know Castleton aims to better the competition in it's products - there are several new mentioned recently. We know they have Indian developers contracted to speed things up, but they're also advertising for another 3 in UK. Job description includes :-
"Your primary focus will be working on the development of a new greenfield cloud hosted application."
So they're also working on something else entirely new.
The mobile licensing agreement, with 365 Agile in April 2016 was essential and is becoming ever more profitable. After final payment, Castleton has it for free from next April, at a saving of £600,000 a year. Castleton continue developing it, and building their solutions onto it for mobile working. That latest from HS Homes is also a reminder of how far behind the curve the housing sector is with modern technology, and therefore the depth of the market in the sector.
Castleton Technology
@CastletonTech
·Great work by @HS_Homes improving efficiency and reducing their carbon footprint, by introducing our #Agile application to their Maintenance team
https://www.housingsolutions.co.uk/news-and-events/news/housing-solutions-saying-no-to-paper/
When you think about it, over the last three or four months we got rid of MXCP evergreen options, and absorbed 17% of Castleton total share capital from them, bought up at market price. Not bad. Only their remaining 7.5% to go.
I see a fair amount of tidying up over the next say 8months, permitting Castleton to rid itself of contracted outgoings and entering next year with a much improved financial profile.
And there's the later CTP one. We know MXCP raising funds, so no surprise, though I had lost sight of these. On loan notes, as Raleigh pointed out, BGF are similarly in a position to convert re. Kinetic, unless CTP buys them back first.