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I do not diminish the setback. But this is a sound company, a very successful one, built sensibly over the years and growing. I do not regard today's RNS as anything other than a temporary state of affairs in it's life cycle. Disappointing, yes. But certainly not defining having regard to its rich set of products, and firmly established position in the market in which it operates. In my view, the future remains bright. Hence I have been a buyer this morning.
£236k buy
big recovery coming, £236 buy. says it all.
Bit overdone for now - I don't think it warrants going back 4 or 5 year price.
There is no disguising the facts, seemingly first affecting the second quarter. A setback is a setback, and there is one. Trying to look on the brighter side, net. debt is reduced, management were always transitioning to longer term contracted repeat revenue ( now more important ), and the company views events as 'short term challenges.' I would like to believe them. Dean Dicknson will manage change. But we shall need to see improvements during this half, and other revenue replacing the one off revenue.
An unexpectedly disappointing update. Anticipate better second half, but still behind expectations. Reorganisation has not gone as expected. There's obviously some in-house sorting to be done.
A lot of shares changing hands continuing, and starting again at this price, and higher over last few months.
I am always pleased when employees are incentivised, and the LTIP does that for senior managers, whilst the scheme rewards the rank and file for their efforts. The £1.45 price from £1.25 put on the company in June last does seem rather a stretch from here, but as you have said the current price is ' out of date.' The price has moved backwards whilst the company is moving forwards. Perhaps shareholders need some reassurance and I trust that at least will come in any trading update - cross selling is continuing with extra opportunity arising from Deeplake-acquired customers, and there will be the Deeplake revenue to add for a full period, which should amount to some £400k with £150k EBITDA as reported on acquisition. No doubt the company will update in due course on success arising from the software and managed services merger to create a better platform for 'Cloud First' sales, in recognition of increasing migration to cloud. It will be an interesting update - it has been made clear more, I hope 'even' more can be expected in the current half than that which ended yesterday.
Fair enough. But they have a long way to go this financial year to get to the FinnCap price, and to meet senior line management aspirations by March of the LTIP.
https://www.lse.co.uk/rns/CTP/castleton-technology-implementation-of-long-term-incentive-plan-2viaae1r7tvvkcy.html
Your point is well made. I agree.
My first post on this board but may I ask, has anyone else been contacted by an American company about shares in Redstone and a possible uplift to pi's in holdings of CTP as a result of previous share buy-backs? I smell a bit of a rat but just seeking advice please.
The National Housing Federation is the professional representative body for housing associations. I think they can be credited, through their members, of knowing what is going on in the sector. It was only on the 2nd. September that they announced their new partnership with Castleton, and named them as preferred supplier. Castleton are not one of a number of relevant preferred suppliers. The company is 'the' preferred supplier amongst its peers. Not Aareon, Northgate, Civica, Capita, or anybody else. Castleton alone is named in their field of expertise.
Tier 1: Preferred Supplier
This is a bespoke multi-year partnership with commercial organisations, created to deliver preferential terms and conditions for products and services for our members.
The product or service offered needs to meet housing association members’ requirements, while delivering exceptional customer service and value. Preferred Suppliers can connect with specific member groups through our digital channels.
Castleton was not granted this status without proper enquiry. It puts them top of the tree. Provided Mr. Dickinson and Mr. Haywood make the figures work, and I have no doubt their minds are on costs, margins and the future, then Castleton should be doing very well, in contradiction of the current price.
On what is known, I agree your sentiments. As a throwaway, it seems remarkable that instead of suffering today on the large amount of trades seemingly sales, the price has actually advanced a little. ( taking into account that one or two of the red entries are likely buys ) I wondered if there would be a large delayed buy. Secondly, there being no RNS, yet, it would seem that the shares sold by Kestrel have been bought by purchaser(s) who are not required to notify. Finally, and it does not matter until the price turns, the multitude of shares changing hands over the past year have done so in excess of the current price, and so they are largely out of play until then.
With fundamentals improving and no reason to be other than optimistic about the future, I can't see any reason we've gone back to prices of a year ago, so I bought some more this morning, my second recent tranche.
As we know, EDRM has met with initial success there, as in the UK and ROI when they started out. It's a straightforward solution, which together with mobile should give an increasing base to cross-sell into. They're both compatible with other providers solutions too, for those who may have other contracts left to run. So I hope for similar success there as before, and build on that.
Becoming debt neutral would be an important milestone, leaving more cash available for return to shareholders, or to invest in growth - but as it is the balance sheet will support acquisitions now should the company identify an opportunity. Either way, if it comes about as forecast it is an enviable position from which to go forward and compete. I am also hopeful that with the appointment of the new managing director in Australia righting the wrongs of his predecessor, that inroads are being made into 'lost' business there and may at least start to show during this financial year. But I would really like to see some managed services contracts coming through based on the new data centre and hybrid cloud sales.
Castleton returning £817k to shareholders today. Doesn't add up to much for most at 1p a share, but it's a progressive dividend - and if forecasts are correct we can be pretty much net debt free come 31st. March. We'll get more on that with trading update/half year results.
There we are. Kestrel. 3% exactly. The buyers have paid at least this price. It will be interesting to see if there is now a buyers RNS, such as BGF, or whether the shares have gone to holders under 3%.
Though the big holders are trading between themselves, buyers anticipating gain, there's not many pi's to be seen. We shall see what the trading update brings.
Obviously someone is selling and someone buying. I would be unsurprised if Kestrel is selling from 13.82% . I would expect an RNS now if that is the case. Similarly with any other shareholder obliged to notify. Should there be no RNS either selling or buying, I conclude these transactions are down to under 3% holders. FinnCap are very optimistic for the year. I trust this half will show an inline with expectations outcome. It may be better, with the continued cross selling and integration mentioned. It seems a long time coming, but I still think that cloud/managed services contracts will arrive.
And looking across the websites, I reckon that's another 2,480000 shares changed hands. There should be RNSs about soon.
out today. Nothing new for followers - an article about the Connect Housing Contract and a long one by James Massey about the need for EDRM, and he ow Castleton in a position to provide it. It must be quite a good solution, some other suppliers use it for their customers.
Still loads of shares changing hands, in big trades. There's another million at least.
A reminder. FinnCap's last note dated 18th. June 2019. First half FY20 ends 30th. September 2019. We have been told by Mr. Dickinson that earnings will be stronger second half.
Castleton Technology (CTP): Corp
Prelims
Castleton’s prelims report performance in line with the trading update: EBITDA of £6.3m (vs £6.3mE) from revenue of £26.4m (vs £26.5mE), with operating cash conversion of 97%, and free cash flow of £4.8m. With the maiden dividend reaffirming the board’s confidence in cash flow and net debt approaching breakeven, the balance sheet retains capacity for acquisitions to complement 7.3% organic growth achieved in FY19, and expected to persist into FY20 and FY21. EBITDA margin expansion from 24% (FY19) to 26.5% (FY21) is expected to derive from continuing improvement in cross sales, and the integration of the now unified Software and Managed Services divisions. With operating fundamentals consistently positive and improving, we lift our target price to 140p (125p), representing a 16.4x EV/EBITDA multiple and 4.5% target free cash flow yield.
Not a great surprise. A load of shares been changing hands. Yet to see the other side of it.