Sapan Gai, CCO at Sovereign Metals, discusses their superior graphite test results. Watch the video here.
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Another £158k worth, maybe twice that if not double reported. Seller and buyer content at 102.5 again.
I see it's just come through on here now.
Bit of a mess-up there. Should be a holdings for Chelverton, going from 5.39% to 4.79%. Hadn't expected that, thought more likely shares being passed from Kestrel to new buyer. However, they've been taken up by somebody in line with previous post.
£350k ( 0.42% )changed hands at 102.5 - little bit higher than the last lot at £1. Major shareholder having to pay more for them. Shares starting again.
Alexa finding it's way into government thinking through DHSC, who want to enable digital involvement by less able users. Tenant support is always a matter of concern for associations. Castleton is first mover and the only provider with Alexa in the sector, through it's partnership with Housing Solutions, who will provide referenceability.
http://www.techmarketview.com/ukhotviews/archive/2019/07/10/alexa-to-provide-nhs-verified-health-advice
Summed up nicely Aphrodite.
I too liked the fact they explained the Australian side of the business in some detail. I'm happy that it was just 10%of the revenues otherwise it would of had a bigger affect on the company.
September to be the date to receive the fist dividend.
The use of using Alexa for tenants to contact their land lords is positive and moving with the times. I imagine it will encourage more people to rent with a land lord that has built in wifi and provides Alexa.
It looks to me that the company is going to continue to grow over the coming years.
All in all, very positive.
Also coming out of that presentation as a throwaway really was the amount of cash coming in through the Maintain solution for customers and contractors.
There's a promotional video just out on that much enhanced Castleton Maintain end to end solution. I'm thinking they're particularly keen on this product, first mentioned here
https://www.castletonplc.com/news/castleton-rolls-out-first-end-to-end-integrated-maintenance-solution/
having partnered with Find My Engineer (and Gas Tag ) and also sorted AI Alexa to complement it. They're hosting a discussion at and sponsoring the National Housing Federation Asset Management & Maintenance Conference on 22nd. October.
https://m.youtube.com/watch?v=qlzAVUe3xIE&ebc=ANyPxKqY76lyPJdx0uSOvmmBtbk3XJL2Xxrv69DRWZ_s0_RsnyMeYhMtEzOOugmL1Vco5VdfGwSjJsKU2XJ95dnDmb_v3RZYkg&time_continue=138
There may be another consideration for some. Dependent on one's individual circumstances and particularly house valuation, I am advised it may be advantageous, though not to oneself, to hold a sensible amount in stable and reasonably performing IHT avoiding companies on Aim, thereby potentially saving 40% tax liability on death. It is a general additional consideration only, when investing in Aim shares, but with no change anticipated in its listing, Castleton probably fits the bill, subject to changing policy and interpretation at the time by HMRC.
updated its diary. Taking opportunities to showcase new developments at end of year.
https://www.castletonplc.com/events/
Bit more on the website on that contract. One more for the technically minded maybe. But what I get from it is there's people out there with a pressing need to replace ageing systems and future-proof new ones, and if they're one of Castleton's 600 existing customers like D and G Castleton has a foot in the door and is well placed to deliver.
https://www.castletonplc.com/news/dghps-digital-transformation-journey/
Well, I see it like this. Castleton's done me very well over the years. It's grown and matured. And Mr. Dickinson and Mr. Chapman plainly have their feet on the ground. If we can get somewhere between the LTIP 133p and FinnCap 140p I'll be very happy. In fact, I'd be satisfied with less. Say FinnCaps original 125p plus.
We're said to be moving towards net cash account wise at end of year, and in my view risk here is absolutely minimal, with sufficient cash flow to pay a tiny but meaningful progressive dividend ( if I invested for divi itself I wouldn't be here ) whilst paying down the £5m or so debt over time. They'll still have cash ( and facilities ) available for acquisitions too - so no dilution foreseen.
It's a slow moving market for sure, but Castleton is very active and innovative within it and has put itself ahead of the game ( FinnCaps analysis of the competition shows that it's well ahead in terms of offerings) is sharpening up its service levels, and with its U.K. and Indian in house developers it can respond quickly to changing demands.
I have little doubt the company is in discussion with Cloud customers. Data storage and retrieval is just one aspect. It has recently brought new products to market, and is continuing with cross- selling where it has been selling over one solution a week into the existing customer base. There are new customers, and the prospect of more both for multi-cloud delivery, and for individual or multiple solutions.
In the absence of anything else, I feel we're waiting now on cloud take-up, with improved margins. That seems logical in view of the recent capital expenditure and company emphasis, and growing referenceability.
Both seller and buyer get what they consider to be a fair deal, without damage to the share price, the shares start from £1, and the investor base is widened.
Kestrel been decreasing slowly overall. Their last holdings RNS 5th. Feb gave them 13460275 at 16.55%. Seems very probable BGF been buying some of theirs.
I have seen no conversion notice for BGF, and the accounts show, having disposed of MXCP's notes, £1,883000 to be outstanding to BGF regarding Kypera. By not converting, BGF appear to be giving Castleton the option to buy back the notes and avoid dilution ( they can do so as of last February ) whilst at the same time increasing their investment by separate share purchase, and at a higher price. Highly supportive.
"BGF is a different kind of investor. We help you build your business, your way. We’re the world’s most active investor in growing companies, backing businesses with promise across the UK and Ireland."
BGF is British Growth Fund rebranded. They supported the acquisition of Kypera in Feb 2016 through £2m in loan notes, convertible @ 85.6. They have not taken that option for whatever remains.They're now buying shares.
New holdings RNS answers that for the buyer. BGF again.
Fincap do so
The company is working towards signatures on contracts, including new customers. It is not spelled out in the RNS but do so - 'The merger of the Software Solutions and Managed Services businesses is expected to aid cross selling and the increasing ‘cloud first’ attitude which some new and existing customers intend to embrace.'
Whatever else may be made of it, I'd say at least £750k changed hands at £1, and maybe twice that.
Back to the Future
There's a bit more on the Grand Union contract here. https://www.castletonplc.com/news/multi-cloud-the-best-fit-for-grand-union-housing-group/
They were an existing customer, but this is a new contract and I think the real point is take up of the new cloud offering, with Castleton responding to increased demand as Mr. Dickinson said on 15th May ( and referred to by Mr" Chapman as "increased interest" in the results.
Castleton Cloud is " a reliable, super-secure and high performing environment, using the latest technologies to deliver super-fast connectivity, enhanced Back Up and superior Disaster Recovery with over 99% availability. Castleton chose the facility, as it’s is one of the most efficient data centres in the UK,with extremely low PUEs and is future proof as a result of the modular construction model it uses.
With unrivalled physical, human and systems security, our multi-layered approach meets the UK government’s highest standards. We can also offer highly secure colocation and hosting so you can be assured that your assets and data are protected, thanks to the deployment of the highest security techniques available."
From my reading it seems that cloud usage is steadily increasing, but there have been some concerns in housing about privacy and data security, which Castleton has addressed as far as is possible. Castleton has 600 customers. If they want the Cloud, and are happy with Castleton, then there is a high prospect of future migration to Cloud by a proportion of that 600, increasing revenue and profit margin.
I think the significance of the new contract may have been overshadowed by the results RNS.
I'll wind up historic Australia with this from FinnCap:-
Castleton’s target market in the UK holds significant capacity for growth even with Castleton’s reach into both the Irish and Australian markets. The Australian Government’s move from State provision to Social Housing provision continues to justify the expansion into Australia, with successful trading back on track while the track record in Ireland speaks for itself, offering the first contract wins and go-lives of the Integrated Platform.
So we're back on track, but they say elsewhere the business there will be £1m revenue down on stuff expected to flow into the accounts this year, but that won't effect the overall profit forecast which remains unchanged. Nuisance, but that is all. Not getting as much this year as anticipated last year - maybe next.
I agree with that. I have ridden out a lot of ups and downs, including the long selling down ages ago ( actually added then when Mr. Dickinson bought and came out well )
I was just looking at what might be seen as negative in what I see as a positive RNS, development and so on, though the Australian thing is a nuisance, and soured the RNS for me. A waste of time and revenue available to be had due to poor individual management there. But in fact, the individual left last October, has been replaced by inside promotion, and in January this year we had this on the website.
https://www.castletonplc.com/news/castleton-australia-goes-from-strength-to-strength/
So Australia doing well, despite a past 'execution' issue previously resolved - but it's held the company back from where it anticipated it would be by now.
That's it. Financially, the company announced a maiden dividend and at the same time FinnCap forecasts we'll be pretty much debt free this time next year. If all goes well, and I can't see why they shouldn't.
As you know, there is a much wider picture than trading over a limited period, and that is why investors continue to hold shares they favour, and ride out small ups and downs. Castleton is self-evidently in a much stronger position as a company than it was. I shall be astounded , with it's established position in the market, if Dean Dickinson's latest investment in infrastructure and products does not yield positive results throughout the year, and upward momentum will return.