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I think we need a little news/update to push higher from here. So bring on the 25th Jan.
It has been a lovely run into the new year and there is a great deal of comfort to be gained due to the lack of selling through the 60's and 70's. Clearly the majority of investors believe that there is significant upside from here to hold onto what they have - me included (in fact I might have added a little more :))
It should be remembered that the 1H 23/24 results reflect a period including UKG, but also a period where price rises were pushed through to other customers. And the likely bottom of the Safetell business before the rebound in revenue.
Whatever 1H 23/24 shows, we also know that this will be the bottom, with the 2H already positioned by the management as the stronger period. We also know that with our contracts and reoccurring revenue, in markets set to grow significantly, that 1H 24/25 will be stronger again (YoY and HoH) so there is literally only good news to come. Revenues, profits should all climb, debts repaid, forward invoicing costs reduced, so regardless of any short term volatility, buyers will come in and the floor price will continue to rise.
My end of year range prediction whilst wide is somewhere between 150p -250p by December. We achieved share price growth of 150% last year against what on the surface wasn't specular top level numbers (although if you know the background with UKG you know the underlying performance was strong).
So good luck all in 2024 with your investments. This one we know should be fun!
I believe that NWT pre-tax profit of up to c. £2M. for its current year could-should be possible, weighted more to H2.
Here are some useful indicators:-
From NWT's latest Investor Meet Company presentation video, 26th. September 2023, Questions & Answers segment:-
Q1: Can we expect the growth in ARR in HCM to continue to grow as a % of sales
A1: "Yes, definitely, that's the key part of our strategy is to get a higher proportion. Obviously we want to grow hardware revenues, but also those service revenues that have higher margins, and that's our key strategy. And as Marie Claire has said before, we're now selling those high margin services to most of our customers. So that IS driving growth."
Q4: When do you expect Safetell to break even?
A4: "We don't have forecasts out there, but anticipation in this year."
Q5: Do you expect to add new HCM software partners in the US as customers in FY 2024? Is Paychex already a customer?
A5: "We're continuing to onboard customers. We've onboarded a couple of new customers this year, and that's part of our growth project. And we're speaking with Paychex on a regular basis."
Q6: You are now nearly 5 months into FY24. How is the company doing compared to H1 FY23 especially wrt to UKG replacement ?
A6: "We've had a strong first five months of the year, and to the targets we've set - we're overachieving those, and we're very excited about this. And we're looking to replace the UKG contract. We're working with a number of software partners at the moment; and also not just with hardware sales, with our service sales as well, which has a greater margin. So we're in line to do that."
https://www.investormeetcompany.com/
From NWT's first 31.10.23 RNS:-
31st Oct 2023 7:00 am RNS AGM Statement
" ... "Last year was a period of significant progress across both businesses, culminating in the Group returning to full-year profitability. As we close the first half of the current financial year, I'm pleased to report that the momentum has continued. New clients and contracts have been won across both businesses ...
... Grosvenor has seen an excellent performance across its Human Capital Management business lines. This has included the onboarding of new clients and displacing its competition, growing its subscription numbers by c.13% ...
"The Board notes that due to the timing of new contracts and orders, it expects revenue for the current financial year to be predominantly weighted to the second half. Importantly, we have adequate financial resources in place to deliver on our plans. ..." ..."
https://www.lse.co.uk/rns/NWT/agm-statement-hupzhufl06ll125.html
And some take-outs from myself:-
• If Safetell breaks even + in its current year, as indicated, this improvement should contribute a £685K.+ improvement to NWT's current year pre-tax profit.
• HCM ARR of up to c. £3M. in April 2024 seems achievable, at a very high margin.
Love it. £2m would be fantastic but I am less optimistic. Given the 2H 23 loss, and UKG, I am expecting a small profit for 1H24 but no more than £250k-£400k, I am expecting £800k to £1.2m in the 2H. I'd love to be proven wrong on the upside, more than £500k for 1H and we'll be on track for £2m. 1H revenue YoY will be cloudy because of UKG but that won't matter if the profit number comes in.
In 2 weeks we'll know for sure.
So a lovely move into the 90s today for NWT, ahead of its interim results tomorrow: up 5p (5.8%) to 91p (90p - 92p), on 25,986 NWT shares traded.
Which is a new seven year high (consolidation-adjusted).
100p is now within touching distance: just one good day could day could see it breached.
And above 100p there looks to be little chart resistance until about the 150p level.
Remember that it's also Burns Night tomorrow, so a wee dram or two of the 'water of life' could be well in order for NWT shareholders.
Though I may well also have a G&T: which seems only fitting, to toast the success of GT Clocks in America, LOL!
And in the meantime, please enjoy this quite delightful display of Scottish music and dance, to help get you in the mood:-
https://www.youtube.com/watch?v=XzKVXnoZR88