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The results are to 31st March are ahead of even the upgraded expectations.
EBITDA in particular is £4.4m compared to the previously flagged £4.2m, and adjusted PBT is similarly well ahead at £3m (compared to Progressive's forecast £2.6m).
Net cash of £5.6m is as stated, and SWG are on the hunt for acquisitions.
Above all, the outlook is very rosy, with Q1 having been strong, high repeatable revenues and an increasing number of new clients.
With 14.1p EPS forecast for this year SWG are a cybersecurity company barely trading on a double-digit P/E.....
Cenkos's update today says Buy and sees 200p as fair value.
They've left their forecasts for this year unchanged at 13.6p EPS and £4.8m EBITDA, with the cash pile rising to £6.9m at the year end.
They summarise:
"Shearwater Group Plc More beats The prescient demand for cyber security protection is shown in these results, with double-digit organic revenue and EBITDA growth. Major contracts wins are reinforcing revenue visibility and the re-platforming of the Software division bodes well for new sales once completed.
? FY22A results. Adjusted EBITDA of £4.4m is 5% ahead of that flagged in April’s FY trading update, and 16% ahead of the estimate we had at the close of the fiscal year. Organic growth amounted to +13% YoY to £35.9m in revenue terms, +19% at the adjusted EBITDA level. Adjusted EBITDA margins rose 60bp YoY to 12.3%. Net cash ended the year at £5.6m (-7% YoY), just shy of our £6m forecast, after a large working capital unwind versus prior year. This is a good set of results."
"? Visibility. A bunching of new contract wins announced in Q4A amounting to £25m contributed to last year’s performance but part will help revenue visibility going forward. This currently stands at £14m, or 37% of this year’s forecast.
? Forecasts unchanged. We are leaving our adj. EBITDA forecast of £4.8m (+9% YoY) in FY23E unchanged and introduce FY24E forecast of £5.0m (+4% YoY). We note that prior years have started out similarly cautiously and been upgraded as the year progressed. A pipeline of software deals now that functionality has been broadened and modernised could be the catalyst for a similar pattern. We continue to see fair value at 200p+, which on FY24E forecasts would be c8x adjusted EV/EBITDA. Buy."
Berenberg have today reiterated their Buy and 380p price target:
Https://www.sharecast.com/equity/Shearwater_Group-18554/broker-views
Pinnochio = for someone who said "he was out" of SWG in Nov 2021, you seem to post a lot of messages on this board.
I note all your messages are doomy, gloomy and slate the management at every opportunity - even when big contracts have been won.
I can only assume you constantly trade this and the gloomy messages are your way of trying to drive the share price down to pick up cheap shares; then sell into good news taking a profit. Rinse and repeat.
I suspect the next move will be significantly up, with bigger buyers sucking up small holders who are happy to take less than £1.40 for shares - that could easily be worth £2.00 with a bit of media coverage in say Investors Chronicle.
You could be kicking yourself for not holding on, when the share price kicks on.
Nice summary on the respected Richard Holway's Techmarketview web site:
Https://www.techmarketview.com/ukhotviews/archive/2022/07/29/shearwater-grows-double-digits
"Friday 29 July 2022
Shearwater grows double digits
ShearwaterUK HQ’ed cybersecurity provider Shearwater Group plc (AIM: SWG), announced double digit growth for the year ended 31 March 2022, with strong demand for advisory work, penetration testing and managed security services
Revenue was up 13% organically to a Group record of £35.9m (FY21: £31.8m). Adjusted EBITDA was up 19% to £4.4m (FY21: £3.7m) with margin maintained at 12%. Adjusted profit before tax was up 24% to £3.0m (FY21: £2.4m). Shearwater ended the year in a strong financial position with zero debt and a year-end net cash balance of £5.6m.
The Software division saw revenue fall 23% due to the development and release of new product functionality taking slightly longer than expected. The Services division however saw revenue jump 19% yoy, with its Pentest business securing a significant win with a global technology business, supplying vulnerability assessment and penetration testing services. In March 2022, group company Brookcourt Solutions won two significant contracts; the first a three-year endpoint solution contract with a global financial organisation, worth US$4.1m. This was shortly followed by a win with a leading telecommunications and media company for the monitoring of the organisation's new 5G network totalling an initial £12.9m.
Average new customer spend was up 43% yoy with 186 new customer wins in the period (FY21: 155). 20 new clients were introduced to Group companies through cross-selling, up 54% year-on-year and fuelling future revenue opportunities. 64% of the client base has long-standing relationships of more than 3 years.
FY23 Q1 trading is in line with management expectations with good visibility of repeat revenue opportunities and high levels of enquiries. SecurEnvoy (which it acquired in 2017) has been further developing its cloud Identity and Access Management platform and the business expects strong growth in this area. The company also established a Mergers & Acquisitions Committee and continues to search and review potential opportunities with a clear strategic fit."
What it is telling me is, pick up more stock on down days. Company is doing great, try reading the results "fully"
Zebbo.I agree.This is undervalued for a growth company......With great prospects.....The market will eventually realise.....
Buying opportunity for you Pinnochio.
Just a weak market at the moment with few private investors.
Market makers love dropping the bid hard on a few sells to scare others into selling.
4.7% down on 70,390 shares traded of which at least 20,000 are buys (2 x 10,000 blocks) as bigger investors who understand the potential here, soak up the smaller, weaker hand PIs who sell and can't see beyond the next 5 mins.
Strange you keep hanging around here though, Pinnochio....
Assume you want SWG shares cheaper than 131p - what's your target buy price?
130p .....such a bargain......broker ....Barings bank have a 380p valuation...........plenty of upside......no downside as this is profitable ....as well as being a growth story.......
A company in the right place at the right time.......At a bargain price.......this is worth the 380p valuation put on by Barings bank.....
A profitable company in a growth phase......At a rock bottom valuation......worth 380p according to Barings bank......and for a lot of very good reasons........
LOL the 2 x 10k buys was me :-). Planning at least 100k shares and am scaling in. Another 60k shares to go.
In todays markets SWG is performing well and I work in the same space, business is robust
Berenberg. Barings...ask Nick Leeson.
Hmm let me see - Nick Leeson took Barings bank down in 1995. That's 27 years ago by my reckoning.
Also what has Barings got to do with Berenberg?
I've seen some rubbish posts in my time, but this is just plain ludicrous.
Assume you've either just finished a session at Wetherspoons or are in your Mum's basement smoking weed.
Obviously I mentioned Barings instead of Barenburg.A mistake as Barings used to be connected with Barenbergs years ago.What matters is they see value at 380p......So at 130p.....This is so undervalued.......You might want this to go down....but very unlikely.....plenty of buying today......
i'm a long term holder of SWG....i dearly want them 200p+.....but there is clearly a large seller or two around at the moment. the volume over the last few days without a rise tells you that.
some selling but this has gone from 115p ,,,,just 5 weeks ago.....plenty of upside to go.....buyers have won the argument recently.....
Pinochio.......If you do not stop this fiction.......You will not be able to get your nose out of the door......In the last 5 weeks this s.p. has risen from 115p to 130.5p......so buying is taking place.......We have also had confirmation of trading......This has far to go up.....fair value 380p......
And this correction comes from someone who thinks Barings bank is still functioning !!
Minehound.....If you would like to listen to somebody who has named himself Pinocchio and acts by fabricating the truth and all known evidence.....then that is o.k....but be warned this is very undervalued and a case for a major rerate is obvious to all....gone from 115p to 130.5p in 5 weeks......all evidence suggests further to go.....but obviously Pinocchio looks to act like his namesake....
Names and irrelevant. Facts are what matters ! Down 9p in two days after the 'wonderful results'. Fact !! Barings bank bankrupt and ceased trading . Fact !!. Your intellect ? Challenged -based on the content of your postings. 380p ? Fantasy.
Increasing profit....FACT.......Increasing Turnover....FACT.......Low PE....FACT....New contracts....FACT........price risen above market recently....FACT.....In a boyant and increasingly important sector ...FACT..... 380p has been given as a price target....FACT....
Don't tell me that you really believe these price targets ? You clearly live in a fantasy world- driven by Barings ?
This outfit is a disaster. Paid too much for acquisitions. Appointed very poor management time and again. Has not won market share. Going nowhere - sadly