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Started: rivaldo, 3 Apr 2024 08:47
Last post: WayneShyte, 6 Jun 2024 18:23
If they hadn’t done a 1 for 100 consolidation in 2019 then this wouldn't even be pennyshare. This company is going nowhere.
Welcome the annual culling of revenues. Sheer slaughter as Stocko wittily jibed. There’s a thought, set a realistic target, and don’t waste time or money on anymore takeovers if you can’t make these ones pay their way. And don’t use ebitda every time to try and make it look less bad. Apart from that well done for ending up with a little cash ahead. How about a dividend? O I forgot it’s a growth company!
Incredible that revenues could be down on forecasts by such a huge amount. Cavendish were evidently totally blindsided by over-optimistic guidance from the company.
Cavendish, who now have a 78p target price, have reset forecasts for the coming year to £27.6m revenues, 2.4p EPS and a £6.8m closing cash pile at March '25 (against the current £10.35m m/cap).
The cash/asset backing to a supposedly profitable cyber-security business was the reason I invested here, so at least the downside remains well protected, but SWG have a lot of work to do to deliver potentially substantial upside from here.
I would rather Cavendish had underpromised further and forecast say £25m revenues, as overdelivering is always the way to go. Anyway, they conclude today:
"Valuation and conclusion: Shearwater Group is a company with a unique and differentiated set of capabilities in critical cyber security applications, and a global blue chip customer base. The company has a strong balance sheet and a track record of strong historic profitability and strong cashflow, together with a resumption of positive cash generation delivered during FY24. The current share price corresponds to an EV/Sales ratio of 0.2x. We are reducing our own target
EV/Sales to reflect the slower recovery trajectory, but we argue that a new target of 0.5x is justified based on the medium-term potential. This corresponds to a new price target of 78.0p."
Started: rivaldo, 11 Jan 2024 12:28
Last post: pedro61, 11 Jan 2024 17:57
Growth sector...Winning contracts...On a low PE....150p is my target...
Https://masterinvestor.co.uk/equities/alumasc-shearwater-and-more-all-on-the-move/
"Shearwater Group (LON:SWG) – Corporate Recovery Is Now Underway
It has not performed well subsequent to my previous COVID Profiles on this company, but I am now having another attempt at getting it right.
Capitalised at £12.1m, the cyber-security, advisory and managed security services group, which has recently secured an attractive three-year contract with a leading global bank for its services, is UK-based but operates on a global scale.
The company is expected to see its sales for the year, to the end of March 2024, rise from £26.7m to around £32.5m, spinning it around from its previous pre-tax loss of £1.3m to a profit of some £1.0m, worth 4.2p in earnings against a 0.4p loss per share.
Estimates are already out there for the coming year to lift revenues to £37.0m, hoisting profits to £1.7m, worth just over 7p per share in earnings.
It is the anticipation of this recovery, as well as its potential over the next 15 months, that makes the group’s shares at just 50.50p look an attractive counter in 2024.
Analyst Price Objectives are just above the 100p mark."
Started: Rich62, 4 Jan 2024 07:24
Last post: rivaldo, 4 Jan 2024 08:06
Excellent news - great to see the second UK Government department contract win as these tend to follow on from each other once you're "in".
And the big 3 year $3.15m cyber services win with the global bank is also expected to contribute to this current financial year to March '24, so this year's forecasts are looking well supported.
Started: Amitshah, 24 Nov 2023 08:23
Last post: Rich62, 3 Jan 2024 21:45
Hi Pedro, was that your 210,500 shares bought at 47p?
Big buying today...This is a bargain.....I expect this to double or triple this year.....
Amitshah - In case you hadn't noticed, we are in late 2023 and the world has changed significantly in the last 2 years!
The current market cap at today's buy price of 45p is £10.7m.
That's with £2.2m cash, at the end of H1 which is the quieter period and when monies are absorbed by working capital ready for the stronger H2.
Projected cash for year end is £5.0m (Cavendish expect £32,5m revenue, pre tax profit £1.0m, net cash £5.0m)
They had 7 million cash in hand in 2021!! What's happened to that mate?
Last year Net cash stood at £0.9m as of 30 September 2022 which reflected working capital absorption during the period. That subsequently reversed as was expected, where by the end of October 2022 Net Cash had increased to £1.5m.
The current trend (working capital) is no different, save for being higher than last years corresponding period.
Forecasts for the full year end is for net cash of £5m, which if coming in looks a very comfortable position, particularly in relation to the current market cap.
Started: PrivatePunter, 22 Nov 2023 20:08
Last post: PrivatePunter, 22 Nov 2023 20:08
Thanks for mentioning Rich62 and also Troajan for the proactive comment.
Link to my piece for interest. I could have penned/added more, but a busy day and I was keen to get something out, hopefully of interest.
https://martinflitton1.wixsite.com/privatepunter
Started: Rich62, 22 Nov 2023 18:32
Last post: Rich62, 22 Nov 2023 18:32
For those who are interested in another's more positive view of SWG - Private Punter (Martin Flitton); who is a share holder - has spoken with the CEO and new CFO today and written up a summary on his on line blog.
Started: oogleflugal, 22 Nov 2023 07:48
Last post: oogleflugal, 22 Nov 2023 08:57
Whoops only 26.7 million last full year. O well
Good luck with tat PP. I have not seen broker forecast. Full year 22 they pulled the rabbit out of the hat and hit nearly 36 million after quiet first half. This year the rabbit went back down the hole and full year slumped to 27/28 million. Another 21 million on to the 10 million first half doesn’t sound very ambitious to be honest. I was hoping some of the delayed contracts from last year might have materialised in this half. Clearly that would have given them some kind of spring board of recovery. The cash position is marginally better if memory serves me right they had some kind of exchange issue last year, so that kind of nullifies the cash improvement, just means that didn’t make another mistake. Unfortunately the reality is yet another disappointing start more pipeline
Beg to differ on the £25m figure you mention, £21.7m looks right according to the broker forecast.
It'll be interesting to hear on the level of confidence in achieving that when I catch up with them later today.
I did say it would be best to wait for interims. The ‘traditionally quieter first half’ is slightly worse than previous two years which's were a disaster. So again they have an enormous amount of ground to make up in the next six months to produce a reasonable full year, at least 25 million. Again the talk is of awards and converting promising pipelines. Someone compared them to IGp . They talked about strong pipeline but the big difference is they delivered in their results recently. But only what would be expected of a growth company so still pretty expensive. The one thing about SWG is it is not expensive at this level.unfortunately that’s not enough to make it worth investing in yet by a long way unless you are prepared to buy ‘the pipeline’.
Started: Rich62, 20 Nov 2023 18:57
Last post: Rich62, 20 Nov 2023 18:57
New interim CFO, Adam Hurst is now in place and previous CFO has gone.
The new guy has an incredible track record at very senior levels 9check out his profile on LinkedIn) and looks a cut above.
I'm hoping he can put together a great presentation for Friday's Investor session and clarify the business goals and strategy to deliver some real value for us shareholders.
Started: PrivatePunter, 9 Nov 2023 07:59
Last post: lotusseven, 17 Nov 2023 11:30
Like it Wayne, £45.50 per share, I can sell one per week for my beer money
This is still a penny share soon they will be doing another 1 for 100 to make the price look good.
HI TKS
AT A TIME WHEN EVERYBODY NEEDS CYBER SECURITY WHY ARE YOU FINDING IT SO DIFFICULT TO OBTAIN NEW CONTRACTS? ARE YOUR PRODUCTS THE PROBLEM--NOT GOOD ENOUGH OR TOO PRICEY- IF NOT HAVE YOU THOUGHT OF EMPLOYING NEW SALESPEOPLE?
Just flagging that I'll be speaking with management on results day, so happy to ask anything of interest that others may wish me to put on the list.
Started: Rich62, 3 Nov 2023 10:33
Last post: Rich62, 3 Nov 2023 10:33
RNS just released. H1 to end Sept results will be out on 22nd November followed by investor presentation on 25th at 1230.
Started: kingsinbad, 25 Aug 2023 07:54
Last post: oogleflugal, 26 Aug 2023 11:01
I’d definitely wait for interims to see any sign of improvement. Each of the last three years has netted less than 10 million for the first half as they claim most of their revenue comes in the last couple of months which so spectacularly failed to materialise this year. Gl
3 of the 4 million is the cash raised for an acquisition 3 years ago. They dont seem to be in a position to close a deal anytime soon, but at least they did not fritter away that cash and they did pay off a loan note . Still no mention of the Office opened like IGP strangely enough in Amsterdam. Look forward to hearing how many new customers and how many retained. They have a lot to do to convince the market they are going anywhere. I no longer take any notice of Ebitda, too many companies on aim rely on this as a smoke screen for lack of real profits. Looks like there are plenty of sellers still looking for an opportune exit
Agreed - bought in here this morning.
SWG have £4m cash against a mere £11m m/cap (even after this morning's rise), and forrecast to rise to £5m by next March.
Progressive forecast £2.4m EBITDA this year rising to £3.2m next year, and more importantly FCF of 9.2p per share rising to 11.1p.
The market looks forward, so there's lots of potential upside from here for a cyber-security company with well over £30m forecast turnover now on the recovery path, and conversely minimal downside for a well funded and cash-generative company imho.
I agree. Very cheap for what looks like a solid business.
Started: Amitshah, 7 Aug 2023 20:41
Last post: threeputt, 21 Aug 2023 11:10
I want to like this company but they can't ever seem to do what they say, 'expect results before mid August' and here we are on the 21st with silence, fully expecting a 'delay to results' rns, the year end finished end of March and almost 5 months to produce audited results is pathetic, last company I was in £80m t/o and we got our results done & dusted and audited all within a month of year end without fail
At 35.5p/share business is worth £8m. Even if they have no cash left, surely a business with £20m plus revenue and a brand of sorts, has got to be worth more than this?
Results are due "Mid August", whenever that is?
Clearly they need to come clean about what is and what isnt happening. EBITA forecasting is catching out a few companies at the moment. £35 million seemed a decent revenue, but now a big drop which may unfortunately be getting bigger as there is no new contract rns for over a year They havnt been able to find that elusive acquisition and what they do have seems to be going backwards. Growth has disappeared ,if it was ever actually there. Delayed accounts are also a poor sign. Is there any value at less than 10 million MC? Its ok for Higgins he had his £30 million pay off for Brookcourt, so although he has bought a lot of shares its still a fraction of his pay out. Until there is some clarification this is now not an investible proposition sad to say.
Look at the last 3 years, they went from 7 million cash 2021 to then 5.6 million in 2022 and now 4 million. They are burning cash. In another 3 years there will be none left at the current trajectory. I hope things change but will need consistent results to restore confidence. I'm avoiding for the time being.
Started: jessielivermore, 14 Jun 2023 13:16
Last post: jimbren, 3 Aug 2023 14:52
"The Group expects to announce its audited FY23 results before mid-August and will announce details of the retail investor presentation in the coming weeks."
Then silence. Two weeks to mid-August.
Now worth a third of what they paid for Brookcourt. Soon be less than the cheapest company they bought. If they still have cash and that looks more and more like a big if, that was nearly half of the current market cap. All they need now to crash the price further is delayed results. Staggeringly incompetent.
usually have notice of final results by now followed by the results end of july. perhaps they just can’t be ****d anymore. no contract no nothing.
I think a lot of shares were issued to roll up various companies into Shearwater, not just Brookcourt. Presumably quite a few lock-ups, earn-outs coming to an end - and then the sales at more or less any price, hitting the share price, in the absence of strongly positive news. A share buyback.woukd be good if it is this type of scenario.
It was cheap at 95p or so we thought
Started: kingsinbad, 8 Jun 2023 08:33
Last post: oogleflugal, 8 Jun 2023 09:08
I think the extra half million has been recognised in todays rise . The wording of this rns is very much no news, rather than an update. ‘Pipeline of opportunities’ is unfortunately not the same as pipeline of orders or even delayed contracts. At least there appear to be no more currency blunders. As stockopedia pointed out what exactly is managements ‘inline forecast?’
A decent jump in cash, from 3.4 million to 4 million since the last update, could be a decent buy at these levels..
Started: ynwa1, 18 Apr 2023 10:58
Last post: littlejimmy, 2 May 2023 07:18
I meant to write buyers not sellers....doh
The same happens in reverse if there are multiple/large sellers waiting for liquidity....
What is always perplexing is how little these big purchases (162000) affect the share price. Yet if 10,000 shares get sold share price plummets 10%.
I wish more CEO bought like this, I met Phil about 30 years, and he was a Rock Star when he worked for Planning Consultancy.
I Have faith that he will get it right.
Started: jimbren, 6 Apr 2023 20:40
Last post: pinocchio, 17 Apr 2023 23:36
Amazing old Enry Higgins keeps shuffling his shares into an ISA. I thought the idea of an ISA was to shelter your tax gains not losses
Wow made it back to 60! Break open the mini bar . Just another 100% to go please
Bit of a strange day. Pretty low turnover considering market cap but quite a shift up in price.
The reason? Who knows. And now it's a very long weekend.
Surely it can't be Higgins' buying announced at 7am as he has been a REALLY bad guide to the share price despite seeming a smart and sensible at the presentations that first sucke(re)d me in a few years back and in a few online ones since then. The recent 2h/"q4" disaster has really shaken my confidence in the company.
Started: f15jcm, 30 Nov 2022 09:38
Last post: Dartron, 31 Mar 2023 19:42
I wish people would stop inferring these underperforming companies are ripe for a takeover.
All SWG is - a load of companies that have already been taken over. There is no synergy or cost saving as a group. None of them really compliment each other, it is just a basket of small cyber companies. If you were private equity or large player why would you want this jumble of loss makers. What opportunity does it offer? Brookcourt is the only decent thing here (revenue wise). If I was PE, I would take that and dump the rest, but not at this price. Its still well expensive for a takeover. Think of the costs of dumping all the ****e, and likely majority control that would vote a reasonable offer down.
I have discussed amalgamators on several shares. I like Knights legal, where the buying is focussed and complimentary. I am a little hesitant on TPX, but at least they have good revenue. This is just a failure in terms of amalgamation.
Possibly due to its mining heritage, they bought into the the next big thing 'cyber' with no clue. And what you are seeing now, just like Blackbird plc for an unrelated example is that - yes there is some demand for their services, but only if they are subsidised on the AIM market. If they had to stand on their own feet the company would be bust.
A massive red flag here is that they never list the revenues and profits from the individual businesses. Why is that? One is keeping all the others afloat I think. So I cant give you a value at what price this is ripe for a takeover, in fact we cant even value it. Id guess around £10M. I Just checked, SWG paid £30M for Brookcourt, but really it was £15M + £15M in shares.
Then they had the cheek to raise £17M to pay for it in a placing. Guess who trousered most of the money and a job for life.
Reading it through it actually sounds like a reverse takeover from Higgins.
Why? The CEO's buying has only served to prove he doesn't know what he's doing. I'm out for a huge loss and won't be back at any price.
Director bought in December 2022 for 108p now share price is 50p.. hmmm bounce back coming.
lol someone has bought back in......
Jeez, what a shower. CEO's buying makes him look even worse
Started: oldbutnowisa, 31 Mar 2023 13:41
Last post: oldbutnowisa, 31 Mar 2023 13:41
Sold at small loss a few months back and now breathing sigh of relief.
Started: ynwa1, 31 Mar 2023 11:51
Last post: oogleflugal, 31 Mar 2023 12:45
I think they need a lot more than cost saving. The whole cybermarket seems to be imploding and it was nowhere near as big as they made out. Its far from a problem just for SWG I’m afraid
They need to merge and cut all the duplications or risk being bought.
Started: zebbo, 29 Nov 2022 13:00
Last post: littlejimmy, 5 Dec 2022 08:25
yep, a lot of the same spiel but they are very bullish about their new tech that is being sold as of now. they reiterated that the figures are always weights to the second half of the year. cash should build into that. it also seems like the CEO or other buyer is still around, CNKS printed 25k for them at 102 after the close.
Anybody see presentation
There was never a raise coming. Cash has already started going back up again
Don't think so. Why would the CEO purchase nearly 100k worth then, dilute himself by doing a raise ?
I think it will go up after presentation
Started: f15jcm, 29 Nov 2022 10:28
Last post: Magicalali, 29 Nov 2022 12:24
A lot of buys
Friday 2nd Dec at 1230
12.30 Friday
When presentation
Receivables and payables both ballooned. Revenue/cost recognition on long term contracts can be a bit of a headache. A question for the presentation
Started: rivaldo, 29 Nov 2022 08:31
Last post: Rich62, 29 Nov 2022 09:51
Disappointing results, however, there are some positive in there and its clear they are building for the future.
I like the increase in sales headcount and also the link up with the N American distributor of SecurEnvoy.
A number of the costs are temporary blips like FX and the cloud hosting costs which will return to normal in H2.
Very strong H2 last year and bigger contract wins give me belief that they can do the same again in H2 this year.
A bit like watching England football, poor first half and they make life hard for themselves but have real potential to turn things round in second half.
Cheap at 92p. I continue to hold
Cenkos have maintained the fair price of 200p+......they fully explain why......Today is an over reaction which gives buyers a bargain.....Everything looking good for future....
Current cash was less than current liabilities. They might even need to do a raise.
Naughty when the last raise they did was to buy another company, but now that money has been frittered away.
Operating costs are too high for the revenue, and recent tax hikes will hurt these guys.
I dont see a buy out happening, as the group of companies are not really profitable. Their biggest assets are the people, and they can leave any time which is standard practice in the IT world.
me too! I was heavily into these but decided gut reaction was the best one. They are poorly run and no point awaiting a bid.
Now I have some cash.
Sold my relatively small holding as soon as I could this morning. SWG seem one of those companies prone to banana skins. Core trading isn't as rosy as I expected, and the FX loss is just poor planning with hedging only in place after the horse has bolted (or whatever the metaphor is).
Cenkos have reduced their forecasts:
this year - 2.4p EPS
next year - 4.7p EPS
which leaves the P/E looking expensive for some time to come. SWG will remain on my watch list - hopefully it will deliver for holders in H2, but without say contarct win news the share price could drift for some time.
Started: oogleflugal, 23 Nov 2022 09:31
Last post: oogleflugal, 23 Nov 2022 09:31
Wonder if Berenberg will lower their £3.80 price target now they have been chopped!
Started: Rich62, 7 Nov 2022 09:02
Last post: Rich62, 7 Nov 2022 09:02
Quick recap and summary on Shearwater - cyber security and software company
FY results to 31/3/22:
+ Revenue (organic) up 13% to group record of £35.9m
+ Adj. EBITDA up 19% to £4.4m
+ Margin maintained at 12%
+ Adj. profit before tax up 24% to £3.0m
+ No debt
+ Cash £5.6m
For this year:
RNS 13/4/22 - Brookcourt (part of SWG) announced a new contract win with a telecommunications company worth potentially £21.0m. Made up of initial 3 year deal worth £12.9m with option to extend for another 2 years for extra £8.0m,.
On this news the share price rose 30% to 145p
SWG (with only 23.8m shares in circulation) is currently valued at 100p/share or £23.8m, with cash at end of March of £5.6m and 0 debt). To me this is a p/e of around 6.0x which is ludicrously low for a growing business in cyber security.
Buying opportunity for the smart investor