The next focusIR Investor Webinar takes places on 14th May with guest speakers from Blue Whale Growth Fund, Taseko Mines, Kavango Resources and CQS Natural Resources fund. Please register here.
London South East prides itself on its community spirit, and in order to keep the chat section problem free, we ask all members to follow these simple rules. In these rules, we refer to ourselves as "we", "us", "our". The user of the website is referred to as "you" and "your".
By posting on our share chat boards you are agreeing to the following:
The IP address of all posts is recorded to aid in enforcing these conditions. As a user you agree to any information you have entered being stored in a database. You agree that we have the right to remove, edit, move or close any topic or board at any time should we see fit. You agree that we have the right to remove any post without notice. You agree that we have the right to suspend your account without notice.
Please note some users may not behave properly and may post content that is misleading, untrue or offensive.
It is not possible for us to fully monitor all content all of the time but where we have actually received notice of any content that is potentially misleading, untrue, offensive, unlawful, infringes third party rights or is potentially in breach of these terms and conditions, then we will review such content, decide whether to remove it from this website and act accordingly.
Premium Members are members that have a premium subscription with London South East. You can subscribe here.
London South East does not endorse such members, and posts should not be construed as advice and represent the opinions of the authors, not those of London South East Ltd, or its affiliates.
A very pleasing H1 trading update just out.
- profitability is "Substantially higher".
- recurring revenues continue to rise and are now 41% of total revenues
- the order book has zoomed up from £646k at 31/12 to £1.1m now, auguring well for H2
- and TST are looking to "deliver full year results at least in line with market expectations", so would seem to be pretty confident.
The cash pile was £2.4m at 31/12/21 - 37% of the m/cap - so should have risen further now.
The turnaround appears to be gathering pace at this £6.5m microcap. Looking good:
Https://www.investegate.co.uk/touchstar-plc/rns/trading-update/202207260802347459T/
Announced today:
Https://www.touchstar.co.uk/blog/jdbilsland
Extract:
"Touchstar Android mobile computing devices will be installed across Bilsland depots as part of a roll out commencing in August 2022. By the end of 2022, the company is aiming to have TouchStar technology within its entire fuel fleet.
The company is also intending to make extensive use of the new Touchstar ‘Mapping Console’ module. The Mapping Console matches the wealth of client and order information contained within the Touchstar ‘FuelStar’ front-end application with GPS technology to provide accurate real-time data on the geographical positioning of vehicles and LOB (Load on Board) status. A full historical audit trail of any time period is visible and specific filters can be applied to assist with easy and logical interpretation of the data e.g. identification of vehicles closest to a particular Address/Postcode/Town/POI or the advanced filtering of vehicles carrying specific products. The available information can be utilised to optimise delivery processes. For example, ‘expected LOB’ data can be used to re-purpose the LOB to different deliveries.
System benefits
Personnel across the Bilsland organisation have already witnessed a wealth of benefits following the installation of the TouchStar systems:
Keeping operations COVID-19 safe - TouchStar technology negates the need for fleet drivers to enter the office, enabling the company to adhere to COVID-19 social distancing measures while operating safely.
Improved company-wide communication - The interlinked computer system facilitates real-time two-way data between the front-end mobile terminals and the back-end fleet management and accounts packages. This streamlined communication provides a far more seamless operation for both Bisland and its client base.
Better visibility – Improved visibility and tracking of order progress and status.
Greater flexibility – The TouchStar system provides real-time ‘left on board data’ which enables an urgent delivery / sudden orders to be prioritised and scheduled, aiding workflow, boosting customer service and facilitating reactive flexibility.
Reduced administrative resources – having multiple systems which communicate with each other has vastly improved daily business operations and reduced paperwork
User-friendly systems – The large display and user-friendly interface of the Touchstar mobile computers allows easy operation by drivers of varying ages and safeguards the investment for the future.
Big benefits have also been realised around proof of delivery and customer invoicing activities. The automated system now involves a full audit trail, removes previously hand-written paperwork and makes for significant time efficiencies to be made, massively boosting productivity.
The TouchStar technology has enabled James D Bilsland to be able to focus on customer service and continue to provide the seamless delivery of fuel within this service-sed industry.
Https://www.touchstar.co.uk/blog/case-study-worcestershire-acute-nhs
If my maths are right resolution 5 was not approved. Does this means a buyback not a option for distribution?
Maybe some news re sharebuy back/dividends may liven things up.
Https://www.touchstar.co.uk/blog/touchstar-findel-order-announcement
"To manage the upgrade, Findel selected UK based rugged mobile computer and scanning specialists, TouchStar, to manage the process from specification through to testing, go live and ongoing support."
"Anthony continues, “As we move towards the go live of the system, we are excited by the numerous process improvements the new technology will deliver. Throughout the testing phase, it became clear that the new TouchStar solution was a step up in terms of speed and clarity of display, it was also well received by all our operators. In TouchStar, we have found a company that not only understands our requirements today, but also for the future. Their industry experience is clear, and their recommendations and technical expertise led to a successful outcome in the testing of the new solution. The localised support we have received from TouchStar has been excellent and we look forward to a successful rollout of the technology upgrade."
Shandypants2, imo it's good news in the current climate that TST is so far under the radar. No flighty PIs panicking at the first sign of a market downturn! The AGM is coming up on June 22nd - hopefully this will continue the good news flow and bring TST to a few more investors' attention.
i think there has been 1 trade in over a week now on TST. Such low trading volumes cannot surely be a good thing. A great little company but it appears no one really notices or cares. Maybe the BOD could up their PR, which is pretty non existent
Https://www.touchstar.co.uk/blog/hedges
Extracts:
"Hedges select 'PODStar' EPOD system from Touchstar
19 May 2022
"Manchester, UK. 19th May 2022: Hedges Chilled Distribution select EPOD system from Manchester-based TouchStar
Technologies Hedges Chilled Distribution is a rapidly expanding UK-based, independent logistics and warehousing company. With an 8,000 sq/ft chilled warehouse capable of maintaining a temperature of 2c to 8c and an additional 8,000 sq/ft ambient warehouse, Hedges Chilled Distribution offers a number of short, medium, and long-term storage solutions. Other services include E-Commerce fulfilment, pick & pack and re-pack services. The company offers chilled, frozen and ambient (full load and groupage) distribution services throughout UK, and Europe, via its own fleet and network of European Haulage partners."
"They began a search for a ‘best of breed’ planning and delivery system that led the management team to examine the PODStar system from Manchester-based TouchStar Technologies. Hedges rapidly reached the conclusion that the Touchstar solution offered the full required functionality when compared to alternative systems."
"Ciaron Reynolds (Managing Director) comments: "Our rapid growth saw an exponential growth in paperwork which was a nightmare until the new system enabled us to effectively go paperless. TouchStar Technologies have been fantastic in how they’ve tailored the software to meet our exact requirement. The pace at which they adapted the system to meet our need has been instrumental in optimising our delivery operation. The trial implementation went exceedingly well and the PODStar system will shortly be rolled out fully so that our entire organisation can accrue the benefits."
Here's a link to the FuelStar win:
Https://www.touchstar.co.uk/blog/allanstobart
Allan Stobart Fuels are part of the rather large WCF Group, which in 2021 had £151m turnover and made £4.7m PBT. Hopefully a little cross-selling across the rest of WCF might go a long way.....
Interesting also to see TST's Sales Director (fuel division) describe the recent UK Distributors' Expo as "The best Expo I’ve attended in twenty-five years”, noting that "we had an incredibly busy time on our stand":
Https://www.touchstar.co.uk/blog/ukiifda2022
MartinHu, the Bilcon Danish strategic co-operation was only announced on Jan 27th 2022, as per below - not sure what more you could expect in only 3 months since then?!
Https://fueloilnews.co.uk/2022/01/touchstar-and-hmk-bilcon-announce-new-strategic-cooperation/
What happened to the tie up with the Danish company? Is it all off?
An encouraging lunchtime presentation from TST. Highlights in no particular order:
- the strong Q1 trading is "ahead of original budget". IM played down the market uncertainty mentioned in the results, noting that this is already "baked in" to WH Ireland's new forecasts of 5.5p EPS this year, rising to 6.7p EPS and then 8.4p EPS
- margins for Q1 are "considerably higher", having risen from 50% to 62% in the last four 6-month periods
- he's expecting "strong progression" in EPS, PBT etc (see above)
- software development fees have gone from almost nothing to £268k last year, and are already at £184k for this year after just one quarter
- a number of new products and product enhancements and additions lined up for this year
- the new products have greater software inclusion, so higher recurring revenues and higher margins
- lots of pilots are underway for fleet expansion roll-outs
- TST can sustain annual double-digit top line growth from the existing businesses
- TST could have £3.5m net cash in two years time. They're hoping to obtain Court approval in the next few months, enabling either share buybacks or special payouts to shareholders
- TST are "in a good place"
good results today, as previously announced, and a very healthy cash position. Very underwhelming SP response that appears to be focusing on a slowdown in April after a good Q1.
However, a profitable, cash generative and revenue growing company with a low valuation is surely the ideal investment so i'm more than happy to stay onboard
WH Ireland today introduce a fair value of 120p for TST - the EV/EBITDA is just 2.7:
"Full year results in line with expectations; positive start to FY 2022E
Touchstar is a supplier of mobile data computing solutions and managed services to a variety of industrial sectors. This morning, the group has released a strong set of results for the year to 31 December 2021, in line with our expectations and demonstrating positive progress against key strategic targets. While revenue increased by 3.7%, EBITDA rose by an impressive 25.5%, principally driven by a higher proportion of recurring software sales that led to a 750bps rise in the gross margin.
The balance sheet remains strong with £2.4m net cash at year-end, and the order book at year-end end stood at a healthy £646k. On the back of the results, we have left our FY 2022E earnings expectations unchanged, while we introduce FY 2023E and FY 2024E estimates for the first time.
The shares trade on an FY 2023E EV/Revenue multiple of just 0.6x, EV/EBITDA of just 2.7x and PER of 11.9x. With approaching 40% of revenue now derived from recurring software contracts, we believe there is the potential for the shares to re-rate as the strategy continues to be successfully executed.
Ascribing a 1.0x FY 2023E EV/Revenue multiple to the shares would imply fair value at 120p."
Yes good results as expected. Interesting comments re distribution, Rivaldo hope you are correct as cash mounting up!
The results are out and show a company definitively on the up.
TST have a £4.4m EV (net of the £2.38m and rising cash pile), and made a £341k PAT (uo from £87k) - or a £233k PBT before the R&D tax credit.
The 38% and increasing recurring income, which the City loves, is another big plus.
TST had a "strong" Q1, tempered slightly by a hesitancy in April for obvious global reasons, but are still confident of "growth in revenue and EBITDA continue in 2022".
TST are considering buybacks and dividends, but with the holding company having negative reserves from prior year losses it should be a simple matter to get a Court ruling to utilise the £1.1m share premium account and pay up dividends from subsidiaries to get the reserves into positive territory.
Very happy to continue holding here.
Looking forward to Monday's results, and in particular the outlook given this from the "above market expectations" year end update - TST have around 40% of its m/cap in a £2.5m cash pile, and also approaching 40% of total revenues are now recurring:
"Current Trading and Outlook for 2022
The Board has given a consistent message that it would be 2022 when the underlying growth rate in all the Group's businesses harmonise. The Board believes that:
o the prospects for the Group appear more positive and more certain than for a long time;
o the rate of growth in revenue and EBITDA will accelerate in 2022 driving further substantial improvement in financial performance;
o the growth in SaaS revenues is likely to outpace the Company's overall growth rate will the aim for recurring revenue moving towards 40% of total revenue by the end of FY22: and
o recent and continuing supply chain constraints appear manageable."
Chelverton Growth Trust, which owns 10.03% of TST (worth £595,000), reported their interims late last week.
They had this rather bullish comment about TST:
Https://www.investegate.co.uk/chelverton-grwth-tst--cgw-/rns/half-year-report/202204141512224691I/
"Touchstar has made further progress in the past six months with a positive trading statement at the end of January. The company now has a very strong balance sheet with some 40% of its market value represented by cash."
Pricey?? TST is valued at £6m,buthasnet cash of well over £1m, probably higher now.
It is growing, profitable and cash generative. It's market cap is less than it's annual revenue. I'd say it is quite cheap.
Let's reassess when the results are finalised.
Cheers - this new partner has some pretty impressive customers:
"Manchester, UK: 4th April 2022
Minster WMS & TouchStar Technologies announce strategic cooperation
Minster WMS, based in Tamworth, England is a software provider to the UK Supply Chain sector. The company was established in 1978 and offer a complete system for any business involved with the distribution of products. Currently the software is used by wholesale distributors, contract warehousing organisations and local authorities to distribute products as diverse as food, sports equipment, cosmetics, stationery, cleaning materials, medical equipment, and furniture.
The company has particular expertise in the supply of contract food service distribution systems, with experience working with high calibre customers such as Marks & Spencer, Best Food Logistics, Wincanton and Pret-A-Manger. Non-food customers include Semichem, Claire’s (North America), Hertfordshire County Council and Bradshaw Group (Singapore and Australia)."
collabs' pouring in ! worthy of a link ?! :
https://www.touchstar.co.uk/blog/minsterwms
https://www.minsterwms.com/
I looked in to this company, I really liked it. But I thought it was still a little pricey even at 70p given its earnings and balance sheet which was already guided in the trading update.
yes did a cheeky top up at 70p too. Results should see a tick up and i'm hoping a decent 2022 should see 100p. Not much to not like here - revenues and profits growing and a healthy cash position. Appears under the radar
That didn't last long. It's quoted 65p-70p this afternoon. I just bought some. I hope this weakness is a good buying opportunity and not a sign that some bad news is on the way. Results due to be reported before the end of April.
15,000 shares just reported bought at 84p, against an 80p offer price - very keen.
TST are certainly winning new business on a regular basis and retaining existing clients. They now have a profitable and very cash generative business moving forward. This raises the question of what next, grow in an expanding market, via a complementary acquisition and/or stay organically? New product development? Will they pay dividends? Think the next year will see a bit of clarity re these questions!