I was lucky and sold out before the drop just keeping my profits running. I'm gutted I have not been able to rebuy due to funds tied up.
Looking good this morning but it is hitting resistance now. If i'm lucky it will retrace back to 54p and i'll be able to buy. It can be a bit of a slow burner, so proof of turn around may be needed in the next results to see this go to the broker rating of 130p and shoe the profits warning as a one off and a buying opp.
Interims – mapping out a steady second half
Interims reveal performance in line with unchanged expectations, bar IFRS16 amendments and minor tweaks since the October update. The merging of the two former divisions to create ‘One Castleton’ is expected to deliver benefits, along
with rightsizing of the Professional Services team and a focus away from competing for low-margin Hardware revenue. New contract wins such as three Managed Services deals in the period show the continuing opportunity, as well as gaining preferred supplier status to the National Housing Federation (the Housing Association industry body). The Housing Association customer base has increased to 595 (FY19: 591), of whom 52% (FY19: 50%) take more than one product; the
contracted order backlog has increased 5% since 1H19; recurring revenues constitute 66% of revenue into 2H20, giving confidence in forecasts; and the group remains well placed once the customer base assesses and commits to the inevitable future in cloud or hybrid software delivery. With 48% of revenue and 44% of EBITDA delivered in the first half (1H19: 49% and 47%), we look to the benefits of execution to deliver a solid 2H and a return to cloud-derived growth in visibility and
quality of earnings into FY21. Target 130p reiterated.
Interims for the period to September 2019 delivered EBITDA of £2.9m (pre IFRS16 £2.7m vs 1H19: £3.0m) from revenue of £11.6m (£12.9m), -13% organic. Postponement or cancellation of expected contract wins affected 1H and FY expectations (adjusted accordingly in October), even as 1H20 vs 1H19 recurring revenue grew from £7.0m to £7.6m and order backlog grew 5%. Net debt of £4.1m (March 2019: £4.9m; September 2018: £4.9m) highlights continuing positive cash flow, comfortably funding the maiden dividend and an increase in capex to drive future growth.
Customer cloud transition led to reduced one-off revenue (particularly Hardware and Professional Services) and accelerated transition to recurring revenue. Movement in the order backlog included decline in one-off orders (£15.5m to £14.9m), even as the recurring revenue backlog grew from £13.1m to £15.2m. New contract wins included Grand Union (£1m over 4 years); Suffolk Housing (£0.5m over 3 years) and Colne House (£0.4m, over 2 years). 73% of sales in the period were to new customers, highlighting opportunities within the group as well as through the National Housing Federation, to target smaller HAs. 1H challenges were met with a robust response to cost management, and we look forward to further proof of execution as the balance sheet strengthens to net cash during FY21. Target 130p reiterated.
Starcom plc* (STAR.L, 1.35p/£4.7m)
Kylos Air partner update (31.10.19)
Update on the use of Starcom's Kylos Air product by Bosch Connected Devices and Solutions, a subsidiary of Robert Bosch GmbH. Starcom signed an initial agreement in September 2017 for the supply of Kylos Air products that is marketed by Bosch as the TDL140, part of a suite of connected devices and solutions.
Bosch is in the process of securing approval for the TDL140 with its various air freight customers and has advised that the TDL140 has been approved as an active tracking device by Swiss WorldCargo, the air freight division of Swiss International Air Lines. Bosch has been marketing the TDL140 for several months.
No change to forecasts.
Allenby Capital comment: Although the approval has yet to result in any additional orders of Kylos Air via Bosch, the approval by Swiss WorldCargo is an encouraging step in what has been a long relationship. Bosch continues to undertake testing to achieve equivalent approvals and certifications from other airlines. Bosch selected Starcom for Track and Trace technology for its new monitoring solution for the logistics and transportation industry with an initial order for a thousand units.
DX Energy (SDX): Commencement of 12 well drilling campaign targeting 15Bcf
Share price: 22p, Market Cap: £45m
SDX has announced the commencement of its 12 well drilling campaign, targeting a mean 15Bcf of gross unrisked prospective resources, in its operated Gharb Basin (SDX: 75% working interest) acreage in Morocco.
The first seven wells located in the Company's core producing concessions at Sebou and Gharb Centre are lower-risk appraisal wells targeting prospects which are close to existing infrastructure.
These wells can be tied in quickly, at low cost, and are similar in geological risk to the discoveries already made and producing in this area.
These will be followed by two step-out exploration wells further to the north in Gharb Centre and outside the reach of the company's existing infrastructure, targeting prospects which are similar to the discoveries made in Sebou and Gharb Centre albeit they are deemed higher risk as this part of the concession has not been previously tested.
The last three wells of the campaign are expected to be higher-risk exploration wells in the Lalla Mimouna Nord concession, targeting larger prospects in deeper, as yet unproven, horizons.
In order to optimise operations and reduce costs, SDX has secured an advanced North American rig to reduce drilling time. Furthermore, the company will perforate and test successful wells in separate campaigns, with multiple wells tested back to back in each campaign to reduce equipment mobilisation costs. The drilling campaign is expected to complete in Q1 2020.
Conclusion: A number of near-term catalysts on the horizon for SDX, and the company will hope to reverse the downward trajectory in its share price YTD. The active drilling campaign will target prospects with varying degrees of risk, and we believe the core focus for investors will be on the Lalla Mimouna Nord concession where the company will look to materially add further gas resources through step out wells.
Fleet deal in North America
Seeing Machines has today announced that it is has signed a contract with Bison Transport Inc, one of Canada's most prestigious transport companies, to install Guardian into its fleet. Bison Transport has been named North America's Safest Fleet by the Truckload Carriers Association and the American Trucking Associations, and is one of the largest carriers in Canada. With over 2,500 employees, Bison serves Canada and surrounding US states with haulage and logistics services. Following the recent completion of an initial trial, Seeing Machines will install Guardian, the Company's retrofit driver monitoring technology for commercial transport and logistics fleets, into around 120 Bison trucks, with
installation to commence immediately.
- Comment: Today’s announcement is another demonstration of the continued turnaround of the Seeing Machines fleet business and an indicator that there is substantial value in this business. Following the challenges in the fleet segment in
2018, Seeing Machines retreated from the North American fleet market reducing its workforce and only supporting existing customers. Despite this, we understand sophisticated fleet operators have continued to seek out the Seeing Machines Guardian product, which remains unique in the market with its ability to help prevent accidents from drowsiness and distraction. Today’s announcement shows the interest from North American fleet operators continues and that the Guardian fleet product has a strong value proposition in this competitive market, even after the company increased prices. The North American fleet market is the second largest in the world (after China) with over 3.6m Class 8 trucks (heavy >15 tonne articulated lorry) and so today’s announced represents an important return to this large market with a leading Brand name customer in Bison. We iterate our Buy recommendation and 12p price target.
SDX Energy (SDX LN)1,6; BUY, £0.65: Operating update in Morocco – SDX has started a 12 well drilling campaign in Morocco,
targeting 15 bcf gross unrisked resources in the Gharb basin acreage. The first seven wells will be located in the Company's
core producing concessions at Sebou and Gharb Centre. These seven appraisal wells will be followed by two step-out
exploration wells further to the north in Gharb Centre. Success at these two wells could open up this northern area of the
concession for extensive follow-on drilling. The last three wells of the campaign are expected to be higher-risk exploration
wells in the Lalla Mimouna Nord concession, targeting larger prospects in deeper, as yet unproven, horizons. The drilling
campaign is expected to complete in Q1 2020.
Well, not a good update. Forecasting 2019 to be 10% below 2018 (128.7m) and I suspect it will be lower than that especially when they say "excluding any impact from the potential acquisition of OMNOVA".
Heading for the 230's imo and possible more.
Castleton Technology (CTP): Corp
Interim trading update
Castleton has released an interim trading update to September detailing a challenging 1H20 for one-off revenue and continuing strength in recurring revenue, which grew in absolute terms. While 2H20 is expected to deliver a material improvement in group performance, we review FY20 forecasts to accommodate the pressure on product and professional services revenue, moving revenue and EBITDA (pre IFRS16) -15% in FY20, and -13% in FY21. Even as recurring revenue demonstrates its strengths and opportunities, in the near term the contemplation of moving to the cloud has changed customer buying habits and slowed decision making – meaning the long-term growth opportunities from recurring revenue growth are stronger than ever, but the instant fillip of one-off revenue, which boosted prior years, is not yet offset. As a growing and focused one stop shop for public sector Housing, and having reorganised to drive greater focus, Castleton’s main risk is now being acquired in moments of share price performance weakness. Target 130p (140p) a 5% free cash flow yield target for FY21.
Possible Hambro selling as they were the last to report selling back in July? Since then only a buy been registered by OCTUS.
Nothing has changed that I'm aware since I bought and so I have now bought my second trance. Everything is looking pretty positive for the company, low pe,peg, cash strong and the sp below the NAV. Enterprise value £3m below the market cap and forecast EPS set to continue to grow. Broker target of 83p.
Unless things change, I'm more than happy to add if it drops more as value in the sp will show eventually.
The problem with just relying on a dividend payment here is what if the dividend gets cut? The debt is not small and at some time BT (openreach) will upgrade the lines at a great cost, so where is that money to come from?
STRONG QUARTER OF INFLOWS BODES WELL
The notable highlight of Record’s Q2/20A update is the +$1.7bn net client inflow, which builds on Q1/20A’s inflow of +$0.3bn. This takes AUME to $59.9bn, ahead of our year-end expectations. When combined with broadly unchanged fee rates over the quarter, we see upgrade potential should this level of AUME be maintained. We prudently keep forecasts
unchanged today, noting materially stronger GBP this month, which would counter some of this upside to forecasts should it be sustained.
- AUME rises 3% to $59.9bn: AUME now stands at $59.9bn, rising +2.7% on Q1/20A’s $58.3m. Given management fees are charged on AUME levels, this bodes well for the future. The +$1.6bn overall uplift can be attributed to +$1.7bn client inflows (see below), +$1.3bn of favourable market movements (equity, fixed income et al), offset by $(1.4)bn of exchange rate movements on non-USD AUME. The latter reflects that only c11% of AUME is USD denominated, hence FX gains/losses are recognised upon converting the various mandates’ currencies. This includes 57% of AUME which is CHF denominated, with CHF depreciating slightly versus USD over Q2/20A.
- Net client inflows of +$1.7bn, driven by Passive hedging: Record achieved net client inflows of $1.7bn over Q2/20A, the second consecutive quarter of inflows following Q1/20A’s +$0.3bn. The increased momentum arose predominantly from existing client mandates, with Record’s continued efforts to deliver a premium, specialist service rewarded with new commitments. Underpinning the inflow was a significant +$1.5bn rise in the core (84% AUME) Passive Hedging product, as larger clients increased mandate sizes, while Currency for Return also delivered a +$0.3bn inflow.
- New clients added with pipeline of more to come: Two new clients (Q1/20A: +3) were added over Q2/20A, which in themselves can hold multiple mandates. We note the new business pipeline includes a diversity of new names, we believe, of all sizes.
- Performance fees yet to come: Performance fees are recognised as and when a client’s agreed accrual periods ends and a performance uplift has been delivered. As yet, no such fees have been recognised in FY20E, but our £1.3m FY20E forecast
reflects a H2/20E delivery broadly equivalent to half of FY19A’s £2.3m annual result.
- Forecasts unchanged, but risk to upside: Q2/20A AUME is already ahead of our FY20E forecast of $58.5bn, with fee rates broadly unchanged. We consider this gives potential for upgrades should it be maintained. We note however GBP’s recent
strength this month provides future translation headwinds, hence we prudently maintain forecasts, awaiting further clarity in the upcoming interims. A FY20E P/E of 14.3x does not fully reflect Record’s longstanding client base and recurring income.
No other alerts set here Majorboy as the sp is below previous all time lows and my alerts I set are based on support levels.
The stats for this company are very good with a low PE and PEG, high EPS and the NAV is 21.7p, roughly the current share price.
Unfortunately, the debt is the same size as the market cap and the operating margins are very low. So when a profits warning comes, as it has, the share price tanks.
So while the company is taking advantage of a customer leaving and doing upgrades which will prove beneficial in the future, it does increase costs/reduce profit and on top of that, e commerce trading for the company has been difficult.
One to watch imo and wait for a turn around with an increase in the profits.
Today's share price down on the acquisition RNS which is no surprise after the rise on friday, breaking through resistance on what was almost certainly leaked news.
What is interesting is the share price retraced back to the old high and bounced off it. This is a classic move where after a break out the share price retraces back to previous resistance, now support, before continuing to climb. This move is often watched for by traders and a signal for them to buy.
Possible moves from here could be a new side ways trading range of 250-265 while the sp consolidates. Sensible stop losses would be set some where under 246p.