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Today's response to the RNS was disappointing. Sometimes that happens. But it has not deterred BGF, a patient investor. And it strengthens the investor base.The detail in the RNS reaffirms my decision to hold for the present, and greater forward momentum is anticipated in the second half. On Australia, it is a pity that individual incompetence has marred the otherwise excellent results. Dean Dickinson will keep a sharp eye there. Raising the total revenue was more costly in comparative terms, but the larger portion of revenue is contracted and therefore repeat. And adding 60 customers to those taking more than one product or service in the year is impressive. Reading the previous posts, for which I am grateful, it appears that the brokers, who have been fairly accurate to date, sought clarification from Castleton on matters relating to forecasts generally, and the realistic expectation of earnings from Australian operations. They have erred on the side of caution, and as a result of lower amortisation and depreciation over this year are able to keep profit figures as previously forecast. That is good news after debate with the CFO, and the net result is a saving of the deferred consideration to the Kinetic vendors. Dean Dickinson is pleased with Australia's first quarter - hopefully under competent management they will progress from there and recover any lost ground, initially with sales of EDRM and mobile. And there is the dividend as promised - not worth a lot but a positive statement regarding future cash generation, and the ability to make acquisitions from existing cash and arrangements, whilst paying down debt. A perfectly satisfactory RNS from a growing company.

The company has the solutions it needs, bought as best in breed, and has integrated them on mobile. It has shown the competence in house both to update old and to create new solutions catering for the vagaries of its potential customer base. Where it does not own best in breed and sees benefit in perhaps more generic solutions, such as Gantus or Localz, it partners with them and integrates the product within its portfolio. It has the most modern cloud storage available. In short, it's offering is at the top tier of whatever customers require. Wifi, or a futuristic derivative is here to stay and there is increasing interest in its application. Housing associations are cautious customers. The initiative with HS Homes demonstrates that Castleton is willing to embrace new technology, thus future proofing its products. Regardless of immediate take up of the Alexa product, what some might view as the icing on the cake, this is another shrewd move by Dean Dickinson in 'selling' Castleton to the market. To the best of my knowledge the only other pure social housing competitor is Aareon. With barriers to new entrants so high as to be well-nigh insurmountable, Castleton with its existing large contracted customer base seems even better placed to progress than before.

I look forward to the information giving rise to future guidance, and the extent to which FinCap, following review, will lift their target figure from 125p beyond the 133p required by the LTIP for full vesting at year end.

Regardless of where they have come from, the shares are out of play in the short/medium term. If they have indeed been purchased by the EBT, they are out of play until such time as they are awarded to satisfy 'existing and future share incentivisation awards, so reducing any future dilution for shareholders.' ( including the management and others whilst being rewarded from the EBT ) I do not know the performance criteria against which shares will be awarded but this will sensibly be linked to company performance, and shareholder value/return, or risk shareholder dissent, ( Nigel Wray has 13.02% ) and possibly harming Smith and Weavers joint 32.56% shareholding. Oak Trust for the EBT already holds 7.41%, and the company intends to continue funding the EBT to 'buy back' shares as a means of keeping the share price in touch with NAV. But with some loosely held shares currently available ( the shares purchased Friday have come from somewhere, but they were at least bought at the top end of the spread ) in my opinion that has yet to start making an impact. Young's holding is below 3%. Any future sales need not be reported. But they are separate issues, and the future for MXCP rests predominantly on the ongoing success of the Ravenscroft and Liberty Global ventures, including future sale of the resulting MXLG business to LG, supported by incoming fees for services in relation to those ventures, whilst sorting out Ide over the months and years to recover value and repayment of the loan notes, rather than the immediate MXCP share transactions. I think it fair to say that Smith and Weaver on their own accounts have a good track record in putting commercial tech companies together ( Liberty Global chose them on that basis ) And Castleton is the most recent example.

I am a little surprised to see Marc Young selling an unknown amount, but some at least may have been bought by Oak Trust. I may be wrong, but I had in mind he is a PDMR.

Appears that buyer and seller both notified, one taking their profits and another hopeful of doing so in the future. I hope it widens the investor base, but in any event such large transfers are beneficial to existing shareholders and go to price consolidation in the lead up to results. The very basics are known, but I am anticipating the company will indicate great confidence for the rest of this financial year and the basis of that built on all the recent developments.

in accordance with stated policy. "At the beginning of the period, the Company established an Employee Benefit Trust ("EBT") to buy MXC shares in the market to be held to satisfy existing and future share incentivisation awards, so reducing any future dilution for shareholders. The intention is for the EBT to continue to buy back shares, however given the intended capital return programme described above, this will only ever be at a price which represents a discount to the current NAV. To date, £2.9 million has been invested by the EBT in purchasing the Company's shares."

Computers is their job. I should think the interview agenda was controlled by Dean Dickinson, in the absolute knowledge it will be read by every housing IT lead professional. Read slowly, he makes an excellent sales pitch. And the company is now fulfilling Service Level Agreements at 96.3%, reducing backlog, and seeking to improve. It achieved 15% revenue growth last financial year ( 12% of which was organic at the half year over previous corresponding half - more information in June ) The opening statement is that ' Castleton remains widely misunderstood.' If so, that is a misunderstanding that can be rectified, and the interview is a shrewd move anyway.

The 24/7 technical support probably represents Castleton's progress to major supplier. Minor suppliers of individual solutions in this fragmented market will not provide it. Supplying excellent products is one thing. Customers also need them to be working properly whenever required. They will look for the after sales experience and the ability to provide that quality of service, weighing their own and other customers' experience when considering adding new products from the same supplier, and entering into new long term contracts. They expect quality service from a major supplier, Castleton needs to provide it, and with strong cash generation Dean Dickinson is responding. He has repeatedly said that the customer is at the centre of everything they do.

I do not expect any sudden impact on the share price from Melio - though over time we may see a widening of the investor base, and it may be that Kestrel, for example, will be able to take profit by a sale to another new institution, with no effect on the share price. Similar trades appear to have occurred yesterday, have been seen many times before, and are beneficial to holders. Dean Dickinson does not consider the matters you have brought to attention, thankyou, individually to merit RNS. Cumulatively they amount to a strengthening of Castleton's product set, and therefore a consolidation of its position in the market. The £1m cloud investment is very interesting, particularly alongside the return of some cash by the dividend announcement I expect with final results in June, and management will expect a return on that investment through sales. As I have always said, I view this financial year as being the year in which the company will be seen to excel ( as also forecast by FinCap ) Looking ahead to June, events will make for a most favourable results RNS.

That is another step forward by Dean Dickinson, tweaking Castleton's offering to enable customers to purchase yet more of their requirements from one supplier, ensuring one responsibility for effective integration and one service contact point, making life easier for Castleton customers. It is part of the continuing one stop shop narrative, and as a 'public service', associations will want to make savings whilst improving their KPIs in relation to their own service levels. You can be sure those last two sets traded are not resting with the market makers. They have been taken one way or another.

Translating the interim results it appears the situation is recoverable at Ide over 18months or so, with an underlying business and platform from which value can be recovered. There may be acquisitions later on using that platform. 'Significant' action is intended at Adept, and soon. He may have taken the view, as I do, that nothing worse can happen with those two and that in view of the NAV of 97p per share, Mxcps return to cash profitability and healthy balance sheet, it is time to move on and attention should be focused on the known opportunities afforded by the Ravenscroft and Liberty Global enterprises.

https://www.investorschronicle.co.uk/comment/2019/05/09/mxc-returns-to-trading-profitability/

MXLG intend to build an IT services provider of size and scale for business consumption. There will be a number of future acquisitions. Those so far are
Koris - a managed communications provider offering on-premise, hybrid, private cloud and cloud solutions with a specialist focus on Mitel telephony and Skype for Business solutions.
365 - an IT services company providing networking, unified communications and IT security services.
SICL - an infrastructure and network specialist providing a range of on-premises, cloud and hybrid technological solutions and services.
I have no idea where management will go next, but the combination offers businesses a broad range of infrastructure, from on-premise to fully managed, which can now be moulded into shape, creating the platform on which to base future acquisitions. It is anybody's guess, but it is possible that future acquisitions will be directed towards business solutions - electronic document storage and retrieval, mobile working and so on, as occurred with MXCPs last roll up after securing a platform company, providing cross-selling opportunities. With regard to mobile, MXCP has an interest in the 365Agile mobile solution, still presumably available for purposes outside social housing.

The company reminds us, in these Liberty Global days, not to overlook the smaller ticket investment opportunities through Ravenscroft/GIF, value accretive throughout the fund term - eight made and four close to closure, additionally generating £1m. pa In fees. Relatively small investments, but with significance potential return pro rata in due course. And as of yesterday there remains £23.5m cash for future investment.

"As has been demonstrated in its track record over the last four and a half years, the Group can deliver a 2.2x return on its capital and that is our aim for the next four to five years. This, combined with the return to a profitable trading position, leads the Board to believe it is time for MXC to re-establish a method of returning cash to our shareholders. Therefore, the Board would like to introduce a capital return programme to be based on our NAV1 which we believe will increase as we deliver against our objectives. The programme will be largely funded by the cash profits from the trading business but will represent a percentage of the NAV declared at each reporting period. By example, at 28 February 2019 the NAV was £65.4 million, representing 97p per share. The Board is currently undertaking a review of the appropriate percentage and the best way to effect this return, whether by way of dividend or share buyback."

I am ambivalent on the matter of returns to shareholders as mentioned. However, such a statement to shareholders reveals the company now truly sees itself as having positioned itself for a much brighter future. I continue to hold with increased optimism. Today's announcement may provoke tipster comment.

Castleton's market is healthy. Common sense dictates it will remain so. Social housing is a necessity, and with it the requirement to administer it efficiently through evolving technology. Demand for that technology is not predicated on the vagaries of discretionary consumer spend. The company has built an enviable position in the market from nothing, despite the existing competition, and developed a large customer base. It has progressed over the years to within touching distance of becoming dividend paying and debt free. Bearing in mind the almost impossible barriers to new entrants, it is a reasonable conclusion that with its improving integrated suite of solutions and due attention to its customers it's position is secure and the company will continue to steadily grow market share as a 'one stop shop.'

There is no need for any change of strategy. So far it is paying dividends. Management do not notify the smaller successes, though I had hoped for/anticipated something on a larger managed services contract. There are long processes in this market and all being well, with relatively new referenceability, that will come.

I add that the selection of acquisitions, though MXCP are doing the legwork, is one on which 3 investing parties have to agree, with LG as the prospective purchaser of the final integrated entity, so acquisitions should be entirely fit for overall purpose.

Things are starting to move along at last. There are 3 companies within MXLG. The directors will now work on integration and synergies as part of the business case. The decision was made to part fund the latest acquisitions from a debt facility, leaving the MXCP cash pile substantially intact for future acquisitions.