Member Info for Raleigh

The company has matured and is well known as one of the top suppliers. IT departments take the trade journal, and seek references from counterparts. Castleton are concentrating on quality and individual customer requirement, and selling more products into an existing satisfied customer base, and migrating Castleton products to the private cloud in Managed Services. The newer products are being introduced by specific launch, as with Castleton Community and .Digital in Dublin, ( probably more to follow regionally ) and the sales team will be following leads. With a growing contracted backlog of work ( up 12% Software, 14% Managed Services )and increasing call on Professional Services (up 43%) an appearance at every generic conference and exhibition may no longer be appropriate to the business model. Dean Dickinson is targeting his current resources. Product development and management strategy, so far as I am able to see, is excellent.

Basically a regurgitation of what is known. I do not see that as negative. It is where it is, ( and by inference at the bottom with remedial work ongoing in some quarters ) seeking to capture the value of MxcUK, looking to further partnerships, and confirmation of others thoughts that the GIF are in Mxc JV. Simon Thomson is not too far out in his summary, and though I expected some mention of progress on the Liberty Global project, that is still to come. We shall have to see what management can pull off.

I am pleased there has been a broadening of the institutional investor base, dealt without the main market, at no cost to other shareholders. Taken together with the very large numbers traded in the same way on Mxcp departure, it is also evident there is an appetite for the bulk buying of shares at around this price.

An insight- giving article. Castleton Community was only on general release this month, and the company will quickly be in the fortunate position of having that all important referenceability in this close-knit sector, available from Clanmill. The article from the trade publication demonstrates the growth potential of that particular product, with customers adding modules as required to what must be an affordable basic entry option for those possibly previously overlooked associations who must digitalise, but with relatively modest IT budgets. As I have mentioned previously, from a financial perspective I expect the full impact of Castleton's recent products, and Managed Services migration, to make itself known on plan during the next financial year as an addition to ongoing cross selling and the cessation of mobile licence fees.

What we have experienced thus far indicates a need to clear whatever is holding the sp back, possibly going back to Cannacord. That said, and although it is a long time coming and indeed we are still waiting on a notification of results date together with whatever that may additionally include, there will be efforts ongoing including those in relation to Liberty Global. Aspirations will not have changed. A year ago Mxcp was seeking to achieve a NAV and justify a market cap of £100m. I look forward to future comments on how that is seen to be progressing following last year's reporting.

"This joint venture with Liberty Global marks an important step change for MXC. Investing in and advising third party funds gives us access to a sufficient level of capital to grow a greater number of assets. Across our own directly held investments and our joint venture with Liberty Global, we believe that we have visibility on around £100 million of assets. To create optimal deal flow, we do not think we need much more than £150 million to maintain a self-sustaining cycle of investment, growth, disposal and distributions to shareholders along the way. Ultimately, with a pool of assets of this quantum, the contribution to MXC should grow significantly, at the same time powering our NAV and returns to shareholders.
We take a three-year view on this "engine" we are developing to be fully firing, as it becomes increasingly self-funding through realisations and self-fuelling through accelerated deal flow, throwing off greater returns in the process. MXC is setting out on the next leg of its journey and I believe it will be a rewarding one for all of us shareholders."

As I said. Everybody takes a profit. It is good to see shares recycled, as with the two delayed transactions today.

As to the future success of the MXLG joint venture for Mxcp shareholders, what has not been mentioned is that MXLG will have the advantage of Liberty Global's existing network and solutions, confirmed by Liberty Global, and that the services it provides are likely to be centrally consumed by Virgin Media Business, a subsidiary of Liberty Global - so it seems evident that the end result of the joint venture is likely be acquired by Virgin Media - whereupon Mxcp and partners will share 50% of the sale valuation.

Everyone takes a profit eventually. Everyone has an agenda. I try to take little notice of share transfers when the business is sound and the investment case persuasive, though I like to see a broad cadre of professional investors. Something IC mentioned, thankyou. But it must be right to say that the 25% holding sold by Mxc at prices between 82.5 and 104.6 were not bought on a whim and without enquiry and due diligence by those with the necessary resources and contacts, the results of which are confirmed by the latest company releases. Nigel WRAY was one such, himself an Mxcp shareholder also, buying shares from them at 101.5 and raising his holding in Castleton from 7% to 13%. With shares from another related company involved, that can be seen as furthering his Mxc interest at the same time as assisting Mxcp in raising cash for it's future acquisitions, but in relation to Castleton and with Nigel WRAY having a foot in both camps I take it as an indication of future prospects from a person who may be regarded as having more relevant knowledge than most. It was not a philanthropic gesture.
We have done well to divest ourselves of Mxcp shares, and their evergreen options, with no such options remaining. That large recycling of shares should go towards consolidation around this price. In my opinion. Usual caveats apply.

My own translation of what he's actually saying is that investee company Ide is a work in progress under new Mxcp management. And that If his own figures are correct, MXC has £14.4m soon to be £15.15m at its disposal, and going ahead with future deals, two shrewd sets of partners in Ravenscroft and Liberty Global. The NAV is such that taking everything into account, a price of 1.5 with an added premium for future prospects would make sense, before the news flow starts.
I had pretty much worked the generality of that out for myself, and it is why I bought in when the share price bottomed out twice in June and July, in anticipation of a revigorated share price. It will happen when the newsflow starts, and there will be more to talk about when another acquisition is added to SICL.

The board has decided to pay a dividend and pay off/service debt. That is a win/win. And of course it is in the nature of a progressive dividend that it increases with earnings, subject to capital requirements. There will be ongoing discussion with their lenders. A sensible balance has been struck. Healthy trading at the price on offer, following the rather sudden widespread drop, so investors agreeing with sentiment here.

The dividend will come and for this full year, but I anticipated some dates with this RNS. But of no consequence.
It appears Kinetic is building through cross selling in Australia. I believe there are 50 or so customers there, so although it is a slow business, if Castleton is as successful as in the UK and ROI it will be a very useful addition to the contracted repeat, cumulative revenue and increasing profitability.

I forgot. I said previously we should take particular notice of the PBT this time, as net profit was thrown out last full year due to credits applied, inflating the figure and EPS. I suggested something better might occur, but it is still a very healthy 170% odd increase on half year figures. And it is now confirmed cost base is stable going forward. And the £600k mobile payments will cease this year, and be available for the bottom line.

That satisfies me. Revenue up to the extent Castleton appears just about on track to meet full year broker forecast of £26.3m. Good to see a change in the revenue mix, with a balance forming against sales solutions from Professional and Managed Services, which was the intention. Profit up, and for me a pleasing increase yet again in the contracted backlog of work, and with recurring revenue giving further visibility of earnings. I am a little surprised that there has been no date set on the dividend, but the intention to implement it this year is reiterated.

It has been nothing but good news and steady progress here, with an innovative team now building on its integrated acquisitions through cross selling, whilst introducing
new products and bringing it's managed service offerings to the fore. I shalł really be looking for the anticipated confirmation that future performance is likely to be sufficiently strong to continue to hit Castleton's own minimum 10% year on year growth target, whilst bearing in mind, housebroker FinnCaps reiterated target from last June of 125p., and the LTIP senior manager ( non director ) aspiration of 133p during next financial year to stay in tune with full vesting at 186.
And a start on the progressive dividend.

Whilst at the same time saving smaller associations from infrastructure costs.

That also is a hosted solution like .Digital, I believe a strategic move, pointing customers towards Castleton Managed Services.

(Much) further to drop? I think not. Potential to rise? I think so.
And they now have contracted responsible partners. With multiple acquisitions foretold, I had expected aggressive further investment before now, but will wait, albeit with growing impatience. In the meantime there will be interest and fees coming in. And presumably the EBT will continue to buy incentivisation shares at this price - shares which 'employees and certain directors ' have their eyes on, and must surely be linked to at least modest success.

It is my opinion that Castletons recent technology developments and the previously announced capital expenditure on improving Managed Services architecture, and taking into account sales to delivery times, though operationally important in this second half, will likely improve figures to a greater extent next financial year, alongside the end of mobile licence payments. That may form the basis of the positive guidance in November.

Thankyou for those posts. The last is very interesting, insofar that it is a bold step to declare there is nothing else like it on offer by other suppliers and that it is a game changer, in the knowledge that competitors would be quick to contradict if they could. I therefore take it to be something special.
It further demonstrates Castleton's foresight, and technical ability to equal and exceed the competition's offerings.
Housing Associations, and Local Authorities (with whom I believe Castleton currently has only a minimal footprint ) have to be seen to fall in line with Govt's digital by default agenda. This fits the bill completely.
From a sales perspective, the potential seems greater than other solutions, in that it will operate with legacy, and other systems and solutions from competitors and therefore provide an 'in' to the whole social housing sector, as well as at face value seemingly being a 'must have' for the existing 700 customers.
Strategically importantly, it is being marketed as a hosted only solution - another driver into Castleton Managed Services, for existing and new customers, which is known to be a key objective alongside the bread and butter cross selling.
And something more for November results outlook.

It is not unusual, whichever way you look at it, and Castleton is not alone this week in falling tech stocks. Some may be overvalued. Unlike some, Castleton is paying it's own way - sufficient to pay a dividend. And looked at another way, the LTIP reflects board achievable aspirations and sets the senior employee target. Announced on 22nd. March 2018 it started at 68p and required 40% per annum over a 3 year period. Splitting it up, though the LTIP may not be framed exactly in that way, minimum 95.2 this financial year. They are now working on keeping to and improving that to achieve 133.28 and 186.59 over the following years for full vesting. FinnCaps 125 is consistent with that, which one would expect.
I shall be delighted if those aspirations are fulfilled, with Castleton continuing to meet it's own 10% year on year growth target.