Indiana investor
23 Mar 2017
Re: Interims I have a hunch (no more than that) that another acquisition is very close.... would that preclude Director share purchases at this stage?I noticed one quite large share purchase this morning which I assume is untelated and a reaction to the results?)
Hardboy
23 Mar 2017
Interims Look good. Nothing to merit such a large fall from grace; but, as we've said before, this may be just rebasing the shares, without such stellar growth built into the price. On the longer term it still looks like a business with considerable growth in it.Sales up 20%. Pre tax profits up 11%. (I'm always a bit uneasy when sales rise quicker than profits - it can indicate costs are out of hand - but if both are growing in double digits I'll live with that.) Acquisitions performing ahead of expectations. Net cash growing. Dividend up 20%. Half 2 should be significantly ahead f half 1. And hints that something major could take off in North America. So maybe the shares are a little overpriced still on fundamentals, but the growth looks solid, so probably this is justified. I think it merits a buy recommendation on a longer term view. No idea what the share price will do short term. As M'toff said, it would be reassuring now to see some director purchases.
Muzzletoff
23 Feb 2017
Re: Preliminary thoughts I understand Stockopedia guru Paul Scott is planning to interview the Tracsis CEO near the end of the March, not long after the full interims are released.As this will be within 4 months of the year end, although he will no doubt be guarded about giving way inside info, it will be useful to hear the tone of his replies as well as the specifics.
valuemanbuyer
18 Feb 2017
Re: Preliminary thoughts I think you'll find that two of the Rail franchise software contracts have simply slipped into H2 due to changes in the franchise timetable . These are v profitable. The events business is competitive and summer weighted . They've cut costs quite dramatically and expect good profits as they did last year . There are new software products that are larger potential contracts that they may win and US RCM opportunities. If you look st this time last year you will see a similarly poor first half. Most of the business is recurring but timings can change . Thus the opportunity. The business generates strong returns , has £12.5m net cash so expect further acquisitions to further boost earnings.Sometimes when bumps in the road occur - in my experience no business goes up in a straight line ,you have to bite your lip and back the management and these guys have always delivered and are heavily incentived to continue.
soundsplausible1
17 Feb 2017
Re: Preliminary thoughts Here's my tuppence worth. I have not done the full analysis since the stop loss kicked so have no vested interest in the Company. Tracsis has been a good bet for several years with excellent growth and profits, which the markets liked. This moved the share price higher, and we all take a pat on the back as things worked out share price wise.In the past few days the share price has become strained with ~30% fall. In amongst this the trading statement that highlighted turnover was being constrained particularly "sales anticipated to take place in H1 are now expected to take place in H2" . So things are taking longer but that impacts on the bottom line. Sales being expected to take place later does not translate to hard cash. Every business expects sales but expectation does not always deliver the hard cash. It would have been better if they could state that an anticipated sales of £XM will not materialise until H2. This would give us hard figures to work with, instead we got the word "anticipate". Yes they confirmed profits will be up but not in the same growth rate we have seen in recent years and the use of words was telling. The excitement helped the share price has gone. There is uncertainty.If they do deliver and anticipated sales and this turns to cash, then bingo is all for the up and up. One look at the share price graph is telling you something. The price is now back where it was ~2 years ago.
shovelier
17 Feb 2017
Re: Preliminary thoughts Should have read I'm no expert.......but you've probably spotted that already!
shovelier
17 Feb 2017
Re: Preliminary thoughts Isn't this all evidenced by the RNS today announcing a buy by Downing LLP for which the market makers may have been gathering. Imho expert and the timings may not work out but just a thought. On the way up again today perhaps on that news.
Indiana investor
17 Feb 2017
Re: Preliminary thoughts I agree with your analysis. I sold a few shares yesterday at £4 plus and bought back in again at £3.60 today. The shares to buy were difficult to source by the broker.This might well back up your theory.
Muzzletoff
17 Feb 2017
Re: Preliminary thoughts HardboyI think the share is being re-rated. I think the market average PE is circa 14x, so Tracsis was always vulnerable.Of course we don't know whether market makers have a buyer and therefore see it worth bombing the prices whilst sentiment is still wobbly. Their spreads are still ridiculous despite the volume.The market seemed to treat the RNS as a hidden profit warning for the full year. I always think the market is prone to over-reaction. It would be interesting to hear what the CEO is saying.Arguably, because of the trading statement they are in open period, but I suspect like you anyone sensible will wait until the price stops falling.
Hardboy
17 Feb 2017
Re: Preliminary thoughts I have a bit more time this morning. I have re read and analysed the announcement and Muzzletoff's helpful analysis, and it still seems to me the market reaction is wrong.Maybe I'm looking at it with rose tinted glasses; but my overview simplified view says: -Turnover is up significantly. This may be in part due to acquisitions, the main ones of which came into the business at the comparable period last year. But this is good. Profits are up. Like you, I don't like EBITA. I try to stick to operating profits; but the statement is profits are slightly ahead of last year. Not great, but still good. The net cash position has improved. Good. The traffic data & service side of the business is coming under pressure from competition, which may reduce gross margin - bad; but they have streamlined operations and reduced overhead costs, so feel they have a competitive edge & a good reputation. Good. They expect more business in North America. This could be the key to their future prosperity. Good. Half 2 should be significantly better than H1. very good. So my interpretation is that they expect the full year out turn to be slightly better than last year, and it could be quite a bit better than last year. So I'm guessing a conservative EPS of 25. Digital Look suggests a forecast EPS of 24. That means we are currently on a PE of 15; which is historically very low for Tracsis, although that has been because it has been seen as a high growth business; and maybe now that view is changing; so it could be it is fairly priced. In conclusion I think the fall of about 30% preceding and following this announcement is unmerited and over done. Having said that, maybe it has been over priced for most of its history, so maybe there is an element of rebasing the share price. Overall I think there is more upside potential than downside risk, so I'll stick a pale blue recommendation on it. Another possibility as it is a lightly traded share is that the market makers have some big potential buyers, and wanted to activated a few stop losses. That would be nice scenario, I was tempted to buy more but I think I shall sit on my hands and watch for a while. I have a large enough chunk in here already.
Hardboy
16 Feb 2017
Re: What I would like to see It is not quite as good, but seeing one of the Corporate investors increasing their stake is reassuring. As for the directors buying - won't they be in a closed period now till the Interims come out?
Muzzletoff
16 Feb 2017
What I would like to see ..is when the market has finished panicking some Director purchases, and not just another tranche of options handed out at the revised price.That will be some sign that the management think there is value here.
Muzzletoff
15 Feb 2017
Preliminary thoughts I think the On Trac acquisition (which seemed quite profitable) only contributed to roughly half of the Final accounts, and so should have contributed another 50% or so for this 6 mth reporting period ( I am guessing £500k to £1m NP contribution). Also, unless heavily discounted, there should be some decent margin from the US software sale.So the indication of flattish figures at the Net Profit line may seem to imply some real underperformance elsewhere. This has been touched on with competitive margins in one of the other divisions. EBITDA as a headline profit can disguise a multitude of sins. Cash generation is usually a litmus test as to whether anything is being fudged. They say cash balances are strong which sounds good after making deferred payments for other acquisitions. I suspect their structure after all the acquisitions is a bit messy. They say the didn't seek to run those acquired businesses, but you can't be totally aloof like a disinterested investment company. So I think they may have some learning to do in Head Office as a relatively young management team.
Muzzletoff
15 Feb 2017
Re: What's happening to the price?! I think in such an illiquid there are bound to be some chunky price movements on volume, up or down. I suspect the concern in the market is to whether something isn't quite as good as it appears. Especially as they have a decent underlying multiple for beating expectations, and now appear to be delivering in line expectations.I haven't looked through all the announcements, but I follow Paul Scott on Stockopedia and it is his view that talking about expectations is all very well but you need to state a range for what those are. Many private investors don't have access to brokers notes, where forecast expectations are given, as brokers will often seek guidance from management when preparing their notes.I will have a further look at their statement. Meanwhile the price is plunging merrily!
OilPrince
15 Feb 2017
Re: What's happening to the price?! I noticed this..."...Tracsis says it will deliver in-line FY revenue and profits IF it can achieve the conversion of new sales for its various software products and services, supported by improvement in gross margin initiatives..." My CAPITALS.Investors don't usually like the IF word do they?
