Sambram
13 Sep 2016
Strong Interims "Escher, a world leading point-of-service software provider, has delivered a strong set of interim results with EBITDA +25% to $3.35m (pre-announced 22 July). Momentum within the postal segment continues with the recent contract Vietnam Post contract win. Greater customer penetration is also trending, with existing clients taking up additional software services. Expansion of the recurring revenues (maintenance and support) is creating a business with considerably greater predictability and lower volatility in earnings. However, it must be remembered that this progress does not prevent any possible upside from one-off license revenues."Panmure on today's interims, on Research Tree
Wexboy
03 Jun 2016
TGISVP - Escher Group Holdings 2016 – The Great Irish Share Valuation Project (Part II):Company: Escher Group Holdings (ESCH:LN)Last TGISVP Post: HereMarket Cap: GBP 31 MPrice: GBP 167.5pOh dear, yet another offensive write-up of mine: With ESCH at 330p per share (having peaked at 395p per share a couple of months earlier), I set a price target of 119p per share! Yup, we have plenty of special snowflakes out there who thought they were the chosen ones to discover what was surely an incredible high margin recurring revenue machine… Maybe so – except I came along & reminded them if doesn’t quack like a duck & it doesn’t look like a duck, it may not be a duck….which they didna’ like at all. And two years later, I’m sure they don’t like the fact I was bloody correct! But eventually you wake up and recognise the timeline & figures just don’t match the story – hence, the relentless decline in the ESCH share price over the last two years.There’s been a blizzard of contract signings reported, included some new areas of business (like e-government & mobile rewards/payments), but little visible sign of them since. The only obvious positive to report is the increasing level of contracted & recurring revenue, which should reach 50% of total revenue in 2016. That’s great, but unfortunately I predicted a side-effect: ‘One way or the other, the transition will likely present another revenue growth challenge’. And consequently…revenue today is still 11% below FY-2013 revenue. Cash flow looks better, but that’s due to a substantial swing in working capital – in reality, free cash flow in the last two years was zero. Which means we’re still a long long way from the historic 31% operating margins Escher clocked in the past. Again, we’ll split the difference between FCF & peak operating margins – which suggests a 1.5 P/S multiple is still appropriate, with no adjustments necessary for cash/debt (net debt’s actually $2.7 million):USD 22.0 M Rev * 1.5 P/S / 1.4623 GBP/USD / 18.7 M shares = GBP 121pEscher remains fairly over-valued. Unless we see a decisive inflection point in the numbers, the shares will keep grinding lower as disappointed shareholders bail. But last week’s announcement was interesting – Stephen McLeod will be appointed a Senior Independent Director. Regular readers here will recognise him as the former CEO of Universe Group (UNG:LN), which was previously a big favourite & winner for me. In fact, if the CEO Liam Church didn’t own 12% of Escher, I’d wager McLeod was being lined up for an executive post…but even his contribution as a director could prove valuable here.Price Target: GBP 121pUpside/(Downside): (28)%For related links/graphs/files, and more TGISVP analyses/price targets: Google the Wexboy investment blog.
Simbrad
31 May 2016
Panmure note from Research Tree... We make some slight changes to our Aveva forecasts in the wake of the analyst 'surgery' on Friday last. Whilst the surgery contained little new news, it helped to clarify our thinking. As we suspected, no special dividend, as Aveva would prefer to retain cash for a potential acquisition. There is also a CMD in the early stages of being planned, think early Autumn, then Aveva will discuss its product plans for its cloud initiative. Finally it was a positive that the management team seems to have a better grasp on its markets.
Simbrad
25 May 2016
Read Panmure Gordon & Co's note on Escher Group, out this morning, by visiting Research Tree: "Hot on the heels of signing Saudi Post for its loyalty platform, today Escher announces that it has secured a pilot with Saudi Post for mobile and iMobility solutions. Proof here of: (i) the importance of omnichannel in the retail market and wider recognition that omnichannel customers display a higher level of loyalty to a brand and typically out-spend multichannel shoppers by over 20%. (ii) Escher has upped its game in upselling – Saudi Post has been a client for almost three years, currently using Riposte software and, (iii)..."
