It has been a good year for CCC. Whilst they say that it is tough to maintain the same growth rate in 2018 they are investing at a rate consistent with 2017's growth.
Having been an investor since their floatation they are a very steady pair of hands, consistent and good management so I too continue to hold. Low debt and cash generative we can look forward to similar cash returns on a 3-5 year horizon.
I will reinvest what I have sold recently if I get to my target price.
Having read the update the only things that are mildly uncertain are:-
- Extended credit terms from the supplier which will cause a c.£25m reduction in working capital in H1
- French contract renewals & expiry of one key contract
Nothing this team can't manage - steady as she goes.... FE
Excellent set of results at first glance but I wonder if they'll live up to market expectations given the recent SP rise. Hard to call the market reaction to news these days but I'm holding long term and the significant hike in divi (more than I was expecting at least) was pleasing.
So the tender offer was 5 times over subscribed which leads me to think that the c.15% rise since the announcement of the return of capital is largely as a result of buy in to receive it. I expect that there will be at least a 7% correction once the paperwork is sorted & the £100m goes out.
Me personally, it reads as though of the 2500 shares I tendered I'll send up tendering about 268 shares worth. Hardly worth all the deliberation really!
I'll certainly share Tb. I tendered 33% of my remaining holding in the end . Looks like I'll know Tuesday if that is going to be scaled back.
It's very difficult to know what to do in such circumstances but I have been moving towards a portfolio target of 50% in cash over the last few months which guided my decision somewhat.
The deadline was the 6th on HSDL as well so expect it's the same for all nominee accounts.
I haven't tendered any, not even the guaranteed entitlement, but will be interested in the SP effect and your results from the trade if you don't mind sharing.
I still can't see how this is a shareholder return and am hoping, perhaps naively, that by doing nowt my holding will equate to the same value as if I'd sold a few. Given the relatively small GE amount it wasn't worth selling and buying back once dealing fees were included and who knows how the SP will move.
Good luck with the trade and hope it pays off for you.
I have just tendered mine and when I went through III's corporate action process it says that the deadline for tendering is 6th! This looks like they are building in some comfort for their current platform issues as the notice says clearly that the deadline is 9th.
Anyway, if you are thinking about doing a trade just be aware of this with III.
"Also, given that the number of shares available after the Tender will be less then one would expect an increase in price which isn't presently happening."
I'm no expert on this but the company is going to hold the £100m of purchased shares in treasury which I understand to mean that they don't get voting rights and are not entitled to dividend but they are not effectively cancelling them either so the value of your investment is not "more concentrated by x%.
In theory if the company needed the cash for an acquisition for example they could re-issue them.
The corporate action notice from III is totally rubbish and only gives you part of the picture. See this link for the full detail http://phx.corporate-ir.net/phoenix.zhtml?c=133410&p=irol-newsArticle&ID=2327822
In theory there is a margin to be made trading as long as you are on the registry on 9th and have submitted your tender so if you buy today you'll be on the registry Tuesday.
I too had considered buying in and selling at the minimum tender price and yielding a few percent.
However, I think there is risk associated with it as you see all the directors have committed to sell their "guaranteed entitlement" which equates to 7% of their holding. Phil Hulme and Greg Lock have offered up to 9x that amount at the "Strike Price" so Phil Hulme's 2.5m shares are just shy of £30m of the £100m.
Therefore, it follows that the offer will probably be oversubscribed and that the Strike Price will be £11.70 of close to it.
This is not a recommendation by any stretch but I am going to follow the directors and sell 7% of my holding in the hope that the price will drop back to £10 or so in which case I will buy back in.
I strongly feel that the end goal is to take this company back private. The high level of shares held by the management and the cash generative nature of the business and the history of buy back/cancellation of shares leads me to think that.
But please DYOR as I don't always get it right.
"I have read through the Tender news item. However, having an attention span of a goldfish, I'm not sure that I understand"
You're not the only one. I've decided to sit it out as I couldn't see how I was getting a return over and above what the natural market correction will become.
It's the first Cash tender offer I've encountered and I wonder why if they're so keen to return excess cash to shareholders they didn't propose a special div of about 81p. Seems a lot simpler but they've done this 3 times before so I guess they see the benefit.
I'm sure someone more familiar with these returns of value can advocate selling a portion but until 3pm on 9th I'm an interested observer. I suppose I could treat it as a special by selling my guaranteed entitlement of ~7% of my holding at the strike price and hope my reduced holding equates to a corresponding rise in the SP but I have no idea how I'd check that. Therefore I doubt I'll partake.
I have read through the Tender news item. However, having an attention span of a goldfish, I'm not sure that I understand.
Are they saying that if I could buy shares at, say, 1100p before 9 Feb then I could sell them back at a price of a minimum of 1170p? In this example, it would be a gain of 6% ish.
Also, given that the number of shares available after the Tender will be less then one would expect an increase in price which isn't presently happening.
Maybe cynical but some less bullish statements might help average down the average share buy back price? I'm hoping CCC follows others that have done share buy backs where the price has dropped (e.g.NG) and I'll use the opportunity to buy back in.
I am definitely long on the rest of my holding as there is low debt and good cash generation.
I look forward to learning how the US foray is going in the March results.
Whilst continuing to exceed the Boards expectations during 2017 the board have given a heads up that 2018 won't be quite as stellar in terms of growth.
"While we believe the positive momentum in the market is set to continue, there will be a number of one-off costs and investments within the Group in 2018 that will not repeat in 2019, which will hold back the enhancement of profitability in 2018. While it is still very early in 2018, the Board expect the year to be one of stable profitability"
Fair enough, I'll take stable profitability as a downturn. No idea how the market will react to this statement.
22nd January is going to be interesting and will determine if I made the right call.
I was wrong about the £100m return being via share consolidation as they announced in November that it would be a tender offer.
Since then the shares have rocketed.
Will the board revert to a tender offer price determined prior to the announcement or will they use today's price as the benchmark?
FWIW I sold a weighty amount at £10.50 and a further tranch at £12.00.
I will be looking to go back in post tender offer at a target price of £9.50.
FE - I suggest that there may well be a National Grid and Vodafone scenario here whereby people see "free" money with the £100m return headline. As we all know, this will be a share consolidation as every return by Computacenter has been in the past so things are so rarely "free". So I will be seriously thinking about selling prior to the consolidation and buying back after (as I have learnt from experience of the two previously mentioned companies!).
I've been through both VOD and NG specials and you may have the right tactic given the amount of head scratching required. It would be nice if the £100M return (~81.5p/share?) is just a pure special and priced in today's rise but I guess we'll have to wait for the Finals.
It also wasn't clear if the £100M was on top of a Final div either but that's maybe being greedy.
Indeed I take your point and agree on the results themselves - very encouraging indeed.
I'd like to know why Germany is doing so well but as many of CCC clients are banks/financial institutions I see that this may well be some upside from Brexit and Frankfurt seeking to displace London as Europe's financial capital and investing accordingly. If I were a CCC salesman in Germany I certainly would be talking this up :-)
I suggest that there may well be a National Grid and Vodafone scenario here whereby people see "free" money with the £100m return headline. As we all know, this will be a share consolidation as every return by Computacenter has been in the past so things are so rarely "free". So I will be seriously thinking about selling prior to the consolidation and buying back after (as I have learnt from experience of the two previously mentioned companies!).
IT service provider Computacenter has recently been present with its own subsidiary in the USA. Mike Norris, CEO, announces the acquisition is now ready for an acquisition.
From: Redaktion ChannelObserver
Computacenter CEO Mike Norris
IT service provider Computacenter is openly thinking about making an acquisition in the USA to strengthen local product availability. The Group expanded last year to the US to expand its global support for its European customers. Last month, a US branch was officially opened. Meanwhile, the IT service provider employs 500 people in the US and 200 in Mexico, as the UK branch office channelweb writes. The seventh customer could also be won there. "We can also build our service business there organically. A takeover in the service division is therefore not absolutely necessary. But to quickly expand the fulfillment offer, an acquisition is sensible, "Computacenter CEO Mike Norris is quoted. However, no discussions had yet been held.
Computacenter announced in March 2016 that it intends to launch a direct presence in the US. A support center in Mexico is also planned. Although customers in more than 100 countries would be catered for, the focus was on the five countries of the UK,
But Mike Norris expresses scepticism towards buy-and-build model as he reveals he was pitched 2e2 for £300m less than a year before it went bust
12 January 2017
Computacenter CEO Mike Norris has hinted that the firm is closing in on a UK acquisition, despite expressing scepticism over the industry's track record when it comes to M&A activity.
Mike Norris (pictured) said a deal in Computacenter's home market could be "on the horizon" as he revealed details of the firm's latest acquisition, Swiss professional services outfit Citius.
The Citius deal was completed on Friday, but talking to CRN sister publication Channelnomics Europe, Norris said the transaction was too small to warrant board approval or a stock market announcement.
Computacenter has been quiet on the M&A front in its home market of late, with Digica (2007), Thesaurus (2009) and ICS Solutions (2011) being rare examples of UK acquisitions it has made public in the last decade.
The firm has made a relatively modest 19 acquisitions since it went public in 1998, but Norris hinted that there are "one or two" more deals in the pipeline for Computacenter, including a prospect in the UK.
"We have one in the UK on the horizon," he said.
"I had a banker trying to sell me 2e2 - I promise you - for £300m within a year of it going bust and he couldn't understand why I was saying no, and it went bust worth zero."
Norris, however, expressed ambivalence towards M&A activity in general, claiming that acquisitions in the IT industry have generally not worked out.
"We'll buy something that we think is good value," he said.
"The problem is that most people have an over-inflated value of what their business is worth. I won't overpay.
"If one does any kind of research on acquisitions, they'll find on average they've not worked in this business. They have failed materially more often than they have succeeded."
Computacenter has expanded mainly through organic growth, and Norris admitted he was sceptical of the buy-and-build model.
"What really doesn't work is roll-ups," he said.
"No one in this industry has learned the lessons of 2e2 as far as I'm concerned. Everyone says 2e2 was an accident waiting to happen, but no one said that before it happened.
"I had a banker trying to sell me 2e2 - I promise you - for £300m within a year of it going bust and he couldn't understand why I was saying no, and it went bust worth zero.
"You can't trust the investment bankers at all, especially not the small ones. The big ones have a reputation and brand to look after, but the little ones will say and do anything to get a deal; it's so unregulated at that level, it's unreal."
Computacenter operates across three areas, namely managed services, professional services, and product resale, Norris explained.
The latest Swiss acquisition adds professional services prowess to its existing local business, which focused on managed services, Norris said.
"The Swiss business is more of a managed services business, and we don't sell very much product," he added.
"This acquisition gives us some more technical skills. It's much easier to add the reseller arm if you have a professional services business. Over time, what I want to do is do all three of those things in every country in which I operate, which is what we already do in Belgium, Germany, France and the UK."
On another note, Norris also confirmed that Computacenter is among the first batch of Dell-EMC partners to have been designated exclusive 'Titanium Black' stat
a2z200 , seems the chairman has been at it again. 250k's worth if my addition is correct. He obviously has faith in the company. Price is slowly ticking up again. Let's hope he's ahead of the news stream.
Read Panmure Gordon & Co's note on COMPUTACENTER, out this morning, by visiting https://www.research-tree.com/company/GB00BV9FP302
"We revisited our forecast assumptions in the wake of the Computacenter Q1 trading update (April). While the core messages were a reprise of lessons from final results (negative UK performance, better France and Germany) we nonetheless worked through some course correction forecast changes. Net/net 2016E EPS from 53p to 51.5p. Remember a defining feature of Computacenter is not its reselling, but that with its little tweaks it has followed the customer, all those years ago, by being vendor agnostic, and more recently by building its services portfolio. In our view digitisation is the next big crank of the wheel. Like all previous shifts it will be driven by product SMAC product we think. Valuation is way too cheap (PE 16.3x, Dividend yield 2.4%, FCF yield 7.1%) given the cash generation and returns policy (next one likely 2017E) ..."
Read Panmure Gordon & Co's note on COMPUTACENTER, out this morning, by visiting https://www.research-tree.com/company/GB00BV9FP302
"Computacenter Q1 trading update is a reprise of lessons from final results. The negative is the UK performance, the positives are Germany, better France and very good cash position. Ahead of speaking with the company this morning we make no changes to our forecasts and retain..."
"Monday 19 OctoberAGM/EGMCity of London Investment Group, CPL ResourcesTuesday 20 OctoberLSE:WTB:Whitbread is about to enter an expensive investment period as it fuels growth through room expansion. The strategy will increase the capital intensity ..."
Personally, I don't think there is anything to read into it other than they are actually quite cheap for a company whose business is now firmly evolving from low margin "box shifting" to higher margin "services". It might reflect a feeling in the business that Germany and France are on a more stable footing.
The shares are very tightly held by the founding directors and their families.
It is cash generative and is regularly carrying out share buy-backs.
That all said, the founders and many of the directors have been in the business a long time and there's a chance they might be looking to exit on a high but I have no idea what shape or form that would take.
So I think I have managed to talk myself round to saying anything might happen! Sitting on the fence or what?!
<b>Computacenter plc Receives Buy Rating from Panmure Gordon (CCC)</b>
Posted by Ethan Ryder on Apr 23rd, 2015
Computacenter plc (LON:CCC)s stock had its buy rating reiterated by research analysts at Panmure Gordon in a report released on Thursday. They currently have a GBX 787 ($11.77) price target on the stock. Panmure Gordons target price indicates a potential upside of 16.77% from the companys currentprice.
Computacenter plc (LON:CCC) opened at 673.0000 on Thursday. Computacenter plc has a 52-week low of GBX 651.6670 and a 52-week high of GBX 802.4000. The stocks 50-day moving average is GBX 701.93 and its 200-day moving average is GBX 706.72. The companys market cap is £807.65 million.
The company also recently announced a dividend, which will be paid on Friday, June 19th. Investors of record on Thursday, May 21st will be paid a dividend of GBX 13.10 ($0.20) per share. This represents a dividend yield of 1.93%. The ex-dividend date is Thursday, May 21st.
A number of other analysts have also recently weighed in on CCC. Analysts at Investec reiterated a buy rating and set a GBX 800 ($11.97) price target on shares of Computacenter plc in a research note on Thursday. Separately, analysts at Barclays reiterated an underweight rating and set a GBX 660 ($9.87) price target on shares of Computacenter plc in a research note on Friday, April 10th.
Computacenter PLC is a United Kingdom-based provider of information technology infrastructure services. The Company provides user support, devices, and provision of applications and data to support individual working styles and improve collaboration. The Companys services include print solutions, data optimization, unified communications and collaboration, network services, supply chain solutions and physical infrastructure.
The value of the company hasn't changed just the number of shares its divided in to, so all things being equal your investment will broadly have the same value after the 15 for 17 restructure, plus one gets the 71.9p dividend.
You probably need to look at the price before the announcement to make a fair comparison, as there was a rally investors to ensure they had stock on the 19th of Feb.
Record Date for the Return of Value and the Share Capital Consolidation, is today 19/02/15
Re: "Proposed Return of Value to Shareholders of 71.9 pence per Existing Ordinary Share
by way of a B Share structure amounting to approximately £100 million
and a 15 for 17 Share Capital Consolidation"
I have sold in the last few days as by my calculations would have lost out, but still watch this with interest, what did others do?
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