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?
It's true that it's a nil sum game for shareholders the consolidation in holding from 17 to 15 shares is converted into cash for you. It's the same for the company though as the reduction in shares also leads to a reduction in cash on the balance sheet. So either way it's a conversion of value to a different form not value creation.
Once the share price changes from the date of the announcement value is created or destroyed depending on the share price change but it's marginal compared to the overall deal.
ok I have looked at other company B share and consolidation info. from other deals, the following quotes explains it pretty well, and shows that YOU are not expected to gain at all, as the new shares (now holding less) plus the b shares should equal your current holding value, the only winner is the company which now has less shares in circulation.
"The Existing Ordinary Shares were consolidated and replaced with New Ordinary Shares, this reduced the number of shares which all Shareholders hold"
"If the Return of Cash took place but there was no Share Capital Consolidation, the share price for an Ordinary Share would have likely to have fallen by an amount commensurate with the quantum of cash returned to Shareholders (absent market fluctuations) because the Company would no longer have the cash which is being returned to Shareholders"
"The aim of the Share Capital Consolidation was to help, so far as possible, make the market price of an Ordinary Share remain approximately the same and to maintain comparability of other Company data such as earnings and dividends per share before and after the Return of Cash"
As I see it the only way this would actually benefit you as a shareholder is if the new reduced holding shares then immediately went to a higher price to reflect the fact that there's now less shares in the company.
But that's a possible outcome and may not happen?
Anyone else got any knowledge of these type of deals please?
Hi all, like the previous poster I'm undecided on this offer, on whether to sell now or not.
On 2 February 2015, the Directors announced their intention to make a one-off Return of Value to Shareholders of 71.9 pence per Existing Ordinary Share, equivalent to approximately £100 million
The Return of Value is proposed to be made using a B Share structure with an associated share consolidation.
The proposed Return of Value would return 71.9 pence per Existing Ordinary Share to Shareholders, for every one Existing Ordinary Share held one B Share,
and in place of every 17 Existing Ordinary, 15 New Ordinary Shares.
So the way I see it you get a gain from the B share dividend, which is then wiped out by the enforced reduction in your holding of 15 new shares for every 17 currently held
Those wins are good news, but what they don't tell you are the losses, like their biggest service contract BT plc, which ends on 01-04-15 after running for 13 years.
Back in 2002 BT thought it would concentrate on its core business (pstn telephones), so outsourced its IT work as computers were not it's business. Just 6 months later BT announced it was all about "convergence" and telephones and computers together were now its strategy !
They now intend to do this work themselves once again.
"UK technology plays have experienced a wild ride this year, and a 12% slump in the FTSE 350 Technology index since early September has given back all the previous month's gains. A series of profits warnings have spooked tech investors, and the ..."
All this Germany/France issues were mentioned in the 1/2 year info, so should have been built into the price. I would suggest 2013 final accounts follow standard UK accounting practice. Will have to see what the analysts make of it. What is of more interest to me is the steps taken to minimize 2014 loses on this, and there is some detail in the full results.
from August 2013:
· Total exceptional items of £29.3 million (H1 2012 restated : £3.6 million), including:
o Trading losses on three previously announced onerous contracts in Germany of £5.1 million in H1 2013 (H1 2012 : £1.7 million)
o One-off provision of £10.7 million for future losses on the three onerous contracts in Germany (in addition to the £2.1 million provision taken in December 2012)
o A non-cash impairment of goodwill and acquired intangibles in France of £12.2 million, due to deterioration in business performance
o Accordingly, 2012 results are re-stated to reclassify trading losses on the three onerous contracts in Germany within exceptional items
· After exceptional items, H1 2013 Group statutory loss before tax of £4.3 million (H1: profit of £20.8 million)
· Statutory diluted loss per share of 5.7p (H1 2012: diluted earnings per share of 10.0p)
· Net funds including CSF of £65.8 million (H1 2012: £83.8 million)
I got the impression for various communications that this was a "bite the bullet" year and that ongoing the loses are minimised and managed. The full results allude to the fact that other business with these 3 customers is profitable and needs to be protected by allowing this loss making stuff complete. I think the redundancy costs are about minimising these loses.
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