Correction - omitted one shareholder and should read:
With Pistoia, Sorbus/Farmiloe,Grossart and now Church House having more that 50% between them it should not be difficult for a potential predator/acquirer to test the willingness to sell and at what price.
SVS Church House Deep Value Investments Fund have added and now hold more than 3% of IND.
This indicates a level of confidence in the prospects of the company and follows the Fund's policy - "The Deep Value investments Fund invests in companies that are trading at a discount to their net asset value (nav). ..... these solid but cheap companies can be bought at attractive prices and with the benefit of time should be expected to return to previous levels of profitability and hence higher share prices. Buying companies at these low valuations will also often make them potential takeover targets."
The price was driven up by the share buybacks, and the management claim the company was fundamentally undervalued. At the moment, they are still right. The price is back to where it was 18 months ago though, and I expect it to hit the 160s later.
The problem does indeed seem to be the sales side. The products seem good. The continued losses are also aggravated by that dire phrase 'broadly in line' which means another miss.
So where does this leave us? With the cash in the bank, the strength of the products, and the potential for change I will stay on here for now. I am probably dependent more upon hope than expectation!
"The Group has long sought a global leader for the sales team to drive a sustained improvement in performance in its key markets. The Group is now in the latter stages of appointing an experienced Global Senior Vice President of Sales"
Nope - they need a top marketing and sales DIRECTOR who gets autonomy over that whole area (not just USA per the strategy statement) and is not dictated to by the money "men" who evidently are out of their depth.
Further on "During the first half of 2017, the Group launched 25 new products" - but look at the reports from shows and the lousy videos (IMO).
A recent "testimonial" video by a US casino customer has the great line "these cameras handle our situation quite well" In fairness, the customer does go on to identify some of the virtues of the "solid and stable solution".
Looking at the comments on Glassdoor there is some suggestion that micro-management by the present executive directors (only two of them) is a problem - and one might surmise that it will continue to make it hard to attract the talent the company needs.
It looks like time for big changes at the top and/or predators to cast an eye over the undoubted engineering talent and buy the company. Surely it must be worth £20m++
Will the new chairman be tough enough and have enough support from major shareholders to change the direction of IND?
Just opinion and would be interested in what others think.
Yet again MK has failed to deliver. Yet again he's promising "jam tomorrow". It's about time IND started to apply some financial discipline to its CEO; how may failures should a CEO be permitted. He is a chronic under deliverer. We first and foremost need a CEO who understands marketing and selling; the financial discipline should be provided by the CFO. A good CFO does not always make a good CEO.
Due to be released by 30 September. Last year they reported on 15th September so it's possible that we may see the H1 results later next week or early the following week (nothing slated in the LSE diary which is about par for the course these days; new chairman, old habits).
There used to be a lot more news on their website about new deals, customers etc. Apart from new product launches it's become an arid desert over the last few years. Almost total secrecy now seems to be the name of the game and if clients are no longer inclined to openly advertise their security precautions in public then it does become difficult to do any PR (if I'm being charitable) but I haven't compared IND's PR offering to other competitors.
As for the rest of the website, don't get me going! Is it just my browser(s)? None of the tabs seem to work! It looks and feels distinctly amateurish (small and low budget); it's as if IND don't consider their website to be a medium for selling their products (maybe they're right; maybe selling face to face is a lot more cost effective in this industry). In the meantime, us poor shareholders are just left in the dark!
PS. Nice rise this morning. Definitely makes a change!
Thanks for link - it looks like a decent sized sale.
As of today it is the only case study on the website. Compare and contrast with one of their suppliers (of body-worn kit) - https://www.edesix.com/industry-solutions/case-studies
And looking at the IND download:
Just wondering why there was only a "UK" , "US" and Portuguese option for the pdf - it's a French installation so would have thought a French version would be a good idea. Click on the French flag with the article and it reports:"Pas d'article trouvé"
Also a bit confused as to the timing of this deal. The case study is dated 2nd August 2017 and it all reads as if done and dusted - but the pdf says "New IndigoVision products are scheduled to be installed in early 2017".
Is it a completed sale (or not)? OR should it read 2018
I won't repeat my long held view that they need a professional marketing presence at board level. (Just have)
Have to say that IMHO the next set of results are make or break for MK.
We've been here several times before, investing time, cash and resources to no avail, and this new drive has to deliver, increased turnover and profits, or we should be showing MK the door; he's overseen too many false dawns to suffer another failure. Quite frankly, given the current market backdrop, if you can't sell security now you'll never succeed.
Back in 2011, Oliver Vellacott tried to orchestrate an MBO and was seen off by MK and Hamish Grossart. OV sold up at around £5+ in 2012 and at the time we were reliably informed by MK & HG that he was trying to buy IND on the cheap. Doesn't look so cheap now!
I have to say that I do miss the old Motley Fool discussion board. Trying to find information about IND's new contracts, developments etc. was alwasy difficult at the best of times but is now nye on impossible. As for IND's own website, I can't say that I'm at all impressed; doesn't seem to work well (certainly not in Firefox) and there doesn't appear to be any contract news of note any longer.
One small hiccup; you actually have to have some share dealing activity to implement the share buy backs! Share dealing has more or less dried up in the last few days.
IND's share price is, as ever, driven by news and now that it plays its cards even closer to its chest (doesn't seem to announce new orders on its website) and the apparent demise of the Motley Fool bulletin board, that news is even harder to come by between RNS.
Looks as if the action might be over for another six months!
ING has announced a share buy back I think this makes the situation even more exciting now.
Not just because of the buy back but because of what they said with it.
To me it means .
1.There is now a floor on the price so Ive limited downside
2.Mgt must know they are generating CASH and have surplus CASH even after significant investment in new US salesforce
3.The divi is likely to be much higher than the current 4p fcst
4.They used the term significantly below intrinsic value so with the share price at 240p I think they must see a 50% valuation gap. Now of course they may value their won company higher than the stock market will do but you wouldnt say that if profits were fluctuating around at a low level, not to me they must feel like they have real momentum and I have increased by expectation for 3m+ ebitda next year. Additionally I think they must be very confident of current sales and H2 why risk looking so stupid if there is a future profit warning?
Historically although profit have been volatile IND have a good record of sales growth so maybe this will be take off. The mgt are generally regarded as credible, they have increased sales consistently for 10 years despite significant price pressure on their products but are now in a on cyclinders phase with new product development at high margins.
I am expecting EPS next year of c.25p with still net CASH of 6m+ so 400p is looking more likely now. The chart shows great support and a clear path to 400p.
Great post - many thanks for taking the time to write up.
it all seems to be adding up to soemthing exciting.
I know they are serial disappointers but they do now seem to be taking steps of quality.
I think the Trump culture will be to get the best / whatever the cost so hopefully that will help to some degree with their premium products.
There are risks of course but teh chart break out is now confirmed firmly on large volume.
And it looks resistacne free until the highs of 500p reached.
Turned up at the wrong venue. Was Bush House, now Pentlands Science Park - Mordun building. About 500 metres away. And conscientious IND had made a map for folks like me at Bush House. Turned out I think I was the only shareholder.
So big drop from dozen to 20 which was typical for many years. A sure sign to "buy when the market has lost interest" ??? There were quite a number of folks though. Auditors, a journalist (Herald probably) and some tech staff - they always like to have some staff at the AGM.
Usual business. Resolutions passed. Near 100% agreement from proxies. Nice round of applause from attendees for Hamish.
Presentations from Marcus, Alex Swanson - Head of Engineering, and Chris Lea (new CFO).
Confirmation of main markets as Cities, Airports, Banks, Police and Casinos. No change really.
Move to Chinese cameras complete. Turns out every other competitor is doing the same. In the past a product would sit in the cataloque for 4 to 5 years, now new stuff turns up every year. So less cash to spend developing a product that will need to be replaced very soon. Not sure what these new features might be. But IND has made the right move in good time.
Priorities are Software, USA, Sales Teams and Partner Support. Sensible stuff as hardware has been commoditised.
Software - Lite, Pro and Ultra approach. Same for other tech. Helping to get away from IND being mainly low volume, flagship solutions.
Cybervigilant seems a great idea. Patented. Very novel I think. Marcus indicated that the Trump inauguration cameras (not IND) were hacked. Widely reported. Competitors playing catch up. But many are faking it.
Regarding USA and Sales Teams. They now have Sales coverage in every state. Whereas before there were gaps. Presumably that means at least 1 reseller reporting to a State level IND Sales guy???? And there are 3 zones. West. North East and South East. One is a long termer and I think the others are top recruits from competitors - one from Avigilon I think.
Admission that they maybe didn't get the best people in the past. Hence endless re-organisations. Time will tell.
At ISCWest IND indicated that they had 200+ at their stand 2 years ago. But with Cybervigilant and aided perhaps by bold new design for exhibition stands they had 900+ visitors. Has to be positive.
Partner Support. Nothing to add other than a statement from Marcus that "our customers love us" but that they need to get their story out better. Amen.
I like Techie stuff. So asked about Body Worn Cameras. Nothing massive but it is good at getting people in the door. Often other security tech is sold to folks initially enquiring about the Body Worn.
They are still the only company with the Distributed Architecture. So, much more tolerant of failure than EVERY other CCTV system installed anywhere. I again expressed my frustration that they are the company with the best end to end architectural solution (undoubtedly); amongst the best cameras (evidence the video comparison of the best of their competitors - although these days everyone just sells Chinese cameras); and amongst the best at everything else. Yet remain a minnow. Don't understand it.
Avigilon $660M vs IND £14M market cap. And probably IND would win any tech competition... that's a guess. And I'm biased.
A few Case Studies. I asked about the great stories Oliver (founder) used to tell of how a Casino (typically) would reject IND to buy a competitor solution on price - it would fail and then they'd come back to IND. I suggested that these are the best stories to help sell a product. These still happen. E.g. Airport with IND in one area but went cheap in the other and had to give up when integration failed so came back to IND.
And an airport terror incident where competitor system tried to find evidence - it took a day then the IND solution was searched and the evidence was found in minutes. Seems
I thought this was a great update.
They are on track for the year - (broker fcsts are 20p EPS)
despite the slow January and say strong momentum and US yet to get started!
Gven the cost investment in the new US sales staff if that can meet profit fcsts this year ,
then logic would say a decent increase in profits next year as those investments start to pay back.
What I like about the new US sales team is that their job should be easy....
They have 10%+ growth in other geographies so de facto the previous sale team was under delivering. New sales team should be able to increase sales by 10% PLUS the backlog from under performing years.
There there is their new cyber product - how timely is that!
Its been well received in the market, has higher margin and it is all incremental profit on the fixed costs of the sales team.....
I think the market will like the new chariman to be announced - time will tell
So as well as the profits (4m ebitda by 2018?)(26p eps?) the fact they are moving into such a growth area could lead to a very punchy rating!
40p would not look expensive
AND they have CASH + are generating CASH!!
I suspect Paul Scott will deliver a positive write up later today - he has previously been a fan.
I bought before the results and early this morning - averaging UP!!
Nice update for a change this morning. Don't want to count my chickens before they hatch (been here before on IND; more times than I care to mention) but perhaps (just perhaps) they are beginning to turn the corner and get it right. I had noticed a number of new job vacancies in the US recently and clearly this is a region where they now hope to see progress (at last).
I thought a good announcement from IND this morning.
The company will always have lumpy sales and its previous track record wasn't great,
but there were no surprises today and several bits of good news.
CASH up significantly and will be c.80p!!! a share by the end of the year.
This is backed up by 200p of Net Assets.
So this is effectively a Benjamin Graham type value stock....
price is less than Net Assets, WC is positive, CASH is positive, it is profitable + paying a dividend.
The divi was increased 20%
H2 sales were up and H2 profit was 0.63m so using that as a run rate gives EBITDA of c.2.6m for this year. which allows for further increases in the dividend and adding to the CASH pile.
That would give EPS of c. 16p to 18p.
So at 177p it might still be argued that is not ludicrously cheap but given the CASH backing of c.80p a share and the fact that the new mgt team would have at that point demonstrated their credibility the upside the following year could be huge.
I think their clear out of defd tax asset is also positive as they clean up the balance sheet in preparation for a full year of good results. They have confirmed that they don't expect to pay tax for the foreseeable future.
There are risks, but I like the CASH generation, the CASH safety net and the tipping point for me is the excellent chart pattern which evidences the steady buying there has been over the last 6 months.
The new CFO is coming from Superglass. That was a total disaster, and his experince there seems to suggest we may need a fundraising here! SPGH only survived because effectively a single individual stepped in and bailed out the company. Not good.
The recent results saw revenue down by almost a quarter, a loss recorded, and the dividend slashed by c80%.
Annoyingly this still keeps cropping up on my value screening. Can anyone come up with something positive here?
The research is commissioned, and clearly produced for promotional purposes. The figures it gives are not new, but interestingly they say they 'assume a strong improvement in cashflow' and suggest the 5p final dividend will be retained, presumably being paid from reserves.
I have bought a few more but I am not convinced it was the right thing to do, particularly after reading Mr Scott's comments. Today's report, although disappointing, didn't state that the Middle East contract had been cancelled so I won't give up on IND yet. I made a better decision to buy RIO at 1961 later this morning and locked in a 7%+ dividend. I will do my best to sit out the turbulence.
The update does not contain detailed figures but shows a return to profitability although it doesn't appear to meet the original expectations. That has resulted in the current 8.3% price fall. A Middle Eastern contract has not completed on time so that must have contributed to the missed target. It's typical of the lumpy nature of profits gained by IND. Maybe this is a buying opportunity as 8.3% looks over done?
I believe IND also stated that they expected to meet full year projections. Like last time, the investors are anticipating good news and the sp has responded accordingly. Let's hope they are right this time or we might see 180.
Well the interims confirmed a near $1m loss for the first half, with turnover down nearly a third. However new projects have been won, and new products are out there. The body-worn camera is very impressive (see YouTube). Debt has been limited, and they did say "we currently expect to recommend a final dividend". This has been a small disaster, and I onstantly expect to see 180, but I think we are still worth holding for now. The history here is of lumpy sales, and this is hopefully another such incident.
I agree totally: a good firm with decent products and an expanding range. (There are drone and body camera videos on YouTube: both very impressive). An RNS is due on 17 September with interims, so we should know some more then. If they are not good we could see a fall into the 180s. A decent set and we could be approaching the 300s where we belong. I hold already, but will keep my reserve powder dry until then.
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