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Research Tree provides access to ongoing research coverage, media content and regulatory news on FIDESSA GROUP PLC. We currently have 28 research reports from 3 professional analysts.
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FIDESSA GROUP PLC
FIDESSA GROUP PLC
Joy of Techs
21 Nov 16
ICT evolution is driven by technological development as advances are made which both meet and shape customer requirements. Our 2011 note No such thing as a telco described the modern reality in that former ‘telcos’ now deliver varying elements of a range of managed services. We built on this theme last year, exploring in further detail their evolutionary paths, operating fundamentals, and cashflow yield similarities. In the consumer environment, demand for bundles of technology is complemented by demand for content. Across the pond, the mooted combination of AT&T and Time Warner typifies the bundled need of ‘pipe’ and content, since unbundled alternatives such as FaceTime and WhatsApp can be easier and clearer to chat over, and Amazon and Netflix are easier to watch anywhere. In the UK, BT’s defensive actions cover delivery, content and capabilities, acquiring EE yet also buying football rights. While TV was long ago added to triple play to become quad play, voice is now merely an app, and fixed and mobile seen as just dumb pipes: it's the content that will influence consumer choices. Growth of TV and film as well as music and gaming over IP leads to UK small cap opportunities. In context of the drive to maximise value from pipes and access by offering content and data, we look at some amongst the potential tech small cap beneficiaries: Amino*, Keyword Studios, ZOO Digital*, 7digital*, KCOM* and CityFibre*.
The Joy of Techs
15 Aug 16
Mobile money has been an awkward area for investors and industry alike. There have been too many new arrivals offering too many new solutions, leading to a confusing plethora of payment methods for both consumers and retailers, championed by varying stakeholders: banks, credit card suppliers or mobile network operators (MNOs). In this, the mobile money industry has ignored the key element of currency – that it is universally recognised and accepted. The confusion of competing payment methods inevitably led to numerous failures. The industry has promised much: a total technological revamping of the monetary systems in place since ancient times, in a short space of time, but has delivered little to date. However, that is not to say changes aren’t happening.
Panmure Morning Note 01-08-2016
01 Aug 16
Interim results headline with 15% growth in operating profit and news of growth in all geographies. Clearly the macro has not changed – ie consolidations and closures amongst the customer base and delays in the regulatory backdrop – but nonetheless the results indicate good execution by Fidessa. To reflect the results and currency (63% of revenue accounted for outside of Europe). We have increased FY forecasts EPS to 88.5p from 83.7p. Whilst the valuation is too rich for us on an earnings basis (PE 27.6, EV/EBITDA 11.6x) the share has ‘yield’ support (Div 3.6%) and that will keep shareholders cheered. We are in line with company guidance. The shares are for fans who believe (rightly) in keeping your winners – remember, Fidessa has a strong balance sheet, strong cash generation and substantial levels of recurring revenue. We retain our Hold. Increase target price to 2132p (1758p).
“I don’t hear any music.”
29 Jul 16
So replied the violinist Fritz Kreisler to the lady who said “your violin makes such beautiful music.” And so we learn that the instrument (ie the hardware) is of no use whatsoever without the human element. This week we saw Sage debut a rack of new products at SageSummit, there was the US$9.3bn Netsuite acquisition by Oracle, which in the wake of ARM plc acquisition pushed share prices up as M&A thoughts drove thinking. We frame all of these moves relative to our SMAC stack scenario. However our Compliance Officer David Langshaw (off to read for an MSc in History of Science, Medicine and Technology at Kellogg College, Oxford - whatever) tells me that I have missed the essential truth – namely Kranzberg’s Six Laws of Technology. Kranzberg’s core message is, ‘Technology merely presents an opportunity: the choice of what to do with it remains ours’ – and so the thing is the intercourse of people with the product. ‘People’ have pushed equity values higher and people will throw up some lucrative opportunities as the economy struggles to generate growth and so looks to technology to be the growth driver. Furthermore the rash of new products show us that technical developments have environmental, social, and human consequences that go far beyond the immediate purposes of the technical devices and practices themselves – note the seemingly sudden burst of interest in IoT and in PokemonGo this month – and this reminds us that “software is eating the world”. As always tech bounces up and down through the Summer months – July was an ‘up’ month. It is still too early to know the operational ramifications of Brexit. But so far the mood music has been more positive than expected, even if I am playing second fiddle to Mr Langshaw. Enjoy the Summer break.
“Never let a good crisis go to waste”
01 Jul 16
History tells us that the way to make money from shares is to “sell when others are greedy and to buy when others are fearful”. Yet for many investors the current market is less Churchill, less Buffet and more ‘Texas hold 'em’. Our soundings through the industry in the wake of the UK decision to Brexit are mixed; there are currency translation winners, there are whispers of projects being iced, there are concerns about the UK being a less attractive destination for staff and some EU tech workers (a third of IT staff in London) unsure of whether to stay or go. There is a vacuum of leadership – regular compass points don’t seem to work right now. This should throw up some lucrative opportunities as the economy struggles to generate growth and should be a positive as the stock market appetite for tech – the growth guys - will then be whetted. Whilst the retreat in valuations is partly healthy – too high for too long (see table), in truth we find the latest ‘spring back’ a surprise. As always tech bounces up and down through the Summer months – and in that respect there is some ‘continuity’. To reprise – Sell in May usually works.
Panmure Research - Flash 27-05-16
27 May 16
The sector valuation was weak through May. Our average FY1 EV/EBITDA faded from 10.8x to 10.4x in the past month. However, despite soggy share prices we are encouraged on several fronts. Yes, there is 'weeping and gnashing of teeth' by some, Brexit concerns have stifled corporate activity, quarterly results have been mixed, there is the usual 'Sell in May' feeling, outlook statements have a defensive tone and there is a general 'risk-off' attitude. However; (i) our 'growth beats returns' investment play is working well (see table), (ii) our 'walking around' research, meeting private and public companies and trips (IPExpo, Accountex, Salesforce World tour) showed us lots of exciting growth companies, and, (iii) there is evidence of tech demand and usage from many fervent millennials. As the wider economy struggles to generate growth, the stock market appetite for tech will be whetted once more. The retreat in valuations is healthy - they have been high for too long (see table). While we retain a generally cautious stance (seasonal factors) we remind that in tech sentiment often beats fundamentals and when we get out of the office cubicle we are encouraged as we "look around; Y' ken can see it on the trees; Y'ken can smell it in the breeze; June is bustin' out all over".
The Slide Rule
12 Jan 17
What is The Slide Rule? The Slide Rule has been designed to dramatically simplify the identification of the best companies in the UK small/mid-cap sector by making a quantitative assessment of the relative potential of each company. At its core, The Slide Rule aims to identify those companies that create genuine shareholder value through strong returns on capital and solid growth, but also present a value opportunity with the potential tailwind of earnings momentum. Companies are assessed within a Quality, Value, Growth and Momentum (QVGM) framework.
N+1 Singer - Small-cap quantitative research - Momentum screen refresh + 10 focus stocks
12 Jan 17
We have refreshed our momentum style screen for the first time since inception on 26 July 2016. As before, the screen selects the 25 stocks exhibiting the most extreme momentum characteristics, according to our measurement method. From these we have selected 10 to focus on. Since inception the screen has underperformed both the main small-cap and micro-cap indices against a background of generally rising momentum. We have noted a subset of the basket, where decelerating momentum at the time of measurement appears correlated with significant share price falls since selection. We shall monitor this factor with the new screen, albeit there are only two such stocks showing this pattern, namely Lamprell (not rated) and Gear4music (not rated).
N+1 Singer - Morning Song 12-01-2017
12 Jan 17
As anticipated, the second half has again been stronger than H1 and results will be broadly in line with expectations. In line with this, the order book has continued to grow and is at record levels. This confirms that significant progress has been made in the Group’s shift towards its Technology Products division which, as targeted, contributed c.60% of group revenue in FY16. The small acquisition of Cable Power also gives a complementary boost to the product range. It is also worth noting the significant reduction in net debt, £1.0m ahead of our forecast. We remain supportive of the Group’s strategy and continue to see a bright future as this transition towards a design led technology solutions business continues. We look forward to more detail in March at the final results.
N+1 Singer - Best Ideas 2017 - Top picks
04 Jan 17
Today we publish our Best Ideas for 2017 - 12 stocks that we believe have excellent prospects in the current year together with a detailed discussion of what we see as the key sector and market themes for 2017. Our top picks are Cineworld, Elementis, Herald Investment Trust, Hill & Smith, IQE, MySale, Redde, ReNeuron, RhythmOne, SDL, Servelec and Severfield.
The Monthly January 2017
09 Jan 17
Despite all the hullaballoo of the Brexit vote and the subsequent election of Donald Trump as the next US President, the UK stock market prospered last year, especially in the latter few months of 2016. The combination of a depreciating currency – making $ earnings more valuable in relative terms - and the Trump emphasis on infrastructure expenditure drove the stock market higher
Making Mobiles Better
17 Jan 17
Mobile phones are increasingly the key connection for the modern world. This means that the performance of mobile phones, and their networks, is going to become more critical for all the apps and businesses that rely on them. New technologies such as VR, AR, and AV will need better, more reliable connections to really move into the mainstream. In this thematic piece we attempt to identify some of the most important issues facing mobile phone networks and their users, and start to identify solutions and enablers that will solve these problems and create value by doing so.