I bought shares in this company at 4.5p in September 2003. I see they are rising. Can anyone tell me please the growth potential for this company as they have just been awarded several new contracts ?

Tip Update: CMS should be a steal
Published: 10:36 Fri 16 April 2004


Citywire tip CMS WebView's 2003 results show healthy growth but this year and next should start to look a lot more interesting.

CMS (CWV) has developed software that collates data from many sources and can push that data out to many different customers as a single, consolidated feed in real time. The company also offers a data feed service to customers by using its own software, and has the exclusive European distribution rights to a data terminal called ProphetX for commodities and energy markets


The initial target customers for its TDI software are the world's commodities exchanges, and the small AIM-listed company boasts three major exchanges: the London Metals Exchange, the Chicago Mercantile Exchange and the Chicago Board of Trade, as customers.


Turnover for the year to December grew by 35% to 1.6 million, and losses before tax fell by 20% to 543,000. Having completed a placing at 10p per share in December to raise 2.5 million, the company had cash at the year end of 3.3 million.


As we reported last month, AAA-rated Giles Hargreave picked up 1.9 million shares for his Marlborough Special Situations fund in the placing.


Chief executive Bob Antell told Citywire that for the past three years, the company has been in development mode, creating and perfecting the TDI software. The new money raised in December was to strengthen the company's sales and marketing effort, and Antell reckons that just three months after raising the money the efforts are beginning to pay off.


He says: 'We are already seeing an increase in the number of people who are aware of us. This time last year we had about six prospective customers, now we are talking to about 100 people.'


Antell stressed that these prospects are at 'wildly different' ends of the spectrum in terms of how close they are to negotiating deals, but the good news is that with the TDI product now completed and support contracts ready to pluck off the shelf, margins on any new sales should be significantly enhanced.


The company has opened a US sales and support office in Chicago, and is also looking at potential partnerships with other vendors that supply exchanges, such as PC vendors, network bandwidth providers and the like. (continued...)

In addition, the company has started marketing TDI to banks. Antell reckons banks are increasingly looking to take real time data feeds direct from the exchanges. He says that to do this, they need to be able to pull in all of these separate feeds, which are often in different formats, consolidate them into a single source and be able to push them out to their own customers. TDI can do this for them, he says.


Not that this is an easy sell. CMS is still a very small and pretty unknown entity. The exchange customers are clearly a good starting point and having them should at least open doors, but Antell does not claim it will be easy to win the first banking customer.


Nevertheless the company's broker, Corporate Synergy, has some fairly ambitious growth forecasts for this year and next. It is looking for turnover of 3.6 million, profits of 300,000 and earnings per share of 0.3p this year rising to 6.4 million of turnover, 2.4 million of profit and 3p per share next year. The broker has a target price of 18p for the shares.


This implies one sale of TDI in the first half of this year and four in the second half. The broker told Citywire this morning that it is comfortable with that.


Last year's figures include only minimal contribution from ProphetX, which was selling only in the UK until January, when CMS won the extended rights to distribute it throughout Europe. Antell was unable to comment on recent press rumours that there was a potential large deal for ProphetX in the pipeline, but it seems probable that the company has been in serious talks, possibly with an exchange.


The market would clearly have liked a little more positive news this morning and has marked the shares down 1.75p at 9.75p, valuing the business at little more than 7 million.


Citywire Verdict:


Sales of 750,000 software systems do not happen over night, particularly when the vendor is a 7 million UK company. However it has three excellent reference customers, and with money in the bank for sales and marketing CMS would be seriously slacking if it fails to capitalise on the opportunity these reference sites present. (continued...)


The biggest challenge the company faces is without doubt sales and marketing, and it may need to look at finding a bigger and more high profile partner to help open doors at a faster pace.


CMS is also one of the dozen or so small listed software companies that fund manager Sean O'Flanagan of Unicorn Asset Management referred to yesterday when he told Citywire that these companies were ripe for consolidation. Although the money raised was not specifically for acquisition, it could give CMS the opportunity to become one of the consolidators. Equally, it could become an attractive take over target itself.


Either way, at just 3.25 times next year's forecast earnings, and with 4.1p per share of cash, the risk that some of the pipeline deals do not convert as the company hopes is more than factored into the share price. The market seems to be missing a trick here. Buy.

this share should bounce back next week

Having been a little diappointed with todays results.There is some serious upside to be made, once a few TDI contracts are announced.Have continued to top up at lower levels before the markets finally wake up.Imho looking at todays trades 10p looks to be the bottom.

Imho you are going to have to be very very patient to the point of dispair. Expect volume to drop rapidly after today. Buyers are not going to return until the dinners on the table. Have been very disappointed with Shares Mag, have in my opinion been very amatuerish. Very positive hyped up article in Nov ultra bullish for 2004 2005.Further deals done, update a few months ago price target 20p. And yesterdays rather half hearted kopout a hold at 11-12p.SM will obviously jump back on the bandwagon when deals are announced.

Have to email SM and ask why the rapid change in stance, when the future for cms looks as rosy as it did in NOV.

Disagree about volume dropping, Momentum.

At least in the short term we should see volumes rise. The company will get some degree of publicity with the results, which I don't think are the worst in the world, and all publicity is good publicity for small companies such as this.

Momentum!

I couldn't agree more with your comments on Shares Mag appearing very amateurish. That had to be said.

CMS tipped at 4.75p was already at 6.75p on the Thursday morning of publication. Who pushed this price up 42% prior to release of the tip? The tip was massively bullish. Massively bullish, to the point that such a change in stance by the enlightened reviewers yesterday, beggars belief. A target of 20p was the only follow up for CMS since the tip. Now it is merely a hold according to them at 11p.

What has changed for this exciting growth company since the tip? Is 20p no longer a target?

Shares Mag needs to take stock of this "Grand old Duke of York" business marching us all up the hill with unrealistic expecations only to quick-march us back down with those watery comments in yesterdays Mag.

Or perhaps I need to take stock, and look at which financial mag I subscribe to.

TSQ.

I am actually very pleased with the continued expansion of CMS outlined in results.

This is going to be an exciting year for the company and I cant understand why any mass sell-off should occur.

Ask yourself this, if someone had offered us private investors stock at 10pence in the recent fundraising, wouldn't we have taken their arm off!

What has changed??? Not much Director selling happening either? These guys are sitting on ten-baggers and still they hold. I wonder why?


TSQ.

When i have time ill email them. Could be interesting if one is received. Answer will more than likely contain the lines " Due to market conditions"

Enjoy topping up stephen

Have built a large holding in superscape results next week. Fingers crossed the results will be well received.

Have a good w/e

Have topped up at just over 10pence.

Could easily see renewed interest in this stock next week. Shares Mag should review the results.

Will check out superscape.

Regards
TSQ.

Short/ medium term upside is looking very limited.imo 12p will become a tough resistance to crack. Downside 10p offers solid support at present. However the longer we go without any announcements on TDI, the more this resistance level will come under pressure.If within a few months no news has been forthcoming the 8p may be tested for support.The placing at 10p is history but at present is offering support.Stock will continue to be driven by retail and traders.
Looking into end 2005, 2006 we could be sitting on a 10 bagger.

2-3 years is a med -long term investment and patience is required.Remember its been almost 6 months since cms had its day in the sun and as far as the SP is concerned gone nowhere.

momentum

I do not think that CMS handled yesterdays results very well, we just got the basic info. It was a pity that CMS chose to use City Wire, instead of the results
release to give out their forward looking views. Perhaps it is part of CMS to
underplay things.

Corporate Synergy were very comfortable with their forecast of one TDI contract
in the first half and four in the second half, this must have come from CMS.
So with the outlook looking much better and a steady stream of news to come.
And that does not include anything from prophetX, Cinnober and DDF, I agree that
the 10 bagger forecast by 2006 could be achieved. And with a decent comfort margin.

Bloodhound

momentum, I accept your technical analysis on support levels, but if I can offer you my reassurance, from a fundamental point it is this - CMs now has cash balances of over 3million and a market cap of about ONLY 8million.

The "Business" if you like, is currently being valued at less than 5million.
That is quite simply ludicrously cheap.

The price doesn't reflect any prospect of TDI sales, let alone increasing ProphetX revenues! Nor does it reflect any industry consolidation potential.

I very much believe we could be looking at a 2year 10 bagger, but patience and our support as investors & I think this company will reward us.

TSQ.

Agree on fundamentals TSQ, but there are lot of investors who piled in during November ( herd mentality) who i beleive are not long term holders ( suehelen) who dooesnt seem to hold anything longer than a week.They will eventually lose patience and sell, unless new buyers come in ( TDI contracts announced) the SP will move lower on thin volumes. Remember this is a micro cap stock with very little following.

broker forcasts
31-12-2005 eps 3.00p p/e 3.50 eps growth 900.00%

I think that CMS have held back some information on contracts for ProphetX, the
results just gave out the minimum ammount necessary. Would not be supprised to
see a news release in the very near future.

bloodhound.

I got that feeling myself bloodhound. The chairmans comments in the citywire article give an air of confidence in the increased sales potential.

The website has been spruced up as well.

A professional little company.

TSQ.

Justed as i supected, some delayed buys spilling over from friday.A couple of 125k and a 50k sell,some very small buys between 8.30 and 10.00 and thats it.
I also think youll find the market beleives CS are way to optimistic in the projected earnings figures.However still happy to buy at these levels but no higher.