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 ?

Sat Apr 17 11:29:25 BST 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.

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.

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 article first appeared on Friday 16 April.

Quite happy for the price to continue down.Still buying at these levels. However if 10p breaks i shall step back and do some more hoovering around 8p. Obviously when im fully invested, they are quite welcome to reverse the trend

Funding raising at 10p appears to be support why ? perhaps a few digruntled institutions.Anyway we ll soon be able to buy under the placing.Its about time us small investors got one over the institutions (suck in with the hype).we were totally ignored in the fund raising and now im so glad we were) Are hignsight.

9.5-10.5p next move 9-10.5, 9-10 8.5 -10, 8.5-9.5, 8-9.5, 8-9p until mid gets to 8p.Coorperate synergy will soon have to lower there projections imho. Will begin buying again at lower levels.In for the long term, but negative on short term SP.

momentum,

I realise you're following the trend, but its practically trading at its cash balance level.

The market will soon realise that this negativity has been overplayed. This has got to be a buying opportunity.

Even 1 TDI contract will change this trend!

TSQ.

Agreed price is cheap and it will get cheaper.At the end of the day youve got to have volume buying to drive the price, we are not getting this and until we do the price will continue with its current trend. Point and figure, which is a good indicator for trend change is showing continued weakness. It has also been some time since the last TDI contract.Imho CMS are finding it tough trying to secure another.

Let your trend be your friend. 9.25-10p and still no buyers at these levels.Looking for a 9-10 close.

Looks like a lot of investors are beginning to lose patience. 9-9.5p. 8p is my initial target. But 6p post share mags tip could be capitulation.Pre Nov tip SP is still up 100% and apart from fund raising nothing of any significants has been announced, so we are heading back to where the rally began.

That's enough for me ! Already lost 30% on this junk so am getting out before that becomes 50%. Going back to some nice safe companies !
Good luck to the rest of you.

Flinny,

I understand the sentiment but IMHO it is worth hanging on to - at least I am going to for the near future. Giles Hargreave picked up 1.9 million shares last month for the Marlborough Special situations Fund. On 16 April Joanne Wallen, Citywire recommended it as a buy (have had a lot of success with her recommendations). "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 hope is more than factored in to the price. Buy". She also suggested it could be a takeover prospect. Good luck!

These will be back up, the MM's are taking the people who took T10's out for the results to the cleaners thats all.

Momentum,

I agree with your sentiment, CMS is drifting and will continue to drift (not necessarily lower!) until direction is is secured by revenue.

This new low has attracted buyers to the stock - probably existing holders adding though.

Have topped up holding as I believe in the product set - but believing in a product set and securing new contracts are miles apart, the rest is pure conjection!imho.

Patiently awaiting that golden rns.

JJ50, thanks for your posting. I'm just not experienced or patient enough to stick with anymore high risk investments - I was doing very well with stocks that I am familiar with eg COLT and Spirent who are good solid companies. I'm sure CMS will eventually come good but I bought at 14p and that looks at least two years away at the moment. I'm confident I can get my money back and get into profit by trading with my favourites !

Flinny, I agree - stick to your winning formula. Good luck with Colt and Spirent!

14p 2 years away ?! TDI contract announced between now & end of June 15 - 18p support. Then maybe another 4 announced 2nd half of year plus Prophet X clients.....30 - 40p year end should be fairly easy. Good luck however if your winning ways are working.

Initial and continuing support fees from these three big customers accounted for 54% of CMS's miniscule 1.63m turnover in the year to December (which in turn helped to slice a fifth from pre-tax losses to 543,000). But Antell believes that the pace of TDI sales can be ramped up to as many as five this year. A couple of futures exchanges in the Far East are already said to be nibbling at the bait, even if they are not quite hooked as yet. He says he would be disappointed if he has not got something to report by the end of the current quarter in June.


Seriously undervalued !

At this price shares are trading on just 4 times next year's forecast earnings. Even allowing for some slippage in revenues, this share looks just about as cheap as they get at this time.

Too tasty guys! Very easy to be negative, but remember if you believe in the company over the long term, you only make brokers rich by buying in & out short term.

Maybe for the patient, but worth it. Are any of you seriously saying this company wont sign ANY new TDI deals!!!!!! Each said to be worth 500-750k?

Come on CHAPS! If the company wound up tomorrow, half of it is CASH in the bank.

Panic if you must, but ask youself this, given the company's increasing turnover, sales and move towards profitability, coupled with an oversubscribed fundraising at 10pence, is this really a no hoper??

TSQ.

10p was a key support level.A two day close below 10p, would indicate a move down to 8p. After this level this will be little resistance down to 6p and 4p. Will probably trade down to is cash level, before establishing a new uptrend.. I know unbeleiveably cheap, but the markets are not renowned for being logical. And we seen it time and time again.Remember this is a micro cap stock and fundamentals dont always surface when you expect them to, and quiet often behave in a different manner to a mid-small cap which are more widly followed.
Until we get an anouncement of a TDI contract SP is going one way and thats down.We may get news tomorrow or next year who knows.Im going to top up some more( big time) but ill what for them to get cheaper.At this rate ill soon have to declare an interest LOL

Anyone can see that their potential is massive & they are putting everything in place. Pulling all the right moves just a bit of a delay on firm news, we may drift some more but we all know what to expect in the coming months & I'm sure we wont be dissapointed. Expecting a small amount of blue tomorrow.

There's no big sells / sellers, just small retail investors which the MM's will be happy to take to the cleaners & sell their shares back to them for a nice markup. Good work if you can get it.

The big boys are sitting tight.