Computer Software Group EPIC : CSW

Shares in Issue : 56.79m

Web Site : http://www.computersoftware.com/

E-Mail : investors@computersoftware.com

Broker Forecasts :

Seymour Pierce 28th Feb 2007 BUY

2007 PTP 8.3m
2007 EPS 9.7p

2008 PTP 9.6m
2008 EPS 10.7p



Company Overview

Computer Software Group (CS Group) has been delivering innovative business solutions for more than 30 years. With 13 offices in the UK we are a leading UK software house focusing on the development of fully-integrated solutions for British and International companies. Today CS Group helps over 2500 companies, including many market leaders, in a wide variety of industry sectors.

CS Group is listed on the London Stock Exchange (CSW) and our impressive client list includes: Blick UK, CBI, Cembre, Chesterfield Borough Council, Connaught, Electrolux UK, Manchester City FC, Morphy Richards, RNLI, Rocom and Thomas Plant among many others.

Why Computer Software Group?

There are many reasons why our customers choose Computer Software Group and our solutions:

-We are the leading UK IBM iSeries software house offering a completely integrated and vertically-focussed solution portfolio from the web and mobile-enabled front-office systems through to back-office accounting and payroll. CS Group solutions have successfully been deployed by more than 25% of the IBM UK iSeries installed base.
-30% of Premiership football clubs run their business with our software. Our leading-edge integration with smartcard technologies has extended our capabilities to include access control integrated with ticketing, CRM, websales, merchandising and corporate sales.
-Our acquisitions of Pinnacle, Advatech and Prolog position us as a leading solution vendor in the Field Service sector with more than 25% market share and with more than 1200 combined customers. Our rich solutions portfolio, extended with new capabilities, is able to address the needs of any service management company.
-We are a leading supplier of membership software and fund raising software to the Not For Profit sector, offering web-based solutions to professional bodies, trade associations, charities, unions, NGOs and sports governing bodies.
-Our acquisition of Transoft have extended our solutions suite to offer application modernization, integration and migration. These specialist products and expertise enable organisations to evolve new IT solutions from their existing ones, allowing companies to deliver improved business processes faster, with less risk and with lower costs.
-CS Group solutions can be purchased or rented on an applications on demand basis for a low, fixed monthly fee.

This was the write up from http://www.growthcompany.co.uk back in June at 99p and also prior to the forecast EPS upgrades for the current year which now stands at 10.1p forecast EPS for 2006 (to be reported 30th Nov). A major event, IMO, after this was not only the acquisition, but also in August a director buy of 100K shares at 100p, which tends to support that they expect strong growth ahead.


http://www.growthcompany.co.uk

Computer Software Group - STRONG BUY
Companies: CSW
27/06/2006
Niche IT software consolidator CSG one of Growth Company Investors picks for 2006 at 68p has made a further move into the legal sector through the acquisition of Laserform. Weve now done two deals in legal, and you can expect more, teases chief executive Vin Murria.

Cash generative CSG has paid 4.8m 4.3m in cash from banking facilities, the rest in shares for Laserform, a provider of documentation and practice management software. It boasts over 2,000 clients, including 80 of the top 100 UK legal practices, and great levels of revenue visibility. If you factor in the 1.5m of cash on Laserforms balance sheet, the true enterprise price paid was lower at 3.3m.

Laserform sported sales last year of 4.1m last year, making 500,000 at the EBITA level. As such, it should enhance CSG earnings this year. If Murria can turn a profit at AIM Group, the legal software venture she bought in May for 5.3m, this intriguing niche could become increasingly important for the company

Analyst Derek Brown of house broker Seymour Pierce has upgraded his February 2007 numbers from sales of 36m to 38.8m, up from last years 25.2m. Those revenues should deliver adjusted pre-tax profits of 7.8m and 9.4p of earnings, figures that place the shares on a forward p/e of 10.2. That rating looks miserly, given earnings are forecast to burgeon by 20.5% in the current year. This group is a strong buy.

Lets hope some coverage from TW along with SCSW (both have it as a buy as well as GCI) will raise the profile of CSW into their results.

3 MM moves up today, L2 now 2 v 1 @114/117

Rolll on the 30th Nov and results.

From the Daily Express this morning as reported by a post on AFN. Cannot not agree, the results should be very impressive as well as the outlook statement :

SHARE WHISPER.
Aim Listed software firm, COMPUTER SOFTWARE GROUP, gained 4.5p to 115.5 yesterday as traders bet on a strong half years results due on November 30, after it bedded in several acquisitions.Impressive intrim figures could lead to a share re-rating.

One thing I like about them is the management team. Vin Murria, the CEO has been with CSW since 2002 and was in the past the COO of Kewill and is a key figure in the CSW's growth. The chairman is Michael Jackson and he is also chairman of Sage. The CFO Barbara Firth has more than 25 years of accounting experience. Its a good team in place and one that is going to be taking CSW places in the near term and over the long term.

The are getting a reputation now for earnings upgrades, and that adds to the appeal for me.

Ive got a few here PP, should have some excelent results.

I suggest you putting them in your compo portfolio over the road, so that I can overtake you.

Nudge nudge, wink wink.

goldfinger, got a bagful in both mate :) real and the competition. Trouble is those percentages get put back to zero later next week, so got to make all those gains again........

Everyone is looking forward to interims late Nov, and the company says comfortably in line, so should be a cracker.

o/t in case anyone is wondering, its this competition : http://212.26.134.247/Competitions.aspx

Post from AFN, the current year 11.5x is very undemanding, as is their target price of 14.5x current year (07) EPS imo. :


edcrane - 30 Oct'06 - 09:40 - 162 of 162


New research note out this morning from Collins Stewart .....

" ...... currently trades on a P/E multiple of 11.5x FY07E adjusted EPS, a discount to software comparables. However, we believe that current growth rates and cash generation justify a narrowing of the discount to a P/E multiple of 14.5x. This is supported by the improving trend in ROCE and our DCF analysis, which suggests a fair value of 156p. A potential catalyst for re-rating is earnings upgrades, driven by cross selling and increased cost savings. We therefore initiate coverage with a BUY recommendation and a 145p price target."

.

Strengthening up begind the scenes, few MM moves up today on L2, its now 3 v 3 @117/120

180K X trade.

Looks like its been decided to clear the seller out then, positive sign and we could be on for a new higher trading range after a breakout later this month imo.

Reason would be that results are due late this month, and with FY expecation of over 10p EPS for this current year, CSW is undervalued imo, by some mark.

Now is the ideal time for anyone wishing to add or buy, to add or buy IMO.

Nicely set now for a run into and out of results.

Given they said "comfortable" I expect results to be slightly, ahead, and given the potential for over 10p EPS this current year, and yet more growth for next year, we should be heading for the 150p price soon enough.

Perhaps the market is waiting for proof of the potential for 10p EPS at full year, with the interim results ? Well, Interim results are due Thursday 30 November 2006.

;-))

Run up to results looks like its starting. They should be very impressive given the trading update.

L2 presently all blue 2 v 2 @115/117

I have level 2 thanks papalp....

whats your target? i'm looking at 1.50??

I'll work on some valuations tomorrow, in the meantime :

Couple of media articles on CS Group :

http://sourcewire.com/releases/rel_display.php?relid=28116&hilite=

http://www.servicemanagement365.com/Call_Centre_Helpdesk_Software/Article411085.aspx

thanks

also watch sqs. (dyor)

I am watching that :)

Esimtate and pricing, well we expect this year to be over 10p EPS, and around 20% growth would give 12p EPS for next year. CSW is cash generative and growing.

How should it be priced, well if you were very conservative and said 15 times current year forecast EPS, you are looking at 150p. But why should a company thats based in the UK, growing and with a low PEG rating be valued as such ? Therefore, if you based this on 15 times next years earnings you get around 180p fair value. The low PEG rating should in fact make 20 times next years EPS not overvalued, and thats 240p.

Therefore, at sub 150p I would consider CSW as undervalued. 150p to 180p fair value (at the moment pending upgrades) and up to 240p nice for holders.

The real plus sides are the growth and the cash generation.

I am not going to worry too much short term, as in the mid term and longer term the value here will surely out.

interesting... also in for the long ride