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.

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

4 MM's up this morning so far, L2 now 5 v 1 @117/121, Interim results this Thursday.

calm down pp!

Not getting excited, just reporting whats going on behind the scense, as has always been done and will continue to be done :)

The little sell off late yesterday has offered a chance to buy sub 120p.

Results Thursday, should be strong, and I retain that sub 150p is undervalued going forward.

Nicely up today, now 3 v 3 on L2, all blue and @119/123

.

Superb results and should lead to current full year upgrades IMO :)

http://www.investegate.co.uk/Article.aspx?id=200611300701049622M

Computer Software Group PLC
30 November 2006
Computer Software Group plc
Interim results

Computer Software Group plc ('the Group'), the AIM-listed niche software
consolidator, is pleased to announce its interim results for the six months
ended 31 August 2006.

Financial highlights

Turnover increased 77% to 19.4m (H1 2005: 11.0m)
5.2m from acquisitions
Recurring+ revenue represents 80% of total revenue
Adjusted* operating margins improved to 21%
Adjusted* operating profit up 85% to 4.1m (H1 2005: 2.2m)
Adjusted* diluted earnings per share up 69% to 5.28 pence (H1 2005: 3.12
pence)
Profit before tax up 80% to 1.7m (2005: 0.9m)
20m credit facility arranged with Barclays Bank to support further
development of the Group

+ comprising support fees, upgrades and cross-sell

*before amortisation of intangibles and share based payments

Operational highlights

Acquisition of Care Business Solutions Limited ('Care') in March 2006 for
2.85m, strengthening the Not for Profit division
Acquisition of AIM Group Holdings Limited ('AIM') in April 2006 for 3.7m,
Laserform International Limited ('Laserform') in June 2006 for 4.8m and
Videss Limited ('Videss') in July 2006 for 7.1m, establishing a
Professional Solutions division

Vin Murria, Chief Executive and Michael Jackson, Chairman commented:

'We are pleased to report the results of Computer Software Group plc for the six
months ended 31 August 2006, which clearly demonstrate we have maintained the
momentum of the previous financial year. We have achieved growth both
organically, through sales and cross-selling initiatives, and by the acquisition
of businesses with a strategic fit and opportunity for improved margins.

We have established ourselves as a major supplier in our niche markets and have
acquired a leading position in the legal software sector. We believe
opportunities exist for further market consolidation and entry into
complementary markets and expect to continue our acquisition programme by
targeting businesses with a broad, good quality customer base and strong
recurring revenues'.

beautifull rising pennant....should take us to 135 short term dyor