Was rather bearish on tech stocks up to about a month back, but for sure the markets seem to have weathered the spring and summer storm and are starting to look intertesting again.

Compel Group as a leading market position in short term IT rental and enterprise solutions. Yesterday it released some cracking results which are summarised below.

The Highlights:

Compel returned a strong performance for the year, continuing to
outperform its competitors

Substantial improvements in turnover and profitability

- turnover increased by 20% to 63 million

- operating profit, before exceptionals and goodwill amortisation, improved
by 140% to 1.2 million.

- after exceptionals and goodwill amortisation, Compel returned an operating
loss of 0.5 million (2003: operating loss of 1.5 million).

Markets have stabilised during the year; the decline in IT expenditure
levels has halted and, in some areas, is showing evidence of increases

Two acquisitions during the year, Syscap and Sysao, strengthened the
Group's already leading market positions in short term IT rental and
enterprise solutions

The outlook and prospects for Compel are very good and better than they
have been for several years



CHAIRMAN'S STATEMENT

I am pleased to report on a strong performance by Compel for the year to 30 June
2004.

The Group achieved substantial improvements in turnover, which grew by 20% to
63 million, and operating profitability, which improved by 140% to 1.2
million, before exceptional costs and goodwill amortisation. Operating loss,
after exceptional costs and goodwill amortisation, was 0.5 million (2003: loss
of 1.5 million).

Two acquisitions during the year, Syscap and Sysao, strengthened our already
leading market positions in short term IT rental and enterprise solutions. Both
have been successfully integrated into the Group and are performing to
expectations.

After a number of years of uncertainty, it is encouraging to report that our
markets have stabilised over the last 12 months. The general decline in our
clients' and potential clients' expenditure levels drew to a halt during the
period and, in some areas, we are seeing evidence of increases. Our businesses
do not rely on substantial market growth - they have, as in previous years,
outperformed our competitors and increased their market share - but improving
conditions will clearly be to their benefit and increase their speed of growth.

None of this good progress would have been possible without the consistent
excellence of our employees. They have as always seized the opportunities
available to us with drive, aggression and commitment. On behalf of the Board I
express my thanks for their hard work.

Our markets are now stable and sales momentum is healthy. The increasing
emphasis on value-added solutions and services, coupled with our operational
leverage, gives us scope to target improvements in operating margins. We believe
that the outlook and prospects for Compel are very good and better than they
have been for several years.

Sir Michael Bett
Chairman.

Fundies

Share price is very near its nav per share, the market cap being circa 24.7 million versus NAV at 20 million.

Cash balance is a positive 6.4 million and the company have been generating good cash flow over the last 6 months.

EPS were 3.6p above forecasts of 3.2p

Historic P/E of 22 (low for the tech sector)

Forward forecast P/E of 13 based on EPS of 5.6p.

Conclusion,

You can buy the shares today for around 93p, I like the look of this one and it appears to have a high Beta. Contract wins through the second half and improved trading should move the share price northwards.

Please DYOR

Dil will, but gives us a bit more.

cheers Gf.

Can't ;-)

Back to compel then, cheap at the price.

cheers GF.

Buys far higher than sells but price slightly down. Next few days should bring rises.

cheers GF.

Could get news in the shares mag and investors chronicle on this one this week.

cheers GF.

Cracking little tech stock this on a low forward P/E of 13 aswell. Well worth a dabble.

cheers Gf.

Nice rise on this one today and please remember this a asset and tech play with NAV per share just short of the market price. Plenty of security built in.

cheers GF.

Moving up again, investors starting to take note of the value in this one.

cheers GF.

Compel giving it some this afternoon , moved up nicely.

cheers GF.

Starting to take off this one, if you dont hold think seriously about it.

cheers GF.

Quiet day today, but should resume going north in the morning.

cheers GF.

Starting to tick up, some nice buying going on.

cheers Gf.

Starting to move up.

cheers GF.

Stats information on Compel CGR.



http://companyresearch.digitallook.com/cgi-bin/digital/security.cgi?username=1038899&ac=7019701&csi=11309

cheers GF.

Moved up nicely today. Over 6 million of cash and cash flow positive generating a nice return inwards.

cheers GF.

Motley fool site as a lot of fans of this one.

Strong sound company.

cheers GF.

Long time no posts here!

I see Shares Mag has recommended CGR as one of its Plays of the Week today. I happen to believe CGR is extremely undervalued on a low P/E and with a 6.3m cash pile on a 31m m/cap - plus huge cash generation each year. Could someone help me out with access to the Shares Mag narrative or the key points please?

Many thanks.

Im still in Rivaldo its one of my sleepers, it as some very sound fundies behind it.

Sorry I cant thelp you with the Shares article, nice to see that its been tipped though.

cheers GF.

Thx GF, good to see another soul here. The tip has now been reproduced elsewhere, so I'm happy to copy it - very bullish, with a forecast 40% rise to a 130p price target:

"Compel Group BUY @ 93p

Once upon a time Compel was valued at nearly 200 Million pounds, with its shares
peaking at over 600p. But that was in the heady days of 2000.

Returning to reality was painful. The desk-top hardware division was sold in 2001, slashing sales but improving earnings quality no end. Customers cut IT spending for three years in a row and main supplier Oracle is only just getting to grips with its PeopleSoft offerings, having bought the giant software company a year ago.

Sales and profits fluctuated until 2004, since when Compel has been on the mend. Its policy of organic growth coupled with purchasing private companies at earnings-accretive prices from its growing cashflow is paying off. The IT market is expected to grow by 5% a year and Compel is increasing its share. It is either number one or number two in its chosen sectors. This means EPS growth of @ 10% this year and next.

Earlier this month, Compel snapped up the market-leading PeopleSoft consultancy and solutions provider Allinity for an initial consideration of 1 million pounds. Profits should grow to maybe 150k next year. Last June, Compel bought Hire IT for 4 million. Combining Hire IT with its Hamilton short-term IT rental offshoot means Compel has 80% of this market.

Last years sales rose 25% to 79 million, while normalised Pre tax profits amounted to almost 800k compared with a loss of 300k the previous year. Cashflow rocketed from 3 million to nearly 11 million.

A high-profile business solutions contract for Which? saw Compel successfully implementing a new customer database and subscription system. A typical contract within the technogoly solutions side was upgrading the warehouse systems of one of the world's leading mobile phone providers.

Blue chip clients include BT, Arriva, Cap Gemini, Sony and Vodaphone. Recent wins includeAlliance Trust, Daiwa Securitiesand South Yorkshire Police. Ongoing IT maintenance and upgrading contracts provides a lucrative recurring revenue stream.

It looks time for Compel to attract a revaluation as its profits growth suggests a PEG of just 0.16 which is extremely low. Analysts at Charles Stanley forecast profits surging to 3.4 million this year and 4.5 million to June 2007. Normalised EPS should rise from 6p to 7.2p this year and over 9p next year.

This means the shares are trading on a forward PE of just 10, which is extremely cheap. The 12 month target price is 130p.

Conclusion:- A small free float of shares means the private investor is better placed to take advantage of a likely re-rating of Compel this year than institutions, which already own half the stock. With a rising dividend and a near single - figure Prospective PE the shares are 40% TOO CHEAP."

Excelent, cheers mate.

GF.