Topped the share charts on Friday following a lucrative contract announcement and is rumoured to have several more contracts in the pipeline.

Website www.coms.com

Article by David Thornton in Red Hot Penny Shares Mag about Coms:

How you could make 231% from ‘the voice in the cloud’
In Penny Sleuth last week I was evangelising about the exciting potential of cloud computing. This has been one of the most lucrative investment stories of the last few years. And it’s a simple story.
As you know companies like Amazon and iomart have spent the last decade building vast data centres – huge humming rooms of computers that act as server farms for the economy. Anyone who produces large quantities of data – from banks to telecoms – can now rely on these data centres to support their business. And it’s dawned on executives that they no longer need to build and maintain vast IT systems. They can simply rent out servers online or ‘in the cloud’ – just as a utility supplies electricity down the cable.
In fact, shares in iomart are up five-fold in the last three years alone. And the big lesson here is that by owning the technology that supports our economy, you could make serious gains on your investment.
I’d like to tell you about another great cloud-computing stock today. I recently spoke to David Breith, the new chief executive of this company. And I have to say I was very impressed. Breith is a telecoms entrepreneur with tremendous flair. Having sold his last business to Daisy, the listed telecom provider, he seized the opportunity back in January to buy a big stake in this company and set about transforming its prospects.
The company is called Coms (COMS) and it helps small businesses to rent their phone and data services in the cloud. It’s a simple story – the best ones always are! But I think it has the potential to deliver a 231% gain from here (at the very least).
The one telecom sector that produces great returns
The telecoms revolution has brought us benefits unimagined a couple of generations ago. The fact that you can make an international call through Skype for almost no cost at all speaks for itself. In many ways these advances have made the world a little smaller.
The problem is that even the smartest innovations rapidly decline in profit as competition moves in. Hardware is tough. And even a market-leading brand like Nokia can suffer a cataclysmic fall from grace in just a matter of years.
However, there is one sector of the telecoms industry where I think it is possible to grow a decent business from a small base; and that is by focusing on the customer service end. Because the fact is that big network operators can be more focused on their hardware and systems than on the people that use them. Helping customers get the best out of the service doesn’t always seem to rank as their top priority. I mean how many times have you had to penetrate a long list of options on our telephony provider’s automated switchboard or try to navigate their poorly designed website? Big companies can often be complacent in their attitude to the customer, especially in the small company sector.

AIM-listed Pinnacle Telecom (PINN) valuing its equity at around £6.7m. Pinnacle had sales of over £12m in 2012 and had raised funds earlier this year leaving it with net cash in the balance sheet.
However just before we went to press Coms announced that it would not proceed after Pinnacle rejected the indicative offer. Given Breith’s large shareholding in Coms, I assumed he wouldn’t make the mistake of overpaying and destroying value, and this has proved to be the case. The distraction of a drawn out bid process would also have been unwelcome. And I take heart from Coms’ discipline in walking away. We should however expect to see acquisitions and opportunism as the company grows. It is going to be part of the story.
This could deliver a 231% return
To reiterate: to invest in Coms at this stage is to invest in Dave Breith’s entrepreneurial flair. He is experienced in telecoms and has a clear vision of where he wants to take the company. The shares have had three big jumps this year. At the start when Breith came onboard; in April on the MITIE contract win; and again in June which took the shares up to the 4p level which valued the equity at £24m. That is a full-looking price for £10m of annualised sales – we are paying a premium for management and the expectation of fast growth.
Given the sales pipeline it is possible for Coms to have annualised monthly turnover approaching £20m by the end of this fiscal year which helps underpin the current price. As the growth momentum continues next year and the mobile leg is added, then the shares should offer strong upside. If a canny acquisition or two helps to accelerate the process, so much the better.
As a comparison, the more mature Daisy sells on a price of roughly 1 times sales, or 1.25 times sales if we include debt. If we get to that longer-term goal of £100m sales then the shares should do extremely well.
Let’s assume in a year’s time we are looking at a £50m sales monthly run-rate with prospects of approaching the £100m rate as we move into 2016. On that basis we should be looking at a market value in the £100m region on an 18-month view. We should allow for extra shares being issued to fund acquisitions; so that might imply a three-fold rise to 12p.
Verdict: Coms is a management situation as evidenced by the dramatic turnaround in prospects this year after Dave Breith became CEO. It is a bet on him and his team executing the growth strategy and supplementing it with smart deals. My target is 12p. Buy with a limit of 4p.

See also new Zak Mir article: http://www.tradersown.co.uk//magazine/read/coms-coms-fresh-buy-trigger-awaited_2211.html#sthash.S62CfFDz.dpuf

Simon Munro has also been topping up in the 3.6-3,8p range, so at least expect a holding RNS next week. Also note the huge buys after Friday's Close, which were not Simon's.

Thank you for posting that article 4PetesSake, an interesting read.

Bodes well for Iomart. :-))

I like this bit:

Let’s assume in a year’s time we are looking at a £50m sales monthly run-rate with prospects of approaching the £100m rate as we move into 2016. On that basis we should be looking at a market value in the £100m region on an 18-month view. We should allow for extra shares being issued to fund acquisitions; so that might imply a three-fold rise to 12p.

nice!

Exercise of warrants

Coms plc (AIM: COMS) advises that certain warrant holders have exercised their right to subscribe for 6,554,700 ordinary shares of 0.1 pence each ("Ordinary Shares") at a price of 3.7 pence per Ordinary Share. These warrants were granted at the time of the placing of shares announced on 14 May 2013. The Company will use the funds raised, of approximately £0.24 million, to help accelerate the growth of the business both organically and through acquisitions.

Application has been made to the London Stock Exchange for these shares to be admitted to trading on AIM and it is expected that dealings will commence on 13 September 2013. These shares will rank pari passu in all respects with the existing issued Ordinary Shares in the Company. The Company's enlarged issued ordinary share capital immediately following the issue of these shares will be 607,873,783 Ordinary Shares. This figure may be used by shareholders as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change in interest in, the share capital of the Company under the Disclosure and Transparency Rules.

I sent DB an email this morning, asking about progress with the Mitie contract etc, and i have kindly had this response from him as follows:


Hi Robert,

Unfortunately I am bound by a set of rules not to give out any price sensitive information, sorry.

I can state we are working on a number of opportunities, some of which are large and as soon as we can they will be announced via RNS.

Please be patient with us we have already got a very good track record over the last 6 Months, and the pipeline has only been increasing as you would of seen in RNS to date.

Thanks

Dave

Dave Breith | CEO

Surely its on twatter! :-)

Holdings in Company

Coms plc (AIM: COMS) has been informed that Simon Munro has increased his overall shareholding to 28,000,000 shares taking his overall holding to 4.61% of the Company.

There is the Simon Munro Holdings RNS that I promised you a couple of days ago.

I'm not sure whether I think Simon Munro is brave, or crazy! :-)

Buying in the 3.6-3.8p is surely a no brainer.

From Twitter - DB is doing a BRR Media Interview at 8.45am tomorrow.

The last time he did one on 14th June an RNS was released the same morning naming Mitie as the Company who the Big Contract was with.

Yawn.

Contract Wins

Coms plc (AIM: COMS) has made a number of recurring contract wins over the past month within its retail, enterprise and wholesale divisions. The total revenues combined are just over £1 million pounds per annum.

Dave Breith (Coms CEO) stated: "These contracts are a further example of the attraction of Coms' managed service offering based around its carrier class VOIP platform. I am delighted with the progress to date and the recurring nature of the contracts gives me confidence around the visibility of revenues going forward"

Doodlebug

Why the yawn, wake up to the RNS.

http://www.investegate.co.uk/coms-plc--coms-/rns/contract-wins/201309120700067826N/

Listen: Coms plc - Company Update

Click here

The following link takes you to the advert for the Coms HR Manager. The interesting part is the bit, which refers to the large increase in staff.

http://www.slideshare.net/slideshow/embed_code/26192238

4P's Link

Unless there is some news to bolster the sp, this could drift quite a bit lower, imo. Just from a chart perspective, maybe even as low as the 3p level?

Issue of Equity

Coms plc. (AIM: COMS) announced the acquisition of Premium O Limited on 12th June and 12 million shares being deferred dependant on £55,000 gross profit over the first 3 Months totalling £165,000.

The Company is pleased to announce that Premium O has achieved the gross profit and £357,000 in the first 3 Months from the date of acquisition has been achieved which is £192,000 over target.

Application will be made for the admission to trading on AIM of the 12,000,000 Ordinary Shares with admission expected to take place on 24 September 2013. The Company's enlarged issued ordinary share capital immediately following the issue of these shares will be 619,873,783 Ordinary Shares, The Company holds no Ordinary Shares in Treasury at this time. The figure of 619,873,783 Ordinary Shares may be used by shareholders as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change in interest in, the share capital of the Company under the Disclosure and Transparency Rules.

The 12 million shares will be allocated as such:
David Breith 7,140,000
Lee Campion 4,800,000
Suzannah Doyle 60,000

After allocation of shares David Breith (CEO) will own 137,326,455 shares representing 22.15% shares in the company and Lee Campion will own 24,000,000 shares representing 3.87% of the company.