Having had my fill of the ramping at the other place, does anyone with any sense have any views on this company?

C&W's Real Time Nostro, powered by Gresham's software - the 'holy grail' of the banking industry - about to go live in October after several years of development with a steering committee, and with four major banks already committed. The major benefit of the package is that users involved in the Nostro system will know their liquidity to the minute, instead of having to wait until the next day to know their position at the close of the previous day. Said to be about to become the de-facto industry standard. There is little competition. Total market, according to the FT, of about $2.2 billion. As takeup moves along, a 'significant minority' of the revenue will accrue to Gresham.

A successful institutional placing just carried out, and said to be about to make it into the FTSE All-Share.

Just about broke 2 years ago, but now, it seems, has major investors queuing to buy.

Any thoughts? And, please, no ramping.

We are so far talking only about the banks in the UK of course ;-)

Crocodile,

Good point, and as you tightly imply, the potential market is of course worldwide, and huge.

What I would like to know is of course, are there any similar systems either in existense mow, or in an advanced stage of development? That really is the key question, because Gresham would have to have first mover advantage in order to have a chance of their system being accepted as a universal standard.

It's hard to imagine thhAmericans accepting a foreign system as a world standard, but you never know, after all Chase JPM are a major international bank, and have influence.

Banks are global these days and roll out systems globally. If the banks mentioned above use it in London you can bet they will roll it out to other branches.

Personally I dont think its that big a deal. I work for a Japanese bank its not difficult to get all of your systems to report ingoing and outgoing cash real time to a risk system.

Almost impossible to control your cash position as you are dependent on your correspondent providing real time information, which many dont do.

IT spend is generally well down in Finance and the next year is no different.

jeff,

Yes you are correct, but this system does sugggest a step forward from the existing legacy systems.

The computer syatem I am associated with has a risk system which updates every 10 minutes, with alerts and other bells and whistles, but this is almost certainly a step forward.

we are still spending on capex, and if anything new system rollouts are increasing!

Crocodile -

I don't think we ARE talking about UK banks.

Here's the RNS that started all the excitement:

RNS Number:1260L
Gresham Computing PLC
15 May 2003


Gresham Computing plc
("Gresham")


Gresham reports that it was announced today, 15 May, by Cable & Wireless that:

"...ANZ Bank, Barclays, JPMorgan Chase and Mizuho Corporate Bank are to adopt
Cable & Wireless Real Time Nostro as the standard infrastructure for sharing
nostro account information between financial institutions and other
organisations. The four clearing banks announced today that they will act as a
channel to market for the service and supply data for it.

Cable & Wireless Real Time Nostro is a subscription-based, online service
providing financial institutions with a real time, consolidated view of their
international transactions and balance details. The service is designed to bring
together all the major banks that provide nostro clearing services on a single
browser access system. It will provide them with greater visibility of cash
movements globally across all types of accounts held with their nostro account
agents, including those for foreign exchange, commercial payments and securities
settlements. Cable & Wireless Real Time Nostro is enabled by software developed
by Gresham Computing.


Scheduled to be operational in October 2003, Cable & Wireless Real Time Nostro
will help banks to minimise the risks associated with foreign currency and
securities settlements, improve the management of global liquidity and enhance
operational efficiency..."

Andrew Walton-Green, Chief Executive of Gresham said,

"The adoption of Cable & Wireless Real Time Nostro by these leading banks is a
major step towards establishing this service as the de facto standard for
sharing Nostro account information. This is a major leap forward for Gresham
towards our objective of delivering significant medium and long term growth."

Wendy,

Are there any estimates as to how much the current deals are worth to GHT in the 1st year?

And if so, do you know the profit margin?

No, Andy - that's the problem.

Revenue to C&W is reputed to be $5000 per desk per month. Likely market share is unknown. The FT estimated that the market was 7000 banks, each requiring 5 desks, which comes out at $2.1 billion if C&W achieve total penetration.

Gresham are being very coy about how much of that will accrue to them - a 'significant minority' was the quote! However, they have said clearly that they expect revenue in 2003 to be modest. And how much of that modest revenue will turn out to be profit is anyone's guess.

Also, with more countries joining the Euro the number of currencies to be controlled is reducing.

Any thoughts on this one, looks to be breaking the 300p resistance, which is also the upper line of an ascending triangle. hesitating as has had such a good run.

Things have gone very quiet on this one. No news has seen it dip steadily. Any thoughts of whether we might see a bounce back to above the 300p mark.

Citywire favourite Gresham Computing returns to prominence at 304p, up 19p, as Bank of America signs up to provide data to the Cable & Wireless Real Time Nostro (RTN).

This brings the number of leading financial institutions who have agreed to provide data in C&W's RTN to 11

Things are looking very interesting here. i think these will be going places soon and especially after US open today. Deffinately one to buy and hold. IMO

Tip Update: Gresham shocked by share fall (CityWire)
27/04/2005

Gresham Computings chief executive was stunned to find his companys shares down 17% today in spite of continued positive progress from its major project with Cable & Wireless.

Shares (GHT), which have been as high as 446p on the excitement engendered by the Real Time Nostro (RTN) foreign exchange reconciliation system for banks, are down 49p at 225p, valuing Gresham at 111.8 million.

If the market thinks that progress has not been quick enough on RTN, then it has forgotten that Gresham never claimed that revenues would come streaming in overnight. This was always going to be a long-term project, dependent in the first instance in getting as many of the worlds top banks to put their data onto the system as possible, before serious revenues were likely to flow.

I am stunned, chief executive Andrew Walton-Green told Citywire. He clearly expected that news that four of the top ten banks have signed up to the system and three are live, with eight banks in total providing data and Barclays live on the full blown Nostro Direct real-time reconciliation system, would lift rather than depress the share price.

Last year we were live with just one bank. Now we have eight providing data and a sensible pipeline for more going forward, said Walton-Green. We have made significant steps in the right direction. This was always a long-term play, but we feel buoyant about progress


Revenues from the C&W RTN service (for which Gresham provides the software and C&W the hosting), started coming through last August, but as Citywire has reported on a number of occasions, company-transforming revenues were never expected at Gresham for at least a couple of years.

Elsewhere, the company reported turnover for the year to December up 21% to 12.4 million. Operating losses reduced by 35% to 1.4 million and retained losses after tax were down 54% to 900,000. The company had net funds of 3 million at the end of December.

It is perhaps the continuing losses rather than the RTN progress that have suddenly spooked the market. The company is after all even now valued at 111 million, which clearly reflects more than the basic trading business.

However Walton-Green said the money is being spent on development of the companys longer-term strategy, which includes the RTN system and another potentially very interesting system that provides real-time invoice and payments reconciliation between companies, their suppliers and their banks.

The system is aimed at improving working capital flows, and Gresham won its first customer, a major UK bank, which is now live using a system that involves Greshams Casablanca middleware software and a third partys application software, to provide a working capital straight through processing system between the bank and its major corporate customers.


The company is currently developing its own working capital system in Australia with a leading Asian telecommunications group. The idea will be to bring it to market through the telecoms group in much the same way that RTN is being marketed by C&W.

Walton-Green said a huge amount of progress has been made in supply chain management, but virtually nothing has been done to date for the financial supply chain.

The other string to Greshams bow is a deal with US giant Hewlett-Packard to resell Casablanca, which runs on both mainframe systems and modern open systems enabling access to data from any of these systems, using a single graphical interface. Last year the company entered a deal with Hewlett-Packard under which HP would resell the software, primarily to its banking and financial services customers. HP has been actively promoting the software since December in the US and is now doing so in Europe. While there are no deals to show for this so far, Walton-Green reckons it is only a matter of time.

Broker Baird initiated coverage on Gresham with an outperform rating. The broker has a price target of 360p based on both RTN and the other new applications, and advises investors who think theyve missed the boat to look again.



Having tipped the shares at 61p nearly three years ago, we warned investors when the hype looked to be getting too much and have advised taking profits at several points. It is interesting that when the shares first rocketed, there was absolutely no certainty that RTN would be adopted by any of the banks.

Now there are real banks putting real data on, and Barclays is live on the data streaming service that enables it not just to browse data on an individual basis, but to use that data to provide straight through processing for real time reconciliation of forex transactions. And yet now investors appear to be running scared.

You need to be aware of what you are investing in. If RTN takes off as the two companies hope, it will be a company-changing thing for Gresham. But there are still no real estimates for how big it could get, or when. The risks are starting to diminish, but they are still very real. So too is the potential though

http://www.citywire.co.uk/News/NewsArticle.aspx?VersionID=73899

Not holding these but are begining to look tempting. Any views?

This is a real roller coaster ride - anyone temted to jump on? The share price is very tempting today what with the further fall in the share price.