Gladstone is a company which has recently become cash generative and is experiencing a turnaround in its buisness. Following a board change the group has turned the corner in securing future profitablility and is on track to report profit ahead of expectations within the next few months. Currently valued just over 5mil this stock is need of a re-rating and seems to have been exempt from the recent rallys.

Excerpts from Full year:

"Gladstone has made a full year profit after tax for the first time of 184k (last year loss 1,676k).

- Earnings per share before goodwill and exceptional items has risen to 1.53p (last year loss 1.50p).

- The quality of earnings has improved. Software support contracts and rentals now represent 37% of turnover (last year 31%).

- Ongoing investment in our core product MRM.plus2 continues to position us ahead of our competition."

"Our MRM trading division is performing in line with management expectations. We raised 260k by an equity placing in September 2003 and will continue to use
this cost efficient route to raise funds for expansion when appropriate. We are
continually looking for the right international opportunities and are exploring
the use of overseas distributors. Holmes Place, one of our private sector
clients, recently decided to upgrade to our central database solution and will
be using our software across 5 European countries. We have good reason to be
optimistic about the future."


Chart:




Full year:

http://moneyam.uk-wire.com/cgi-bin/articles/200312231436156124T.html

Well well, looks like it isnt worth 5million judging by todays response. Up 17% today :) Well guess it's just me holding these here.

Kael..I have been into these for sometime..I do not spend much time on these boards but am amazed that this is such an undervalued company.
If only the company would provide a little more news rather than just giving out positive statements.

I do note that volume has increased recentley so they could be about to move up to they level of 30p that I expect them to reach as soon as the results come out.

I would also like to hear out views/values if anyone else holds these.

I've been buying regularly for the past year for the following reasons:-
Market leaders 70/75%
Strong proven management team
Turnover & profit both accelerating
Increased bottom line revenues from consultancy & licence fees
Cash balances should easily exceed 1m+*
Turnover increasing 8/9m+*
Tax losses of 3m to be utilised
Possible/probably overseas partnerships
Cost control - last years total board remuneration less than 250k
Directors hold around 30%
Market cap 5/6m - farly low for profitable market leading software co.
Recent upbeat trading statement in May
Full order book

*estimates based on February interims

Looks very little downside in current markets.

Web site?

I have an (obvious) interest in small cap software companies so poked around for Gladstone's website which appears to be www.gladstoneplc.com -- but I'm getting not found.

Anyone know the correct URL?

TIA

That is the correct URL. Sharescope gives the web site of every company.
I did a tracert on it and it exists. It seems to be 62.254.200.5 and on ntl.net.com

Try www.gladstonemrm.com I think the plc site has been taken down for about 3 weeks now.

Seems to be a little movement today again.Could it be that something is about to happen, in regard of partnerships.

Kael:

You are right. www.gladstonemrm.com works. And it's all horrible Flash which will not work on every platform or browser.

Let me be very direct: it is very silly to disable the only Google-searchable URL for your company. It is child's play to redirect it. And why change it in the first place?

Why do I make such an issue of this? It all lays questions at the door of their marketing management. Given the importance of the Internet to a tech company, they need to get this right.

Yup completely agree with you on that one MM, as for why they did what they did, I have no idea. It's strange, as far as I can remember. when you typed in www.gladstoneplc.com it would redirect to the mrm site anyway. And yes, marketing needs a rollicking. Did anyone have the opportunity or boredom time to visit the Leisure show thing they were at recently?

This is not Gladstone plc. A piece of text on the MRM site: -

Gladstone MRM is a division of Gladstone plc.

Where is the rest?

Gladstone MRM are the only operational business of Gladstone, which is why it probably re-directs.
My only problem with the site is that the news section needs updating as well as some other areas - many sites use flash now.
They have done multiple sites for Six Continents, Marriott Hotels, John lloyd Leisure & many others, so i don't think it's any lack of web knowledge.

I have just taken a look at the sites..they are poor by any standards and why do they appear so out of date and lacking in news?

Could they be so busy they have no time top spend on own website? Also waste of resources, maybe thats the trick in making profits, which is what the company is now doing rather than wasting time on areas that do not bring a return.

If I had more funds available now..I would buy as I only see value.

Well aI would assume they dont make a lot of buisness via their website. Thus they dont feel the need to make it aesthetically pleasing.

Interesting to note the RNS from yesterday:

LONDON (AFX) - Gladstone PLC said it raised 110,000 stg before expenses via
a placing of 1 mln shares at 11 pence per share.
It added the proceeds of this placing will be used to strengthen the balance
sheet for business development.
rn

Possible reason for the lack of movement on high volume days.

I see from the returns yesterday that Ben Merrit C.E has bought 200000 shares at 11p. While another non ex has sold over 1 million at 12.7p.

A bit odd but I see this as a vote of confidence by Ben in the business.

I just look forward to the results or a positive trading statement before they go into a closed period.

Why do you think they needed to raise the cash though as I though they had over 500,000 in the bank and were ahead on profits from May statement?

Do you think they may be buying another business so to expand?

Could be, it wasnt a large sum of money - if it was I would have been a bit worried but waiting and holding these ones - still fundamentally undervalued.

Trouble with this one it looks like dead money until results. However, just the time that one sells it shoots up for some unknown reason so I will sit and wait and even buy a few more if it slips back to 11p

This is looking very interesting now. Acquisition in the making:

LONDON (AFX) - Gladstone PLC said it has issued and allotted a total of 1.5
mln new shares via a placing at 11 pence per share, raising 165,000 stg before
expenses.
The proceeds of this placing will be used to strengthen the balance sheet
for business development.
rn

Key part is the latter sentence.

Has not done anything for the share price Kael.

Of course it hasn't, reason being that it was placed at 11p. current mid price is 11.25p There needs to be further clarification on the company's position. Of course a trading update wouldn't go amiss current value stands at 11.25p = @ 4.7million.

Question that investors would like to know is why would they need to make a placing when they are cash generative? There are only a few possible reasons for this. The only reason I would panic about is that they are in the red atm.

This imo is not the case. Therefore it leaves us with a few options, most of which would be encouraging. The only inkling for the moment is that last sentence, which, the way it is worded, could mean any number of things. IMO they would either be looking to make an acquisition, funding for international expansion or funding for a new product. Whichever option proves to be correct they are the market leaders in their buisness and that can only be encouraging.

I am currently still holding and will until the share price represents fair value. I expect that to occur after full year results. At the very least this little company is worth 10million. Full year results will give a clearer picture, it's just a shame they are a few months away. :(

As with so many AIM companies the directors take the piss and give small sharesholders no information and do not give a stuff. So many insider deals done. Here we have one director selling over a million shares at 12.7p and another buying at 11p and no information as to whom purchased the others.

The current CEO only added 200,000.

Do you think the buyers were kept in the dark and shelled out 250K?