reports
- Gareth James
Weak Fiscal 2017 Result Justifies Voting for ASG’s Takeover of SMS
We continue to recommend SMS Management & Technology shareholders vote in favour of the ASG Group takeover offer at the Scheme of Arrangement meeting on Sept. 1, 2017. SMS’ fiscal 2017 result was unsurprisingly weak and in line with both our expectations and the downward earnings trend of recent years. EBIT fell 34% in fiscal 2017 which follows a 49% decline in fiscal 2016. EBIT margin has steadily compressed from 15.2% in fiscal 2010 to 3.1% in fiscal 2017, reflecting an increasingly compet.....
- Gareth James
Increasing competition is a structural trend facing the Australian IT ...
The SMS Management and Technology board of directors has determined that the ASG Group takeover offer for SMS is superior to the DWS offer and DWS has announced that it will not submit a counter proposal. This means that SMS shareholders will need to vote on the ASG offer at a Scheme of Arrangement meeting and we recommend SMS shareholders vote in favour of the ASG offer. SMS will announce the date of the Scheme meeting following execution of the ASG Scheme Implementation Agreement. The ASG offe...
- Gareth James
Corporate Action: We Recommend SMS Shareholders Vote in Favour of the ...
The SMS Management and Technology board of directors has determined that the ASG Group takeover offer for SMS is superior to the DWS offer and DWS has announced that it will not submit a counter proposal. This means that SMS shareholders will need to vote on the ASG offer at a Scheme of Arrangement meeting and we recommend SMS shareholders vote in favour of the ASG offer. SMS will announce the date of the Scheme meeting following execution of the ASG Scheme Implementation Agreement. The ASG offe...
- Gareth James
SMS FVE Increased to AUD 1.84 Following Last-Minute ASG Bid
We have increased our fair value estimate for SMS to AUD 1.84 per share following the takeover offer from ASG Group. The ASG offer comprises AUD 1.80 in cash but also enables SMS to pay a fully franked dividend of up to AUD 0.10 per share, or AUD 0.14 including franking credits. If a dividend is paid, the value of the offer will decrease by the value of the unfranked dividend, meaning the maximum potential value of the ASG offer to Australian tax payers is AUD 1.84, including franking credits. T...
- Gareth James
Increasing competition is a structural trend facing the Australian IT ...
We recommend SMS Management & Technology shareholders vote in favour of the DWS offer at the Scheme of Arrangement meeting on June 14, 2017. The DWS offer, which comprises AUD 1.00 in cash plus 0.39 DWS shares, is worth AUD 1.60 per SMS share based on the current DWS market price of AUD 1.53. This represents a significant premium to our standalone fair value for SMS of AUD 1.00 per share. SMS’ board of directors have also advised shareholders vote in favour of the offer, in the absence of a .....
- Gareth James
DWS Throws SMS a Much-Needed Lifeline as Profit Weakness Continues. FV...
We have increased our fair value estimate for no-moat-rated SMS Management & Technology to AUD 1.55 from AUD 1.00 per share due to the high probability of the DWS takeover offer proceeding. The DWS offer comprises AUD 1.00 in cash plus 0.39 DWS shares per SMS Management & Technology share. We don't provide research coverage of DWS but value its shares at AUD 1.40 per share based on the consensus fiscal 2017 EPS forecast of AUD 0.14 and the average one-year forward P/E multiple over the p...
- Gareth James
Increasing competition is a structural trend facing the Australian IT ...
We cut our fair value estimate for SMS Management & Technology, or SMS, by 17% to AUD 1.00 per share following weak earnings guidance. At the current market price of AUD 1.39, we continue to believe the shares are overvalued despite the 53% share price slump this year. First-half fiscal 2017 revenue guidance of AUD 150 to 155 million implies a 9% fall on the previous corresponding period with EBITDA guidance of AUD 4.5 to 5.0 million implying a 57% collapse. Although guidance is weaker than ...
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