# RXP - RXP Services



## System (25 June 2011)

RXP Services Limited (RXP) is an ICT professional services company providing services to·both private and public sectors.

RXP provides consulting and professional services to a number of S&P/ASX 50 corporations and government bodies·in Australia.

RXP has also established its operation in SE Asia (Hong Kong) providing services to both private and public sectors.

http://www.rxpservices.com.au


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## fingerap (28 November 2011)

This stock seems to have potential.

Low PE compared with peers, the chairman is the ex SMS (SMX) founder, who grew SMX from a small operation to what it is today. If he can reproduce this magic with RXP, may be a little go-er.

Might be worth a flutter IMHO - Thoughts ?


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## McCoy Pauley (29 November 2011)

I glanced through the IPO documentation last week (no more than that, really).

I had the impression that much of its earnings seemed to be quite contingent on a few events happening.

I should probably take a closer look at the company as it is in an area that I like, but at this stage, I would prefer other companies to RXP.


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## VSntchr (29 August 2013)

McCoy Pauley said:


> I glanced through the IPO documentation last week (no more than that, really).
> 
> I had the impression that much of its earnings seemed to be quite contingent on a few events happening.
> 
> I should probably take a closer look at the company as it is in an area that I like, but at this stage, I would prefer other companies to RXP.




While most of the other IT reports I have read have been pretty dismal at best, RXP is blowing them out of the water.
Massive top line growth combined with margin expansion and forecasts of this continuing in the next FY.

They have (on 1 July) acquired Transpire. Prior to this they had $11m in cash sitting on the balance sheet.


Report states the intention to consider divs in the first half of next year....
Big jump this morning but this one could have a long way to go if it keeps impressing.


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## Knobby22 (29 August 2013)

The company does seem to be kicking goals.
I would like to see how the takeovers go so the company is not without risk. Could be good timing however as we are at the bottom of the cycle in IT imo. I am having trouble pricing it but will keep my on it.


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## VSntchr (29 August 2013)

Knobby22 said:


> The company does seem to be kicking goals.
> I would like to see how the takeovers go so the company is not without risk. Could be good timing however as we are at the bottom of the cycle in IT imo. I am having trouble pricing it but will keep my on it.




I agree that pricing it is a little difficult with the margins growing rapidly and revenue in high growth...

But reverse-engineering my model to provide an output of the current price utilises some pretty conservative numbers.

If these guys can continue to thrive in this part of the cycle it will be interesting to see what they do as it turns up..

Im pretty noob when it comes to the IT industry but reading some of the other reports has given me a good picture of how tough it is out there at the moment...


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## Hodgie (11 October 2013)

Knobby22 said:


> The company does seem to be kicking goals.
> I would like to see how the takeovers go so the company is not without risk. Could be good timing however as we are at the bottom of the cycle in IT imo. I am having trouble pricing it but will keep my on it.




Great price movement this week, lets hope it continues to rally into the 90s


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## VSntchr (22 October 2013)

I mentioned in Robusta's thread that I have a few opportunities that I am allocating capital to at the moment. So figured I would post a little more about one such company.

*What I like about this company - *
Management is of a very high calibre for such a small business and have skin in the game. Chairman (Lloyd Roberts) is the founder of SMX and CEO (Ross Fielding) is an ex Telstra suit. It appears RXP is a passionate project for them. 
Other IT companies are doing it very tough. Looking at the recent results of SMX, DTL etc, you will see that they are struggling to grow earnings. If RXP can establish some good ground while the cycle is at the bottom - the eventual upswing will be beneficial.

*What I don't like about this company - *
Recurring revenue is not as high among contractors as it is for most other businesses I own.
RXP is conducting a "roll-up". Integrating acquisitions has historically had a poor success rate in other companies.

*Why I am buying*
Looking at some of the acquisitions you can see that RXP is usually paying about 4 x EBIT. Once the companies RXP acquires form part of their company, the acquired businesses gain access to the resources of the larger entity and the benefits associated with being listed (I'm sure I could bore you all with more benefits of acquisitions). 
Whilst I have studied the pro's and con's of such a strategy - I feel that in this case the strategy has a high probability of creating tangible value for owners. There are companies that employ similar strategies such as GXL and GEM - however they are using a large amounts of debt to make the acquisitions. I think that the strength of RXP's balance sheet (which has allowed it to make acquisitions with cash and in some cases script) differentiates it from some of these other companies.
The other risk to consider is that the acquisitions will not be integrated properly. This risk is very real and I will be monitoring all company updates and keeping my ear to the ground to assess the ongoing progress with regard to this factor. I believe that having such a strong board within such a small company positions RXP very well to integrate...but time will tell.



In any case - I beleive that I have purchased with a sufficient margin of safety should some of my assumptions prove incorrect


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## So_Cynical (3 March 2015)

VSntchr said:


> companies.
> 
> *Why I am buying*
> 
> In any case - I beleive that I have purchased with a sufficient margin of safety should some of my assumptions prove incorrect




Trading very close to an all time low and at a substantial discount to the 50c float price of Dec 2011, on the plus side the company has grown from 44 million shares at listing to 137 million shares, market capitalization more than doubling in 39 months, 22 mill to 46 mill...i suppose that's an achievement of sorts.

RXP has never paid a dividend and has no debt, 10 million in cash and makes money, FY15 revenue expected to be over 75 mill yet PPT, AMP and CBA have all been selling down their positions over the last 3 or 4 months.

The whole IT services sector hasn't done well over the last 3 or 4 years...time for a turn around?
~


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## The Triangle (24 July 2019)

Keen on this.   

Expect EBITDA growth to be achieved in FY19
▪ Maintain guidance of double digit earnings growth 
▪ Progressive dividend policy remains in place

Could see a company with 8-9% fully franked dividend.  Don’t see this SP lasting at these levels.    Only thing I’m curious to see is cashflow.....


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## The Triangle (11 November 2020)

And I'm out at 53.  Thank you takeover.  Might see a counter offer but managers support this one. 

Its a good premium based on short term performance - however 55 cents is relatively small when you compare rxp to one year ago.  Headwinds must be pretty stong and their management maybe do not believe enough in RXPs upcoming profitablity and cashflow.  To reccomended this offer seems odd.   I was in this for a longterm doubling.  But cant squawk at +30% 

If the offer fails Ill get back in.


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## System (31 March 2021)

On March 29th, 2021, RXP Services Limited (RXP) was removed from the ASX's Official List in accordance with Listing Rule 17.11, following implementation of the scheme of arrangement between RXP and its shareholders in connection with the acquisition of all the issued capital in RXP by Capgemini Australia Pty Ltd, a wholly-owned subsidiary of Capgemini SE.


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