# CSV - CSG Limited



## Fool (7 December 2009)

CSG Limited is Information and Communication Technology (ICT) company
head-quartered in the Northern Territory. The company provides expertise in the
provision of integrated technology solutions to key customers include some of
Australia’s leading companies, along with state and federal governments. The
company offers services through: Managed Services; Print Services; and Enterprise
Services.

Showing real growth potential for 2010 and solid fundamentals.

Financials
FYE June 	6/2007 6/2008 6/2009
Revenue $m 	76 	133 	195
NPAT $m 	11.0 	18.8 	23.2
EPS  ¢ 		6.4 	11.0 	13.3
EPS Growth % 0.0 	70.7 	20.9
DPS  ¢ 		0.0 	4.0 	4.5
Franking %	0.0 	100.0 	100.0
Dividend Yield % 0.0 2.9 	6.3
PER x 		19.6 	12.5 	5.3
ROE x 	24.4 	28.8 	27.1

Date  		Last  	% Change  		Vol *
04 Dec 2009  	1.790  	 2.87%  		585,078
03 Dec 2009 	1.740 	1.16% 			361,621
02 Dec 2009 	1.720 	-0.58% 		138,401
01 Dec 2009 	1.730 	2.67% 			106,422
30 Nov 2009 	1.685 	-3.44% 		73,907

Volume has started to increase over the last few days, approaching double top, possible breakout play.

DYOR


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## bloomy88 (7 December 2009)

What do you think are the growth prospects for the company?
Which companies are their customers?
Had a quick look and they look interesting...
Cheers


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## Fool (8 December 2009)

bloomy88 said:


> What do you think are the growth prospects for the company?
> Which companies are their customers?
> Had a quick look and they look interesting...
> Cheers




Have a look at their “18/08/2009 5:58PM 15  Results presentation” should answer a lot of your questions. 

Today’s news is encouraging, though CSV got sold down on very lite volume.  Looks like another Government contract should be sealed early 2010. 

“Darwin based IT Services Company CSG (ASX: CSV) announces that it has moved to contract negotiations with the Northern Territory Government.”


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## Fool (10 December 2009)

Trading halt, let hope its good news on the NT contract, would have a good chance to break 52 week high if it is.


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## subaru69 (10 December 2009)

Got this email this morning...

CSG Limited  -   (CSV .ASX)    
10th  December 2009 


Offer Details 
________________________________________

Offer Summary:                       Institutional  Placement  

Issuer:                                       CSG Limited  

Offer Size:                                Approximately $65 million   

Pricing:                                      $1.60                                    

Macquarie's Role:                  Macquarie Capital Advisers is Sole Lead Manager and Underwriter to the offer


Key Points  
________________________________________
Offer Summary:
•	CSG to acquire 90% of KMBS, for NZ$107m (A$84m) and associated financing business, Leasing Solutions Limited (LSL) for $NZ25m (A$20m) 
•	KMBS has exclusive rights to import, sell and service Konica Minolta Multi Function Devices (MFDs) throughout New Zealand
•	Acquisition of KMBS would see significant growth in CSG core print services business and is consistent with CSG's acquisitive growth strategy 
•	Transaction expected to be immediately accretive 
Overview of CSG:
•	Leading full service Australian information, communication and technology company with end to end capability to deliver integrated technology solutions
•	Broad variety of customers ranging form blue chip organisations and government SMEs. 
•	Strong track record of earnings growth and longstanding customer relationships.
•	CSG is now Fuji - Xerox Australia's (FXA)'s largest dealer in Australia, with five dealerships across Queensland and the Northern Territory 
•	Business shows resilience through the cycle with 20% profit growth recorded through recent economic downturn  

 Timetable
________________________________________

Offer Opens:                                                                        10th December 2009    

Settlement  Date       :                                                         16th December 2009 
(Unconditional  placement)

Commence Trading:                                                         17th December 2009
(Unconditional  placement)

Settlement  Date       :                                                         25th  January   2010  
(Conditional  placement)

Commence Trading:                                                          27th January 2010
(Conditional  placement)


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## Fool (10 December 2009)

Yeah, while placements are normally not good for the short term SP, I think today announce is fantastic for shareholders, but a shame shareholders can’t participate. This will really add to the company’s growth in the coming years and the CEO is keen since he is buying $12M of the $64M being placed (which is a big positive for the SP). Don’t forget upcoming news on the NT Gov contract. I am bullish on this stock if you haven’t noticed!! 

DYOR


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## Fool (11 December 2009)

Well today move is just amazing, looks to brokers trying to accumulate from the volume and trading pattern in the last few days.  The question is how much more will the news from the NT Gov contract add to the share price.


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## Fool (22 December 2009)

Director can’t help himself, bought 100k more shares at ~$1.93. Only time will tell how much the NT GOV contract will add to CSV market capital


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## Fool (30 December 2009)

Well, need I say more about this stock, price broken to new all time high and director continues to buy. 

Brokers have this stock as a buy with a price target of $2.60 (ASR)

DYOR

Price closed today @  $2.12


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## Go Nuke (7 January 2010)

Gee the bot is relentless on this stock.

My father in law recently bought into this stock. One of his friends son is on some REALLY good money working for CSG (not a director or anything) and he reckons the NT contracts going ahead are extrememly likey to say the least.

Does anyone think these could be a sell down from the recent cap raising?

Indeed if the CEO is buying 12Mil of 64Mil, that is a fantastic thing for shareholders.

FYI I DO NOT hold this stock and know very little about it other than what I have stated. I bougth BRM instead 

Goodluck


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## Go Nuke (11 January 2010)

Anyone else find the buying and selling of this stock "unusual"??

Just doesn't seem to look right.

I read somewhere else, someone speculated that the bot was buying and selling to itself....what would be the point of that? Other than to seem like the stock was liquid.


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## bajabus (25 January 2010)

hmm, not sure if I'm seeing what your seeing with the recent trades.  They had an excellent run at the end of last year - driven by what I have no idea, but it looks like a bit of a correction now.


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## pacman (19 January 2011)

CSV has had a disappointing run these past months, pity I didn't sell when it dropped - anyone know why it has hit the doldrums despite a recent contract in the UK?


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## Wysiwyg (25 February 2011)

As a potential holder, do fundamentalists see the current net profit, P/E ratio and paying dividends as an attractive value buy proposition. Not too cluey about cents/ share valuation of a company myself but it looks overdone and is at historical resistance zone which may become support. 12 month down trend hard to ignore and must be for fundamental reasoning.


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## skc (25 February 2011)

Wysiwyg said:


> As a potential holder, do fundamentalists see the current net profit, P/E ratio and paying dividends as an attractive value buy proposition. Not too cluey about cents/ share valuation of a company myself but it looks overdone and is at historical resistance zone which may become support. 12 month down trend hard to ignore and must be for fundamental reasoning.




This one got me a little bit baffled as well. They fix photocopiers and you think they'd be a cash cow...The ratios look pretty good on the surface. But I think cash is one part of their problem. Negative operating cash flow and large investment / acquisition cash flow, putting the sustainability of the dividend in question.

Balance sheet isn't that tight either - big intangible asset line (from all the acquisitions) and substantial debt ($100m borrowing + others).

And a court case to confuse the issue... that might just be enough for many to shy away from it.

Could be good value though if you can understand the gist of the business in more depth.


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## Wysiwyg (25 February 2011)

skc said:


> Could be good value though if you can understand the gist of the business in more depth.



Thanks fellow. Further investigation suggests this business will be difficult to sustain.


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## suhm (30 January 2012)

It's less than half than the unsolicited offer price only months ago but looks like it will be a value trap for awhile.


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## skc (30 January 2012)

suhm said:


> It's less than half than the unsolicited offer price only months ago but looks like it will be a value trap for awhile.




Perhaps the bidders were just being polite when they said "We are walking away because of concerns re Europe", when they really found a few skeletons in the closet.

The revised NPAT of $10m for the half year pitch them at 7-8c EPS. So even with the downgrade you think it can support a share price of 70-80c. At 50c the market is probably pricing another cap raising or more $hit to be dug up.

The half year details will show their cash flow situation. 

Is there any information or chance of debt issues?


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## skc (30 May 2012)

Picked up a position today at 74c on these guys.

They just announced an asset sale for the technology solution division of their business at $225m (plus $32m earn-out). The net proceeds after tax will be $190m (~67cps).

Management intends to distribute most of these capital after transaction costs, restructuring costs (of remaining business) and pay down some debt.

Say transaction cost = 3% = $7m.
Restructuring costs = $7m in a separate announcement.
Total debt = $85m so say they pay down 2/3 = $56m.

This leaves the company with $120m for distribution or ~43cps.

At 74c this leaves the remaining business at ~30cps, or $85m in market cap. With remaining debt ~$29m less cash of $14m as per half year, the enterprise value of the remaining Printing Service division is ~$100m.

CSV also announced a bit of profit downgrade for the Printing Service division... FY12 EBITDA to be 30% less than last year (which was $45m)... so ~$31m this year. Say we take out ~$5m in corporate costs, that leaves EBITDA of $26m.

In other words, currently the remaining business is trading at ~4x EV/EBITDA. Plus there's a free punt at the earn-out (~10cps).

Hopefully the market will re-rate this to something a little bit more generous over the coming days.


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## McLovin (31 May 2012)

The print services division must be really struggling. Last year segment PBT was $38.5m at the half PBT was $14.3m and now they're saying EBITDA will be $30m. That might be why the market isn't getting too excited.



			
				skc said:
			
		

> Say transaction cost = 3% = $7m.




According to the announcement the $190m is net of transaction costs.


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## skc (31 May 2012)

McLovin said:


> The print services division must be really struggling. Last year segment PBT was $38.5m at the half PBT was $14.3m and now they're saying EBITDA will be $30m. That might be why the market isn't getting too excited.
> 
> According to the announcement the $190m is net of transaction costs.




I was taking the normalised EBITDA for the print service division which was ~$16.4m at H1... so the 2nd half deterioration isn't that bad.

I agree that it is not the most exciting business, but there's enough valuation upside to take a stab.. the percentage return potential is high after the capital return.


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## McLovin (31 May 2012)

skc said:
			
		

> I agree that it is not the most exciting business, but there's enough valuation upside to take a stab.. the percentage return potential is high after the capital return.




I'm actually in there with you at 74c (small parcel). There's pretty limited downside in the short term and hopefully there'll be some up lift once the numbers start rolling through. Never understood businesses that sell their best business and keep the dud. Perhaps the instos were pushing for it.


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## rcm617 (31 May 2012)

My bet would be the return will be a fully franked dividend.
They have $20m of franking credits available and another $25m or more after paying capital gains tax from the transaction, so about 16c per share which would support a 37cent fully franked dividend. Total cost to CSV will be about $104m, so can fully pay out debt with this.
Have bought some for my SMSF as I will get the franking credit paid out to me in full, effectively a 53c payout to me,the rest of the company costing me 20c. Thats if they are thinking the same as me.
Considering even at its depth the printing division has a similar EBITDA to the technology division, I think thats a pretty good deal.


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## McCoy Pauley (5 July 2012)

The sale to NEC Australia has been completed.  The board is working out the best method of returning excess capital to shareholders and expects to make a further announcement when the full year results are released on 23 August.


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## tinhat (3 May 2013)

I've just stumbled upon this company this evening. It wouldn't have come up in any of my market scans because of a weak balance sheet and poor earnings performance. The share price seems to be on the mend - on a now well established turn around. The company seems to be on a turn-around too with a complete restructure of the management and the business. Interesting. Looks like they are done and dusted with their share buy-back and capital return which might explain the run up in share price to a degree.

I guess where the share price goes from here depends on what faith the market have in the management. I'll put this on the watch list and put it down for further research because it looks like the share price might continue to go up in the medium term.

Their website is a  bit weird though. There is a distinct lack of marketing polish to some of the content. The telephony and VOIP services business seems a bit of a strange fit on the surface but I can see the potential synergies given they are targeting the SME market more. IF you go to the VOIP page you get some very uninspiring copy about their VOIP service.

http://csg.com.au/Print-Services/Telephony-Solutions/Products/Telephony-,-a-,-VOIP-Solutions.aspx

Don't bother to "click here" the link is broken. The "Instant Demo" button takes you to the contact form.

As mentioned the copy is inspiring:

_The difference between CSG and our competitors in this domain – we know what we are doing and we do it well.

If after reading the information provided below you would like to know more,  we would be pleased to make a time to meet with you and discuss how this technology may be of benefit to your organisation._​
Freaking hilarious. Why choose us? Because we know what we are doing! There's a compelling proposition.

Anyway I am sure it is a work in progress.


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## piggybank (23 September 2013)

P&F daily update...


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## tinhat (23 September 2013)

Website still busted.


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## Miner (22 March 2017)

Hello - breaking the ice after the most recent posting of  23 Sept 2013 for those following this scrip for whatsoever reasons for some heads up.

 The current value of this stock  as per Stockinvestvalue is 0.52 against market price 44 cents
The highest price was $1.72 and the stock price slumped by 5% with massive volume without any public notice published on ASX.
Low PE 7.7
NPAT increased by 14% bla bla
Why the slump and why market failed after result announced.
Is there something market announcement need to be done?
I just bought a small parcel day before yesterday assuming the lowest ever price, but today further reduced  5%. What could be the bottom and why this behaviour? General sentiment? who knows /

Thanks in advance


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## peter2 (27 June 2017)

Another price gap filled after disappointing news.


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## greggles (9 February 2018)

CSG Limited hitting all-time lows today after releasing a disappointing FY2018 Trading Update this morning.

Forecast FY2018 revenue has been revised from ~$269m to $253-$260m. The company attributed the reduction in revenue to lower than expected print equipment sales which was driven by changes to the salesforce and sales incentive programs to accelerate growth in the technology business.

As at 31 December 2017, the Company had a closing cash balance of $21.6 million (including restricted cash of $13.6 million) and $42.5 million of corporate debt.

CSV was hammered after the announcement and is currently down 13.8c to 29.7c, a decline of 31.61% today. This one could be off the boil for a while now. The company will need to show evidence of revenue growth before there is any chance of a change in sentiment, and that could be some time off.


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## The Triangle (1 July 2018)

It's an understatement to call this a trainwreck.   Another downgrade this week.  $150 million in impairments and provisions.  I'm interested in getting in if this drops to the teens and the CEO departs the business.   Good recovery potential (also a good potential to go up in smoke)


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## peter2 (1 July 2018)

Checked my chart to see the three strikes and I'm out until there an obvious turnaround in price behaviour.


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## System (21 February 2020)

On February 20th, 2020, CSG Limited (CSV) was removed from the ASX's Official List in accordance with Listing Rule 17.11, following implementation of the scheme of arrangement between CSV and its shareholders in connection with the acquisition of all the issued capital in CSV by Fuji Xerox Asia Pacific Pte Ltd.


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