# SMX - SMS Management and Technology



## porkpie324 (27 April 2006)

anyone know anything about smx apart from whats in the a/report, i have been holding smx since july 2003 bought on double bottom, bought some more may last year, they just going up and up (not complaining though), up a massive .38c today on double vol. porkpie


----------



## porkpie324 (13 September 2006)

bought some more using CFD this morning, SP has been weak after an but seems to have found support around 3.30. porkpie


----------



## rubles (13 September 2006)

Hi Porkpie

I used to love trading this share - although I haven't traded it for about 18mths. 

Not sure what they do, but it used to be really predictable to trade.

Cheers
rubles


----------



## porkpie324 (13 September 2006)

yes SMX has been an excellent trader, just holding 3000 shares now and this mornings cfd pos,although will watch carefully in case todays rise is dead cat bounce. porkpie


----------



## condog (24 October 2009)

I hold SMX and anyone of you guys who had it lately would be grinning from ear to ear like I am......  I sold half my holdings this week thought it was too dear.


----------



## McCoy Pauley (1 March 2010)

SMS Management and Technology Ltd (ASX:SMX) has gone off like a frog in a sock recently.  SMX is an ICT company with offices in Australia, the United Kingdom and Singapore.  It provides services through a number of different units, including "SMS Consulting", "SMS Technology Solutions", "SMS Enterprise Solutions", "SMS Defence Solutions" and "M & T Resources".

This is a chart that will make holders of the stock and those who don't hold (like myself) wince at the missed opportunity:







Been a real "market darling" of late with some excellent results posted last week.


----------



## clinta44 (10 January 2012)

I only have one regret about this stock - not buying enough of them when I had the chance... I'm still awaiting the day they are reasonably priced so i can load up again.


----------



## oldblue (10 January 2012)

clinta44 said:


> I only have one regret about this stock - not buying enough of them when I had the chance... I'm still awaiting the day they are reasonably priced so i can load up again.




They're around a two year low at present. What do you regard as "reasonably priced" - and why?


----------



## clinta44 (10 January 2012)

oldblue said:


> They're around a two year low at present. What do you regard as "reasonably priced" - and why?




From my calculations - I think there worth about $5 a share also the value has hovered around $4.80 - $5.80 over the last four years. 

my current small holding was purchased at $3.60 so I am reluctant to buy a significant amount until they reach a simluar price.


----------



## McCoy Pauley (13 January 2012)

Looks like SMX is positioning itself to potentially break above the downward channel that's developed over the last six months.


----------



## Nutmeg (21 February 2012)

*Half Year Results - SMS Management and Technology*

SMX reports its  half year results tomorrow.  I am not expecting that they'll blow my socks off.  DTL which is a superior company, although providing a slightly different suite of services, was disappointing, notwithstanding growing top line growth.  I expect that SMX will be a cut below that.  Any views?


----------



## clinta44 (21 February 2012)

*Re: Half Year Results - SMS Management and Technology*



Nutmeg said:


> SMX reports its  half year results tomorrow.  I am not expecting that they'll blow my socks off.  DTL which is a superior company, although providing a slightly different suite of services, was disappointing, notwithstanding growing top line growth.  I expect that SMX will be a cut below that.  Any views?




I actually think that smx is a superior company. Dtl do have a superior reputation. I'm not expecting a fantastic double digit profit increase but I think tomorrow will be a decent report. 

Let's not forget dws they released a great result in the same sector. So it's hard to base other companies results based on poor performance of a market leader. 

Just my thoughts


----------



## skc (21 February 2012)

*Re: Half Year Results - SMS Management and Technology*



clinta44 said:


> I actually think that smx is a superior company. Dtl do have a superior reputation. I'm not expecting a fantastic double digit profit increase but I think tomorrow will be a decent report.
> 
> Let's not forget dws they released a great result in the same sector. So it's hard to base other companies results based on poor performance of a market leader.
> 
> Just my thoughts




Or OKN which reported a slightly negative result. The sector is not showing consistent trend at the moment.


----------



## Nutmeg (22 February 2012)

*Re: Half Year Results - SMS Management and Technology*



clinta44 said:


> I actually think that smx is a superior company. Dtl do have a superior reputation. I'm not expecting a fantastic double digit profit increase but I think tomorrow will be a decent report.
> 
> Let's not forget dws they released a great result in the same sector. So it's hard to base other companies results based on poor performance of a market leader.
> 
> Just my thoughts




May you be proven right rather than me.


----------



## Nutmeg (22 February 2012)

Half year results:

*Revenue* $169.5m up 16.1% on pcp

*EBITDA1* $ 21.8m up 3.8% on pcp

*Net Profit After Tax* $ 15.2m unchanged

*Interim Dividend per Share* (fully franked) 13.5 cents unchanged


----------



## Nutmeg (22 February 2012)

*Re: Half Year Results - SMS Management and Technology*



clinta44 said:


> I actually think that smx is a superior company. Dtl do have a superior reputation. I'm not expecting a fantastic double digit profit increase but I think tomorrow will be a decent report.
> 
> Let's not forget dws they released a great result in the same sector. So it's hard to base other companies results based on poor performance of a market leader.
> 
> Just my thoughts




You are correct, athough only just.  SMX's result was better than DTL's inasmuch as SMX's NPAT was unchanged and DTL's declined.  Interestingly, IRE, another great company in the tech space, albeit in financial services, showed an 18% dip in full year NPAT.


----------



## craft (22 February 2012)

*Re: Half Year Results - SMS Management and Technology*



Nutmeg said:


> You are correct, athough only just.  SMX's result was better than DTL's inasmuch as SMX's NPAT was unchanged and DTL's declined.  Interestingly, IRE, another great company in the tech space, albeit in financial services, showed an 18% dip in full year NPAT.




I have had a bit of a look at both SMX and DTL.

Both companies investing ahead of the growth curve and have seen their utilisation rates fall as some customers have delayed their investment projects. This was flagged by DTL in an earlier announcement. 

Both companies have had good top line growth, should stand them in good stead if/when projects come back on line.

With delays in DTL’s higher margin business they become somewhat more exposed if they were to lose the government contracts that are up for renewal.

SMX’s flat result given the project delays and softness in certain markets is a reasonable effort. I also see DTL’s result as reasonable. At the headline level it is a fall of 9.5% but that is against a phenomenal PCP. If you compare this figure against two periods ago, DTL is up by 51.5% and on trend whilst SMX is up by 11.5%

Since listing DTL’s linear regression trend line has shown an annual compound increase in of 19.4%. The comparable increase for SMX is 9.4%. DTL is currently on a grossed up yield of 12.5% and SMX on 8.5%.

IMO both companies are good long term prospects but both have short term headwinds. 
I own shares in DTL.


----------



## Nutmeg (22 February 2012)

*Re: Half Year Results - SMS Management and Technology*



craft said:


> I have had a bit of a look at both SMX and DTL.
> 
> Both companies investing ahead of the growth curve and have seen their utilisation rates fall as some customers have delayed their investment projects. This was flagged by DTL in an earlier announcement.
> 
> ...




I agree with your assessment of the future prospects of these companies.  Hopefully, DTL will be sold down so as to be more compelling value than it is at present.


----------



## Nutmeg (24 February 2012)

I liked the reference in SMX's half year report that they were taking market share.  I didn't see a similar reference in DTL's report.


----------



## clinta44 (8 March 2012)

*Re: Half Year Results - SMS Management and Technology*



Nutmeg said:


> I agree with your assessment of the future prospects of these companies.  Hopefully, DTL will be sold down so as to be more compelling value than it is at present.




The only thing that has me rattled about DTL is the 10 for 1 share split... I just don't understand the reasoning behind that move. While the company said "the split is intended to benefit shareholders by increasing the liquidity of the company's shares and increasing the affordability to retail investors" this got me thinking something was a foot… I assume that retail investors would look for value rather than affordability. Anyway… that put a dampener on my outlook of DTL. 

As for SMX… The biggest concern I have with them is that they are currently holding onto there staff while project uptake has been slow, it seems like they haven’t been able to redeploy some of there billable staff. The only question that is in the back of my mind with this one is… how long can this continue…


----------



## Klogg (8 March 2012)

*Re: Half Year Results - SMS Management and Technology*



clinta44 said:


> The only thing that has me rattled about DTL is the 10 for 1 share split... I just don't understand the reasoning behind that move. While the company said "the split is intended to benefit shareholders by increasing the liquidity of the company's shares and increasing the affordability to retail investors" this got me thinking something was a foot… I assume that retail investors would look for value rather than affordability. Anyway… that put a dampener on my outlook of DTL.
> 
> As for SMX… The biggest concern I have with them is that they are currently holding onto there staff while project uptake has been slow, it seems like they haven’t been able to redeploy some of there billable staff. The only question that is in the back of my mind with this one is… how long can this continue…




I don't own the stock and am only speaking here from my 6years experience in the I.T. projects space.

This, in my view, is quite a smart move as many consultancies are now competing with each other for quality staff. Contract rates are increasing rapidly because of the demand in I.T., and consulting agencies can't keep up with this and continue their profit margins... So, they keep their staff on the bench and re-deploy when they can.

In my mind, it's the equivalent of holding an asset that is temporarily underperforming, but you know will be in high demand in the near future.


----------



## clinta44 (10 March 2012)

*Re: Half Year Results - SMS Management and Technology*



Klogg said:


> This, in my view, is quite a smart move as many consultancies are now competing with each other for quality staff. Contract rates are increasing rapidly because of the demand in I.T., and consulting agencies can't keep up with this and continue their profit margins... So, they keep their staff on the bench and re-deploy when they can.




I certainly understand the logic...but they can only be benched for so long. I'm just hoping the projects start getting approved so they can retain the staff... 

I guess that's the issue with government clients... they always drag there heels in decision making. then at the last minute want it completed in no time flat...


----------



## Muschu (26 April 2012)

Not a good day today!


----------



## Ves (24 October 2012)

This one got hammered yesterday.

From the AGM address it looks as if they will earn between $12-14 NPAT for the first half of 2013.  In 2012 this figure was $15.2 million.  

The most interesting part of the details given to the market is the part where they are continuing to invest for a turn-around in the second half of 2013.   It is either that they are too stubborn to change their cost-structure or that there is some green shoots (or sentiment change in their clients) still showing themselves.

Interesting times.  

disclosure:  Not holding - but an interested onlooker.


----------



## skc (24 October 2012)

Ves said:


> This one got hammered yesterday.
> 
> From the AGM address it looks as if they will earn between $12-14 NPAT for the first half of 2013.  In 2012 this figure was $15.2 million.
> 
> ...




On the same day that UXC provided a positive update. The word is that SMX's major client of Cathay Pacific in HK has been cuttting back expenses. Those major clients can easy put $1-2m dent in the NPAT if you can't easily re-deploy your personnel


----------



## Ves (24 October 2012)

skc said:


> On the same day that UXC provided a positive update. The word is that SMX's major client of Cathay Pacific in HK has been cuttting back expenses. Those major clients can easy put $1-2m dent in the NPAT if you can't easily re-deploy your personnel



Probably not too far from the truth, there is some evidence of such happening (without naming actual contracts they are losing revenue) in the AGM address, in particular the few times they mention the Asia / HK region.


----------



## Klogg (24 October 2012)

For anyone thats interested, it appears that DWS took a bit of a battering (not quite the 25% that SMX did) just by association.


----------



## Ves (30 May 2014)

Interesting development  (maybe only because it agrees with my thesis on these IT companies) that SMX is buying back their own shares,  which I assume is because they think that they are cheap,  and potentially a sign that they think the bottom of the IT spending / investment cycle is getting closer.

I was looking at SMX the other day,  back of the envelope type stuff out of interest (ie. scribble),  not as cheap as DTL in my opinion,   but not overly expensive by my rudimentary calculations...

It's good to see the company are putting some money at stake to go with their repeat proclamations that we are nearing the bottom.  This _possibly_ gives it _some_ substance.


----------



## Rainman (8 January 2015)

Ves said:


> ... It's good to see the company are putting some money at stake to go with their repeat proclamations that we are nearing the bottom.  This _possibly_ gives it _some_ substance.




I started buying into SMX in mid-2014 because _I_ thought it was the bottom.  I was wrong.  That said, there is worse management around.  SMX's management appears to be acting sensibly by buying back its stock in the low $3 range.  It has plenty of cash to do it with.    

My humble tuppence worth.


----------



## peter2 (22 July 2015)

IT companies seem to be the sector of the moment. Good news from ASZ, DTL have produced huge gaps up in their prices. MLB has been on fire. 

TNE is currently in a corrective pullback and I'm watching the chart closely for a buy signal.

I want to mention SMX as another contender for consideration. Price seems to have started to climb off it's two year lows (support?).


----------



## piggybank (19 August 2015)

peter2 said:


> I want to mention SMX as another contender for consideration. Price seems to have started to climb off it's two year lows (support?).
> View attachment 63543




Peter2 congratulations on your call. Up 11% presently after the 2015 results were announced to the market earlier today. Here is one of the announcements:- http://www.stocknessmonster.com/news-item?S=SMX&E=ASX&N=427856


----------



## peter2 (19 August 2015)

Thanks. SMX finished the day +19%. I've sold 1/2 and waiting to see what happens next. Last report (Feb 15) was also good (price spiked up) but then dropped down quickly. I've been concerned by the thin MD on this one ever since I bought the initial parcel and this trade only went into one lucky portfolio. 

IMO this sector (IT) is a good one to stick with as companies seek to create productivity gains by improving/upgrading their IT systems.


----------



## notting (19 August 2015)

Sector has really struggled over the last 18 months or so and their have been a couple of explosive days for a few of em recently.
It would be good if the PC business took off again. 
The smart phone and dumb pad thing is popping I reckon,  it would be good for the desktop to reemerge as the genuine machine, as it is.
I have a stake in this and missed the action today.


----------



## peter2 (17 November 2015)

SMX: I was waiting for a buy setup, after the abc corrective move back to the prior BO level (= support). It didn't happened so I'm still waiting. Now it looks like I'll be waiting for a buy signal from a much lower level. 

Three months ago the news/outlook was good, price jumped up. Now it looks like the outlook has changed pretty quickly. The reduction in quarterly sales due to the corporate reorganisation didn't seem that bad to me. 
Glad I'm not relying in fundamental data to make trading decisions.


----------



## VSntchr (17 November 2015)

peter2 said:


> SMX: I was waiting for a buy setup, after the abc corrective move back to the prior BO level (= support). It didn't happened so I'm still waiting. Now it looks like I'll be waiting for a buy signal from a much lower level.
> 
> Three months ago the news/outlook was good, price jumped up. Now it looks like the outlook has changed pretty quickly. The reduction in quarterly sales due to the corporate reorganisation didn't seem that bad to me.
> Glad I'm not relying in fundamental data to make trading decisions.



SMX is one of my favourite IT stocks to trade and I was waiting for a break over $5.00. It seems the AGMs have not been kind to stocks in this sector, after they mostly all posted good FY results not so long ago. 
I'm actually on the otherside of your comment regarding the drop in EBITDA. 1H15 was already a pretty weak number looking back historically...so to not be able to hold ground with that is pretty negative, especially when the share price has been on a tear...


----------



## Wysiwyg (17 November 2015)

The exit at any price is an anomaly. At a guess, price could drift aimlessly until nearer the half yearly report or another trading update. XIJ (I.T. sector) has trended upward most positive since the August crash.


----------



## piggybank (19 April 2016)

Unfortunately this is the second time I have written this as my computer crashed a few minutes ago and I lost what I had written down. Never mind, such is life. Since the last posting, the price as continued to fall hitting another 52 week low today of $1.70 (4%). 

As you will see from the monthly chart below, there is now a high possibility that if it goes below the $1.50 mark it could then go as low as 30-40c - only time will tell.

DIVIDEND INDICATED GROSS YIELD - 13.87%
P/E (ttm) - 7.69
EPS (ttm) - 0.22

​


----------



## Ves (20 April 2016)

piggybank said:


> As you will see from the monthly chart below, there is now a high possibility that if it goes below the $1.50 mark it could then go as low as 30-40c - only time will tell.



That's definitely possible in the medium/long-term from a fundamental perspective.   If I recall,  the net tangible assets  (ie. stripping out all the goodwill) are around 30-40 cents per share.

If the profitability of the business keeps reducing to a rate that converges with the firm's cost of capital,  then there is no reason why that price level could not eventuate.

I could be wrong,  but from where I sit it seems like SMX's original business model has slowly been eroded (both by technological change and increased competition). Their cash cycle has also increased in length (ie. it takes them from the time they start doing the work,  until they bill it,  then receive payment).

It's possible that the business has been mismanaged in the last few years (which often happens to roll-up / acquisition driven organisations) and the new CEO has been brought in to clean up the mess.

They are completely restructuring this business in the medium term,  and from the language in the AGM,  it will be a completely different beast going forward.  

I don't think it's past metrics are really that relevant at all.   

In the past they were "predominantly reliant on short term project based business"  (system design, ie. it's lumpy and reliant on the business cycle) but now they are trying to win more (larger) multi-year contracts and longer term annuity based operational deals  (especially in the cloud space).

I think that SMX looks superficially cheap,   but I'm not exactly convinced that their strategy will be as successful as their past endeavours and there's a fair bit of risk in that.


----------



## peter2 (23 November 2016)

*SMX* used to be a great little trading stock and obviously a favourite of a few value investors. It's sad to see that mgt have stuffed this business.

Three huge profit downgrades over the years show up on my charts as little bombs. Three strikes and the management are deemed to be ineffective. The price break down below 3.00 was also another death nell for me. 

I need a little skull and crossbones icon. Wait a minute, I've got one of those also.


----------



## Rainman (30 November 2016)

I think SMX looks like an interesting turnaround candidate here.  I mean, how much worse can it get?  Although, as the great Peter Lynch said, it is always darkest just before pitch black.


----------



## System (28 September 2017)

On September 27th, 2017, SMS Management and Technology Limited (SMX) was removed from the ASX's official list in accordance with Listing Rule 17.11, following implementation of the scheme of arrangement between the Company and its shareholders in connection with the acquisition of all of the Company’s shares by ASG Group Limited.


----------

