BVS - Bravura Solutions

[steve fleming]

Fast growing global IT success story, providing services and applications for portfolio management, life insurance and pension industries.

I picked up some of these @ $1.30 in the recent selloff after watching it fall from $3.10 to $1.17 over the last year

A well received financial report for FY07 with revenues of $100m and NPAT of $5.3m (After R&D of $10m)

Consensus FY08 is for revenues of $161m and NPAT of $13m jumping up to $20m in FY09. This excludes any earnings related to future acquisitions.

Revenue increasing both organically and by acquisitions. Have started to leverage their products into the lucrative and fast developing Asian markets. Management also believe they have a unique oportunity to further their recent European successes.

EBITDA margins for FY08 were a healthy 16.6%(adjusted for integration costs) and forecast to be approx 17% in FY08 increasing as scale efficiencies and integration synergies flow through.

Revenues underpinned by recurring maintenance revenue, including $30m a year from Bank of New York.

Management are the major shareholders and have basically delivered on most of their key IPO projections.

CSFB came out on Monday with a $2.80 target, and Huntleys have had BVA as a buy at under $1.90 for most of this year.

[steve fleming]

Delivery The Key For Bravura Solutions
FN ARENA NEWS - 17/05/2007


Changes to superannuation laws have made the sector and those companies providing funds management services much more attractive to investors. Another way to gain exposure is via companies providing essential software and programs for the managers to use.
An example is Bravura Solutions (BVA), a provider of consulting service and wealth management applications to the investment management sector, which includes superannuation providers, fund managers and life insurance companies.

Listing in the middle of last year the company is slowly gaining increased attention in the Australian market, particularly following its recent announcements. These include the acquisitions of AB Prodata and Rufus in the European markets and a deal with New York Life that gives the company increased exposure in the Asian marketplace.

Macquarie sees the Rufus acquisition in particular as a source of significant potential upside, as it provides the means for the company to penetrate the wrap product market in the UK, which offers the chance for the group to cross-sell its other products.

This provides some scope for the company to develop in the UK along the lines of its domestic operations, the broker noting management has taken advantage of what is a fragmented market and developed a full range of products, so providing it with more selling opportunities.

The growth potential in Asia is also significant, as UBS sees the deal with New York Life as not only supporting earnings expectations both this year and next but offering additional upside from the development of its Sonata Risk Module application.

By entering the Asian market through the deal the company will be exposed to a number of potential new customers, while the broker sees opportunities to boost earnings by means of scoping studies and other such work.

It estimates such studies could generate as much as $500,000 per country, so having moved into five countries initially a solid boost is possible. Credit Suisse notes the New York Life arrangement is likely to be extended into more countries in the region, which would add to the upside potential.

The broker rates the stock as Outperform while suggesting the key issue for the company is not the growth potential but delivering on this potential, as it has experienced a period of significant growth in a short-term and there remains the chance of some integration issues.

There has been some evidence of this with delays to the Sonata rollout and some integration costs stemming from the UK acquisition, but in the broker's view it remains too early for a definitive view on how well management are handling the issues. Assuming a worst-case scenario the broker values the stock at $2.08 while its best-case outcome is in excess of $5.00, so there appears solid upside potential if management can get things right.

Macquarie is similarly cautious given the integration risks in the short-term, but points out the revenue gains over a two to three year period should be significant. While the upside potential sounds good, UBS notes with the stock trading at around 28x FY08 earnings the upside potential appears largely priced in at current levels.

The broker rates the stock as Neutral, as does Macquarie, while Credit Suisse sees it as a Buy. The only other rating in the FNArena database is a Hold from Aspect Huntley. The average price target according to the database is $2.42, while broker earnings estimates are largely in line with prospectus guidance for the current year.

Shares in Bravura are unchanged today at $2.13, having traded in a range of $1.19-$3.10 over the past year but having come off its highs following a recent rights issue.

[stephen]

How would you characterise their revenue sources?

What I'm thinking is this:

- revenue from licensing software can be annual or one-off, depending on the model, but in any event it can scale far faster than overheads.

That's some pretty stunning forecast growth I must say.
- revenue from services pretty much only scales with employee numbers, and in fact there's a real risk that as you grow you dilute your ability to enforce your methods, as new hires outnumber the old-timers.

[Hommel]

Fisher Funds has a stake in this one. At the recent roadshow they were very enthusiastic about Bravura.

[macduffy]

SteveF:
Where do you get a sp of $2-13?
BVA closed yesterday at $1-70, its highest price since the low around $1-20.


Disc: small BVA holding.

[macduffy]

Sorry, Steve F
Didn't realise that the last sentence was part of the 3 and a half month old article!

[Footsie]

technically the stock is not in an uptrend yet,,,.........

there needs to be another retracement and a 50% rally from the mid august lows suggests one is imminent.

The correct time to buy is when it starts to rebound from the next pull back.

If you buy in this 1.70-1.80 mark u will be disappointed in the ST.

There is still a large seller out there

[steve fleming]

technically the stock is not in an uptrend yet,,,.........

there needs to be another retracement and a 50% rally from the mid august lows suggests one is imminent.

The correct time to buy is when it starts to rebound from the next pull back.

If you buy in this 1.70-1.80 mark u will be disappointed in the ST.

There is still a large seller out there

Footsie - per your post on HC on the BVA thread on 9 August 2007:

"been watching for over 2 months

bought in today.."

It closed at $1.60 that day.

How does that reconcile to your above post???

Also - Fisher Funds have bought an additional 9% of BVA since April - so there is also a large buyer out there as well.

[Footsie]

Steve / mosteph

anyone who predicted the August crunch deserves a medal
and better still anyone who bought in at 1.20 should be working for me!

I bought a position of 7,000 shares on that day at 1.55 for one of my clients
The position im looking for in BVA is about 100,000

i have not filled what i want yet

like i said - its not in an uptrend yet

yes fisher are buying, but someon large has been selling to them..... and they havent finished

PS was i or was i not correct that buying at 1.70+ was a bad idea...... its now back in the 1.50's

[Footsie]

mosteph

it takes a while for the SSH notice to filter through

i'm not sure of the time scale but they are often weeks or months after the event.

a large player is definitely selling down
queensland investment have been selling out - and the recently filed a ceasing to be sub notice
its probably them

So let me get this right - you bought on the low and sold on the high.
congratulations!

[steve fleming]

Footsie - good call re the retrace. However it has been on exceedingly light volume (ie average of about 50,000 shares per day).

By contrast, the rise from 1.30 to 1.70 saw volumes average over 500,000 (10 x higher)

Also, FYI, the Corporations Act requires Substantial holders to notify any changes in their holdings of more than 1%, within two business days.
Pretty severe penalties apply if this is not complied with.

[Footsie]

Yes steve

but the point is Queensland investment are now below the 5% mark

So they dont have to file anything.

Hence why i think its them selling out
5% is 7.1m shares

Look im not trying to argue with you guys.
I like BVA as much as you do.
I'm just trying to be 100% sure that the downtrend is over.
Therefore unlike mosteph i'm not trying to pick bottoms
I'm just waiting for confirmation that its time to go long -boots and all

[Phaedrus]

This chart illustrates some of the points that others here are making.
http://h1.ripway.com/Phaedrus/BVA99.gif
The On Balance Volume indicator gives good insight into whether volume is flowing into or out of a security and often gives early warning of changes in market sentiment. Usually, such warnings precede other more commonly used signals. That was not the case here though, when the break of the upward trendline triggered a Sell some days ahead of any obvious OBV signal.

The histogram along the bottom of the chart depicts Volume. Up days have green bars, down, red, and blue = no change. You can easily see the effect that high volume days have on the OBV plot. I have circled "steps" in the OBV that were caused by the 2 biggest "up" days and the 2 biggest "down" days. Obviously the former are Bullish and the latter Bearish.

So, what does this chart show? Well, firstly, it shows that BVA is still in a downtrend. Right now, it would need a Close of above 170 to end this downtrend by confirming the existence of an uptrend. Note, however the following :-
(1) The big down days are getting progressively smaller.
(2) The OBV appears to be flattening out, maybe even beginning to rise.
(3) See how over the last couple of weeks, the Up day volumes have been markedly higher than the Down day volumes.
(4) Notice the recent 4 consecutive Up days. (First time all year)
(5) These Up days were on increasing volume.

All of the above are evidence that the downtrend is weakening. I wouldn't be buying yet, but any/all of the following would generate Buy signals, in my opinion.
(1) A break of the trendline.
(2) A clear rise in the OBV.
(3) A break above 170 (the beginning of an uptrend)

I usually avoid giving any personal opinion at all with regard to charts that I post, and prefer to let the market speak for itself. Here, though, I'm almost prepared to stick my neck out and say that it looks as though the bottom is in at 130.

Time will tell though eh?

[Footsie]

Its now cut through the red line phaedrus has drawn.....

I can hear someone ringing a bell !!

I close into the 1.60's and a hold above this level would signal it for me.

Is Queensland investment nearly finished?

Time will tell.

[stephen]

I lost interest on today's announcment that the UK operation is outsourcing infrastructure to EDS. Nothing good will come of that.

My experience of working in companies where this has happened is that while IT costs go down, obstacles to productivity increase for the people who earn the money. It's never supposed to work out like that, but it always does.

I could expand on the reasons why this is so, but anyway, they're off my watchlist now.

[Footsie]

I've pulled the trigger.....

shot my load so to speak

It was the volume that did it for me

Technically i might have got it slightly wrong but its hard to get your timing exactly right Fundamentally with earnings growing from 4.2cps to say 15cps in 2 years its a high conviction trade

[Footsie]

well as they say if you cant justify your purchase you shouldnt be buying

and if you wouldnt buy more..... then you should sell

[steve fleming]

Huntleys reaffirm BUY on BVA today:

"FY08 EBITDA is expected to be in the range of $26m and $29m. FY08 EBITDA margin is expected to improve to 17% as scale increases and integration complete, resource management and utilisation improve.

These revenue projections may be quite conservative – they certainly suggest lower growth than earlier indications.

However major implementations under way and offshore expansion involve significant risk so greater than usual prudence is welcome.

BVA has the underpinnings of a strong global business with cash flows underpinned by the mature Rufus operation, which itself should grow profit at 20%+ for the next two years.

The non-Rufus part of the business is establishing itself as a strong player in the high growth wealth management segment.

The experience of developing product for the innovative Australia market provides BVA with a competitive advantage in other markets "

[Footsie]

CHOMP

Breakout.

[Footsie]

I think we should see a real breakout this week as the LT and ST mA cross.

[steve fleming]

I think we should see a real breakout this week as the LT and ST mA cross.

Almost. Highest close on Friday ($1.78) since June.

Though still way below its highs of $3.00+ earlier this year.

[macduffy]

Macquarie Bank just announced as Substantial Shareholder with 5.5% of capital.

[steve fleming]

BVA are forecasting a $10m + operating cash flow surplus for the first half of 08.

Given they are still ramping up big time (ie placing pressure on w/c) this highlights (if is acheived) the strength of BVA's margins and the success of its business model generally.

[Footsie]

IF BVA achieve the EPS if have forecast of 10-11c this puts them on a p.e of 15-17x

clearly when assessing their growth potential, the industry dynamics, the management and track record it suggests they are inefficiently priced.

This stock has a history of being "mis-read" or inefficiently priced by the market
eg when it ran to 3.00 and this subsequent fall to 1.17

A current "fair value" might be in the range of say $2.00 to $2.20 growing to say $2.50-$3.00 in 12 months.

[Footsie]

Nice up day in a down market

Could this be the big break of the 1.80 resistance?

If so - clean run to 2.20

Phaedrus will be all over it!

[Footsie]

dammit.... if it hadnt been for the index collapse

[Footsie]

Woosh! - Look at the strength pour in

[steve fleming]

Woosh! - Look at the strength pour in

These guys are killing it!!!
Funds administered by BVA applications (as reported):
May 29 2007 - $800 billion
Sept 11 2007 - $850 billion
Oct 19 2007 - $1,000 billion
Nov 8 2007 - $1,080 billion = USD $1 trillion
Therefore 35% growth in less than 6 months – Outstanding stuff!

[Footsie]

toot toot

v nice

great management

[steve fleming]

This company really does continue to impress.

Nice to see the share price starting to better reflect BVA's potential.

....“Over the course of three years, Bravura has achieved exponential revenue growth. As Bravura continues to expand and gain momentum, I am confident we will achieve our vision of becoming the leading supplier of wealth management applications and services across Asia Pacific, Europe, the Middle East and Africa.”....

[steve fleming]

http://www.bobsguide.com/guide/news/2007/Nov/8/Impact_Investing_appoints_Enda_Mahoney_as_Chief_In formation_Officer.html


Yes, with BVA having taken on a Global Head of Product, together with a Global Chief Technology Officer over the past few months, doesn't look like there was much room for poor Edna.

[steve fleming]

Big volume day to-day.

Story gets better and better:

"Sydney; 12 November 2007 – Bravura Solutions (Bravura, ASX: BVA) – a leading global supplier of wealth management applications and professional services – has premiered amongst the FinTech 100 group of companies as named by Financial Insights and American Banker magazine. Bravura is the only Australian company to appear on this year’s list.

The FinTech 100 is an annual listing of the world’s leading vertical technology vendors which generate more than one third of revenues from the financial services sector.

Global revenue was a key component for Bravura’s standing, attesting the company’s strengthening presence across the Australia and New Zealand, UK, European and Asian markets.

Iain Dunstan, Group CEO and Managing Director, Bravura Solutions said: “This award is a proud achievement for Bravura. 2007 has been a strong year for the company, which generated significant revenue growth and momentum across all regions of operation.

“Entry into the FinTech 100 represents a key milestone for Bravura and stands testament to its market leading global presence in financial services.”

Changes to legislation governing investment and pension systems have driven IT spending across the financial services sector globally. Customer retention initiatives and new account growth have seen an increase in demand for Bravura’s wealth management applications and services."

[steve fleming]

An interesting $2mil trade went through yesterday in a single on-market trade.

Aequs Securities was the seller and Reynolds & Co the buyer.

On further investigation i now see that Aequs and Reynolds have traded between them over $7mil of BVA stock in the last month...pretty good effort for a couple of small time brokers.

So confirms that we have one large seller and one large buyer.

[COLIN]

An interesting $2mil trade went through yesterday in a single on-market trade.

Aequs Securities was the seller and Reynolds & Co the buyer.

On further investigation i now see that Aequs and Reynolds have traded between them over $7mil of BVA stock in the last month...pretty good effort for a couple of small time brokers.

So confirms that we have one large seller and one large buyer.

Fisher Funds the buyer, perhaps, to add to BVA already in their BRM and Aust. Growth Fund portfolios? They might use a small broker, being specialists in things small themselves! Just a passing thought.

[steve fleming]

Fisher Funds the buyer, perhaps, to add to BVA already in their BRM and Aust. Growth Fund portfolios? They might use a small broker, being specialists in things small themselves! Just a passing thought.

Possibly, they paid in excess of $2.50 for BVA shares last year...and the BVA story has improved considerably since then, so you'd think they would still seee good value at these prices.

[Footsie]

The buyer is MBL and the seller is Queensland investment

[steve fleming]

some of Huntley's latest re BVA:

"...The tone of announcements in recent months suggests management is confident of meeting FY08 targets issued at the time of the release of FY07 results. These were for revenue of $155m-$165m and EBITDA in the range $26-$29m...."

"....One of our biggest concerns, the price and shortage of appropriately skilled employees, is yet to be realised. The company continues to source employees out of Melbourne and Adelaide, both, particularly the latter, proving much less expensive than Sydney. As a global group there is also the ability to move staff from regions with excess capacity to those with excess demand. The company is budgeting for a 5% increase only in average wages in FY08.

Another concern is that the sub-prime related chaos among some financial institutions will retard growth. So far management has witnessed nothing that indicates this is the case. Management’s view is that, because BVA’s systems increase efficiency, demand should remain strong even in a less buoyant environment, aside from burgeoning demand from the increasing scale globally of the wealth management industry.. ."

[steve fleming]

http://sa.iguana2.com/cache/28dadf64668c0a21f05e06735bf160fa/ASX-BVA-483207.pdf

"all business units are progressing and/or trading well above expectations and will result in significant revenue growth for many years to come."

"Earlier this year, I was extremely proud to have been nominated for, and won, the Ernst and Young Entrepreneur of the Year award in the Technology, Communications, E-commerce and Life Sciences category for the Eastern Australian region.

During one of the stages where I was being interviewed, I was asked what thecompany’s greatest obstacle was; I replied without hesitation that it was exponential growth"

Do your DD on this one folks....its a great story.

[Footsie]

Steve F

What's your target price and valuation for BVA?

[steve fleming]

Steve F

What's your target price and valuation for BVA?

FTSE

BVA's EV/EBITDA (08) is 9.74
BVA's EV/EBITDA (09) is 7.48

Current EV/EBITDA ratio for sector ~ 15

Therefore inital target would be $3.00 - increasing to $3.50 - $4.00 over the next 6 - 12 months assuming the story holds

[steve fleming]

FTSE

BVA's EV/EBITDA (08) is 9.74
BVA's EV/EBITDA (09) is 7.48

Current EV/EBITDA ratio for sector ~ 15

Therefore inital target would be $3.00 - increasing to $3.50 - $4.00 over the next 6 - 12 months assuming the story holds

Credit Suisse have re-affirmed their strong buy on BVA with a $2.80 target.

[Footsie]

BVA have to deliver to be re-rated back to the mid 2.50 mark

all will be revealed by february me thinks

[_Michael]

I like the story and see significant potential in terms of locked in revenue streams, servicing a growing market and barriers to entry. In addition i'm impressed by the entreprenurial spirit of management and that they have significant flesh in the game. Also like that fund managers who USE the software are also buying the shares.

Yet i'm not quite ready to pull the trigger. Why not? Guess the lack of cashflow still worries me, my feeling is that they will probably deliver on forecasts and if they do there will still be time to buy as a long term hold (albiet missing the 40% or so that one might enjoy between now and then).

On the other hand, you are looking at a $250 million company that is still putting more cash out the door than they are bringing in - so if that continues for another 12 months the stock will get hammered and noone seems to be thinking about that...

All in all i'm more optimistic on BVA than pessimistic but will wait for the cash, and some sort of assurance iof being able to buy at below 20 times fwd earnings...

cheers
Michael

[steve fleming]

On the other hand, you are looking at a $250 million company that is still putting more cash out the door than they are bringing in - so if that continues for another 12 months the stock will get hammered and noone seems to be thinking about that...



Hi Michael,

BVA anticipate positive net operating cash flow for the December quarter to be above $15 million...we'll see if they can deliver!

cheers

[_Michael]

Hi Steve

For sure - its going to be all eyes on the cashflow statement for Dec Quarter and if they come through with the goods then there won't be much left to hold her back....!

[Footsie]

cashflow will be positive.... just depends by how much....


If its $15m.... then price will shoot to 2.50 quickly i'd say....

if it was only $10m... then i'd doubt price would fall back that much.


Give the confidence returning to the stock as evidenced by the price action i think it will be the former...... the market is almost always right.

[_Michael]

Bravura signs major transfer agency deal with leading UK
financial services group


Sydney, 27 December 2007 (ASX: BVA) ­ Bravura Solutions Limited (Bravura) ­ a leading
global supplier of wealth management applications and professional services ­ has signed a
multi-year agreement with a major UK financial services group, for the implementation of the
Rufus transfer agency platform.

Under the initial three year deal, Bravura will provide secure hosted applications which will
support the launch of a new set of investment products. The project comprises a new licence
fee and implementation services which will generate revenues in excess of $5 million during
calendar year 2008.

Iain Dunstan, Bravura Solutions' CEO and Managing Director said, "We are very pleased to
welcome one of the UK's leading financial institutions as the first new Rufus client under
Bravura's ownership."
- ends more -

About Bravura Solutions Limited

An S&P/ASX300 company, Bravura Solutions Limited (Bravura) is a leading global supplier of
professional consulting services and highly specialised administration and management
applications for superannuation & pension, life insurance, investment, portfolio administration,
transfer agency and STP financial messaging.

Bravura provides professional services and wealth management applications to more than 175
financial institutions including a range of corporate clients. More than 18 million accounts are
administered on Bravura software, with more than US$1 trillion in funds administered globally.

Bravura currently employs more than 650 people staffing 14 offices across Australia, New
Zealand, UK, Europe, Asia, South Africa and India (with a distribution partner)
.

Bravura Solutions is proud to have been ranked number 1 in Australia's BRW Fast Starters for 2007
and to have won the 2007 Australian Export Award for Information and Communication Technology.
- e

[_Michael]

ASX RELEASE
Absa Investment Management Services signs major licensing
deal for Bravura's TalisTrust and Sonata Business Services


SYDNEY, Australia; 31 December 2007 ­ Bravura Solutions (Bravura, ASX: BVA) has signed
a major new licensing agreement with AIMS, a subsidiary of the leading South African banking
and financial services institution, Absa, for a major upgrade to its registry systems.

Under the deal, Bravura's unit registry offering, TalisTrust will replace AIMS' existing
administrative systems and consolidate multiple applications on a single platform. The new
system will enable AIMS to administer a more diverse range of financial products, automate
transactional processes and better manage its growing customer base.

Mark Kitching, Chief Operating Officer of AIMS said: "Our decision to purchase TalisTrust
follows an intensive evaluation of competitive offerings, prompted by strong growth of AIMS'
business.

"TalisTrust will simplify our existing administrative environment, delivering significant time and
cost savings. This will enable us to better focus on our growing client base and service
delivery."

"Bravura is delighted to extend its relationship with AIMS, which has contributed significantly to
our strengthening presence in the South African market," said Iain Dunstan, Group CEO and
Managing Director, Bravura Solutions.

"Bravura's success in South Africa is largely due to the ease with which our products comply
with South African requirements and enable companies, like AIMS, to seamlessly integrate their
businesses across geographic destinations and legal jurisdictions."

"The deal with AIMS reflects our growing global footprint and commitment to the expanded
EMEA region's financial services sector and it will generate over $3 million in new licence and
services revenue during calendar year 2008."

As a result of the TalisTrust deal with AIMS, Bravura will recruit additional staff to provide local
support and expand Bravura's range of offerings to the South African market.

[_Michael]

Think that I'm going to give BVA the benefit of the doubt on this one and assume that they will make their cashflow forecasts - but tread careful in case they do not.

On Friday I bought 50% of what I intend to buy, then pick up the next parcel after the next results announcements in Feb - leaving option to average down/up.

The deal flow seems to building rapidly and am picking this is on the back strengthened reputation in the market place which seems to building all over the world.

Also see the longer term potential -once fund managers locked in switching costs are high which gives them an attractive economic moat.

Also some of their services are charged as % of FUM or by transaction so they have good exposure to two trends: growth in funds management and growth in outsourcing.

Still for me its a little on the speculative side due to my concern about cashflows post acquisitions - but on other hand not overly expensive from price to sales perspective.

Asume FY09 will see increased margins % of sales and improved cashflows, management substantial holders so genuine motivation to deliver on this promise.

[Footsie]

Michael

This is not a speculative stock

[steve fleming]

a must-read article in the AFR during the week on BVA.

Iain Dunstan was quoted as saying BVA couldn't be better placed in the current environment even if it tried.

[COLIN]

a must-read article in the AFR during the week on BVA.

Iain Dunstan was quoted as saying BVA couldn't be better placed in the current environment even if it tried.

Should be music to the ears of Carmel Fisher's devotees in BRM. Should help to offset her disastrous investment in CCP.

[_Michael]

a must-read article in the AFR during the week on BVA.

Iain Dunstan was quoted as saying BVA couldn't be better placed in the current environment even if it tried.


Yeah there has been nothing but deal flow announced over the last few months but stock got knocked back - nice to see it making a strong and fast comeback this last week.... the more sign-ups they get the more long-term lock in revenue they secure for the future. Its looking like shaping up as another impressive Australian success story in IT not unlike IBA (although the market does not seem to think too much of IBA at the moment they have achieved a great deal over the last five years/...)

[Footsie]

Steve Fleming

Can you please post that article from the AFR. we dont get the afr over in Kiwiland.

Thanks

[steve fleming]

Steve Fleming

Can you please post that article from the AFR. we dont get the afr over in Kiwiland.

Thanks

Have thrown my copy out sorry....but this is the start of it from the Commsec newstand.

Contract renewal pumps Bravura with confidence
Date6/2/2008
AuthorPaul Smith
SourceThe Australian Financial Review--- Page: 59

Bravura Solutions has signed a deal with The Bank of New York Mellon for itsRufus software, worth at least $A15m. The agreement extends the Australianwealth management software group's five-year contract with the bank to theend of 2013, and could potentially generate annual revenue of up to $A40m. Thecontract was initially negotiated after Bravura acquired Rufus from the bank in2006. Bravura group MD, Iain Dunstan, said the contract extension was anendorsement of its performance to date and significant as it continues to expandits European business. Shares in Bravura rose 9.3% to $A1.64 on 5 February 2008

[David Hardman]

Contract pumps Bravura with confidence

http://afr.com/home/viewer.aspx?EDP://20080206000020269497&magsection=industry-itt&title=Contract+pumps+Bravura+with+confidence&source=/_xmlfeeds/industry/itt/feed.xml

Just missed out picking up some more BVA at 1.19 a few weeks ago. Sometimes its silly to sit top of the queue waiting to be filled!

[steve fleming]

If BVA stays around these levels for too much longer, you'd think the directors would seriously considering re-visiting the takeover proposal that they were rumoured to have recieved late last year from a UK institution that valued PEM at $2.10 to $2.30.

[Footsie]

Steve was that and AFR rumour?

[steve fleming]

Steve was that and AFR rumour?

Was in the AFR and other media.

Iain Dunstan acknowledged that BVA has been approached.

[Footsie]

Stock is running again.....

Rumours of t/o running around once more.

I've also heard that there is a new insto looking for a big stake which might account for it.

again all heresay. :)

[Footsie]

we'll see how it reacts today to see whether there was any grounds to the rumour...
IF its false I just dont get how these things start and why someone would pay 15% above y'day's close on a rumour.... in this market !

By the way It's loving this trading range of 1.30-1.80 at the moment. It's been in this mode for 7 months. Almost a reliable trading pattern.

[Footsie]

I sold some into the excitement...

[Footsie]

Could this be it?

Takeover

[macduffy]

Could this be it?

Takeover

And if it is, who is the suspected predator?

[COLIN]

Could this be it?

Takeover

Looks like just another "Opes Prime" situation to me. What is there to get excited about? Rather the reverse.

[macduffy]

Yes, sadly.
Another case of directors getting caught up with a dodgy financing deal.

:(

[Footsie]

my dreams go up in another Margin call.........

who knows where this one will get placed at....

i just hope it doesnt bring about the collapse of BVA


A predator strike from GBST, IRess or CPU is the only hope now.

[steve fleming]

my dreams go up in another Margin call.........

who knows where this one will get placed at....

i just hope it doesnt bring about the collapse of BVA


A predator strike from GBST, IRess or CPU is the only hope now.

"The Lift Capital debacle is unlike that of Opes, in that clients did not automatically hand title over their shares to Lift and Merrills when they signed over for their loans, but the difference is academic now, as the appointment of administrators triggered a charge by the bank that gives it ownership of Lift's entire client share portfolio."

Bad luck for the Directors.

However it puts BVA right in play now - my understanding of why the takeover didn't proceeed in November last year is because the Directors didn't want to let go of their 30% stake - now they have no choice! its going to be sold from under them!

[Footsie]

Thanks Mo - my return for calendar 08 is -17% YTD.... however i've had down quarters before and i'm confident in can pull out of this one.

The thing about the small cap sector is although they get bashed in a sell off... some stocks I own could run 50%+ in a short space of time from where they are now if we recover.... as i have said, i own stocks on p/es of 4x

Im told that it's c. 14% of BVA that is held my Merrills.

Anyhow
BVA
likely outcomes in order
1. Line get's placed to institutions at $1.00-$1.20 (puts BVA back on the map and is not necessarily a bad thing) = Neutral
2. Corporate raider eg GPG takes the whole line. = positive
3. CPU, IRE buy the stake and/or launch a full takeover. = positive
4. Merrills tarnish their reputation and dump on market... price goes to 50c = bad for existing holders, positive if yuo buy at 50c !

regardless of the outcome, i'm sure there will be an opportunity somewhere to make $$

[steve fleming]

Anyhow
BVA
likely outcomes in order
1. Line get's placed to institutions at $1.00-$1.20 (puts BVA back on the map and is not necessarily a bad thing) = Neutral
2. Corporate raider eg GPG takes the whole line. = positive
3. CPU, IRE buy the stake and/or launch a full takeover. = positive
4. Merrills tarnish their reputation and dump on market... price goes to 50c = bad for existing holders, positive if yuo buy at 50c !

regardless of the outcome, i'm sure there will be an opportunity somewhere to make $$ Certainly going to be interesting to see which ways this goes.

This is part of an interview Iain Dunstan did with MergerMarket a couple of months back when the takeover talk was doing the rounds. Unless Dunstan was not telling the truth, there is genuine interest in BVA, and a director sell down would provide an opportune time for a trade buyer to take a stake.

__________________________________________________ __________________
Bravura Solutions could either be acquired or become acquirer, MD says

Bravura Solutions, the listed Australian provider of back-office financial software and services, is as likely to be acquired as it is to become an acquirer. Managing director Iain Dunstan said that back-office software is a "scale business" so, "we are continually looking at acquisitions and people that are bigger than us are looking at us". Dunstan said although there is "nothing formal" with regard to a sale, there have been enquiries, and Bravura "could go either way".

At its current size, Dunstan said Bravura would be "small fry for global players". He said Bravura currently has a market capitalisation of AUD 240m (USD 220m) and revenues of AUD 170m (USD 156m), making it very affordable for large global players.
Dunstan said Bravura is an appealing target because it is the leader in its space in Australia, with the most market share; it is the only company of its type in New Zealand; and it has established business in Hong Kong, South Africa and the UK, and is profitable in all those regions. He said the company has good core software and 180 clients.
Dunstan said Bravura would only look at a buyer that could grow and continue to invest in the business. He said a potential buyer was therefore unlikely to be a PE player, but rather a trade buyer, most likely from the UK or Europe.
He said it was reasonable to assume that an appealing offer price would have to be substantially higher than the company's current market capitalisation

[Footsie]

here's hoping Steve F

[steve fleming]

However it puts BVA right in play now - my understanding of why the takeover didn't proceeed in November last year is because the Directors didn't want to let go of their 30% stake - now they have no choice! its going to be sold from under them!

....."approaches from certain parties in relation to a potential corporate control transacation".....

:)

[Footsie]

more twists and turns ...........

$2.00 & CPU according to DJ newswires

[steve fleming]

more twists and turns ...........

$2.00 & CPU according to DJ newswires

Multiple parties....

"A broking source told Dow Jones Newswires that Computershare (ASX: CPU) may bid for the financial services software firm.The person said Computershare is looking at paying $2 a share, and that two private equity firms are also among the interested parties. "

http://www.theaustralian.news.com.au/story/0,25197,23543395-643,00.html

[macduffy]

Some good news at last! $2 would see me exit with a small profit and , in the circumstances, I'd settle for that.

;)

[David Hardman]

Some good news at last! $2 would see me exit with a small profit and , in the circumstances, I'd settle for that.

;)

Surely ML and ANZ will hold out and wait for news on the deal

http://business.smh.com.au/casualties-grow-after-lift-collapse/20080415-26cj.html

[macduffy]

$2 would also presumably get ML out of this particular hole so perhaps they will encourage a quick deal?

;)

[_Michael]

ditto my friend

[macduffy]

For what it's worth, Macquarie Equities has a valuation of $1-80 for BVA and expects a bid to be " north of $2 ".


:)

[Footsie]

the wait continues.........

[macduffy]

the wait continues.........

Yes, Footsie. The thrill of the chase!

( bty, I'm encouraged when I look at your great record over the last few years. Hate to think what mine is in the period 1961 -2008 ! )

;)

[Footsie]

thanks 2008 hasnt been kind to me.... but there is still 8 months to go and a takeout in BVA will do wonders for my overall p/f.

[David Hardman]

Will we find out this morning..... or will we have another extension to suspension.

Anything over $2 will make me happy.

[macduffy]

Company has requested another extension to suspension.

;)

[macduffy]

Bravura and Ironbridge Capital in advanced negotiations for scheme proposal.
Basis of a proposed price of $1-73 per Bravura share.

I'm not very impressed!

:(

[David Hardman]

Bravura and Ironbridge Capital in advanced negotiations for scheme proposal.
Basis of a proposed price of $1-73 per Bravura share.

I'm not very impressed!

:(

Hrmm. IronBridge are MBO specialists. Lets hope that the directors of BVA are doing their best for ALL shareholders and are not using this as an opportunity to restore their own shareholding in the group after the Lift debacle.

[Footsie]

They will need to do better than that!

18% premium wont cut the mustard for a takeover.

You wont get the likes of fisher selling for that price

It needs to be AT LEAST $2.00

i suspect the low price all relates around the LIFT issue

P/equity are always trying to get bargains.

I'm hoping that the disclosure will flush out another bidder. ie CPU might say...... gosh at 1.73 we'll buy it.

[steve fleming]

Huntley says:



BVA is engaged in discussions with private equity group Ironbridge Capital that may lead to a bid at an indicative $1.73.
The stock is in suspension after Directors’ shares became caught up in the failure of Lift Capital, another equity business that allegedly borrowed funds using clients’ stock as collateral. Principal funder of Lift, Merrill Lynch, has declared a 31% holding in BVA.



We are surprised at the price, which represents a relatively small premium to the prevailing – in our opinion – depressed share price.



We think there is a high probability a competing bid will emerge, which we believe needs to be at least $2.00 to succeed



Computershare is rumoured to be interested and would be a logical buyer.



If the directors have in fact lost their stock this unfortunate situation could weaken the Board’s resolve. Nor would we expect Merrill’s to put up much of a fight.



We recommend accumulation below $1.75

[macduffy]

The Ironbridge t/o of Bravura has been confirmed at $1-73.

:mad:

[steve fleming]

The Ironbridge t/o of Bravura has been confirmed at $1-73.

:mad:


It appears that Dunstan and Woodfull don't currently have title to their shares: therefore the deal can't happen.

The market certainly doesn't think it will get across the line.

[steve fleming]

From MergerMarket:
-----------------------------------------------------------------
Fisher Funds, a 12.7% shareholder in Bravura, believes Bravura is worth far more than the AUD 1.73 offered by Ironbridge, a source close to the New Zealand fund manager said. He argued that a valuation of around AUD 2.20 would be closer to the mark based on market growth projections, potential upgrades, good management and Bravura’s strong market position.

Ironbridge Capital has offered Bravura directors Iain Dunstan and Simon Woodfull shares, along with cash, in a special purpose vehicle. The deal is conditional on the two executives establishing ownership of a combined stake in Bravura of almost 31% of the company.

Other Bravura shareholders will receive AUD 1.73 in cash for each share held.
A source close to Ironbridge said that Dunstan and Woodfull would be excluded for voting at the shareholder's scheme meeting and, given the 75% approval required, the threshold would be hard to reach should Fisher vote against the deal. There will be two scheme meetings; one for shareholders excluding the two directors or their nominees, another meeting for the directors or their nominees. Option holders can vote at the shareholder meeting if they exercise their right to convert their options to shares.
Fisher has an influential position, the source close to Fisher noted.

As the leading institutional shareholder, Fisher is speaking to other shareholders. “It is not perceived as an attractive price,” the source said, adding that if Fisher's view of the company's value proves correct then other bidders may well emerge. “It is early days still.”
As this is effectively a privatisation, the source argued, it is not a practical option for all shareholders to be offered an equity component. Fisher is thus arguing about value rather than pushing for an equity component.

[David Hardman]

BVA spiked 18% yesterday on reasonable volume. Significant move for this stock.

Can only think this is on the back of some Lift Capital news?

Still trading well under T/O price.

[Footsie]

still a few days left... im still expecting a profit downgrade

and deal to fall over

[steve fleming]

BVA spiked 18% yesterday on reasonable volume. Significant move for this stock.

Can only think this is on the back of some Lift Capital news?

Still trading well under T/O price.

Yep, good call.

Revised deal terms agreed to between Mcgrath Nicol/Lift/ Directors and ML and looks like it will all go ahead now, in a more simple form, at $1.73.

[Footsie]

you are forgetting that yuo need shareholder approval

fishers may not sell

[David Hardman]

a partial takeover could suffice, for Fishers won't control the board.

Announcement just out.

They did not get close to the 23m required by Iron Bridge.. They expect 19-20m EBITDA

Does that make it another downgrade?

They sounds hopeful the deal will still go through.

[macduffy]

$18.6m EBITDA so they didn't quite make the revised ( downward) figure.
Revenue up strongly but profit slashed heavily, a classic case of profitless growth. Will be interesting to see if Ironbridge are still interested and if so, at what price?

:(

[_Michael]

Hard to know what to make of this. Putting the takeover aside for one minute and looking at the business with market cap around $117m.

Growth appears to be there and customer relationships intact but when will the costs be scaled back, and the margins open up?

If they can work some discipline into pricing their project work and consultant expenses etc the company could turn out to be cheap 24 months down the line.

Are IronBridge allowed to build stake on market? If so they would be getting in at half the agreed price so the EBITDA shortfall may not be as major.

[macduffy]

I see that Ironbridge have now formally withdrawn from discussions.
Stand by to await a revised proposal, at a substantially lower indicative price.
:(

[Jaa]

Anyone know what today's trading halt is about?

Debt issue? Takeover? Acquisition?

[winner69]

No idea jaa but jeez i hadn't noticed that BVA shareprice had fallen all the way down to 17 cents odd

Once once a very promising post float but the chart just got worse and worse and it went off my watchlist around the $1 mark six months ago

Again another case where charts keeps one out of trouble ........but things may be changing?

[Footsie]

could be curtains for these guys

bank is obviously calling in the debt. hence the cap raising.

I notice fisher funds holds this stock..... why do they have this Buy and hold forever regardless approach to stocks.

[macduffy]

I suppose that Ironbridge could be fronting up with another, lower offer.
If they've sorted out their own problems, that is!

I took my loss on this one a few months ago but best of luck to anyone still holding.

[Jaa]

The second update does say "Recapitalisation Proposal" so I assume it is some form of rights or equity issue as oppossed to a takeover.

Obviously not a quick fire "placement" though! May be a way for the orginal owners to regain control after last year's debacle?

Footsie, their underlying business and cashflows seem pretty sound so I would be surprised if they dissappear completely.

Their software effectively runs most of the financial services companies in Australasia and many investment firms in Europe and is near impossible to replace in a hurry (The "economic moat" Carmel Fisher was talking about in the weekend). Thus maintenance and consulting revenues should be enough alone to tide them over, albiet with cuts to the number of staff.

[Footsie]

from what i read in the last mac bank note

debt has ballooned to $60m
market cap is only 25m... and with NPAT only $5m so the are in the poo....

NO doubting its a great business model... but mgmt are poor.
if are you are generating 73m of rev in the half and only npat of 2m something is wrong... given this is a service industry NPAT margin should be nore like 12%


The best way I can see out of this is that the CEO is fired.
they slash costs. do a rights issue at 15c for 200m shares = $30m

Its disgraceful that a company with these credentials has been run like this


I sold my holding at 1.42 and thank goodness for that.....

Plernty more fish in the sea Jaa.... nothing to see here move along

[Jaa]

The proposal is out and at face value it looks like a takeover and a big pay day for Ironbridge at the expense of existing shareholders. The directors also get to swap their margin lending account with one with Ironbridge with is no doubt nice for them but seems to be at the expense of the remaining shareholders.

The proposal is to raise $33.4m at 0.15 cents (versus a market cap of $21.5m at the rights issue price) via a rights issue fully underwritten by Ironbridge.

Only $28m is going to pay down debt though, which will halve the companies total onbligations. The rest is going in fees, mostly to Ironbridge plus a further $13m in options exercisble by Ironbridge at 0.15 cents anytime in the next 2 years.

As they have been sitting on this since March 13 and no doubt trying to to get a better offer, the chances for an improvement seem slim. It does require shareholder approval though which can't be guranteed considering the structure and terms. The independent report should make for interesting reading.

Thoughts?

[winner69]

still waiting for the recap to take place .... rights issue 15 cents this month I think still might be rejectedby shareholders

What happens then?


Interestingly shareprice crossed the 200MA line recently .....

[Jaa]

Anyone else still following Bravura? After watching for a few years I finally bought a smallish holding in their last 10c capital raising.

Thus its nice to see Ironbridge take the latest offer/entreaty a bit more seriously after dismissing the previous random offer between 17.5c-20c out of hand.

Any thoughts about what price it would take Ironbridge to let go of this one? Figure they would be happy wih an offer a bit above their average entry price (~15c) and obviously above the 19.5c they so dismissely rejected, say 25c?

[Jaa]

Interesting that Fisher Funds still hold 12% of Bravura and have been buying all year including today according to the SSH notice they just filed.

[macduffy]

Interesting that Fisher Funds still hold 12% of Bravura and have been buying all year including today according to the SSH notice they just filed.

In that case they'll be sitting on a pretty hefty book loss overall, at the moment.

BVA is one of several FF favourites that I looked at several years ago. I bought three - lost my shirt on BVA - lucky enough to score a three plus bagger in AOE - and still hold RKN which has more than doubled since then. Overall, not a bad result!

[Jaa]

Ironbridge (currently with 67%) have finally made their move, with a a now confirmed merger agreement at 28c. They have been creeping for a couple of years so this was expected. Guess they saw the recent market and BVA share price weakness and the falling AUD as an opportunity to pounce.

Fishers who have about 14% have accepted and the independent directors have recommended approval so it looks all over for Bravura.

Happy enough with the price but not the 3 months of waiting and uncertainty till they pay up!

[Toulouse - Luzern]

A good win for FFM.

[Stranger_Danger]

Is it? I have them as losing a fortune on the investment, overall.

[Toulouse - Luzern]

Hi Stranger Danger,

A fair question.

Depends how you look at it.

Contingent on how much information you have on when FFM bought, and if they traded BVA at all, and what % of the FFM AU Growth portfolio was in BVA.

My view was/is that immediately before the offer, the share price was 17 cents over a four day period, and after the offer closed it was 28 cents.

FFM I assess will get 11 cents on the pre offer share price of 17 cents = 65%.

The offer was contingent, it could have fallen over.

I wanted to see it go through, rather than lapse and the price decline to 17 or below, so I saw it as a win.

Now, if FFM bought in 5 years ago at circa 70 cents then record my agreement, it is agreed, it was a disaster.

My face value, simple view was that compared to what BVA value we had 3 - 4 weeks ago, we are much better off.

BVA current NTA according to Direct Broking detailed view is -1cent, PE is 63, and dividend yield is 0%.

At face value BVA appeared unable to realise any value for shareholders in SP over last few years.

So agreed BVA was not a good investment but IMHO if you still held it at the time of the offer then an exit at 28 cents is a win.

Best outcome for me as a FFM Au Growth holder is for FFM to accept the offer which I gather has happened.

However I don't think FFM had a great value invested in BVA at the time of the offer as the positive effect on BVA price was immediate, the impact on the FFM daily share price immediately following the offer was low. The gain I see for for FFM is that they no longer have to consider BVA at all, they can look at the other "dogs" they may have. With the Tower Investment related changes it may be the FFM Au team are probably more than busy.

PS: I follow FFM Au Growth fund fairly closely.

On 11 July 2013 the FFM Au Growth price reached 2.7993 a recent high after a run up of a week or so (according to my records E&OE) the prior recent high was in March 2013 at 2.7176. I don't record the prices every day (holidays /other things to do etc).

Good luck to the new owners.

[Snow Leopard]

So I came across a company called Bravura Solutions which listed on 16-Nov-16 under the code BVS which it turns out is the very same Bravura Solutions whose sorry tale is partially documented here.

The Q is: does one buy some and hope the $1.30 to $3.00 to $0.10 to $0.27 story does not repeat.

The A is: maybe, or maybe not.

Best Wishes
Paper Tiger

[Snow Leopard]

So to follow on from the previous one:

I did in the end buy the minimum amount I am willing to initially invest in a stock and so far not much as happened !

Best Wishes
Paper Tiger

[Snow Leopard]

So to follow on from the follow on:

It, whatever it is, seems to be happening now.

Best Wishes
Paper Tiger

[Snow Leopard]

9576

Well, it took a while to really happen.

But it did, in the end, happen.

Probably will not happen much more though.

But I could live with it if it did.

Best Wishes
Paper Tiger

[percy]

9576

Well, it took a while to really happen.

But it did, in the end, happen.

Probably will not happen much more though.

But I could live with it if it did.

Best Wishes
Paper Tiger

So could I..lol.

[Snow Leopard]

...Probably will not happen much more though...

How wrong can you be?

Not only has it continued to happen, but the market has been surprised by just how much it has been happening and will, hopefully, continue to happen.

Song time:

https://www.youtube.com/watch?v=OZ3DKv6ft_0

[Snow Leopard]

Not been particularly happening since last post. More sort of a post happening consolidation.

But a couple of days of strong rises with some volume behind them - could be a whole new happening.

:)

[Snow Leopard]

Well as happenings happen the last happening was a REAL happening:
down from $6.03 to $4.65 in four days, and all because some other company (ASX:LNK Link Administration Holdings) announced that it was not happening for them, so I am told.

Hopefully a bit of post happening re-happening over the next few weeks, but eh! who knows, or cares?


Meanwhile I can recommend both the region of Puglia, in Southern Italy, and its wines.
But bring a decent corkscrew as they have not caught up with modern NZ wine tech here yet :(.

Would be great if Greece is a little more on the ball, but somehow I doubt it.

[percy]

Don't know about BVS,however, if I was in such a lovely part of the world ,I think i would manage a few corks.!.

Google maps had some great photos of the area.

[Snow Leopard]

One of the problems with happening to move into permanent accommodation after a couple of years on the road is that instead of reading the full year announcements as they happen you are busy buying fluffy towels and rubber mallets.

So on the 23rd I missed BVS announcing a 20% jump in profits and a reasonably rosy outlook.
The traders of the ASX, being what they are, decided it was worth both $4.13 & $5.23 ( & various values between) a share on the day. Today it is 'worth' $4.80

Despite the last three months being definitely downtrendy, the longer term still looks good and they can sit on the shelf next to the Tiki who faces the door and keeps the flat safe.

[greater fool]

Reduced. Was off topic banter

[Jaa]

FY result out yesterday meeting guidance with recent acquisitions doing well but they expect no growth this year due to COVID delaying new contracts. Very confusing outlook statement.


It is therefore possible that FY21 NPAT will be similar to FY20.

Market seems to have freaked out and assumed that means Bravura's impressive growth of the last 5 years is over and their core product Sonata has saturated the market. Price is down from $4.30 odd to $3.47 and continuing to drop.

Recurring revenue is now 77% of the total and their contracts are for 5-10 years. Colour me confused. :confused:

[Snow Leopard]

So I came across a company called Bravura Solutions which listed on 16-Nov-16 under the code BVS which it turns out is the very same Bravura Solutions whose sorry tale is partially documented here.

The Q is: does one buy some and hope the $1.30 to $3.00 to $0.10 to $0.27 story does not repeat.

The A is: maybe, or maybe not.

Best Wishes
Paper Tiger

I sold out of these long long ago ( and changed my stripes for spots since the above post ) but it appeared in todays list of significant price movers - like down 52% [ A very unhappy happening :scared: ].

The last five years appear to have been $1.30 to $5.60(ish) to $0.63 today 'repeat'.

The reason why (https://stocknessmonster.com/announcements/bvs.asx-2A1411004/)