Last week we attended the 17th Annual Macquarie Conference in Sydney. One business firm that looked particularly appealing was CSG Limited (ASX: CSV). Unfortunately the stock is a bit on the small side for our funds but a brief analysis is an interesting exercise.
Last year marked a significant turnaround in the fortunes of information and communications technology group CSG Limited (CSV) with each disappointing announcement seemingly being following by another one. Investors decided it was best to abandon their previous fast running champion stock and in February analysts at RBS even went as far as to question whether the company still deserved to be considered "investment grade". No surprise thus, CSG’s share price performance has not been that flash (down more than 30% over the year) and that is an understatement, without discussion.
CSG’s first half results were below expectations of the broker. The revenue miss was attributed to a longer than expected sales cycle in Enterprise and reduced sales productivity in business solutions.
The company has announced another capital raising to meet upcoming contracted capital payments and to keep some funding flexibility. The announcement sees minor changes to the broker’s earnings estimates.