Computer Systems Advisers

Wished I spotted this a week or two back, but nobody can always be at the top of the heap, just don't be the last.

a) CSA expects recurring income from information technology (IT) outsourcing as well as the customer services and support segments to boost its operating profit. Both segments contributed close to 80% of operating profit for the nine months ended Dec 31, 2006. The remainder came from IT systems and solutions.

b) Revenue for the third quarter grew 14.4% to RM112.36mil from RM98.19mil in the same quarter a year ago while net profit increased 26.8% to RM6.14mil. Earnings per share rose to 6.07 sen from 4.79 sen before.
c) Net profit for the first nine months came in at RM18.91mil, close to the RM20.4mil achieved for the whole of the previous financial year. CSA director Peter Yong said the IT outsourcing division now contributed close to 50% of the company’s earnings before tax, surpassing its own projections.

d) “The coming financial year will see us aggressively pursuing new outsourcing contracts in Malaysia and with global customers of Computer Sciences Corp (CSC),” he added. CSA is a member of the CSC group.

e) CSA recently spent RM14mil to expand its data centre to 23,000 sq ft from 10,000 sq ft to deliver more value-added data centre services. “We will continue to secure IT outsourcing deals globally by leveraging on the hub.

f) About 50% of revenue in the segment comes from countries in the Asia-Pacific region.

Paid Up: 101.2m shares

CSA Holdings Ltd 49.4%

Global Professionals Ltd 7.8%

Mohamed Rashdan bin Haji Baba 4.68%
Nik Mohd. Sidek 3.46%
EPF 1.33%

Free Float: 31%

BV Per Share RM2.35

EPS 2007 estd. 27 sen

Main reason for the recent pick up in activity: parent US company CSC looking to privatise the company. BS? Not really, considering CSC did privatised the Singapore arm last year. Its obviously on a consolidation strategy - best way to use excess cash. If CSC paid the same benchmark it paid for the Singapore company, which is 1.9x forward P/NTA, this points to the privatisation to be done at a minimum of RM4.00. Believability rating: high. Timing rating: sooner than you think.