DB:RD2D

Stock Analysis Report

Castleton Technology

Executive Summary

Castleton Technology plc, an investment holding company, provides software and managed services to the public and not-for-profit sectors in the United Kingdom and Australia.


Snowflake Analysis

Undervalued with excellent balance sheet.

Share Price & News

How has Castleton Technology's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: RD2D has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-1.7%

RD2D

-9.6%

DE IT

-6.8%

DE Market


1 Year Return

-18.0%

RD2D

21.5%

DE IT

6.5%

DE Market

Return vs Industry: RD2D underperformed the German IT industry which returned 21.1% over the past year.

Return vs Market: RD2D underperformed the German Market which returned 6.1% over the past year.


Shareholder returns

RD2DIndustryMarket
7 Day-1.7%-9.6%-6.8%
30 Day-0.6%-5.2%-3.7%
90 Day-0.6%5.1%-3.6%
1 Year-17.1%-18.0%22.3%21.5%9.8%6.5%
3 Year30.1%28.8%133.9%127.4%6.8%-2.6%
5 Year42.3%40.8%217.1%203.9%12.5%-2.9%

Price Volatility Vs. Market

How volatile is Castleton Technology's share price compared to the market and industry in the last 5 years?


Simply Wall St News

No news available

Valuation

Is Castleton Technology undervalued compared to its fair value and its price relative to the market?

49.3%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: RD2D (€0.85) is trading below our estimate of fair value (€1.67)

Significantly Below Fair Value: RD2D is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: RD2D is good value based on its PE Ratio (14.3x) compared to the IT industry average (31.9x).

PE vs Market: RD2D is good value based on its PE Ratio (14.3x) compared to the German market (20.2x).


Price to Earnings Growth Ratio

PEG Ratio: RD2D's earnings are forecast to decline next year, so we can't calculate its PEG ratio.


Price to Book Ratio

PB vs Industry: RD2D is good value based on its PB Ratio (2.3x) compared to the DE IT industry average (4.4x).


Next Steps

Future Growth

How is Castleton Technology forecast to perform in the next 1 to 3 years based on estimates from 1 analyst?

-76.5%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: RD2D's earnings are forecast to decline over the next 3 years (-76.5% per year).

Earnings vs Market: RD2D's earnings are forecast to decline over the next 3 years (-76.5% per year).

High Growth Earnings: RD2D's earnings are forecast to decline over the next 3 years.

Revenue vs Market: RD2D's revenue (4.2% per year) is forecast to grow slower than the German market (5.1% per year).

High Growth Revenue: RD2D's revenue (4.2% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: Insufficient data to determine if RD2D's Return on Equity is forecast to be high in 3 years time


Next Steps

Past Performance

How has Castleton Technology performed over the past 5 years?

69.4%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: RD2D has a large one-off loss of £623.0K impacting its September 30 2019 financial results.

Growing Profit Margin: RD2D's current net profit margins (16.2%) are higher than last year (15.9%).


Past Earnings Growth Analysis

Earnings Trend: RD2D has become profitable over the past 5 years, growing earnings by 69.4% per year.

Accelerating Growth: RD2D's earnings growth over the past year (0.6%) is below its 5-year average (69.4% per year).

Earnings vs Industry: RD2D earnings growth over the past year (0.6%) underperformed the IT industry 13.9%.


Return on Equity

High ROE: RD2D's Return on Equity (16.1%) is considered low.


Next Steps

Financial Health

How is Castleton Technology's financial position?


Financial Position Analysis

Short Term Liabilities: RD2D's short term assets (£9.3M) do not cover its short term liabilities (£13.1M).

Long Term Liabilities: RD2D's short term assets (£9.3M) exceed its long term liabilities (£9.1M).


Debt to Equity History and Analysis

Debt Level: RD2D's debt to equity ratio (21.1%) is considered satisfactory.

Reducing Debt: RD2D's debt to equity ratio has reduced from 47.4% to 21.1% over the past 5 years.

Debt Coverage: RD2D's debt is well covered by operating cash flow (109.2%).

Interest Coverage: RD2D's interest payments on its debt are well covered by EBIT (3.7x coverage).


Balance Sheet

Inventory Level: RD2D has a low level of unsold assets or inventory.

Debt Coverage by Assets: RD2D's debt is covered by short term assets (assets are 1.7x debt).


Next Steps

Dividend

What is Castleton Technology's current dividend yield, its reliability and sustainability?

1.40%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: RD2D's dividend (1.4%) isn’t notable compared to the bottom 25% of dividend payers in the German market (1.43%).

High Dividend: RD2D's dividend (1.4%) is low compared to the top 25% of dividend payers in the German market (3.8%).


Stability and Growth of Payments

Stable Dividend: Too early to tell whether RD2D's dividend payments have been stable as they only just started paying a dividend.

Growing Dividend: Too early to tell if RD2D's dividend payments are increasing as they only just started paying a dividend.


Current Payout to Shareholders

Dividend Coverage: With its low payout ratio (20%), RD2D's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: Insufficient data to determine if a dividend will be paid in 3 years and that it will be covered by earnings.


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

2.6yrs

Average management tenure


CEO

Dean Dickinson (58yo)

3.3yrs

Tenure

UK£618,000

Compensation

Mr. Dean Robert Dickinson has been the Chief Executive Officer & Executive Director at Castleton Technology plc since October 31, 2016. Mr. Dickinson serves as Managing Director of Advanced Learning. He se ...


CEO Compensation Analysis

Compensation vs Market: Dean's total compensation ($USD798.84K) is above average for companies of similar size in the German market ($USD415.76K).

Compensation vs Earnings: Dean's compensation has increased by more than 20% in the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Dean Dickinson
CEO & Executive Director3.3yrsUK£618.00k0.27% £187.1k
Haywood Chapman
CFO & Executive Director5.2yrsUK£522.00k0.0012% £848.8
James Massey
Chief Operating Officer1.8yrsno datano data
Ben Cullen
Chief Technology Officer1.1yrsno datano data
Jimmy Rogers
Software Sales & Marketing Director5.3yrsno datano data
Laura Phelan-Rogers
Human Resource Manager0yrsno datano data
Karen Showker
Company Secretary0.6yrsno datano data

2.6yrs

Average Tenure

Experienced Management: RD2D's management team is considered experienced (2.6 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Dean Dickinson
CEO & Executive Director3.3yrsUK£618.00k0.27% £187.1k
Haywood Chapman
CFO & Executive Director5.2yrsUK£522.00k0.0012% £848.8
David Payne
Non-Executive Chairman6.8yrsUK£118.00k0.083% £57.9k
Philip Kelly
Senior Independent Non Executive Director0yrsUK£74.00k0.17% £116.1k
Paul Gibson
Non-Executive Director2.6yrsUK£70.00kno data

4.3yrs

Average Tenure

58yo

Average Age

Experienced Board: RD2D's board of directors are considered experienced (4.3 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 2.7%.


Top Shareholders

Company Information

Castleton Technology plc's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Castleton Technology plc
  • Ticker: RD2D
  • Exchange: DB
  • Founded: 1997
  • Industry: IT Consulting and Other Services
  • Sector: Software
  • Market Cap: UK£58.423m
  • Listing Market Cap: UK£69.575m
  • Shares outstanding: 81.71m
  • Website: https://www.castletonplc.com

Number of Employees


Location

  • Castleton Technology plc
  • Douglas House
  • 1 Emmanuel Court
  • Sutton Coldfield
  • West Midlands
  • B73 6AZ
  • United Kingdom

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
CTPAIM (London Stock Exchange AIM Market)YesOrdinary SharesGBGBPOct 1999
RD2DDB (Deutsche Boerse AG)YesOrdinary SharesDEEUROct 1999

Biography

Castleton Technology plc, an investment holding company, provides software and managed services to the public and not-for-profit sectors in the United Kingdom and Australia. It operates through Managed Services and Software Solutions segments. The Managed Services segment offers information technology (IT) infrastructure and support for businesses. The Software Solutions segment provides business processes to social landlords covering tenant engagement, rent collection, financial planning and control, document management, and repairs management, as well as integrated software solutions to the housing association sector. The company’s software solutions include AI, a solution for integrating Amazon Alexa services into current applications; Agile, a point of service delivery tool that is designed for field based workforce and customers and enables to complete forms, take photos, link to workflows, view documents, and others; CRM software for social housing sector; Electronic Document and Records Management (EDRM) software to access physical and electronic documents; and Financials, a finance system. Its software solutions also comprise Housing for managing arrears and raising repairs; P2P system, which allows suppliers to submit their invoices, and check the status of orders and invoices, as well as scheduled payment dates; Strategic Modelling, a time-based modelling solution for business leaders in the social housing sector; Castleton.DIGITAL software solution to build Web portals and apps; Community, a housing management solution; and Data Services to combat illegal subletting and validates data. The company was formerly known as Redstone plc. Castleton Technology plc was incorporated in 1997 and is headquartered in Sutton Coldfield, the United Kingdom. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/25 21:24
End of Day Share Price2020/02/25 00:00
Earnings2019/09/30
Annual Earnings2019/03/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.