AIM:GAMA

Stock Analysis Report

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Executive Summary

Gamma Communications plc provides communications and software services for business in the United Kingdom and internationally. More Details


Snowflake Analysis

Excellent balance sheet with moderate growth potential.


Similar Companies

Share Price & News

How has Gamma Communications's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: GAMA is less volatile than 75% of UK stocks over the past 3 months, typically moving +/- 4% a week.

Volatility Over Time: GAMA's weekly volatility (4%) has been stable over the past year.


Market Performance


7 Day Return

-1.5%

GAMA

-1.2%

GB Telecom

-0.4%

GB Market


1 Year Return

28.8%

GAMA

-28.5%

GB Telecom

-10.1%

GB Market

Return vs Industry: GAMA exceeded the UK Telecom industry which returned -28.5% over the past year.

Return vs Market: GAMA exceeded the UK Market which returned -10.1% over the past year.


Shareholder returns

GAMAIndustryMarket
7 Day-1.5%-1.2%-0.4%
30 Day-5.3%11.5%13.4%
90 Day1.9%12.8%6.4%
1 Year29.9%28.8%-26.9%-28.5%-6.5%-10.1%
3 Year167.2%159.9%-38.3%-47.2%1.5%-10.9%
5 Year269.3%249.2%-62.8%-70.7%27.4%-1.6%

Long-Term Price Volatility Vs. Market

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


Simply Wall St News

Valuation

Is Gamma Communications undervalued compared to its fair value and its price relative to the market?

41.02x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: GAMA (£16.1) is trading above our estimate of fair value (£14.7)

Significantly Below Fair Value: GAMA is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: GAMA is poor value based on its PE Ratio (41x) compared to the XE Telecom industry average (20.7x).

PE vs Market: GAMA is poor value based on its PE Ratio (41x) compared to the UK market (21.2x).


Price to Earnings Growth Ratio

PEG Ratio: GAMA is poor value based on its PEG Ratio (5.8x)


Price to Book Ratio

PB vs Industry: GAMA is overvalued based on its PB Ratio (9x) compared to the GB Telecom industry average (2.7x).


Next Steps

Future Growth

How is Gamma Communications forecast to perform in the next 1 to 3 years based on estimates from 6 analysts?

7.1%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: GAMA's forecast earnings growth (7.1% per year) is above the savings rate (1.2%).

Earnings vs Market: GAMA's earnings (7.1% per year) are forecast to grow slower than the UK market (27.1% per year).

High Growth Earnings: GAMA's earnings are forecast to grow, but not significantly.

Revenue vs Market: GAMA's revenue (9.8% per year) is forecast to grow faster than the UK market (6.8% per year).

High Growth Revenue: GAMA's revenue (9.8% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: GAMA's Return on Equity is forecast to be high in 3 years time (23.6%)


Next Steps

Past Performance

How has Gamma Communications performed over the past 5 years?

19.7%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: GAMA has high quality earnings.

Growing Profit Margin: GAMA's current net profit margins (10.7%) are lower than last year (11.2%).


Past Earnings Growth Analysis

Earnings Trend: GAMA's earnings have grown by 19.7% per year over the past 5 years.

Accelerating Growth: GAMA's earnings growth over the past year (8.8%) is below its 5-year average (19.7% per year).

Earnings vs Industry: GAMA earnings growth over the past year (8.8%) underperformed the Telecom industry 9.5%.


Return on Equity

High ROE: GAMA's Return on Equity (21.9%) is considered high.


Next Steps

Financial Health

How is Gamma Communications's financial position?


Financial Position Analysis

Short Term Liabilities: GAMA's short term assets (£139.7M) exceed its short term liabilities (£78.4M).

Long Term Liabilities: GAMA's short term assets (£139.7M) exceed its long term liabilities (£29.0M).


Debt to Equity History and Analysis

Debt Level: GAMA's debt to equity ratio (2.2%) is considered satisfactory.

Reducing Debt: Insufficient data to determine if GAMA's debt to equity ratio has reduced over the past 5 years.

Debt Coverage: GAMA's debt is well covered by operating cash flow (1210.5%).

Interest Coverage: GAMA's interest payments on its debt are well covered by EBIT (169.7x coverage).


Balance Sheet


Next Steps

Dividend

What is Gamma Communications's current dividend yield, its reliability and sustainability?

0.65%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: GAMA's dividend (0.65%) isn’t notable compared to the bottom 25% of dividend payers in the UK market (1.72%).

High Dividend: GAMA's dividend (0.65%) is low compared to the top 25% of dividend payers in the UK market (4.94%).


Stability and Growth of Payments

Stable Dividend: GAMA is not paying a notable dividend for the UK market, therefore no need to check if payments are stable.

Growing Dividend: GAMA is not paying a notable dividend for the UK market, therefore no need to check if payments are increasing.


Current Payout to Shareholders

Dividend Coverage: GAMA is not paying a notable dividend for the UK market.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of GAMA's dividend in 3 years as they are not forecast to pay a notable one for the UK market.


Next Steps

Management

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

6.3yrs

Average board tenure


CEO

Gamma Communications has no CEO, or we have no data on them.


Board Members

NamePositionTenureCompensationOwnership
Andrew Scott Belshaw
CFO & Executive Director6.08yrsUK£981.00k0.24%
£ 3.7m
Xavier Robert
Independent Non-Executive Director0.17yrno datano data
Henrietta Marsh
Independent Non-Executive Director1.58yrsUK£34.00k0.0010%
£ 16.1k
Long Wu
Non-Independent Non-Executive Director6.42yrsUK£45.00kno data
Richard Last
Independent Non-Executive Chairmanno dataUK£100.00k0.056%
£ 861.0k
Martin Robert Lea
Independent Non-Executive Director6.42yrsUK£60.00k0.014%
£ 215.3k
Alan Gibbins
Independent Non-Executive Director6.42yrsUK£53.00k0.014%
£ 215.3k
Andrew Stone
Non-Independent Non-Executive Director6.42yrsUK£45.00k0.52%
£ 8.1m
Maria Ginman-Horrell
Independent Non Executive Director0.17yrno datano data

6.3yrs

Average Tenure

60yo

Average Age

Experienced Board: GAMA's board of directors are considered experienced (6.3 years average tenure).


Ownership

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


Insider Trading Volume

Insider Buying: GAMA insiders have only sold shares in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

Gamma Communications plc's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Gamma Communications plc
  • Ticker: GAMA
  • Exchange: AIM
  • Founded: 2001
  • Industry: Alternative Carriers
  • Sector: Telecom
  • Market Cap: UK£1.536b
  • Shares outstanding: 95.38m
  • Website: https://www.gamma.co.uk

Number of Employees


Location

  • Gamma Communications plc
  • Kings House
  • Kings Road West
  • Newbury
  • Berkshire
  • RG14 5BY
  • United Kingdom

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
GAMAAIM (London Stock Exchange AIM Market)YesNew Ordinary SharesGBGBPOct 2014
6GCDB (Deutsche Boerse AG)YesNew Ordinary SharesDEEUROct 2014
GAMC.FOTCPK (Pink Sheets LLC)YesNew Ordinary SharesUSUSDOct 2014

Biography

Gamma Communications plc provides communications and software services for business in the United Kingdom and internationally. It offers strategic services, such as collaboration, cloud PBX, SIP trunking, ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/11/28 19:21
End of Day Share Price2020/11/27 00:00
Earnings2020/06/30
Annual Earnings2019/12/31


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.