Too many requests Sidebar Columnist | Undercover Columnist

Archive for category Sidebar Columnist

Mobile banker for Intelligent Environments

Banking software specialist Intelligent Environments (IE) felt the effects of lost contracts last year with flat full year revenue and a 25 percent dent in operating profits to £860,299.

IE continues to bolster its key online transaction-based recurring revenue streams. Last year saw 4 new customer wins, twice that of 2008, including going live in October with National Savings & Investments. These plus new contracts signed since the year end, with HRG and Vanquis Bank and a credit card deal with Orange. will see repeat business rise from last year’s 30 per cent of total revenue.

Mobile banking is also exciting, going live in May with an unnamed high street bank via an iPhone application, while Google, Windows and Blackberry applications will follow soon. In the US roughly 30m people already bank using mobile devices and IE is thought to be talking to 30-40 mobile operators currently.

IE still has a decent cash pile, up 10 per cent to £1.1m, and that could be used for acquisitions going forward says chief executive Philip Blundell.

Canaccord forecasts £1.2m of pre-tax profit and EPS of 0.72p in 2010 (£0.9m and 0.54p for 2009).

Undercover Columnist says:

Shares 12 per cent fall on the day reflects previous day’s 17 per cent jump, but accelerating bottom line growth means 2010 PE of 13 is not expensive.

contact me

Tags: , ,

1 Comment

Smartphones lift for IQE

Advanced wafer products maker IQE saw record second half revenues of £31.2m after rapid de-stocking in the firstSemiconductorhalf. Such a stark turnaround saw a £833,000 first half operating loss become a £3.4m profit between July-December. Net debt was cut from £18.1m to £14.9m, partly thanks to strong cash conversion.

IQE, whose semiconductor wafer products are used in mobile handsets, Wi-Fi and DVDs, among others, has benefited from volume hikes in smartphones as consumers rush for the latest gadget. 3G handsets typically use four or five times the number of Gallium Arsenide chips than the previous generation of handsets, says chief executive Drew Nelson.

IQE will continue to concentrate on high speed wireless communications markets which produce almost 80 per cent of sales and all operating profits. Opportunities in optoelectronics (converting light into electricity) also exist, such as Blu Ray technology and LEDs, while developments in renewable energy, such as ‘green’ CPV solar cells are on the cards.

The semi-conductor market seems to be turning for the better while outsourcing remains a major trend. IQE’s estimated 30 per cent share of an outsourcing market worth $600m (£370m) at the last count is very encouraging.

Panmure Gordon predicts adjusted pre-tax profit of £4.1m and EPS of 0.93p (£3.2m and 0.47p).

Undercover Columnist says:

These results underscore what a well run business IQE is but a 2010 PE just shy of 19 is a hefty rating in spite of the exciting growth potential. After a five-fold share price hike in a year, there’s no obvious catalyst for more in the short term.

contact me

Tags: , , ,

No Comments

Best ever quarterly gain for Footsie

Today in the market

Today in the market

Market Moves
techMARK 1,488.10 -0.19%
FTSE 100 5,133.90 -0.50%
FTSE 250 9,142.31 -0.79%

Wall Street fell out of bed at the start of its trading day after the release of disappointing business activity data and London quickly followed the US market downwards. However, a rally in the last half hour ensured that the FTSE 100 enjoyed its best ever quarterly percentage gain since the index was established in 1984.

Travel companies TUI Travel and Thomas Cook were in the shade after the latter’s underwhelming trading update this morning. The company said that the trend to later bookings continues but ‘consumers are still going on their holidays.’

Fashion and food retailer Marks & Spencer posted a 0.5% fall in like-for-like sales in the 13 weeks to 26 September as recession-hit shoppers stayed frugal. Chairman Sir Stuart Rose said he remains cautious on the company’s outlook and expects 2010 to be a tough year.

M&S shares fell back, taking sector peer Next with them. In what may not be an entirely coincidental piece of timing, George Davies, the founder of Next and the mastermind behind Marks & Spencer’s successful Per Una clothing line, launched a new clothing label today, GIVe. Davies plans to open 25 stores selling the new clothes line.

Hedge fund manger Man was the best performer after a bullish trading update. “Investor sentiment is continuing to improve across the industry, the performance outlook is healthy and the prospects for sustained industry inflows are very promising,” chief executive Peter Clarke said.

Airport scanning machine maker Smiths was also wanted despite pre-tax profits dipping to £371m from £380m in the year to July on sales up 7% to £2.67bn. The figures were a little better than forecasts, while it held the dividend.

Shares in Dairy Milk maker Cadbury were barely changed after the Takeover Panel gave US potential bidder Kraft Foods until 5pm on 9 November to make a bid for the UK confectionery company or walk away for at least six months.

Insurers remained in favour, buoyed by persistent rumours of sector consolidation, though Deutsche Bank has poured cold water on suggestions that investment vehicle Resolution will bid for Legal & General; nevertheless, the German bank upgraded the stock to ‘hold’ from ‘sell’ and also suggested that sector peers Aviva and Old Mutual are underpriced.

Support services specialist Babcock has lost its contract with Network Rail for High Output Track Renewal operations, but trading overall is as expected. Network Rail told it today that its Babcock SB Rail joint venture with Swietelsky Baugesellschaft had lost the contract, it said.

Travis Perkins, the leading UK builders’ merchant, said sales trends for the last three months are ahead of expectations but its current market consensus for 2010 remains unchanged. The group said turnover for the nine months to the end of September is down 11%. Its larger rival, Wolseley, joined Travis Perkins on the upturn.

haysRecruiter Hays Group is marked down after being named by the Office of Fair Trading as one of six recruitment agencies involved in a price-fixing cartel.

Care group Care UK could be on the end of a management buy-out after private equity firm Bridgepoint confirmed this morning it was in talks.

Online clothes retailer ASOS results to date are in line with management’s expectations and it expects the first half outcome to be marginally ahead of the prior year. Sales are up 47% for the 6 months to 30 September 2009, with international sales rising 110% for the period, which represents around 25% of total sales.

Greyhound bus operator FirstGroup said overall trading remains in line with management expectations but warned the transport industry faces a challenging year ahead. The shares shifted into reverse, along with sector peers Go-Ahead and Stagecoach.

Like for like revenues eased in the three months to end-August at financial services and healthcare software provider Misys, but order intake was strong. On a pro-forma like for like basis, which excludes the effect of currency movements and adjusts for the acquisition of Allscripts, group revenues declined by 2% in the three months to 31 August, while adjusted operating profit rose by more than 15%.
market down
Neuropharm, the pharmaceutical company focused on neurodevelopmental disorders, saw its pre-tax loss widen to £6.5m in the year to 30 June 2009 from £4.9m the year before. The company has no revenue.

Insolvency consultant Sterling Green swung into profit in the second half of the year due to a combination of reduced costs and increased revenues, but still posted a loss of £321,000 overall. The working capital position remains challenging, it added.

FTSE 100 – Risers
Man Group (EMG) 331.20p +7.50%
Legal & General Group (LGEN) 87.80p +6.10%
Smiths Group (SMIN) 888.50p +6.03%
Aviva (AV.) 448.10p +3.92%
Wolseley (WOS) 1,507.00p +3.79%

FTSE 100 – Fallers
TUI Travel (TT.) 254.60p -4.29%
Liberty International (LII) 480.00p -3.94%
Thomas Cook Group (TCG) 232.30p -3.53%
Marks & Spencer Group (MKS) 362.10p -3.39%
Next (NXT) 1,792.00p -3.14%

contact me

Tags: , , , , ,

1 Comment

ITV has dropped the Ball

ITV's Boardroom blunder

ITV's Boardroom blunder

ITV has dropped a huge clanger by not appointing former Sky boss Tony Ball as its new chief exec. Yes, his reported £30 million pay and incentives package does seem at odds with the current belt-tightened business environment, and yes, his ‘Millwall school of management’ was always controversial and cost him friends in high places. Ball’s apparent demands to hand pick the next non-executive chairman of ITV – to replace outgoing exec chairman Sir Michael Grade – may have put a little too muc power in his back pocket.

Yet Ball’s days at Sky are fondly remembered in the City. Under his four-year leadership Sky, 39.1% owned by Rupert Murdoch’s News Corporation, doubled its subscriber numbers to seven million and became the leading player in commercial television, largely thanks to his policy of exclusive rights to increasingly popular Premier League. And crucially, Ball remains among the few calibre candidates capable of addressing ITV’s biggest problem – reducing the broadcaster’s reliance on advertising revenue. That challenge still remains but whoever the eventual appointment is, they’ll need to rely on more than X-factor to turn ITV’s fortunes around.

contact me

Tags: , , , , ,

1 Comment

Eastern promise lures HSBC boss abroad

HSBC boss Hong Kong bound

HSBC boss Hong Kong bound

Shunting the operating base of HSBC chief executive Michael Geoghegan from London to Hong Kong tells us two things. Firstly, it represents another signal of the increasing shift in economic power from the west to the east. Where a traditional G7 power base of US and European interests once held sway, now it is rapidly being overtaken by a wider group of nations in the G20, reflecting the expansion in emerging markets such as China and India. Banking markets are less mature in Asia than they are here and thus the opportunities to grow and increase profits are greatest.

But there is a second and more reassuring point. It demonstrates that western banks are returning to their stuffy savings and loans knitting, a pattern that once produced solid streams of profits that allowed large chunks of cash to be handed back to shareholders on a bi-annual basis through dividends.

In their desperate dash for growth far too many banks have developed a devil may care attitude in regards to growth, expanding into all sorts of highly leveraged, high risk products and markets. That shift has led us to the events of the past few years and the near collapse of the western banking system, so a return of grey suits and reassuringly dullness is a welcome breakthrough.

contact me

Tags: , , , , , , ,

No Comments
Too many requests