Xpertise Share Discussion Threads

[blackrabbit] 01/9/2008 15:02

Apparently a considerable amount of buying today................do some people think they know something we don't ? BR.

[qwazi] 27/8/2008 11:32

So -- an increased, recommended, offer of 165p. So forget what I said about Lynx making a counter-offer, that won't happen now. But looks like I was right about the typo in the first offer announcement, as the revised offer still shows a cash confirmation of £10.62 million!!

An excellent result, and looks like a done deal with 54.8% irrevocables.

[blackrabbit] 27/8/2008 07:15

Well, what a lovely surprise on returning from a very long weekend in Manchester, far away from screens and financial matters. Must go away again soon ! BR.

[qwazi] 26/8/2008 17:33

Musings...

Lynx used to hold 25% of XPG. I think the shares were distributed to the directors of Lynx as part of a reorganisation. (Richard Last, who is a director of Lynx, is the chairman of XPG).

XPG had been trying to do a deal for ages and had finally agreed to buy Parity, which would have made them the second biggest IT trainer in the country.

Then, QA-IQ come along and spoil the party at the eleventh hour.

XPG can't be happy about this. But with over 40% of irrevocable acceptances, the directors have little choice but to recommend the offer..... unless....

Another offer comes along. From Lynx, or some newco connected to Lynx. Assuming they would have to acquire 75%, and it would need to be at least 165p for the other irrevocables to fall away = £7m + the acquisition of Parity @ £4.7m = £11.7 million. The company has already secured financing of £2.25 million from Barclays toward the acquisition of Parity, which leaves £9.45 million to find. I bet that Parity would be prepared to accept a vendor loan note for part of the consideration, say £2 million. Plus, XPG is sitting on £3 million cash. I would assume that only some of that could be used for acquisition of its own shares, say £1 million. That leaves £6.45 million to be found from other sources.

How easy is it to find £6.45 million in the current market? Not easy, for sure. But you would be buying into a company with c.£2 million of pro-forma operating profit, the 2nd biggest company in the market, and an obvious trade buyer when you want to exit.

It's a long shot, but worth keeping an eye on.

As an aside, I note the offer values XPG at £8.7 million but Englefield Capital have agreed to provide QA-IQ Bidco with facilities of up to £10.62 million. I can't remember whether the cash confirmation has to include an estimate of costs, but even if it does, I can't believe that the costs for an £8.7 million transaction are nearly £2 million!!! £10.62 million would be equal to £1.88/share, or, allowing for, say, £1 million of costs, would be £1.71/share.

If anyone here is more up to date with the Code requirements in respect of cash confirmations, perhaps they could comment. It just looks a bit strange to me.

[deanroberthunt] 22/8/2008 16:41

explorer...or ILX??

[666james] 22/8/2008 16:29

not holding these but I love to see a great story and this is certainly one....well done all holders

[explorer88] 22/8/2008 09:18

great news :-)

next cash offer : EBT? (already in takeover talks with Audley, current share price 8p, an agreed offer would probably be somewhere around 18-20p)

[eggbird] 22/8/2008 08:56

well done guys!

[qwazi] 22/8/2008 07:14

Excellent news! Cash offer at 95% premium!!

-- The Board of QA-IQ Bidco announces a cash offer to be made by Lincoln
International on behalf of QA-IQ Bidco to acquire the entire issued and
to be issued ordinary share capital of Xpertise Group plc.

-- The Offer is being made at a price of 150 pence in cash for each
Xpertise Share and represents a premium of approximately 95 per cent. to
the Closing Price of 77 pence per Xpertise Share on 21 August 2008,
being the last Business Day prior to the date of this announcement; and
a premium of approximately 74 per cent. to the average Closing Price of
approximately 86 pence per Xpertise Share for the six month period prior
to the date of this announcement.

[qwazi] 12/5/2008 12:22

Nice to have some company BR!

Agree with your comments. I think what may be holding the price down is that training may be perceived to be one of the first costs to be cut in a cyclical downturn. However, I think that XPG are somewhat protected from these concerns for 2 reasons: (i) they have a good spread of clients are not over exposed to any one sector (unlike the financial training companies) and, more importantly, (ii) a decent proportion of revenue is secured under contract in their Managed Training services division, and so is not exposed to short term economic fluctuations.

I really don't think that the market has realised that the visibility of its order book has improved substantially over the last two years.

[blackrabbit] 10/5/2008 11:59

You're not quite on your own qwazi !

With current trading good - forward earnings estimates for the next two years of 12p amd 15p - almost 40p per share cash - a price target of 150p+ ....... surely this share has to be considerably higher on a 12 month view. BR.

[qwazi] 09/5/2008 11:07

Been running some numbers (although I think I'm talking to myself here).
Daniel Stewart are currently forecasting t/o of £24m for FY08 and gross margins of 34.8%. The latest DS note said that their forecasts are conservative and the balance of risk is on the upside, and that the group is experiencing margin improvements in its main IT training services business.

If one assumes that revenue comes in at £25m (4% above forecasts) and gross margin improves to 36% (against forecast of 34.8%), then the P/E at a price of 83p would be 4.1x.

If margins recovered to 2006 levels of 37.8%, then the P/E would be a mere 3.2x!!

DYOR.

note: I hold shares in the company.

[qwazi] 07/5/2008 11:15

Positive note out from Daniel Stewart today:
- group is experiencing margin improvements in IT training services
- balance of risk is on the upside, believe the group's performance could exceed "conservative" 08 forecasts
- TP 157p
- notes that co. is trading on an 08 ev/ebitda of 1.5x, falling to 0.6x in 09

just looks too cheap to me. and with the stability of the longer term contracts not being recognised by the market, perhaps the management will start thinking that they should raise some finance to buy out the company at the current depressed levels. dyor, imho

[qwazi] 16/4/2008 10:38

Strong trading update today, turnover ahead, gross margin ahead:

"Trading in the first quarter of 2008 has remained strong. Delivered revenue of
£6.0 million was 13% above the corresponding period in the previous year and 11%
ahead of budget.


We have continued to see strong trading from our major customers, where revenues
now form a greater proportion of our overall business. Pleasingly, there has
also been a slight improvement in our gross profit percentage.


The Board is confident with regard to prospects for the remainder of the year."

[bossmanuk] 28/2/2008 08:58

OK,

Just got another 1000 @ 120p


L2 now


2 -------- 112p vs 120p -------- 1

[bossmanuk] 28/2/2008 08:53

My buy went in this AM 1000 @ 115p. Wanted more but no joy.

L2

1 -------- 112 vs 120 -------- 2

Regards,


BossmanUK

[qwazi] 28/2/2008 08:28

Daniel Stewart flash note out - BUY target price 157p

[qwazi] 28/2/2008 08:01

Yes, excellent results, delivering on what they said they were going to do.

[liveinhope] 28/2/2008 07:37

Pleasing results issued today.

[saucepan] 13/12/2007 07:51

Still in. The stock has not made quite the progress I hoped for yet (I expect as a result of general market weakness), but a very reassuring trading statement has been issued today - link in header - making the situation rather less speculative. I expect the uptrend to continue now.

ShareScope now has XPG with a Projected P/E of just 8.54 and a Rolling PEG-1 of 0.24.

[saucepan] 28/9/2007 09:37

No posts, since I was here three weeks ago. A quiet thread is often a good sign.

XPG ticking up nicely to new four-year highs this morning.

[saucepan] 06/9/2007 19:38

Hi to thread regulars

XPG came through my ShareScope filtering exercise last night, looking for stocks with a Rolling PEG-1 of less than 0.75 making 52-week highs.

The Rolling PEG-1 of XPG is just 0.20

Here are some additional fundamentals:

Profit (£m)
2004 -0.55
2005 -1.36
2006 1.08

Turnover (£m)
2004 26.55
2005 43.86
2006 64.63
2007 (F) 144.10
2008 (F) 169.50
2009 (F) 184.80

EPS (p)
2004 -0.54
2005 4.28
2006 6.44
2007 (F) 9.00
2008 (F) 12.10
2009 (F) 14.90

Other:
Projected P/E: 12.22
Beta: 0.16
Broker Consensus: Buy
Investors Chronicle View: Buy

After some further research, including taking note of the forecast growth detailed above, I went long today at 125p.

The longer-term chart also provides an interesting "bigger picture"

[qwazi] 14/8/2007 08:54

Daniel Stewart note out - upped full year sales forecasts to £21.5m 07 and £23.4m 08, kept PBT unchanged at £0.7m rising to £0.9m in 08.

Expect a 1/3 - 2/3 weighting in PBT - due to H1 costs associated with new projects.

TP 148p giving an 07 multiple of 11.6x.

[wjccghcc] 14/8/2007 08:51

Didn't look like that much seasonality last year with PBT of 125k and 194k for H1 and H2 last year. Agree with nurdin - are they really going to do 500k in H2?