Dm Share Discussion Threads

[aa29] 14/11/2008 16:01

Thanks - had spotted it too eventually.

No additional detail about the acquisition.

[skyracer] 14/11/2008 15:37

It is there. Under "Results" then scroll down to "Circulars", 9.4p about what we expected.

[aa29] 14/11/2008 15:17

RNS:

Scrip Dividend, General Meeting and Posting of Circular

On 12 November 2008, DM announced the acquisition out of administration of the trade and assets of Data Locator Group Ltd and of certain associated companies ('DLG') from the administrators of DLG.

At the same time, DM announced that the substantial interim dividend of 3.5 pence per ordinary share (the 'Interim Dividend') announced on the 16 October 2008, to be paid on 25 November 2008 to shareholders on DM's register as at 24 October 2008, would be postponed to give shareholders the opportunity to elect to receive their Interim Dividend in new DM shares by way of a scrip dividend alternative (the 'Scrip Dividend Alternative').

The Interim Dividend will now be paid, alongside the Scrip Dividend Alternative on 23 December 2008 to shareholders on the register as at 24 October 2008. The final time for receipt of elections under the Scrip Dividend Alternative is 3.00 p.m. on 8 December 2008.


The Scrip Dividend Alternative, in accordance with Article 145 of the Articles of Association of the Company, requires the approval of Shareholders at a general meeting of the Company (the 'General Meeting'). A Circular to shareholders sets out the notice convening the General Meeting, to be held at 10.00 a.m. (London time) on 4 December 2008 at the Company's registered office at Green Heys, Walford Road, Ross on Wye, Herefordshire, HR9 5PQ.


DM is pleased to announce that the Circular containing the full terms and conditions of the Scrip Dividend Alternative and the General Meeting has been posted to DM Shareholders today and is available on the Company's website www.dmplc.com. (not yet as I post)

[aa29] 14/11/2008 15:13

I expect we will simply get the option to take the dividend in shares and a circular will be issued soon. Assuming AW is taking shares they are guaranteed to raise £4m in new shares plus whatever proportion of the other £1m is taken in shares.

Incidentally Paul, were those forecasts you quoted from Blue Oar or Altium?

[paulcaine2003a] 14/11/2008 15:04

Any idea about how we will get the new shares? Will there be a shares issue for the number of shares required to fill the scrip dividend?

[aa29] 14/11/2008 14:39

On reflection, I think its safer to rely on the original description of the deal until further clarification comes out :

'DM, the direct marketing group specialising in customer recruitment and database management, announces that it has acquired out of administration the trade and assets of Data Locator Group Ltd and of certain associated companies ('DLG') from the administrators of DLG for a cash consideration of £3.25 million. In addition, DM will collect outstanding debtors on behalf of the administrators (with no recourse for any sums that cannot be recovered).'

There is no reference in there to shares being acquired.

[aa29] 14/11/2008 10:52

Jeff, I think you're right - the £72.5m is last year's deal figure.

A bit more detail:



'DM plc, a database marketing, gamecard and direct mail supplier, has acquired 70 per cent of DLG, effectively purchasing the company's debt from KSF's administrators Ernst & Young.

Senior managers at DLG, including CEO Jeremy Whitaker, retain ownership of 30 per cent of the business. They were due to meet with DM management today to finalise details of the new partnership.'

(Second paragraph corrected by me to change DLG share to 30%, Kaupthing owned 70% of DLG.)

[paulcaine2003a] 13/11/2008 23:14

Don't ask me how I got this information but here is last years accounts for DLG. Looks like total liabilities are around £10m. Total assets are around £12m. This has probably changed a bit in the last year but looks ok bearing in mind the £3.25m price.

DATA LOCATOR GROUP LIMITED

64 CLARENDON ROAD
WATFORD
HERTFORDSHIRE WD17 1DA WD17 1DA


TRADE ADDRESS: 3-5 Rickmansworth Road, Watford WD18 0GX

* * * * * * * * * * COMMUNICATIONS * * * * * * * * * *
TELEPHONE: [phone]
FAX: [phone]
URL: www.datalocator.co.uk

* * * * * * * * * * COMPANY IDENTIFIERS * * * * * * * * * *
REGISTRATION NO.: 03680504

* * * * * * * * * * COMPANY INFORMATION * * * * * * * * * *
INCORPORATION DATE: December 8, 1998
EMPLOYEES: 151

* * * * * * * * * * CORPORATE STRUCTURE * * * * * * * * * *

HOLDING COMPANY: DLG ACQUISITIONS LIMITED
ULTIMATE HOLDING COMPANY: DLG HOLDINGS LIMITED

TOP SUBSIDIARIES BY TURNOVER
Registration No. Company Name Turnover
05211850 BRAINBOX UK LIMITED -
05008874 DATA LOCATOR INTERACTIVE LIMITED -
04788041 CHORUS FINANCIAL SERVICES LTD 881,000
04503082 POSITIVE RESPONSE DM LIMITED -
04485602 CALL CONNECTOR LTD 119,000
04482822 VENTURA MEDIA LIMITED 2,927,000
04053979 EPIC CARE LIMITED 1,507,000
04000377 RESPONSE CONCEPTS (UK) LTD -
03969832 BUSINESS LOCATOR LIMITED -
- - -
Download Table

* * * * * * * * * * EXECUTIVES * * * * * * * * * *
DIRECTORS:

* Mr John Richard Fleming, Finance Director
* Mr James Neil, Chief Operations Officer
* Mr Jeremy Stewart Whitaker, Chief Executive Officer
* Mr John Richard Fleming, Finance Director


Go To ICC Directors

* * * * * * * * * * DESCRIPTION * * * * * * * * * *
PRINCIPLE ACTIVITIES: The provision of collection and sale of lifestyle data.
INDUSTRY TYPE:
COMPANY TYPE: Private Limited with share capital
COMPANY SIZE: Large unquoted company

* * * * * * * * * * MARKET AND INDUSTRY * * * * * * * * * *
SIC:
74130 - Market research and public opinion polling

* * * * * * * * * * FINANCIALS * * * * * * * * * *
FISCAL YEAR DATE: June 30, 2007
FISCAL YEAR END: June 30

LAST FILED ACCOUNTS: June 30, 2007
ACCOUNTS TYPE: Full Accounts
ACCOUNTS LODGED DATE: October 16, 2007
ANNUAL RETURN: December 8, 2007
CREDIT LIMIT: 80,000

* * * * * * * * * * BALANCE SHEET * * * * * * * * * *
ASSETS
Date of Accounts 30/06/2007 30/06/2006 31/12/2005
Tangible Assets 530,000 1,207,000 1,110,000
Intangible Assets 3,729,000 0 0
Total Fixed Assets 4,259,000 1,207,000 1,110,000
Stocks 0 0 0
Debtors 6,049,000 3,141,000 4,067,000
Cash 369,000 1,354,000 68,000
Miscellaneous Current Assets 1,803,000 832,000 1,574,000
Other Current Assets 2,172,000 2,186,000 1,642,000
Total Current Assets 8,221,000 5,327,000 5,709,000
Fixed Assets 406,000 1,206,000 1,110,000
Intermediate Assets 124,000 1,000 0
Due From Group, Non Current 0 0 0
Due From Group, Current 0 0 0
TOTAL ASSETS 12,480,000 6,534,000 6,819,000
Download Table
LIABILITIES
Date of Accounts 30/06/2007 30/06/2006 31/12/2005
Creditors 1,307,000 923,000 1,147,000
Bank Overdraft 0 0 825,000
Miscellaneous Current Liabilities 4,119,000 2,950,000 3,330,000
Bank Loans - Current Portion 0 0 0
Other Short Term Finance 403,000 1,651,000 321,000
Due To Group, Current 403,000 1,344,000 0
Due To Directors, Current 0 0 0
Other Current Liabilities 3,716,000 1,299,000 3,009,000
Short Term Loans 403,000 1,651,000 1,146,000
Long Term Loans 4,418,000 271,000 215,000
Long Term Bank Loan 0 0 0
Other Long Term Finance 4,418,000 271,000 215,000
Due To Group, Non Current 3,543,000 0 0
Due To Directors, Non Current 0 0 0
Other Long Term Liabilities 4,000 4,000 7,000
Total Current Liabilities 5,426,000 3,873,000 5,302,000
Total Long Term Liabilities 4,422,000 275,000 222,000
TOTAL LIABILITIES 9,848,000 4,148,000 5,524,000
Called Up Share Capital and Sundry Reserves 50,000 50,000 50,000
Profit & Loss Account Reserve 2,582,000 2,336,000 1,245,000
Revaluation Reserve 0 0 0
Shareholder Funds 2,632,000 2,386,000 1,295,000
Called Up Share Capital 50,000 50,000 50,000
Sundry Reserves (Including Grants) 0 0 0
Contingent Liabilities 0 0 0
NET ASSETS 7,054,000 2,661,000 1,517,000
Download Table

* * * * * * * * * * INCOME STATEMENT * * * * * * * * * *
PROFIT AND LOSS ACCOUNT
Date of Accounts 30/06/2007 30/06/2006 31/12/2005
Total Sales 20,519,000 6,708,000 16,341,000
Cost of Sales 7,162,000 2,289,000 7,053,000
Gross Profit 13,357,000 4,419,000 9,288,000
Operating Profit 194,000 1,455,000 2,006,000
Export 923,000 164,000 362,000
Nontrading Income 402,000 9,000 1,000
Interest Payable 350,000 40,000 100,000
Pretax Profit 246,000 1,424,000 1,907,000
Taxation 0 184,000 614,000
Profit After Tax 246,000 1,240,000 1,293,000
Dividends Payable 0 0 635,000
Retained Profits 246,000 1,240,000 658,000
Value Added 5,916,440 3,553,688 8,288,128
Capital Employed 7,054,000 2,661,000 1,517,000
Net Worth -1097000 2,386,000 1,295,000
Working Capital 2,795,000 1,454,000 407,000
Emp. Renumeration 4,985,000 1,747,000 5,232,000
Dir. Renumeration 755,000 303,000 206,000
Audit Fees 12,000 13,000 23,000
Non-audit Fees 37,000 18,000 33,000
Depreciation 219,000 170,000 506,000
Number of Employees 151 110 212

[guru11] 13/11/2008 21:51

All very interesting. I was thinking of buying more DMP shares with my interim dividend - looks like I will not have to bother and can just take more shares.
If AW does the same with his 80% holding then the cash flow out will be quite limited. Deals looks good to me - as well as the future turnaround potential especially with the economies of scale and the additional turnover.

Are we saying that the company in 2006 was valued at £23.5, which went to £72.5m and has now crashed to its present levels to which DMP has bought out at, although are they not taking on certain debts as well?

The data administrators role is being advertised in London on £34k.

[jeff h] 13/11/2008 18:48

I guess the £72.5m figure comes from last years sale:-

[aa29] 13/11/2008 13:11

'Any ideas what it means by "the deal worth £72.5m"?'

Paul - that was one of the questions I had in mind too.

[paulcaine2003a] 13/11/2008 12:43

Cheers for that info AA29, looks like its just you and me here at the moment.

Any ideas what it means by "the deal worth £72.5m"?

I think it will be interesting to see what next year's figures will be revised to post-acquisition. Currently they are:

Year Ending
31-Dec-08
31-Dec-09

Revenue (£m)
22.17
25.84

Pre-tax (£m)
6.47
8.79

EPS
3.08p
4.19p

P/E
3.2
2.3

PEG
0.1
0.1

EPS Grth.
+24%
+36%

Div
0.40p
0.55p

Yield
4.3%
5.9%

[aa29] 13/11/2008 11:23

Some further information which adds a few questions about the deal structure announced in the RNS



'DLG has retained 30 per cent of the business. The deal worth £72.5m was handled by KSF's administrators Ernst & Young and led by DLG's chief executive Jeremy Whitaker. '

'DM chairman Adrian Williams says: "DLG fits neatly into DM plc's complementary group structure. The synergy between our two companies is immediately obvious, as DM has access to an audience of 8 million registered customers who play our gamecards and respond to direct communication. We have been looking to partner with a major data owner for some time in order to fully leverage our highly valued but under-utilised asset."'

[aa29] 12/11/2008 20:02

Certainly looks a cracking deal. DM have a great track record of turning round their acquisitions and will have paid as little as possible to the administrators. This is the time to be making acquisitions like this - probably very lucky that they hadn't shelled out all the cash on the dividend. I wouldn't be surprised if the deal is priced at around the level of debt recovery meaning they could end up getting the databases in for free by the time they're finished.

In the short term, this may hold back profit growth but long term, good upside.


PS Thanks Paul for the research on DLG - I've done a bit more, Promethean sold DLG to Kaupthing last October. Surely even better news for DM than I first thought, they would appear to have taken advantage of the Icelandic fire sale.

PPS And further to that, the Kaupthing purchase valued the whole of DLG at £75m which emphasises the rather large upside potential of the deal with the caveats that not all parts of DLG have been taken on and the deterioration in trading since Kaupthing bought it.

[paulcaine2003a] 12/11/2008 17:04

Also this:

Founder sells Data Locator to management in £25m deal
by Daniel Farey-Jones, Brand Republic 09-Mar-06, 07:30

LONDON - Data Locator's senior management, led by chief executive Jeremy Whitaker, have bought the company from founder Simon Johnson with private equity funding.

The seven-year-old company has been sold for a sum in the region of £25m to a seven-strong management team and private equity firm Promethean Investments.

Expanding the company through acquisitions is an option, according to Promethean's principal Mike Biddulph.


"Data Locator is a dynamic young business with an exceptional management team, offering us the potential for rapid growth through the continued development of its existing services and the acquisition of complementary businesses," he said.

The team consists of Whitaker, chief operations officer John Dunne, chief financial officer Ivan Parkinson, group sales director Graham Bate, group marketing director Jason Froggett, group commercial director Sue Nelson and group data director Richard Webster.

The company's name will change from Data Locator Group to DLG, but the group will continue to market its consumer lifestyle data under the name of Data Locator.

Whitaker, the former European managing director of Brann Marketing Services and managing director of The Knowledge Store, said DLG excited him enormously.

"Our growth rate is astounding, our business model unique, and our people universally acknowledged to provide exceptional service," he said.

Another former European managing director of Brann, Roy Boss, is joining the company as a non-executive director.

[paulcaine2003a] 12/11/2008 17:01

An article from 2006 valued the company at £23.5 million!!!


£23.5 million MBO Promethean plc, Data Locator Group Ltd, Data Locator Holdings Ltd, HSBC Bank plc, Management team

Promethean plc has agreed to acquire Data Locator Group Ltd (DLG) for £23.5 million in a management buy-out. According to the terms of the agreement, DLG will be acquired by an acquisition vehicle, Data Locator Holdings Ltd. Promethean will own 71% of the issued share capital of the vehicle and the senior management team will own the remaining 29%. HSBC Bank plc provided a £13.5 million acquisition facility to the acquirers.

Value: £23.5 million
Announced: March 09 2006

[paulcaine2003a] 12/11/2008 16:58

Thinking that Ill probably take the shares. Will increase my holding, reduce my breakeven and I like the sound of significant cost savings and cross-selling.

[skyracer] 12/11/2008 16:45

Scrip dividend: presumably the price will be the closing price today ie 9.75p mid.

[guru11] 05/11/2008 15:50

Quite interesting. Suggests that DMP is still way under valued.

Be interesting what the pe ratio will end up this coming year,
together - even more so - what they suggests it could be for the following year.

I am having a job finding another company on such a low pe ratio,
that is likely to maintain the pe ratio for the following year as well.
There has been some mentioned in the IC, Tandem being one, but when you look at it seems difficult to calculate how they come to that number.

[jeff h] 05/11/2008 14:26

paul - from an employee of one of the interested parties.

[paulcaine2003a] 04/11/2008 16:38

Jeff H - Where did you find that info.

Its interesting because that suggests another bid could come at some stage, although I'm not expecting one in the near future!

[jeff h] 03/11/2008 19:23

Learnt that one of the failed bidders was a large leisure company....they
had a cash bid trumped by a private equity bid, but then the private equity
firms funding was withdrawn with the credit crunch so no bid.

[guru11] 29/10/2008 22:34

Looks like we could be looking at a half of one percent drop in interest rates here shortly.

With DMP I don't expect much action with the share price until full year results are announced. These should please and when one realise what the year end pe ratio is, then one should realise that DMP is good value and is a very strong hold to recovery recent share price falls.