Dm Share Discussion Threads

[windass] 11/1/2010 15:31

OFT SEEKS COURT ORDER AGAINST PRIZE DRAW PROMOTERS

11 January 2010

The OFT has issued High Court proceedings against the companies and individuals behind five UK prize draw promotions in an attempt to prevent mailings and the distribution of scratch-cards which, the OFT considers, are misleading.

The proceedings seek an injunction preventing unfair practices by Gloucestershire-based Purely Creative Limited, Strike Lucky Games Limited, McIntyre & Dodd Marketing Limited, The Winners Club Limited, and Dodd Marketing Limited, all of which are based in Herefordshire.

The injunction is also being sought against Adrian John Williams , a common director of all the companies, and Wendy Elaine Ruck, the common secretary, as well as Catherine Cummings a second director of Purely Creative Limited, and Peter Jude Henry, a previous director of The Winners Club Limited.

The businesses promote various premium-rate prize draw scratch-cards which are distributed through inserts in magazines and newspapers, as well as direct mailings. The action is being taken under the Enterprise Act 2002 for breaches of the Consumer Protection from Unfair Trading Regulations 2008 (CPRs).

The OFT considers the promotions are legally unfair because they:

create the impression that the recipient has won a prize, which in fact cannot be claimed without incurring a cost, such as through a premium line telephone call or a payment for 'insurance and delivery';
deceive consumers into believing they have been particularly fortunate to have been selected or to have won a prize;
deceive consumers that a prize is of a high value;
omit information, or provide ambiguous information, about the chances of winning, costs of claiming, and terms and conditions of the prize draw.
The companies believe that their promotions comply with the relevant laws and guidelines and have refused to cease their publication.

Heather Clayton, OFT Senior Director, said:
'Our case is that these promotions encourage people to believe they have won a valuable prize when, we argue, the plain fact of the matter is that people are being sold a low value product. We have been unable to reach agreement with the companies or secure voluntary agreement that distribution will cease. So we think the best thing now is for the High Court to decide the matter'.

NOTES

Purely Creative Limited has a registered office of Kings Buildings, Lydney, Gloucestershire, GL15 5HE. Strike Lucky Games Limited and McIntyre and Dodd Marketing Limited, and The Winners Club Limited have the same registered office of Green Heys, Walford Road, Ross on Wye, Herefordshire, HR9 5DB.

2. It is for the High Court to decide whether the promotions are unfair under the Consumer Protection from Unfair Trading Regulations 2008 ('CPRs'). No date has yet been scheduled for the High Court hearing.

3. The CPRs came into force on 26 May 2008 implementing the EC Directive on unfair commercial practices. The CPRs prohibit unfair commercial practices which distort consumers' decisions. They introduce a general duty not to trade unfairly on businesses dealing with consumers. They prohibit misleading consumers by action or omission. They also contain prohibitions against aggressive practices, as well as 31 specific practices that are always considered unfair.

4. The CPRs are enforceable by the OFT and other designated enforcers through both the criminal and civil courts. Breaches of the CPRs also constitute 'Community infringements' under the Enterprise Act 2002. Under this Act, the OFT can apply to the courts for an injunction ordering businesses to comply with the law in future. It may also accept undertakings from those involved in lieu of action.




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[guru11] 06/1/2010 08:37

Agree - all looking good with a possible pe ratio of just over 4. Only fly in the oilment is how much the legal side is going to cost. I did think that they were paying a 23% tax charge so on that basis the pe could be lower than 4.
Await full year results. I would have thought that the share price should be around a minimum of 10.5p and even 12.5p though.

[jeff h] 06/1/2010 08:11

Sounds like great news on the trading front....pre tax profit to be what
around the £5m mark with more next year?

I've added 100k anyway.

[aa29] 05/1/2010 18:08

RNS issued today (sounds good):

Trading Update


DM, the direct marketing group specialising in customer recruitment and database management, is pleased to announce a trading update for the year ended 31 December 2009 and provide an update on sector regulation which influence the Group's activities.


In September 2009, at the time of the announcement of the interim results for the six months ended 30 June 2009, the Group reported robust performance given the challenging economic environment. The Board is confident that the Group now has the strategic assets, market position and management to become a leading, fully integrated online and offline lead generation and direct marketing business.


In the second half of 2009 the Group has seen steady organic growth with the integration benefits of recent acquisitions delivered ahead of expectations, providing continued resilience to challenging trading conditions. Following recent measures to control costs, performance across all channels has seen good growth with all business units individually delivering a satisfactory performance.


Regulatory Update


Recent operating bans imposed on our competitors by the premium rate regulator, PhonepayPlus, have resulted in increased public and media confidence in the sector and a consequent improvement in both consumer response and the availability and cost of distribution channels, all of which have benefited the Group. The Group continues to apply the highest levels of care to the design of its creative products where the Board believe we are market leaders.


In the context of recently implemented EU legislation, the Office of Fair Trading ("OFT") has recently reassessed the promotional formulae which we currently adhere to that were previously agreed in 2007. This reassessment means that the OFT are now seeking alternative assurances drafted in wider and less specific terms than previously agreed and which DM is not prepared to accept in their current form. In the interests of achieving regulatory and operational certainty in the long-term the Group has therefore elected for definitive legal interpretation and explicit direction via the courts rather than agree to comply with what the Board believe are ambiguous proposals which could risk inadvertent breach in the future. That procedure has now commenced.

[guru11] 24/12/2009 08:57

Hi Jeff H -
You didn't ring because you and I are classed as a class A person who will never ring, and they target class B and C people. The latter regard £1,000 as big money that is why they are prepared to waste £5 on a phone call to try to win £1,000.

It is like the T.V. questions 'What is the answer to .....' Is it A, B or C. Phone 090 at £1.50 per minute and you could win £1,000. Remember the ITV quiz program a couple of years ago, they had 400,000 callers in one evening trying to win a cash prize, at 65p per call. It can be a very big money winner for the organisers.

It is like the lottery, is it a wasted pound, although there is obviously a chance of making it big. One needs a chance of winning big, not just £1,000 which is not going to change our lives at all.

Maybe we will be richer by the end of 2010 by holding DMP shares.
I think that the chances are very good.

[jeff h] 23/12/2009 16:36

Yes, Seasons Greetings to you guru.

I've received a couple of DM scratchcards in a local paper recently...both advertise fireballcasino.com on the back....both were "winners"...though I don't fancy ringing the £1.50 a minute number to get a "claim number" as the
call could last up to "6 minutes"

[earl strickland] 23/12/2009 14:55

Merry Christmas to you guru.

Heres hoping to see a bit more of your posting next year, eh!

[guru11] 23/12/2009 14:38

Merry Christmas and a Happy New Year to all DMP shareholders.

I am confident that the share price will be stronger in 2010.

Just an unloved, well managed, lowly rated stock not on too many punters radar screen at present.

[guru11] 14/12/2009 13:35

In the period ended 30 June 2009, the Group did not pay a dividend

Think that it is a case of awaiting the final results next April for any movement now.
The stock is obvioiusly on a low rating, management know what they are doing, we are in a touch market, but then more people are now playing the lottery so more people could be buying DM scratch cards. No fireworks for the present, but one would expect a bit of a rise next year.

[pete.b] 12/12/2009 08:25

Any news on this one? Seems very quiet.

Isn't there a divi due soon?

[nissi_beach] 11/12/2009 16:23

might need to do some more research here

EPS of 2.8p

[guru11] 09/11/2009 20:32

We've seen a string of small sells of late. The price has had to drift.
Even today 10 November we have seen a small sell and a further 1/4p drop in the price. Not good.

Not even a write up (unless I have missed it) in the Investors Chronicle either.

A bottom draw job, until the price does actually recover. Punters have really lost confidence even with a small well run company with proven directors.

No doubt in my mind that this stock is very much unloved and must be cheap.
I can see the price moving again next April when they announce final results.

[empirestate] 09/11/2009 14:55

nice performance from the davey jones

[guru11] 24/10/2009 10:36

The usual drift in share price after around 15 small share sells. Bid was 10.5, then 10p then this week 9.5p.

The companies prospects are good, so why sell out at this time. One will have to wait for a better shareholder value.

I am staying on board for this to happen. I believe with proven management it is not if it goes up, but a question of when.

[guru11] 19/10/2009 21:45

I have a feeling that the IC will write these up as a buy sooner or later.

Write ups on the interim results have been a bit lacking.

We all are aware of the management skills of turning companies around and the timely buy of other companies, of the low pe ratio, and the future growth potential.

It is a shame that the share price is taking so long to recognise a good stock, and that we may have to wait until possibly next April - around final results time - for another uplift in the share price

[plast] 16/10/2009 21:06

well im hoping the same, time the management started to get the ball rolling, dmp is hiding from peoples attention at the moment.

[guru11] 29/9/2009 10:26

The Investors Chronicle should have one of their buy articles on DMP when they do write it up, although they do not always do a write up straight after results. One to hold on to for a better share price.

Looks like as usual that it will be another waiting game until another set of results, before any more interest is generated in this stock, that is why some punters are jumping ship. I can still see this share price substantially above todays level in 2 to 4 years time though.

[guru11] 15/9/2009 13:13

AA29 - agree - good post. With my dividend I bought more DMP shares, to increase my penny per share rise each time.

Will the stock move after the write up in the I.C. this time around is the question? On a potential pe of 5 or less we all know it is very good value, and as has been said Mr Williams has a habit of adding other companies at good valued prices and turning them around quickly.

[scr00ge] 15/9/2009 11:40

Hi AA29

You have done your reaserach and hats off to you. I conceed that the DLG & PDV aquisitions were very good moves - both have solid reputation & track record. They picked them both up at rock bottom prices. Also Adrian Williams is able to do as he pleases - it is his company.

I know a little of the online market and it is tight at the moment especially email marketing because of deliverablity issues. I would have reduced the debt and played the long game but its not my company.

The statement does not say too much about their future apart from more of the same - where is the growth going to come from to make this stock £1 in 5 years time. IMO at the moment they are probably trading 10-20% below their fair value. I want to see a potential exponetial growth - where is it going to come from? 10% potential return is not enough - I want 10x...

Humbug

[aa29] 15/9/2009 11:15

Scr00ge, you have a valid view.

After the final MBO attempt failed to get finance last year, the company declared its special dividend - I presume Adrian Williams wanted some cash (he owned 81% then and still controls around this in voting rights). After the dividend was declared, the opportunity came up to buy DLG for c£3m (a business that had recently been 'worth' £75m). It surprised me at that time that the directors chose to keep the high gearing caused by the special dividend and increased need for working capital caused by the acquisition. They (and there's only AW who has a significant holding) had time to reinvest an element of their dividend in the share offer that went with it if they'd wanted to.

AW did put money in earlier this year in the open offer of £1m but did benefit from scooping up shares at 5p, nothing wrong with that.

Yesterday's results were encouraging and AW has a great record of making value acquisitions. When AW sold shares to Hugh Villiers earlier this year, he retained the voting rights so he can still (perfectly reasonably) do whatever he likes with the company. I think the company has a good future ahead of it but have the feeling (as I said above) that we, as minority shareholders, won't see all the benefit of that if AW does eventually take the company private - others on here have a more optimistic view.

[scr00ge] 15/9/2009 09:30

Hi All

So I had a look at this stock when they paid a massive dividend in Dec 08 of 3.5p thinking this stock has all the ticks in the boxes, shrew management taking opportunities in the downturn, online presence, complimentary offine buisness, saucy windfall dividend & a dirt cheap price. I just had a gremlin on my shoulder thinking there has to be something too good to be true about this and as such I did not buy. I regret it now on the performance to date with a 30% increase.

I have a question though which I would like any feedback - Why did the company pay such a whacking dividend and return £5.08m when they have a debt pile of £6.41m? I would assume they must be paying ~5% interest per year on this so thats £320k p/a. Would it not have been a shrewd move to pay of a major part of their debt pile (currently £6.2m) when the market is so fragile...?

The only reason I can think why they have done this is because their chairman Adrian Williams has 118,069,112 shares which is 70.99% of the issued equity. The bloke just pocketed: £4.1m and he probably is only paying 20% tax on this.

This makes me think that the management is shrewd but not looking out for my interests and is making bank today. what will tomorrow hold for the company...?
It is not so clear cut - the results are good but ar they good enough to justify this behaviour.... thoughts on the back of a postcard!

Humbug

[aa29] 14/9/2009 23:49

Guru, don't think the 300k traded today on Plus show up in the trades list (on my info system anyway)

[guru11] 14/9/2009 22:15

AA29 - We have top management here, and I cannot see anyone else who takes over doing a better job. I will continue to hold longer term as I believe the stock represents very good value.

The MM marked the stock up on the results, but trading was still very low. One can only watch the price and hope that it rises sooner rather than later.

[aa29] 14/9/2009 11:51

plast - your £6.5m was gross profit, the bottom line profit was £1.75m.

Skyracer - net debt is only down so much because of the £1m open offer proceeds. Receivables have increased sharply though with the acquisitions but this increase should not recur and cash flow from profits should start eating into the debt.

The company has the net debt from Adrian Williams' choice - there was time to reinvest an element of his special dividend late last year if he'd wished (I know he eventually put some back in at a lower level in the open offer). Likewise, I still have the feeling that he will take the company private at some stage in the future and at a level we the minority shareholders won't like.

Overall, I was cautious when I posted earlier this month and that's been borne out in these figures. I thought the general tone of the comments was encouraging and now the acquisitions are integrated, management time can be fully spent driving performance.