Gcap Media Share Discussion Threads

[grahamite2] 15/8/2005 09:12

Since the last posts this has rallied quite nicely, even with the bid being quoted as the share price If I sold it would only be to liberate funds for use elsewhere. UBS target seems truly ridiculous - I don't think either constituent company has tested such depths before or anything like them.

[simon gordon] 07/7/2005 18:51

Rumble in the Jungle is that OFCOM are going to allow more Digital Multiplex's to operate nationally.

GCap has a lock on the current status but if OFCOM changes the rules it will be negative.

GCap may sue OFCOM.

[simon gordon] 30/6/2005 09:48

After all the data I think the risk is more to the downside.

I base this on:

Probable negative Rajar figures in August.

A DMGT rating equals a £2.43 price target.

EPS for 2007 of 18 is very sensitive to the UK economy - could be cut.

UBS have called it all the way down - price target £2.25.

[simon gordon] 29/6/2005 12:16

Beefy background data:

[simon gordon] 28/6/2005 19:25

Bear case:

[alun rm] 28/6/2005 18:19

There is no doubt that this share is right on the front line if the economy does indeed continue to slow or even move into recession. Media valuations will always be at the leading edge, since advertising is the first thing to be cut as businesses tighten their belts.

The question is, how do you see the economy going?

I understand the negative take on things, and this is being reflected in GCAP's shareprice as it reaches record lows. However, if the economy picks up then GCAP will be one of the first to reflect this in its figures.

It really depends upon your level of optimism!

Personally, I feel good about things.

[simon gordon] 28/6/2005 17:36

Evil - I think you are being extreme in the price points you espouse. For it to go sub £1.00 we would need to sink into a depression.

Remember the key things hurting now:

1. COI reviewing spending - resolved in Autumn.

2. Merger of sales houses.

3. High St. - is it a slowdown, recession or depression.

GCap at £2.60 offer a 4.6% yield.

Are DMGT waiting to pounce?

The forward P/E to 2007 is 14.44.

2006 is a period of consolidation.

GCap is now mirred in doom and gloom with the share price at a ten year low.

[evilwebby] 28/6/2005 16:19

As advertisering revenues slump, there is nothing to stop this company going sub 200p, then sub 150p, then maybe sub 100p imho. It's horrendously expensive on fundamentals.

Alun: soft landing for the housing market - are you serious? London is now down 5% according to hometrack; prices have been falling for 12 months, even throughout the traditionally strong H1. The gearing in the property market will ensure than any "soft landing" wipes out a load of BTL speculators.

simon: I agree, those forecasts are very pie in the sky. I bet 3 years ago no one forecast that GCAP/CAP would have lost so much of its shareprice. Harder times for the economy are around the corner, and GCAP is going to be one of those right in the firing line.

One last thought: the notion that the BoE can control the economy with a mere cut in interest rates is ludicrous. They're precided over the biggest debt binge in history which has brought us to where we are currently, so cutting interest rates again is not really going to do anything other than inflate an already massive debt bubble.

[simon gordon] 28/6/2005 13:51

Background:

[simon gordon] 27/6/2005 11:41

Alun an article to support your view:

[simon gordon] 26/6/2005 15:57

Snippet:

Radio today has a 7.0 per cent. share of the £8.9 billion UK display advertising market. Between 1992 and 2002 radio advertising growth outpaced that of all other media, with a compound annual growth rate of 10.6 per cent. to £461 million, compared to a compound annual growth rate of 3.7 per cent. in total UK display advertising spend.

[simon gordon] 25/6/2005 17:33

Interesting growth point:

As people use Personal Video Recorders (SKY+) to screen out adverts the medium of radio could see more spend.

[simon gordon] 25/6/2005 17:16

Much of the preceding data is subjective!!!

[simon gordon] 25/6/2005 17:09

If Rajar is poor and ad. spend does not pick up the share could go sub £2.00.

DMGT forward P/E
12/05 - 15.2
12/06 - 13.5

If Gcap had a forward P/E for 2007 of 13.5 the share price would be £2.44.

Peers in the global radio industry have a forward P/E in 2007 of 16.5.

That would equate to a share price for GCap of £3.00 if EPS hit 18.

Prior to the slowdown (February 2005) Charles Stanley had EPS of 25.7 for 2007.

[simon gordon] 25/6/2005 17:02

2005 - Pro Forma
T/O - 246m
PBT - 38m
EPS - 16.1
DPS - 18.5

2006 - Forecast
T/O - 218m
PBT - 26.5m
EPS - 11.3
DPS - 12

2007 - Forecast
T/O - 240m
PBT - 42m
EPS - 18
DPS - 12

Forward P/E's @ £2.60
2006 - 23
2007 - 14.4

VALUATION
Fair value - £2.70
Good value - £2.20

PRICE TARGETS
UBS - £2.25
Lehman - £3.38
SocGen - £4.11
Numis - £3.00

[simon gordon] 24/6/2005 15:31

Some background:

[simon gordon] 24/6/2005 14:10

Big American firm keep buying - 4% disclosed 13/6/05.

[alun rm] 23/6/2005 16:58

I have just bought in, could this be the low point for this stock? Its all doom and gloom but in reality there are some great assets here and if the advertising revenues pick up (big if?) the stock could be back at £3.50 in the blink of an eye.

I see this one as a long termer. It may yet go down, but with a solid balance sheet and good products, it is only a matter of time before we see the price above the current level (263p). in the meantime we should see a 4 to 7% dividend - so it is better than cash in the ISA.

upside, £4 in a year

downside, £2.20 as the economy slumps

my vibe, interest rates are about to drop, the housing market is on course for a soft landing, advertising revenues will pick up and this share will do very well between now and Xmas.

alun

[simon gordon] 23/6/2005 15:30

Numis forecast:

[simon gordon] 23/6/2005 15:27

Guardian article:

[simon gordon] 23/6/2005 13:04

A bit of bull (written in May):

[simon gordon] 23/6/2005 09:09

Summation of current predicament:



I'll be back with forecasts and more beef....