I-Design Share Discussion Threads

[the prophet] 01/12/2011 10:46

-be interesting to see what rhps say on IDG, their weekly comment is out this evening, with the months mag out on Friday evening, so I'm sure IDG will feature in there somewhere.

[the prophet] 01/12/2011 10:43

-hi interceptor, many thanks for the clarification. Yes, I can see what you guys are saying, the eps growth from first half to second half is strong, and, unless that stops or there are some seasonality issues at play, then one would think 3p eps should be bottom of the range if H2 is repeated next year. If the growth pattern were to continue, then something like 4p-5p should be very possible. I guess that is why one needs forecasts, because if Arbuthnot are not plugging in at least 3p eps, one would have to ask why.

[interceptor2] 01/12/2011 10:31

Hi The Prophet

The figures were for just the second half H2 2011, and the 255k is including the R&D figure of £46.5k.

But I thought I should show a figure for H2, with the R&D tax credit stripped out which was the 210k figure and EPS of 1.48p.

Maybe I worded my post poorly.

ic2...

[the prophet] 01/12/2011 10:25

-interceptor2
-thanks, I also like the under-promise over deliver situation and upgrades as we go through a fy, helps the feel good factor. But there is a point where if you (ie the company) truly believe they are going to do 3/4/5/6p eps and they are steering the market to 1.1p or so eps, then that is clearly misleading the market, also, its doing the shareholders as well, as the company will not get the rating it deserves, although in IDG's case, the rating don't seem to bad!

-not sure re the 10% rule, I've heard AIM companies talk about it, can't see why it wouldn't apply to them as well, probably more important for AIM companies ot abide by this than main market ones, but i admit, i don't know. Regardless, its good practice for companies to keep shareholders up to date regarding market expectations and their own internal forecasts, imo.

-edit, just seen you posted rule re AIM companies, thanks.

[interceptor2] 01/12/2011 10:18

I would expect Arbuthnot forecasts to be similar to Edisons, I do like companies to under promise and giving scope for upgrades later in the year. But I feel the forecasts have always been too far behind events here, IDG do seem conservative with there outlook statements, and only confirmed in October that they would make a maiden profit, when it was clear many month's before to many here that this was likely.

I believe the 10% above or below forecasts is only for non AIM companies. For AIM companies see below.

An AIM company must issue notification without delay of:

♦ any material change between its actual trading performance or financial condition and any profit forecast, estimate or projection included in the admission document or otherwise made public on its behalf;

[the prophet] 01/12/2011 10:10

-interceptor2
-forgive me if I am being a bit thick here, are you saying the pbt of some £100K includes an R&Dcredit of some £250K or so, so underlying pbt was really
-£150K? The eps figure you are quoting, of 1.48p, does that relate just to second half performance, once R&D credit stripped out? Have i for the right end of the stick? thanks.

[the prophet] 01/12/2011 10:04

-decent enough results

-but seeing as Edison is paid for research and they are basically given a steer on future numbers by the company, then there is a complete disconnect between Edison forecasts of 1.1p eps or whatever for fy 2012 and 5.5p-8p forecasts here. Yes, brokers try to err on the conservative side, be interesting to see what Arbuthnot come out with, but if its similair to Edison's, then the chances are that is what the company at this point in time thinks it will make. I think AIM rules require one to issue a profits warning/upgrade if the company believes it is trading outside the + or - 10% figure of market expectations. Not that all companies seem to comply with this rule!

-obviously at forecast 1.1p fy 12 the shares sit on a forward p/e not far off 60, which, even for a growth stock, looks a bit rich! Wish some of my others could get a rating of half that!

-Any comments?

[interceptor2] 01/12/2011 09:40

It's worth a mention that the PBT including the R&D tax credit for H2 was £0.255m and EPS = 1.8p. Even if I take out the R&D tax credit, EPS still came to 1.48p.

I have projected what next years profits might be trying to be conservative with my calculations, and was very surprised at the conclusions.

No point speculating at this time with figures, but I agree with cfro with my optimism for 2012.

ic2...

[bigbigdave] 01/12/2011 09:33

I think we are looking at a future Zulu stock here, certainly qualifies for something new.

[greenroom78] 01/12/2011 08:56

Beat me to it Williemanjaro - My computer doesn't allow me to c&p the direct link to the edison notes anymore. For some reason it now opens pdfs directly using adobe rather than in my browser. I need to work out how to change this.

[cfro] 01/12/2011 08:55

Excellent results!! :0)))

1.1p eps is very good and a little more than what i actually expected. The is some R&D capitilized but that is to be expected imo.

Yes as you say rivaldo 5.5p is easily achievable but as you all know im slightly more optomistic than that and still expect 8p.

The growth here is just phenomenal.

[greenroom78] 01/12/2011 08:52

New Edison note. They have copped out somewhat and still have 1.1p EPS for next year - I expected a little better from them, they don't seem to have taken into account the difference between H1 and H2.

[greenroom78] 01/12/2011 08:35

Worth remembering that joono is still very much in its infancy so I would expect good growth from that for a good while yet. Also I assume that the recently announced Canadian contract made very little if any contribution to H2. Therefore looking forward two lots of H2 + the Canadian contract with no further growth would put us a lot closer to your 5.5p EPS target. A couple more decent contract wins and cfro's 8pps target could also look on the low side.

I agree that 90p should be very undemanding once the market wakes up to the potential.

Does anybody know if they have any more tax losses available or do we need to apply a taxation rate to future profits?

[interceptor2] 01/12/2011 08:25

Very strong results, and as you have already mentioned rivaldo, it's the performance in H2 that stood out for me.

When this is projected forwards and knowing that new contracts are as yet to contribute, makes prospects for IDG look very promising.

ic2...

[rivaldo] 01/12/2011 08:00

:o))

Results RNS just out, and it reads very well, exactly as IDG have flagged:



Note that H2 alone produced a £211k PBT. Annualised - with no growth - that's £422k PBT.

Allowing for what should be very good growth given the new contracts, a projected profit of say £750k PBT this year would give almost 5.5p EPS.

At IDG's rate of growth that would easily support a 90p share price, particularly with net cash etc.

[greenroom78] 01/12/2011 07:57

101k profit and 1.1p EPS

Very good performance.

[greenroom78] 30/11/2011 14:32

rivaldo - 'give us a clue' investing.

[rivaldo] 30/11/2011 14:26

I just got e-mailed a video from Penny Sleuth/Tom Bulford recommending 5 shares which should grow by over 100% in the next 12-18 months.

None of them were specifically identified - you have to subscribe for that - but one of them was undoubtedly IDG.

TB reeled out everything we already know, without actually naming IDG. He was talking about possible global domination with IDG already in Ecuador, the USA and the Netherlands as well as the UK - and we can add Canada to that list as of Monday! Plus Greece of course - the banks there might be pretty desperate to find new ways of earning income....

[cfro] 29/11/2011 22:22

I was thinking that there might be another contract win announcement either tomorrow or on the results day too IC2.

Cant think why they would not tell anyone who the Candian bank is. The only reason i can think of is if they ae very close to securing more contracts that are somehow linked to this contract.

[interceptor2] 29/11/2011 19:16

Certainly there is much more potential contract wins in Canada, when you consider that two of the UK banks IDG have contracts with Barclays and RBS have a market cap of £20.5bn and £11.7bn.

Then compare the top 5 banks in Canada.

Royal Bank of Canada = £46.6bn
Toronto Dominion Bank = £41.0bn
Bank of Nova Scotia = £37.3bn
Bank of Montreal = £20.3bn
Canadian Imperial = £30.8bn

I'm looking forward to Thursday's results, and to read the tone of the statement which I would expect will be very upbeat. You never know there might even be another contract win announcement.

ic2...

[cfro] 29/11/2011 18:21

Cant understand why they wont mention who the Candian bank is tho. The only reason i can think is that perhaps they are very close to securing more contract wins that are somehow linked in some way??

[the prophet] 29/11/2011 11:50

-cheers for the reply guys, hear what you are saying. As I said, I'm a holder here and it looks a good situation. Riv, keep an eye on SRT!

[rivaldo] 29/11/2011 11:30

Prophet, good to see you here. G78 has answered very well. In addition to Arbuthnot's historic and current conservatism re IDG's forecasts, I'd say a lot of it is simply down to sentiment. IDG is obviously on an "up" at present, whilst SRT is on a "down" and unlikely to go anywhere for a while given yesterday's RNS - without contract win RNS's anyway. Incredibly simplistic, but true. I do like SRT, but my one quick post on the thread was reflective of my stance that imo it's a wait and see at present.

Finally, IDG have a global opportunity opening up for them with the help of the major players in the industry (Cardtronics etc), with apparently no or little competition - for an idea which actually makes its client banks money for nothing. And IDG's tiny £8m m/cap is easy to multi-bag to say £25m-£30m - much easier than to go from say £25m to £75m-£100m.

[greenroom78] 29/11/2011 11:04

The Prophet, Arburthnot have been a long way behind the curve here for over a year now - their forecasts tend to be reactive rather than forward looking. If you look at the revenue growth over the past few half year reports you will see how quickly things are developing. Now they are breaking even a very high % of all new earnings will go straight to PBT and boost EPS.

0.7pps is very undemanding for the current year and implies a growth in profits of around £100k for the year. If you look back you will see they have upgraded earnings for the last year several times over the past 12 months each time by more than the current growth target (of £100k).