ILX Share Discussion Threads

[spaceparallax] 19/9/2011 14:50

It'd be nice to see the target met - heaven knows it's been tough going

[paleje] 17/9/2011 08:43

TW holds ILX in his small caps growth fund, reiterated his Buy advice today with 55p target (lowered a bit from 61p). Can't link as it's an email:-

Take for instance another example from our Fund - ILX

ILX, the e-learning software and consulting services group which has grown to become the global market leader in PRINCE2, had a pretty stellar year ending 31st March 2011. The pivotal twelve months saw an 8.5% rise in Revenue which helped to drive an 87% expansion of the company's underlying profit before tax, which rocketed to £1.42 million. EPS came in at 4.14p, with net debt as at 31 March 2011 falling considerably to £1.89 million, helped by strong operating cash flow per share of 5.9p. A first quarter trading statement released on 26 July 2011 noted how this strong growth had continued into this current year and that overall both Revenues and profitability are ahead of the same period of last year. However, the company also provided guidance in regard to its UK operations, which are, despite the UK business recently winning its largest contract to date, constrained. However, this downward pressure in the UK market is being more than shouldered by the company's international division delivering year on year sales growth of 90%.

It is the continued sharp growth in international revenue and profitability, driven by the company's scalable business model and margin improvements, which make investment in ILX increasing attractive. The company is however optimistic that the UK operation will remain broadly flat and will, importantly hit its revenue targets, but it is the rapid growth in the overseas markets that are the real key for this company, highlighted by a major new contract with the New Zealand Defence Force which is worth a minimum of £250,000.
Companies that are delivering strong, double digit earnings growth are few and far between, especially when their shares offer a decent yield. ILX is one such company. For the year ending 31st March 2012 the company should deliver EPS of 5p, and with such strong operating cash flow we can comfortably expect the management to at least maintain the 1.5p dividend. At 25.5p, which capitalises the company at just £6.9 million, the shares trade on a projected multiple of just over 5 and currently yield 5.9%. Our view is that fair value is circa 55p – so there is some serious capital growth here couple with an attractive yield.

[eagle eye] 07/9/2011 11:14

Eventually ILX may command a lofty prospective PER of 8, giving rise to a share price of around 40p. Thats on current earnings forecasts, so plenty of upside here over the next year or so. I'm happy to collect a divi of around 6% while I'm waiting.

[paleje] 06/9/2011 09:17

Because there's not much going on markt, except stock markets collapsing:)

I think all would agree with you ILX is good value or we wouldn't be here, steady performer with good divi and global exposure, share price will improve but we can't expect much in current conditions.

[markt] 05/9/2011 12:55

wow....ILX is one of the most inactive message boards out there !

[markt] 12/8/2011 10:27

Long post, sorry !

=====
Price to sell today...at 25p !!

What resulting P/E are we down to now ?!!

27M shares before scrip issue...
if assume that long term > 3% investors take the scrip and that private investors do nothing and hence receive the divi (unless took the scrip last time....)

then ..
200k pnds divi cost and 0.7M new shares to make 27.7M shares


2010 sales....and broker prediction (very close to the company....large holder....so I think that company has checked that the numbers are correct wrt to current expectations of the directors...



while noting that a large investor in the co. is not going to recommend to sell the shares !.....but noting they bought shares not so long ago, only going to do if they like their analysis of the numbers....)

11.8M and expected for 2012 is 15M and 17.5 in 2013 !!
over 4 years they expect that the turnover will be not so much below double !
that is amazing growth.
Very very few companies are expected to provide that level of turnover growth while having
-a P/E below 10 (P/E =6 for next annual report according to broker analysis, 4.9p EPS, based on 1.8M PBT, achieved 1.4M in last annual report...and have achieved growth in sales and closed the loss making part of the co....and high international sales growth in last 2 years so I think it is achievable...)
-to have a low debt and
-have global sales....and
- have sales linked to the computer sector and
-to the education/learning sector via a computer (good sector imo, base of users has rapidly grown, ipads, itables etc laptops, notepads and is expected to continue to grow rapidly)

and some of those numbers are already proven/reported...

on the -ve side the company is not well known.....and is a microcap so it is difficult to become seen ! (until perhaps closer to hopefully achieving the predicted year end results...and hopefully announced OK or good future expectations)...

P/E of 6.....crazy imo...

1.8M PBT.....400k divi (or part as scrip)...0.45M tax @ 25% (1% reduction per year company tax)...leaves approx. 1M...making the end of year debt perhaps around 0.9M. Small. Can then be ignored perhaps since well covered by income...and future profits could be used to increase the dividend if the company wanted.....Already pays 5%.....in a few years it could easily pay double that in my view and still wouldnt be paying out all the earnings. In 2 years time it could be a 7.5-10% divi relative to current sell price of 25p....and be linked to a rising share price, if growth in turnover and EPS is produced as expected or even in part as expected. For me, it is a good combination. Often a company with such prospects has shares with a P/E of 20, much higher exposure to risk of a fall if any bad news.

If producing 4.9p and close to debt free...then in theory it could pay 4.9p as dividend.
20% divi at current selling price of 25p. And in good sector and growing turnover....so 5 years later that EPS has good chance to be higher. Perhaps 50% higher 5 years later, minimum imo, makes 7.5p. 'Could' pay a divi of 33% next year !!...but a growing company would never normally do such a thing...unless they can find no other use for the money and I think they would (with higher return than 5%)....

If producing 4.9p EPS...and continue to pay 1.5p divi....then 3.4p goes to increase the assetts of the company....and shareholders own those asetts pro rata....so they get 3.4p/share richer even though the cash does not go in their bank account.
Also, what is the buy out price for a company that is rapidly growing turnover and earnings and could pay a 20p dividend ??!!
Well if you can borrow money at say 5% (via bonds, loan notes, bank debt)....then to buy a company like ILX which produces 20% income (related to todays selling price of 25p)....it makes fantastic sense...
and if you can cross sell products....and increase profits even better
and if can reduce costs by merging ILX with another company or department doing similar work....then profit can be increased even further...

if remove the cost of the board of approx. 1/2M and cost of AIM listing and accounts etc....perhaps 300k-500k....then the predicted internal profit increases from predicted of 1.8M to 2.5M-3M.
While cap. value is around 7M according to ADVFN. (after scrip issue I expect it to increase to 7.2M due to approx. 200k of extra shares...estimating that 1/2 will take the scrip issue).

2.5M-3M predicted PBT if remove the cost of the board and being listed company....accounts etc etc....
with 7.2M cap. value.

This RATIO IS AROUND 3 !!!. Crazy !.

And if you have 7.2M then you can only get a 3% return I think from Govt. bonds or long term deposit......or is it less....so the ILX earnings are especially high in comparison....
in reality of course you can not buy ILX at current share price....would have to pay more....but still be cheap buy compared with its earnings even at a higher price, imo...

Imo the current share price is ridiculously too cheap....
Any views ?

[markt] 10/8/2011 13:01

...anyone know how the number of shares would be calculated for the scrip issue instead of taking the divi....

and any view on the pros and cons of the scrip issue ?

With the divi there is a witholding tax of 10% before divi money arrives at a shareholder....and have to pay income tax as well....

is there a 10% witholding tax on scrip issue ?
and is scrip issue liable to income tax ? (perceived income as the same as the cash divi ) ??

anyone know ?

[markt] 01/8/2011 20:15

..earlier today there seemed to be a number of sales going thru....
(surpised me so close to the XD date...but perhaps some people think the price will fall by the divi amount)

and few buys from what I could see....
but the sales were being taken and no fall in price....

so I am hoping that there is a biggish fish soaking up the sales....
and that we may see a largish buy trade get reported at some time...
perhaps tomorrow before the shares go XD, to get the divi or take scrip offer.

see what happens...

[markt] 31/7/2011 13:53

I agree with your comment about news....I think the dirs. are fully aware !...and imo opinion they will try to provide if they can while staying within the regulations.....they wont want a news/info vaccum...
they own shares and big option package.....

company was in many ways 'new' after closing loss making part in 2010...not long ago....I think they realise that the market needs ongoing info/news about the 'new' entity to have confidence in the new entity....(hopefully sales in Auz etc will continue to be good so good news can be produced, non-UK sales have rocketted in % terms over last 3 years, no reason to think it will change direction)

Im hoping it won't drift....share price has risen quickly in last 6 months...I'm hoping that the trend will continue...probably/perhaps volatile/spikey...since that is the way it has been in last few months....illiquid share...

I agree the value is there....I dont have a price target.....if produces good news then ....in future...the price possibilities will be upgraded....(and broker price target is higher than your price I think I recall)...and then I am hoping that 6 months later again that the price possibilities will be upgraded
risk/reward is very good imo

(with tablets and internet connected notepads etc sales increasing....(ebook sales growing quickly)..(10-15 years ago, ipads, itablets, Kindle, ebook readers did not exist)..the market to learn stuff on the train travelling to work etc etc is increasing all the time....and learning sector is growing solidly.......imo ILX is in a good sector at the right time, at a cheap price....hopefully future news will show that it is competing well in the sector....time will tell)

(and if the market decides to put ILXs past share price performance in the history bin and only think about the future then it could help the share price.....Jan 2012 is only 5 months away, the company closing its loss making part in last part of 2010 may then seem like ancient history....I hope !...5 months is nothing....OK, takes time, change sentiment about the past, gradual possibility)

[paleje] 31/7/2011 10:08

Might dip a bit after the xd, then it'll need news, otherwise expect it to drift imo, but the value is there, 45p by year end?

[markt] 30/7/2011 21:06

1.8M PBT expected ...up from 1.4M in past year...and co. has said that currently doing nicely and in line...

1.8M PBT versus a cap. value of 8.6M
and 5% divi...

and 1.8M PBT is after approx. a cost of 1M for the directors and AIM listing etc
if said that raw PBT is closer to 2.8M then imo you can see better the profitability of ILX and its low P/E vs cap. of 8.6M

(if someone wanted to buy ILX they could pay double and the earnings versus price would not be expensive imo, 2.8/18...only around 6 or 7.....and would get existing global sales...+ contacts in various continents through which could also sell products of anyone that bt. them + experienced co. capable of competing and achieving sales of around 10M (not a start up), or if ILX bt anyone else then same cross selling benefits (std. stuff in software related sector)

(there is another UK elearning co....cap. of around 1M....and other cos. elsewhere....could buy via shares if good deal...OK, noting ILX history on acquisitions has had some problems over last 10 years, but has produced co. now with sales of around 10M or so, an achievement)

on -ve side for ILX is past problems.....but partly caused by the financial crash....(co. provided a lot of training for finance sector in London, that part closed at end of 2010...)

nothing g'teed with shares....but risk/reward looks very good at the moment imo

partly needs time for people to hear about the new company situation and numbers after closing part of business at end of 2010....and partly needs nice or good RNS and results...and I guess the closer we get to the year end and to achieving the mkt expectation of 1.8M PBT the share price could benefit

(Expansion into Auz has been very quick and big...and good news since Auz economy has been doing very well....partly driven by massive mining sector doing very well...so Govt. and cos. have money to spend imo....if continues then could easily impact ILX share price, sales are significant % of the total....)

and of course some profit taking perhaps from people who bought in the 20-30p range not many weeks/months ago...may slow progress...normal...

Oh, and of course Octopus have a big stake now...and a director on the board....so one assumes that they will be trying to do as much as possible to assist , contacts etc etc..and of course also the T1PS people who are widely connected and they have been doing a lot of deals....so they could come up with something for ILX

[markt] 29/7/2011 22:27

BTW

"The dividend will be paid on 14 October 2011 to shareholders on the register on 5 August 2011, and the shares will therefore become ex-dividend on 3 August 2011. Elections for the scrip issue need to be made by 16 September 2011. "


(I have added para separations to make it easier to read than 1 solid block of text)

"As stated in the Directors' report, the directors recommend payment of a dividend of 1.50 pence per share, subject to shareholder approval at the Annual General Meeting on 20 September 2011.

This dividend will be paid on 14 October 2011 to shareholders on the register at 5 August 2011. The shares will therefore become ex-dividend on 3 August 2011.

A scrip alternative will be offered, at the average share price for the period 3 August to 9 August inclusive. Shareholders who elected to receive the scrip alternative in 2009 will receive the scrip alternative for 2011 automatically.

Shareholders who wish to elect to receive the scrip alternative will need to obtain a mandate form from the company and return it to the registrars no later than 10am on 16 September 2011. "


So
if share price goes up after 9th August then it may be much better to take the scrip option since there will be a discount....and have until 19th Sept to get forms to the registrar.....
if a contract is announced after 9th August then the price could well rise....

the dirs. are taking the scrip option

of course to take any of the choices you have to be a shareholder before the shares go ex-div on 3rd August....which I guess is some time next week.....Wednesday perhaps ..I havent got a calendar handy at the moment...
if goes ex-divi on 3rd then I assume you would have to buy on Monday or Tuesday.

(Even if take the cash divi choice ...a 1.5p divi on 14th Oct if buy in next few days is perhaps an incentive to buy imo....)

(expected to be close to debt free I think at the end of this year.....and I think I recall 1.8M PBT is the expectation, ....and RNS says they are on track....so they can afford to pay the divi and also pay down good part of the debt....ILX still has more to do/go but it is shaping up nicely imo......chart looks good, quite spikey/volatile (normal, minicap and illiquid) but trend is quickly up.........with low P/E, very low P/E)

[paleje] 27/7/2011 07:36

Not at all c2i, welcome, xd imminent, decent upside imo, good luck.

[contrarian2investor] 26/7/2011 18:21

I have placed these on my watchlist after today's update.
LOL paleje please don't think that I am stalking you.

[markt] 26/7/2011 14:18

...looks like my post was 4 days early !! 1408 of 1410

=====

I think the price range 20-30 is now behind us....
with this RNS hopefully the market will take a bit more interest...
====

various small sales in last few days...of around 3-5k shares each...at 28p
someone hoovered them up with buy of 20k shares....nice buy....

===
illiquid share....if market takes interest in ILX then shares could really fly if people willing to pay prices to get some......and if those sellers of 3-5k shares ....stop it !! je je !
====

still tiny volume today...only 70k shares so far....20k pounds...not a lot ...

[paleje] 26/7/2011 09:06

UK Analyst reiterated their strong buy advice this morning:-

26th July 2011
Analyst: Philip Morrish
Email: [e-mail]
Tel: [phone]

ILX, a provider of e-learning software and consulting services, this morning released a trading update for the first financial quarter ended 30th June 2011, which provided comfort that our existing expectations remain deliverable despite the well publicised UK slowdown. With the shares trading at 28.5p and our unchanged target price of 61.5p, we re-iterate our stance of strong buy

[divinausa1] 26/7/2011 07:15

pos update...

[markt] 22/7/2011 17:42

....and the PER is even more attractive if consider the profit if add back in directors wages and cost of AIM listing....adds around 1M pounds....

then you get a really low P/E result....showing the internal profitability of the company....intrinsic value.....shows imo that the shares are under priced.

(ah, training sector tends to be more active imo in the 3 seasons outside of the summer holiday season (certain exceptions like Univ. summer courses, kids language schools etc......and the recent 1 day event on the south coast)...of course its the winter season in Auz and NZ where ILX have been success in expanding dramatically in last 12 months.....fingers crossed they are continuing with the success of last 12 months and if so then some news at some time...)

[eagle eye] 22/7/2011 17:19

Interesting video links from the ILX website:

[paleje] 22/7/2011 16:48

Cheers eagleeye, all showing as sells on my monitor, good value indeed.

[eagle eye] 22/7/2011 16:36

paleje,
The first couple of trades look like sells at 27p.
The following trades at 28.3p are in fact buys...I know because I was one of them.
Looks as if the MM was prepared to square the books and make a small turn.
The shares go ex div 1.5p in the next two weeks.
28.3p minus 1.5p equals 26.8p. Thats a PER of less than six based on EPS of 4.5p for the current year. Good value.

[paleje] 22/7/2011 16:19

That's unusual, all red trades today yet we're not far away from xd, I think we'd had a TU by this time last year too.

I wonder if one's coming next week which insiders don't like the look of, I know it shouldn't happen but it does. It's just against the odds to get all reds when there's no news (that we know of) to cause it. Anybody any thoughts?

[markt] 11/7/2011 10:58

chart is looking good imo.....definite up trend ...but illiquid stock so spikes along the way...

up from 21p to 30p from July last year....approx. 50% rise....so anyone who bt. at 21p must be happy...(cheap P/E imo ....so a little more good news and could really motor imo)...forecast is 1.8M this year...from 1.4M last year...big rise if achieves it...especially for a cheap P/E

[djonson] 08/7/2011 21:29

Hi divinausa1, I strongly suggest you to continue posting if you find out iteresting news. Goals of these forums are to gather additional infos and points of view, so all what comes in that direction is ALWAYS welcome