Imagesound Share Discussion Threads

[iandippie] 07/3/2007 10:47

No different really to what happened after the interims. Confusion over results, initial fall, then a week or so later, a swift 30% rise. I won't grumble if the same pattern is followed again.

[masurenguy] 07/3/2007 10:40

I agree. The various accounting issues involved really complicate and obfuscate a clear interpretation of the accounts. At this level of market cap the PI is an important investment sector and consequently management need to ensure that the positive aspects of the results are clearly emphasised and interpreted to the market that they are fundamentally addressing. This they have clearly failed to do !

[smiler1] 07/3/2007 10:29

I don't think the results are necessarily bad as they might first appear. The problem is that it is difficult to compare 2nd half performance with 1st half because one is reported under IFRS and one isn't. What is clear is that turnover has increased in the 2nd half by 47% (only 10% due to acquisitions) and that gp margins yr on yr have increased from 35% to 42%. Before amortisation and one off costs, I estimate that the underlying operating profit has doubled that of the first half (assuming gp% remained the same in both halves). I do not know why they wish to make the results so hard to understand

[njp] 07/3/2007 10:08

Does seem as though CS are happy to hoover up stock at the moment. Director buys perhaps?

DJ

Yes, accounts are shambolic in presentation terms and are certainly disappointing. Director interest in this plus the acquisition money indicates that they're looking to achieve much more in the next year or two.

Will be interesting to see what CS have to say.

[quotes_4_u] 07/3/2007 10:07

cr and diogenes in disagreement

I nearly fainted :-))

[cockneyrebel] 07/3/2007 10:03

I don't know diogenes - for a co with a mkt cap of £10m they have some complicated accounts. The FD told me he would highlight the figure that should be looked at when I spoke to him after the results.


Will see if I can get a handle on what Collins Stewart the house brokewr think, should be a note or motelet soon I guess. Collins Stewart are the buyer on 16.75p this morning.

CR

[papalpower] 07/3/2007 09:42

MG - the IG buy levels were well above the offer price of late, more than normal, that points to a lot of margined money in, and obviously it quickly departs as well.

NJP - we appear to be discussing different viewpoints, mine being that adjusted or undelying EPS does not warrant being in the headlines, although its fine to put it in lower down, is just my viewpoint.

[masurenguy] 07/3/2007 09:31

After the initial flurry of Sells there have been several Buys reported. Looks to me, from the transaction times, that some of these could be Sells.
Level 2 is currently neutral.

It appears that the actual results did not quite match the market expectation !

[diogenesj] 07/3/2007 09:11

Disappointing results imo, and although they said they would meet forecasts I don't think they have. Taking their definition of adjusted ptp at 600k and dividing by 63m shares gives eps of 0.94p against a forecast 1.10p. Negative cash flow, substantially negative net tangible assets, net debt of £2.6m (they misleadingly highlight 'net bank debt' of £1.3m), challenging retail conditions, uncertainty about the cost of PPL licence fees - this doesn't look like a very strong franchise.

In view of the fact that they have adopted the IFRS standard which does not require amortisation of goodwill, I think we must assume that the £1.9m charged to "depreciation" of intangible assets really does represent a loss of value, and should not have been added back in arriving at the adjusted ptp above. Or have I, er, got the wrong end of the stick here?

[dave88] 07/3/2007 08:56

Yep Dave i'm out made 50% here but can see better investments for my money,glad i took out a long on IND y/day you still short CR?

[njp] 07/3/2007 08:53

Agree with you, novice. It's the forward outlook that is interesting with this share. The directors weren't buying shedloads just to make a couple of pence.

And don't forget the loan facility for acquisitions.

[novicedave] 07/3/2007 08:47

dave- I asume you are trying to sell; if you are trying to buy there would be no problem (just leave an order with your broker).

results were a little dissapointing- although turnover was higher than I expected. i'll carry on holding (small holding) as the forward outlook looks better, might add a few if we see a significant fall.

nd

[moneypit23] 07/3/2007 08:45

Yep max 25k buy, only 1.5k sell online for me at the mo!

[nickcduk] 07/3/2007 08:27

Excuse my ignorance here but is this a seasonal business? 2nd half profitability was a lot lower than first half. Ebitda was lower in the second half and profitabiity was down sharply. I dont see what everyone is so bullish about.

[ptolemy] 07/3/2007 08:27

Good progress in line with expectations. Plently of examples of new business but outlook a little cautious. I guess that's the nature of the management team. They're continue to strengthen their position in this niche. Full contribution from acquitiions in 07 should drive growth. Interesting to see if management buy any more shares; I think they bought bucketfulls after the last results and Yapp has recently joined and might want to join the fun.

[njp] 07/3/2007 08:05

PP

If you accept that adjusted earnings is key information that investors look for, then clearly there's a need to make it prominent.

As for ISD's accounts, it's clear they could make it a lot easier for investors.

Which underlying eps number are you referring to?

[papalpower] 07/3/2007 08:01

NJP, I fully understand that, however why the need to highlight the figure ? I mean, every company could do that to make the headlines a little more pretty, however, is there a need to highlight adjusted earnings ?

I have been watching this and reading here for a long time, however the "undelying" EPS in the headlines is one thing I do not agree with.

[iandippie] 07/3/2007 08:00

hear, hear.

[njp] 07/3/2007 07:57

PP

Which rock have you been hiding under for the last few years?

Adjusting out goodwill amortisation and exeptionals is standard practice. In this case, exceptionals actually were a net contributor, but one needs to strip this out to find the running rate.

Interested in how you attempt to make sense of a set of accounts.

[papalpower] 07/3/2007 07:44

Maybe because its only the strugglers who feel the need to highlight an "adjusted" or "underlying" EPS figure.

If they are confident with their progress and books, why the need to try to hype up your "underlying" earnings, fact is, the most important number is Fully Diluted EPS at this moment in time.

Underlying is well, underlying, and a multitude of things could happen in a year such that the underlying trend is not continued, statistical manipulation, so for me, not having it highlighted is fine. Its there to be seen for all and sundry who wish to see it.

[cockneyrebel] 07/3/2007 07:39

yep, the £992K pre-amort number divided by the 61m shares looks like about 1.6p eps adjusted. There's a tax credit in there tho so it all takes some working out. Looks like it's around the 1.1p ?

Not straight fwd results - whey the hell they can't highlight the adjusted eps number like BVM have done in the opening today I don't know - most other co's can. Not very helpful.

£600K underlying pbt they highlight too so with no tax and 61m shares that's about the 1p eps level too.





CR

[njp] 07/3/2007 07:24

I make it 1.73p adjusted earnings per share. Historic p/e around 10. Excludes both amortisation and the exceptional profits.

[gringostar] 07/3/2007 07:05

Financial Highlights


• Turnover up 4% to £8.2m (2005: £7.9m), with recurring revenue up 11% to
£5.1m;
• Adjusted EBITDA up 60% to £1.6m (2005: £1.0m);
• Operating loss of £1.1m (2005: £1.9m);
• Profit before tax, amortisation and non-recurring items of £0.6m (2005:
£nil);
• Reported loss before tax of £0.8m (2005: loss of £2.2m);