Inspicio Share Discussion Threads

[edcrane] 21/9/2007 08:33

Here's some comment from Daniel Stewart

Inspicio 1H results look broadly consistent with our full year expectations. Inspectorate organic sales growth was strong at 20% (offering some upside against our 15% assumption for the full year), although in contrast the Inspectorate operating margin looks slightly (20bp) light. However, management continue to expect to achieve their 8% margin target for this business in 2H.
We recently upgraded to BUY and like the stock for exposure to a high growth, high margin and consolidating industry - although we will review our price target today which we have not adjusted since before recent market falls - and see moderate upside. The current PE is 14.6x 08E, a 16% discount to Intertek on 17.4x - this discount is relatively high compared to the historic average.
Sales were £100.7m (which had been detailed in the trading update), +49%
EBITA £6.2m +178%
Adjusted EPS 2.5p (+79%)
Inspectorate operating margin was 5.2% in 1H. We forecast 5.4% in 1H and 8.0% in 2H. Critically, management continue to anticipate an 8% margin in 2H
For the group, management anticipate further margin progress in 2008 - this is already embedded in consensus expectations. We forecast 9.5% EBITA margin in 08 after an 8% forecast in 07
2 potentially large contracts have been announced - tier 2 soil testing contract for the 2012 olympic sites, and a contract with BHP Billiton to test above 80m tonnes of coal
The impressive Inspectorate organic sales growth performance was boosted by US refineries close to capacity, new labs in St Petersburg, Lagos and Medellin; high metals prices have encouraged more exploration & production-related testing.
There is a net non-recurring cost of £359k - we had assumed nil net cost in 1H, with £0.5m in 2H
Net debt at the period end was £42.6m - making our £40m year end forecast look achievable, although the working capital outflow of £7.5m looks substantial

[jonwig] 21/9/2007 07:45

Yes, looks OK, Honiton.
I find these results quite difficult to analyse, with all the acquisitions.

I bought back in earlier in the week, but fewer shares.

[honiton] 21/9/2007 07:29

in line results..albeit on the upside.

[honiton] 18/9/2007 16:51

um..a bit of a mixed bag

[jonwig] 16/9/2007 16:59

Hi, Honiton.

I must own up that I sold earlier this month - but other stuff, too.
I suppose I'm very dubious about the state of the market for a while, but INP is one I will buy back into in due course.

I may be wrong - it won't be the first time!

[honiton] 16/9/2007 16:08

keep the -15% stop loss off high.

[masurenguy] 07/9/2007 15:26

Interims due two weeks today !

[jonwig] 03/9/2007 07:15

ITRK produced some sound figures today, though weaker dollar had a big impact.
Outlook:

"The market for our services continues to expand and we expect a strong
performance in the second half of the year."

[honiton] 29/8/2007 12:51

just market noise. at the moment the market is a voting machine and not a weighing one.

[masurenguy] 28/8/2007 16:52

Wonder what prompted todays post 4.00pm drop, with only 10% of the days transactions after that time !

[jonwig] 16/8/2007 12:06

Recent broker comment:



And today ...

STOCKWATCH Inspicio initiated as 'buy' at Citigroup, target 190p

LONDON (Thomson Financial) - Citigroup has initiated coverage in testing and inspection group Inspicio with a 'buy' rating and 190 pence target.

The broker said Inspicio's 2008 post-tax return on capital employed of 8 pct, coupled with current double-digit organic growth, suggests management is meeting the cost of capital on deals without disrupting underlying performance.

It said three small targeted bolt-on acquisitions should be completed during the second half of 2007, and at some point it would anticipate additional larger deals.

Citigroup said Inspicios current 20-30 pct discount to SGS/Intertek looks too high given stronger organic growth and robust deal execution. Adding that, as Inspicios scale builds, and managements track record develops, it expects this rating gap to narrow.

[jonwig] 16/8/2007 11:58

update of broker views:

13-Aug-07 Altium Cap Buy 162.25p 215.00p - Reiteration
13-Aug-07 Daniel Stewart Hold 162.25p 190.00p - Reiteration
05-Jun-07 Daniel Stewart Hold 185.00p 190.00p - Reiteration
15-May-07 Altium Capital Buy 176.00p 200.00p - Reiteration
15-May-07 Daniel Stewart Hold 176.00p 190.00p - Reiteration
11-May-07 Daniel Stewart Hold 175.00p 190.00p - DownGrade
24-Apr-07 Daniel Stewart Hold 170.75p 180.00p - Reiteration
10-Apr-07 Daniel Stewart Buy 159.00p 180.00p - Reiteration

[jonwig] 26/6/2007 09:18

Hi, Honiton.

Well, INP are forecast to earn 7.5p (P/E 23.1) to end-2007 and 10.8p (P/E 16.1) to end-2008.

For ITRK, currently on a historic P/E of 19, the corresponding forecasts are 48.2p (P/E 20.0) and 55.2p (P/E 17.4).

So, allowing for 2007 as a bedding-down year for INP, there should be some upside to 210p.
Of course, that leaves out growth through further acquisition and the synergies which go with that and, of course, the chance that we might get bought out ourselves.
If there were to be a bid for ITRK (a more established company), it might be in that one's interest to make a defensive bid for us, perhaps.

[honiton] 26/6/2007 09:03

i didn't expect anything different..

jonwig - what price do you expect in a year's time?

[jonwig] 26/6/2007 07:10

... and a confident AGM Statement from ours today:

[jonwig] 25/6/2007 07:17

A confident trading statement from ITRK this morning:

[jonwig] 19/6/2007 15:45

A new holder, with plenty:

The Company received notification on 18 June 2007 that Berenberg Bank has an
interest in 2,740,000 Ordinary Shares, representing approximately 3.1 per cent.
of the Company's issued share capital.

Germany's oldest private bank!

[petersmith6] 16/6/2007 12:23

INP taken over by SGS?now that would be funny.i work for scientifics who used to be owned by SGS..i could go full circle...joy .better practis saying Société Générale de Surveillance ...we got told of if we didnt say it properly.

[honiton] 13/6/2007 16:38

I don't know what to make of institutional share holder changes. Some ofit is driven by changes in manager or style or just their overall stanceand exposure to that sector. I have a holding in Rothschild who have a holding in Cycladic Capital who have a holding in INP. They are pretty switched on bunnies so happy to keep with for the moment.

Gradually buying into INP at prices ranging from 119,123 and 176. Expect AGM trading statement to be positive and for INP to either grow or be taken over by the likes of SGS.

Hopeful for maiden dividend but might be a year or so off.

[jonwig] 13/6/2007 16:24

J O Hambro have been reducing:

from 4,736,806 to 4,236,806 (now 4.80%)

[jonwig] 13/6/2007 15:55

Sorry for being obtuse, Honiton.
We can see now why INP are keen to beef up their size, in the face of consolidation activity in the sector.

Only an addition of 100,000 shares, but "every little helps" as your friend Tesco says:

The Company received notification on 12 June 2007 that Polar Capital Partners
has an interest in 2,718,600 Ordinary Shares, representing approximately 3.08
per cent. of the Company's issued share capital. The Ordinary Shares are
registered under Goldman Sachs Intl Nominees.

[honiton] 13/6/2007 12:53

news item as follows. got to be positive for companies/sectors.

ZURICH (Thomson Financial) - Swiss goods inspection group SGS SA still
expects sales to reach 5 bln sfr next year and an organic growth rate of 5 pct
for the current business year, chief executive Chris Kirk said.
In an interview with Swiss finance newspaper Handelszeitung, Kirk said that
the company is no longer in talks with erstwhile takeover target Bureau Veritas
but did not rule out that a major merger would happen later this year.
Kirk also said that the company is looking at smaller as well as larger
acquisitions but that it faces stiff competition from private equity companies.

[jonwig] 13/6/2007 12:31

I'm not with you, Honiton!!

[honiton] 13/6/2007 12:20

With SGS announcing end of talks and with stated intention to acquire could be on the horizon..