Share Name Share Symbol Market Type Share ISIN Share Description
Litcomp LSE:LIN London Ordinary Share GB00B0ZQ8D12
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  +0.00p +0.00% 35.00p 0.00p 0.00p - - - 0 05:00:10
Industry Sector Turnover (m) Profit (m) EPS - Basic PE Ratio Market Cap (m)
Nonlife Insurance 0.0 0.8 11.7 3.0 2.23

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Date Time Title Posts
29/5/201020:23Litcomp. Highly profitable niche insurer.513.00
22/4/200911:09LITCOMP - PE less than 2, 3 million in cash, market cap 2million!!!!!41.00
13/6/200813:34Litcomp....too good to be true ?...maybe not !133.00
16/4/200618:01Lin Liangren: morecambe bay scapegoat31.00

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egoi: When they said in September: 'The Board of Litcomp notes the recent rise in the Company's share price and announces that the Company is in advanced discussions with a potential offeror regarding a possible offer for the Company at 33 pence per share in cash..... This anouncement is being made without the approval of the potential offeror.' Nige's phone number busy was it lol?
sham71: Something fishy going on here. LIN did not release results on time because the share price would have galloped away. The 33p offer would have then looked derisory. Now they have successfully put an effective cap on the share price. The question is, are they working in shareholder interests? It would appear NO! Whose behind the offer? That will reveal all.
abc125: Changed Nomad straight after RNS re share price movement, is that usual? Maybe LIN were reluctantly forced to put out a statement by the previous nomad. As regards to Wray being behind the offer, I just don't see it. I don't know a great deal about him, but doesn't he normally invest in listed companies? edit: he bought a shedload - 440k odd - at above 60p in 2007.
foodcritic: LitComp Plc ("LitComp" or the "Company") Statement Re: Share Price Movement The Board of Litcomp notes the recent rise in the Company's share price and announces that the Company is in advanced discussions with a potential offeror regarding a possible offer for the Company at 33 pence per share in cash. No final agreement has been reached and so there can be no certainty as to whether an offer for the Company will or will not be made. This anouncement is being made without the approval of the potential offeror. A further announcement will be made in due course.
glasshalfull: Sifting through a multitude of emails received while away & came across the GE&CR monthly review dated 1st July. My estimates following the trading update and which I posted over a week ago are bang in line with the commentary from GE&CR. LitComp* The company provided a trading update on 23rd June stating that although sales revenues were in line with expectations, a decision has been taken to increase provision reserves. As a result pre-tax profit expectations are running behind our earlier forecast and we have edged back our expectations by some £0.2 million ahead of the preliminary announcement due in August. However, we continue to believe that the share price fails to reflect the profitability and cash generation of this business and our stance remains buy. LitComp* EPIC: LIN Share Price: 29p Market: AIM Market Cap: £1.80 million Estimate Year to 31st Mar 2009 Sales (£ million) £32.5m Pre-tax Profit (£ million) £1.6m Earnings Per Share (p) [fully diluted] 7.64p Price Earnings Ratio 3.8 Dividend Per Share (p) 0.0 Dividend Yield (%) 0.0 Reiteration of my earlier post; Glasshalfull - 24 Jun'09 - 07:52 - 204 of 220 edit Year to 31st March Sales 2007A - £6.23m 2008A - £11.29m 2009E - £25m Pre-tax Profit 2007A - £0.83m 2008A - £1.11m 2009E - £1.8m (alter this by 10%-15% to account for "slightly comment) = £1.53m - £1.62m ie. 38% - 46% growth over 2008. So, looks like we will be close to 45% growth y-o-y. Not bad considering the current macro climate. Also, now had a chance to reflect on your post above abc. I think I'm coming round more to your line of thinking and scenario you paint in Option 2. Maintains a high cash balance and allows for a decent EPS progression. As egoi has mentioned in previous posts, I think that each of the scenarios is potentially a win-win for the shareholders and company and, as you say, if resolution of the bond issue materilises in August then I would anticipate that its resolution will provide a fillip to the share price with cessation of uncertainty over the issue. Regards, GHF
glasshalfull: Trading during the 12 months ended 31st March 2009 remained strong. However the Company has made prudent reserves against certain claims and other risks arising during the period. As a result the Company believes that despite revenues for the period being broadly in line with management expectations, profits were slightly below market and management expectations. Commenting, Chairman, Doug Smith said, "The Directors are pleased that the Elite business has continued to grow profitably, but in the present economic circumstances it is felt that it is appropriate to adopt more conservative reserving policies, particularly against claims." The important fact is that the business is still performing / growing...phew! It would have been lovely to get an exceeds expectation statement but in the current climate and with share price more than halved during the last 2 years despite Elite's performance I believe a fall off in business was built into the share price. Trading remained strong and business is continuing to trade profitably after year end. As I say, I can live with profits slightly below market expectations when the company was priced for Armageddon. I believe that 8.9p EPS was factored in so like the posters above I would estimate slightly as 7.5p-8p EPS expectation reasonable I would say. And, the company has indicated that revenues were broadly in line with expectations (usually slightly weaker in my book) and the slight profit shortfall is down to conservative reserving policies which again is something I can live with. The main thing since Dec 2008 announcement was to get a feel for whether Elite was still performing / growing. Thankfully this is still the case and like most other companies in all sectors the current economic environment would appear to have affected the company, albeit marginally. Been nice to get an indication of cash balance and how Medico had performed in the period but nothing in the statement has set alarm bells ringing. I plan to maintain my holding but if the opportunity avails itself to pick up stock cheaply it would be churlish to refuse. Still think this is a long term winner once bond issue resolved and economy starts to recover. At 29p share price my implied EPS would equate to a PER of 3.6 - 3.8 as a rough guesstimate. Happy for any additional comment or correction. My take. Regards, GHF
glasshalfull: Here's hoping abc :-) I'm now keeping my powder dry until release of the results and we can better determine if Elite is continuing it's fantastic growth; hopefully improvement in Medico; company still maintaining large amount of net cash and update on the corporate bond issue which I feel is the main reason that's holding the share price back. egoi's post of the 3 scenarios was interesting. Each of them positive for the company and share price, but if pushed I'd plump for a low conversion if Elite was maintaining it's high growth rates and generating some cash as I feel that any medium term investment would see several multiples of the current share price. 100% conversion on the other hand transforms the company into a cash rich vehicle potentially better placed to exploit transforming acquisitions in the current distressed market. As egoi pointed out, hard to see anything other than a win-win irrespective of how the corporate bond issue resolves, of course with the caveat that trading is continuing apace. Regards, GHF
abc125: Just to add, the loan notes have been a drag on the share price. Four years ago, £3.6m was raised, paying a coupon of 10% per annum. It is commendable that LIN have serviced interest payments of £360k a year from cashflow/profits without hiccup. Presently, there is only £2.6m outstanding. £1m of loan stock has been either redeemed or converted. My hunch is that LIN will start paying a divi within the next year, and on this basis, bondholders will most likely convert to shares. The weaker hands were taken out in November last year. £0.5m was repaid. It was a good sign that more bond holders did not ask for their cash back, at the height of the credit crunch. Each £1 loan note converts into 3.3 ordinary shares. If LIN earn 12p EPS (fully diluted) in the FY March 2010, a 3p divi say, would be manageable. Importantly though, a 3p divi would equate to a 10% yield for convertees, the same as they are getting now. So, on that basis, why would they not convert? Even if say 25% don't convert, LIN can quite easily fund any repayments. Indeed, it would be earnings enhancing if there is less dilution. The only fly in the ointment is if trading has fallen off at Elite. But I don't think that is the case. In the last few months, Elite have taken on a divisional MD (who started in April), and new reinssurannce treaties have been signed, which could potentially double turnover, yet again, in FY 2010 You don't do that if things have gone pear shaped. Worth noting that Elite has been growing revenue exponentially: March 2007 - £6m March 2008 - £11m March 2009 - £25m (GE&CR estimate) March 2010 - £50m (my estimate !)
glennborthwick: Litcomp Plc* – Interim Results: Maintain Buy Recommendation with 165p Target Price Key Data EPIC LIN Share Price 35.5p Spread 33p – 38p Total no of shares 6.0 million (14.6 million fully diluted) Market Cap £2.1 million (£5.2 million fully diluted) 12 Month Range 30.5p – 47.5p Net Cash £0.25 million NMS 500 Market AIM Website www.litcompplc Sector Specialty Finance Contact Jason Smart, CEO +44 (0)14 7656 0113 Litcomp, the provider of After the Event (ATE) insurance, medico-legal reports and litigation services, has today announced strong interim results, driven by an impressive performance from its After The Event (ATE) insurance business, Elite. In the 6 months to September 30th 2008 net profit before tax rose by 140% to £0.88 million, earnings per share doubled 100% to 9.2p and at the period end the company had net cash of £250,000. Elite insurance produced further gross premium income and profit before tax growth with the former up 248% £14.5 million and the latter up by 91% to £1.48 million. The results show that the company expanded its business at the cost of margins, but that this was justified by an overall lower claims risk. New reinsurance treaties were negotiated from 1st of April and have increased the percentage of gross premium income retained which had a positive effect on some margins but increased Elite's exposure to claim liabilities. The company intends to use re-insurance and co-insurance to increase its underwriting capacity and cover new lines of business. Tighter capital and credit markets have constrained litigation funding and consequently up front premiums. While Elite's major commercial business pipeline remains robust, claimants are delaying litigation because of a lack of funding. The company expects this situation to ease in the New Year as new litigation funders have entered the market providing the finance to proceed with litigation. The Medico-Legal Reporting business saw revenue grow by 8% over the corresponding 2007 period to £0.87 million, but failed to carry this growth through to the bottom line with the loss before tax up by 41% to £0.6 million. While Medico only comprises 5.7% of the group's turnover, Litcomp's directors are confident new business initiatives will continue to generate revenue growth. Litcomp's remaining convertible note holders agreed at a special general meeting held on the 10th of December to extend their redemption until the 31st of October 2009. £2,615,700 worth of 10% Secured Convertible Loan Notes remain on issue and the extension provides more time for the company to refinance the notes in the new year. With each £1 in loan notes convertible into 3.3 ordinary shares, there is a potential dilution of 8,631,810 ordinary shares. The increased revenue and profit in a difficult market shows that Litcomp has a robust and growing business. While the margins at profit driver Elite have contracted, the fact that profitable new business continues to be written is commendable. We are mindful of the potential dilution effect the conversion of the loan notes will bring, but were this to occur the majority of the company's debt would be wiped out and net cash would benefit at the expense of earnings per share. Despite this the company maintains a net cash position and a strong earnings base and with our 2009 and 2010 forecasts unchanged we continue to recommend the stock a buy with a target price of 165p. Forecast Table Year to 31st March Sales (£ Million) Pre-tax Profit (£ Million) Earnings Per Share (p) Fully Diluted EPS (p) Price Earnings Ratio Dividends Per Share (p) Dividend Yield (%) 2007A 6.23 0.83 9.9 4.1 3.6 0 0.0 2008A 11.29 1.11 13.2 5.4 2.7 0 0.0 2009E 25.0 1.80 21.6 8.9 1.6 0 0.0 2010E 30.0 3.35 40.1 16.5 0.9 0 0.0 *Litcomp Plc is a corporate client of Bishopsgate Communications which is owned by RSH, the ultimate owner of GE&CR. This research note cannot be regarded as impartial as GE&CR has been commissioned to produce it by Litcomp Plc* The information in this document has been obtained from sources believed to be reliable, but cannot be guaranteed. Growth Equities & Company Research is owned by Ltd which is commissioned by companies to produce research material under the Growth Equities & Company Research label. However the estimates and content of the reports are, in all cases, those of Ltd not of the companies concerned.
abc125: GE&CR said in their July note last year when the share price was 67p: "It is our assumption that, notwithstanding the attractions of a 10% coupon, at some stage the potential for significant capital gains to be realized will push all loan note holders to convert their position into ordinary shares.(the loan note term ends in october 08) " - With the share price just above the conversion price of 30p, most holders will opt for the cash instead. I can't see bond holders accepting ordinary shares and selling at 42p on the open market as this would lead the share price to tank. It will be interesting to see how Litcomp tackle this because LIN will need to hold onto their cash reserves for future growth. They may ask the bond holders to extend the term if the share price does not appreciate by october.
Litcomp share price data is direct from the London Stock Exchange
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