Network Data Share Discussion Threads

[130407] 30/4/2007 11:36

someone got mugged on their 9k sell.

[its the oxman] 30/4/2007 09:51

must admit i have some sympathy with the argument - hips don't add that much to the house buying process - but also don't see the govt back tracking now so i guess down at these levels its a good opportunity should it all go ahead as planned, which remains a bet i'm happy to play. just annoyed i bought too soon

[tole] 30/4/2007 09:43

Believe the Lords report could be out tommorrow...so suppose it depends on their review and whether any motion is passed.

[130407] 30/4/2007 09:37

Looks like the uncertainty around HIPS is driving it down without volume.

The next 14 days will know one way or another what happens.

[masurenguy] 30/4/2007 09:36

It's an MM manipulated illiquid share. It went up by 50% in three days on no news and small volumes and it has come down in the same way. This mornings 8% drop follows one sell of 2000 shares.

[its the oxman] 30/4/2007 09:31

oh dear - can anyone explain this collapse/change in sentiment beyond it being a small illiquid share ?

[masurenguy] 29/4/2007 10:47

Well the big question is what will be the impact of HIPS both on the property services sector as a whole and also specifically on NDH !

We can only wait and see - nobody can really answer that question at this stage. However what one can say is that the future prospects for NDH are very much linked to their success in exploiting the new HIPS market. They have borrowed money to fund Hipstar (circa £1.4m) and now they need to get a return on that investment.

If you add back the development cost of Hipstar and the AIM listing into the 2006 P & L then the PAT would have been circa £1.2m. This would give you an historic PE of circa 15 at Fridays closing share price. Thats not particularly expensive but it is not cheap either especially for a company of this size that has borrowings over £3m.

Future valuation is very much dependent upon the success of Hipstar - if it achieves its objectives (as in the very bullish £55m sales forecast for 2007) then you could see the share price at 100p. If it doesn't, as a small and VERY illiquid AIM fledgling (remember Griffiths still holds 79%), then we could see it remain in a 50p - 70p range for some time.

[130407] 29/4/2007 10:27

Masure

whats your view on NDH short and medium term?

[masurenguy] 29/4/2007 10:16

NDH has had a very healthy growth in its mortgage and insurance business and I concur with your figures of pretax profits without the cost of listing and the investment in Hipstar. This is their core business since Surveying is still in an early stage of growth and just breaking even while HIPS has not yet started.

However brokers growth projections of an incremental 90% sales increase of £26m in 2007 is based primarily on the additional sales projected from Hipstar. If mortgage/insurance increases by 20% (£6m) and Surveying increases by 100% (£2m) that leaves a balance of £18m to come from Hipstar (£1.5m per month).

If the market slows because of higher interest rates and HIPS also slows the number of transactions then this will not help growth in mortgage/insurance business (both volume driven) or HIPS income. Those are the risks that I previously highlighted in response to post #128.

[nurdin] 29/4/2007 10:01

Nothing new there 130...the Government is committed to HIPS and is unlikely to delay, as it serves no purpose imo.

[talha2] 29/4/2007 10:00

130407

they were mentioning on Working Lunch (Friday) that this coming week Conservatives and Liberals will try to work towards delaying it.

I could not remember in the Commons or the House of Lords

[130407] 29/4/2007 09:54

growing implicit opposition to HIPS. if its delayed it could be probs all around.

[nurdin] 29/4/2007 09:52

You telling only half the story Measureguy and, as expected, scaremongering has started!Its natural that right wing newspapers like the Torygraph will do anything to tow the Tory line!

-First of all, look at the core business.Network Data Handling is one of the fastest growing mortgage network in the country and last year recorded 29% growth in revenues
-PBT came in at £.22m ,INCLUDING HIPS investment costs of £1.4m,higher tax charges and the exceptional listing costs.Without these costs NDH would have recorded PBT of around £1.7-£1.8m
-the core business is generating sufficent cash to cover interest charges by a healthy 4x
-leaving HIPSTAR aside for the moment,it is reasonable to assume that the core business will lift profits from the mortgaging business by another 20% (on a conservative estimate) giving a PBT of (from the core business)of say £2m
-for 07 brokers are forecasting PBT of £2.4m which suggests to me that they are allowing only £0.4m pbt from the HIPS business this year
- I dont know where you get your sums from but would be interested to know how you arrive at 'HIPSTAR building income at a rate of £1.5m per month'
- I give full credit to the management for seizing the opportunity to invest in a market that is expected to be worth over a £bn over the coming years.Borrowing of £3m to address this market is a small fry in relation the reward NDH could rip

[masurenguy] 29/4/2007 08:26

Well NDH have increased their gearing and invested heavily in building a facility to exploit the HIPs market. Current borrowings are above £3m, not insignificant for a company with sales of £29m and net assets of circa £1.1m.

Interest cover in the year just ended was just 1.9 so NDH need to be generating a significant revenue income from HIPS quite quickly to start recouping their investment. If HIPS does start to clog up house sales then this will not be good news for NDH since it would reduce their projected HIPS revenue stream and mortgage income. Continuity of survey business would not offset this since this currently represents less than 10% of their sales is not yet contributing any profit.

The current Edison forecast envisages a 90% increase in sales this year, from £29m to £55m, which is a very ambitous projection and largely dependent upon a very quick and substantial inflow of business from their new Hipstar division, so there is no way that any slowdown in the processing of property sales, due to the advent of HIPS, would "benefit" NDH.

In order to recoup their investment, service their debt costs and achieve broker targets, NDH need to hit the ground running with Hipstar and start building an income stream up to the level of around £1.5m a month in order to achieve current broker forecasts for the current year. Their Q1 'trading in line with expectations' update was based upon 'the volume of house transactions driving the business' and has no bearing on HIPS since this will not be a factor until the second half of the year.

NDH still have all to play for and have made a substantial investment in HIPS in order to rapidly expand their business going forward but the picture will not be so rosy in the short term if HIPS does succeed in 'clogging up' house sales.

[tipsytoad] 28/4/2007 10:15

felix

if hips clogs up the house sales and this is a real senario

then as I see it, it will benefit NDH as it will

(a) insure a continuity of work for HIPS surveyors

(b) give NDH the continued opportunity to keep increasing the HIPS surveyors so expanding into a growing area

mortgages will always be in demand (more people coming into the country needing more homes etc) many investors are going into the 'buy to let' market, as unfortunately the rich/poor divide is growing

Personally I would like to see NDH offer a package whereby a HIPS pack could also offer the purchasers a mortgage, (subject to the usual conditions) as to make the sale easier and more advantageous to all parties. buyer, seller and NDH

[aerotus] 27/4/2007 18:48

What a ride!

[masurenguy] 27/4/2007 14:07

Share price went up 50%, from 60p at last Thursdays close to a high of 90p on Tuesday, on no news whatsoever. When this happens, in just 3 sessions, it is usually traders jumping in on some rumour, driving up the price amd then quickly taking profits as they move on, leaving the share to fall back just as sharply.

[tipsytoad] 27/4/2007 13:58

me neither
can only put it down to the share illiquidity
and some small time selling

earlier on this week there were a few T trades which looked like buys
(hard to be completely sure)

so did not expect this drop

the good news is it could go up just as quick
as soon as people realise its potential imho

[mikeyboy5] 27/4/2007 13:48

Can someone please explain to me why this share is still going down when we had such positive news this morning, the future looks positive with HIPS etc, brokers give it a target of 99p.... I am on board and regard it as a good medium to long term investment but I jsut don't undrstand the mechanics of the drop in the share price.

[masurenguy] 27/4/2007 10:15

The problem with this share is that Griffths owns almost 80% so there is minimal liquidity. This shot up from 55p on very small volumes over the past couple of weeks and the sharp fallback over the past few days has also been on extremely thin volumes.

[tipsytoad] 27/4/2007 09:18

good solid long play

no. of surveys carried out 140% higher this year than 2006 first quarter

hips comes in 1st June - as we know

houses on the market before this date
do not need hips,
however from early next year
every single house/flat etc
will have to have a hips pack
regardless of whether they are on the market or not


although in a hips pack a surveyors report is not now mandatory
(this has been watered down)
people who want to seriously sell their property will get one
and the properties that don't have one will take longer to sell
imho

this is why I call it a solid investment