Office2office Share Discussion Threads

[daz] 27/11/2013 13:02

Another big trade of 100,000 gone through, which may have been delayed from yesterday. Perhaps some stake building going on.

[simon gordon] 26/11/2013 15:27

Daz,

No, another ADVFN poster made contact with their PR company and was informed that the company was willing to chat after the January trading update.

You could try direct, I can't find an email address for him so as to make first contact, decided to leave it until after the January update.

Maybe flogging furniture will raise margins!?

[daz] 26/11/2013 15:03

Quite a few buys going through this afternoon pushing up the price.

Simon, did you speak to the FD? I had also been intending to do so, I wanted to ask about the extent of the cost cutting and the margins being targeted in the medium term.
The price to sales ratio here is one of the best on the Market and if OFF can raise margins, even by a little bit then the effect on the bottom line could be dramatic even without revenue growth.

[gucci] 26/11/2013 10:35

starting to tick up

[professor x] 24/11/2013 19:31

Thanks Simon.
I sold half of my holding on the spike after the IMS. I would like to keep a foot in the door just incase there is an improvement in trading as I feel the upside in 2014 could be huge.

[simon gordon] 24/11/2013 18:24

Prof,

I sold 75% of my holding before the IMS because the price was falling and I thought office supplies could be having a bad 2nd half. The other 25% I sold last week.

I'm now pondering whether to buy again or walk away.

The CFO's history is keeping me interested in the story, I reckon he has been brought in to re-engineer the group and unlock value. You'd think the major shareholders would be on the trumpet demanding action. Office Supplies needs to go to someone who wants more scale and can cut costs.

I'm aiming to speak to the CFO and get a vibe of what his strategy is.

[she-ra] 24/11/2013 18:14

Just hope they don't go for a fundraising. Your scenario would be better Simon.

[professor x] 24/11/2013 17:48

Are you still holding some Simon, or did you sell the lot after the recent IMS?

[simon gordon] 24/11/2013 16:39

Any thoughts on how much the Office Supplies (Managed Procurment) division would be worth if they sold it off:

2010
T/O - 145.7m
EBITA - 16.4m

2011
T/O - 131m
EBITA - 13.5m

2012
T/O - 147.7m
EBITA - 11.2m

2013 must be down on 2012, have to wait until March 2014 to find by how much.

2014 could be stable with the cost cuts, maybe at 9m?


Banner Division (Business Critical Services):

2010
T/O - 62m
EBITA - 5.4m

2011
T/O - 62.5m
EBITA - 6.6m

2012
T/O - 79.6m
EBITA - 6.98m

2013 will see profit held back by contract set up costs, 2014 should show a good improvement.

How much would this division be worth as a separate entity with no/low debt? Central costs for OFF were 9.5m in 2012, how much would they be for a separate Banner division?

[affc21] 15/11/2013 19:43

Simon, your most welcome

[simon gordon] 15/11/2013 15:41

affc21,

Thanks for the broker note.

[she-ra] 15/11/2013 15:15

Its just the share price was over £2 a few years ago with a worse balance sheet.

[affc21] 15/11/2013 15:14

GECR
Office 2 Office Trading in line report:




I'm not invested here, thought it may be of interest to some on this board.

[aishah] 15/11/2013 15:02

she-ra. I have no connection with Paul Scott. Just reporting his view for all to see. You make your own judgements and decide what's best for you.

[daz] 15/11/2013 14:31

With respect to Paul, I don't think that's the complete picture.

I don't think anyone is expecting the company to pay a dividend, debt repayment and investment in Business Critical services is going to be the priority for some years to come.

The company managed to repay borrowings through cash generation, the interims showed that the company generated about £5.8m in cash, of which £3m was used to repay borrowings, following on from the £2.5m repayed the previous year, so I think to say the company are completely at the mercy of the banks is overplaying it somewhat, as with the repayment trend in place they do have some negotiating position.

The company did manage to grow revenues at the interim stage, so if this trend continues, then with the further cost saving initiative announced this should allow further debt repayments.
The company's directors have also bought meaningful amounts recently - 300k, which has to be some sign of confidence in the strategy.

Clearly the shares are not without risk but the rating is putting a very low probability of the company pulling itself around.

[she-ra] 15/11/2013 14:14

AISHAH - I think Paulypilot said something similar about RM Education in the low 60's.Its now 117p.

Paul Scott seems to ignore that Office2Office enjoys a dominant market position in this sector and could be of strategic importance to companies want to get into this market.OfficeTeam carries much more debt and I don't see that raising cash.

But maybe Paul Scott has seen two new shareholders on the register and sees that Office2Office might be being stalked and wants to get in. And maybe you are Paul Scott under this alias? I don't know. I only say that because you have been mentioning his fund a few times on the message boards.

[simon gordon] 15/11/2013 13:55

Ideally they would sell off the Office Supplies division, do a smallish equity raise and become Banner Plc.

2012

T/0 - 79.7m

Adjusted EBITA - 6.9m

And it is a growth company with high quality customers.

[aishah] 15/11/2013 13:49

Office supplies company Office2office (LON:OFF) has issued an IMS which says they are trading in line with expectations. - shows very attractive valuation figures - a forward PER of just 3.2, and a dividend yield of 17%. So obviously I had to check that out! As always, such figures are too good to be true, and in this case the interim dividend was passed, with no decision yet made on whether there will be any final dividend.

However, that pales into insignificance when you see how bad the Balance Sheet is here - it's one of the worst I've seen in a while. Net assets are £17.3m, but that includes £57.4m in intangibles. Write those off, and the net tangible asset value is negative to the tune of £40m! Sorry, but that's just horrendous.

Net debt was reduced to £23.3m at the last reported Balance Sheet date of 30 Jun 2013. Bear in mind that the company only made £2.7m operating profit last year, and interest on debt consumed most of that, at £2.1m. So really this company is completely at the mercy of their Bank, and should therefore be regarded as very high risk.

It looks to me as if they are stretching their trade creditors quite hard too, so all in all this is a company in a highly precarious situation. There is no getting away from the simple fact that they need to do an equity fundraising to fix their Balance Sheet.

- See more at:

[dewtrader] 15/11/2013 09:36

Level 2 looks very weak one on the bid , all the other MMS offering stock

[allstar4eva] 15/11/2013 09:32

Some tend to get excited when the share price rises a few pence...

[dewtrader] 15/11/2013 09:21

sorry have changed to flatlining , looking dead

[tipjunkie] 15/11/2013 09:07

hardly screaming
don't be so hysterical

[dewtrader] 15/11/2013 08:48

flatlining now

[dewtrader] 15/11/2013 08:42

very welcomem, but these traded at 400p years back