Phoenix It Share Discussion Threads

[ukinvestor220] 25/3/2014 16:27

200dma down to 135 now!

[essential] 21/2/2014 08:25

Very quiet on here! Just bought in. The chart looks very strong with RSI over 50 and it looks like the price could hit the 200dma at about 140p

[mpilot] 28/11/2013 08:22

The recovery looks like it's on track after the glitch 18 months ago. It must be that all results underwhelm the market, and with a reduction in the mid-year divi; I suppose the response is not so wild.

Oh well. Will it recover in the coming days???

[mpilot] 28/11/2013 08:14

What the ...

[woodcutter] 28/10/2013 10:27

Aleman

didn't look at the pension info but todays announcement doesn't look too clever so perhaps good job we didn't invest. Seems they are possibly not paying their suppliers responsibly.

woody

[mpilot] 28/10/2013 08:28

Why do I have the impression that this company will keep tripping over its own feet!

Feeling frustrated, that after its share price climb back to acceptability after the accounting issues, we now have a supplier issue!

Ahhh!

[aleman] 05/6/2013 18:38

Woodcutter - nothing to scare me off. Might have even picked some up if I had spotted the results first thing. Would still consider around current prices as seems to be pretty good value.

I was curious about the pension assumptions. In the last year, female life expectancies crept up 0.1 year. Men's life expectancies fell 0.6 years for 65 year-olds and 0.9 years for 40 year-olds. Why are men in PNX pension schemes bucking the trend everywhere else and dying sooner.

[major clanger] 03/6/2013 18:06

PNX upgraded by Investec:

http://www.brokerforecasts.com/news/article/articleId/4606377

[woodcutter] 26/4/2013 13:03

Thanks Aleman

Will have a fresh look. I figure you're right on the accounting irregularities despite getting a clean bill of health from the new auditors it's probably wise to see a full set of accounts first. It does look promising though if it can be turned around.

Will let you know if i buy.

Woody

[aleman] 26/4/2013 09:38

Hi, Woodcutter. I bought FIF at 3.8, I think.

Cashflows look too weak at interims. (See note 17). EBITDA of £15m suggests maybe just shy of £20m for full year. THere is clearly some promise of a recovery judging by higher orders but that is probably not enough cash to maintain the dividend if it doesn't come. I would wait for full-year results to see if stronger orders lead to recovering cashflows. THere is every chance it will but I wouldn't give them the benefit of the doubt after the accounting irregularities.

[woodcutter] 25/4/2013 19:46

just read the TW article posted by twix. EBITDA forecast £33.5m with DEBT/EBITDA covenant at 2.5 times. The latter makes makes it look very risky. Not sure how much room for manoeuvre there is on D&A.

All depends on how you value the debt if you include everything as i have then DEBT/EBITDA is 2.8. If you just include net debt at £81m then ratio is £2.4. This is more sensible but very close to the limit.

With some work on the working capital arrangements coupled with a little belt tightenining, maybe little less capex spend, net debt could begin to be brought down considerably i would have thought.

Risk of a placing possibly too, so some uncertainty.

Woody

post note: i only had depreciation at £6m (taken from interims and not doubled up) at post 252, it should have been £12m so adding a further £6m gives EBITDA £34m in line with forecast

[woodcutter] 25/4/2013 18:03

Aleman/WJCC

This cropped up on one of my TA filters on MACD. Could this be another turnaround like FIF for the patient? The FIF management team had previous highly rated performance something i need to investigate more for PNX.

Despite the potential dividend cut the cash flow looks very interesting at £14.2m with £1.8m interest (excluding pension interest.) The depreciation/capex spend is only £6.6m/£5.2m not that bad. Previous years depreciation/capex almost balanced too so not a common feature.

The forward order book is £284m at end sept, now £322m
The annual contract value is £188m at end Sept, now £194m

This years revenue prediction (digital look) £247m. So far this years revenue £124m so not impossible.

Going forward this looks pretty decent, annual contract value 76% of this year possible revenue (Am i reading that correctly?)

EV £201 (includes all debt)
EBITDA £28m roughly (ptax £15m, I,D&A £13m)
EV/EBITDA 7.2

DEBT £93 (all debt less cash)
EBITDA £28m
DEBT/EBITDA 3.3

debt to ebitda looks high but my estimate of ebitda was conservative (i think). The order book and annual contract values coupled with the cash generated makes it look a reasonable investment to me. As the cashflow pays off the debt as with FIF we'll begin to see improved eps.

The risks are new management team needed in parts of business including additional directors, time spent reorganising accounting functions after restatement/impairment, potential loss of one or more major contracts and therefore annual contract revenue.

On the upside there is a lot of work available and with a bit of restructuring to turn the mid market sector around it could be very profitable going forward.

Appreciate your comments guys.

Aleman can you remember the early FIF DEBT/EBITDA ratio when you first bought in? I think it was about 2.7.

Woody

[mpilot] 12/4/2013 11:54

All very quiet and depressing here.

Anyone else got opinions on this company ??

[aleman] 14/2/2013 08:07

I take your point, although capex this year has been lower. The trouble is that this year's doesn't match depreciation. THe question, given what you have pointed out above, is does it need to? I still think the results would seem very different if working capital bounced back and debt fell £10-20m.

[wjccghcc] 13/2/2013 19:52

Agree about the working capital but IMHO you can't ignore the capex as they say that the majority of last year's £13.9mm was "supporting customer contracts particularly in the more capital intensive areas of business continuity and hosting".

[aleman] 13/2/2013 14:44

£14.2m of operating cashflow covered only £1.8m of interest at the interims so it doesn't seem so bad. £10m was eaten up by working capital but that won't keep repeating and a reversal could dump out a lot of free cashflow. Orders are up so one might hope the operating cashflow would increase again. too. I still think the gloom may have been overdone.

[wjccghcc] 13/2/2013 09:48

2 brokers are predicting a dividend cut. Also the balance sheet is quite weak with debt over 8x FCF so I wouldn't buy these solely on the dividend being maintained.

[aleman] 13/2/2013 08:16

Sounds like eps will be around 15-16p this year and then pick up next year according to the IMS. (Forecasts are around 22p.) Has the gloom been overdone slightly? I'd even guess at a token increase in the final dividend just to emphasise that things are not so bad. Is a 7% yield a bit harsh for a company that looks set to grow again and have a twice covered dividend next year? Maybe. It may need a clean set of accounts and a promising outlook to make any progress so I wouldn't expect much until after the finals.

Edit - Yield up to nearly 8% after the opening dip. Looks more like a possible good buying opportunity than a time to jump ship at 140p.

[major clanger] 31/1/2013 09:38

Downgraded by Panmure Gordon this morning:

[northernlass] 10/10/2012 17:13

'Looks Up For Sale'

PHOENIX IT 'LOOKS UP FOR SALE' AFTER BOSS DEPARTS

Scandal-hit computing firm Phoenix IT Group today abruptly parted ways with its chief executive David Courtley and dumped its auditors Deloitte.

The group is investigating allegations of "accounting irregularities" which first surfaced a month ago and could result in a £14 million hit. "This resignation is not related to the ongoing accounting investigation," insisted Phoenix IT, adding that the scandal is "of as much concern to David as it is to the remainder of the board".

Chairman Peter Bertram steps up to be executive chairman and PricewaterhouseCoopers replaces Deloitte .

Bertram has a reputation as a "fixer" as he turned around IT company Azlan a decade ago. George O'Connor, analyst at Panmure Gordon, said Bertram's appointment "indicates to us that Phoenix IT is now for sale. There has long been a community of buyers for IT infrastructure service companies."

Courtley joined in August 2011 and earned a base salary of £375,000 plus benefits but Phoenix IT did not say if he would receive a pay off. He is entitled to 12 months' notice.

Source:


P.S.
Here's some links about SCLP, one of the hottest stocks at the moment:

[bulltradept] 03/9/2012 21:24

I'm leaving it for 20 days and then coming back to it, by then the dust should have settled and you never know perhaps all issues will be out and known.