Share Name Share Symbol Market Type Share ISIN Share Description
Watermark Group LSE:WMK London Ordinary Share GB0009422097 ORD 1P
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  +0.00p +0.00% 5.13p 0.00p 0.00p - - - 0 05:00:10
Industry Sector Turnover (m) Profit (m) EPS - Basic PE Ratio Market Cap (m)
105.8 -7.2 -69.5 - 0.00

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Date Time Title Posts
04/9/200812:20*** Watermark Group ***132.00
08/4/200814:24Watermark - "The Recovery" HSBC up holding to 16%70.00
09/2/200715:06Watermark - One Stop Shop for Airlines1,511.00
02/2/200715:56Watermark heading for 20p40.00
29/7/200615:20New Date! WMK's CEO John Caulcutt - Wed 12th May, 11am10.00

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Watermark (WMK) Top Chat Posts

run rabbit: Well I was going to have a browse over the website tonight (Can't watch X-Factor) but they are revamping it.Wonder if they can do the same with the share price.
infoblast: From a previous post and figures do seem about right Whether there is value here will depend on future trading. The company has a turnover approaching £100M. If it can make 5% and attract a P/E of 10 then its value will be £35M. Divide by diluted shares (post conversion) of 107M gives a share price of 33p. If they can make 10% and attract a P/E of 12 then its 78p. Also from ADVFNs Financials page; Net Tangible Asset Value PS * 12.23 Net Asset Value PS 87.17
run rabbit: Well noticed a few late buys reported on the trades page from Friday which should set things up for a nice move when we resume trading tomorrow.Not much talk about the 18M contract with Air Canada and a few more like that will see this back into the 50p region. This snippet,from the last results,show what the group has been able to achieve Financial Highlights * Turnover up 17.3% to #93.96 million (2005: #80.09 million) * Services division's revenue increases to #60.09 million (2005: #43.83 million) * Improvement in gross margin to 38.68%, despite negative impact of weaker US Dollar * Significant exceptional restructuring costs incurred and bad debt provisions * Pre-exceptional profits before tax are #1.99 million in line with expectations (2005: #6.34 million) Refinancing * Underwritten placing and offer of #8 million secured fixed rate convertible bonds to reduce and restructure debt and support growth, subject to EGM approval * New banking facilities, comprising #6.5m two year term loan and #1.5m overdraft Operational Highlights * Acquisition of ICL from Japan Airlines Corporation in April 2006 * ICL successfully relocated to the Encompass Centre, Heathrow * Air New Zealand catering contract commenced in August 2006 * Supply chain management contract secured with Air Canada, confirmed in February 2007 I do not forsee this going up in a straight line but with confirmation of the turnaround in the interims a significant rise in the share price is certainly bound to be on the cards.
stemis: All our holdings are small, now! The bond issue is basically a deep discounted placing in drag for institutions. Bond holders will receive 62,598,450 shares in 2010 for putting up £8M now. That's 12.8p per share (with the added security of a second charge until 2010). They've managed to exclude small PI's by setting a £35,000 minimum. Existing shareholders will end up with just 41.6% of the company. Even the advisors have taken their cut with £1.2M of the £8M convertible funds going to them. The initial feeling is one of having been stuffed. However the question is whether its all in the price. Whether there is value here will depend on future trading. The company has a turnover approaching £100M. If it can make 5% and attract a P/E of 10 then its value will be £35M. Divide by diluted shares (post conversion) of 107M gives a share price of 33p. If they can make 10% and attract a P/E of 12 then its 78p. What the refinancing has done is remove the uncertainty over the survival of the company and got the bank off its back, which is why the price is moving upwards. Its all about delivery from here on in. Previous management have paid the price with their jobs (although no doubt will be well compensated). New management will probably get a raft of options at around the current price.
stemis: The year end position is pretty well known - a loss before tax of £2.2M and net debt of £8M. Current market capitalisation is £10M. To support an enterprise value of £18M at, say, 10 x earnings would require an EBIT of £2.6M. That's not too far away from current levels [forecast PBT = 1.4 - 1.9M + interest of say £0.8m), despite the impact of non exceptional restructuring and reorganisation costs. Watermark don't seem to have a problem getting business (as evidenced by the Air Canada contract) although making money out of it is a different matter. Their annualised turnover must be over £100M now. At one time they made an EBIT margin of 10%. Even half of that would see a significant share price increase from here. Like most I expect (hope) that Watermark will have taken the opportunity to clear the decks. Past management clearly took their eye off the ball and were maybe squeezing profits to the limits to maintain their track record. New management can start their records afresh. Once Watermark looks back on an even keel I can imagine one or two in the industry will come sniffing around.
hmt: Does any one have any views on the pending results and on the prospects of a recovery for share price?
damanko: This taken from Strategic Equity Capital (SEC, 70 million pound investment trust, part of the SVG stable) results, out a couple of days ago. Will look up their holding and paste further soon (if this has already been covered/mentioned previously, my apologies): Watermark Group has seen its share price fall significantly following the termination of takeover talks and a subsequent profits warning. Following this there has been a change of management and we believe that there is considerable upside in the shares should the performance of the business be restored. In order to oversee this process, since the period-end, Graham Bird, a fund manager of SVG's Public Equity Team, has been appointed to Watermark's board as a non-executive Director.
rivaldo: From Charles Stanley's web site - the JAL deal is adjudged a winner: "Watermark Group Share Price: 123.5p Market Cap: £54.8m (WMK.L) We last wrote on WMK on 10 April when we gave a no recommendation opinion at 124.5p, because we considered that there was unquantifiable upside if a bid materialised and downside if it did not. Following the announcement of the acquisition of the catering business from JAL, we consider that the downside risk has been significantly reduced and the possibility of a bid at a reasonable premium to the current share price has increased. We have therefore changed our recommendation to Hold. Although our opinion is Hold, speculative trading clients might consider purchasing the shares. Acquisition WMK's subsidiary Air Fayre (AF) has acquired ICL the in-flight catering subsidiary of Japan Airlines International (JAL) for a consideration of only £1! As part of the agreement, WMK has, in addition, paid the proceeds of a sales an lease back of the freehold property less some adjustments to JAL, which we understand accounted for most of net assets. This will leave the Group with some net assets from the transaction which will be accounted as negative goodwill. ICL has some 11 customers of which JAL, Singapore Airlines and Thai Airways were the largest. ICL reported a small loss for the year to December 2005 on sales of £19m. The business model is likely to be changed to that of AF. AF is in reality a logistics operation. It has a substantial facility including cold storage at Heston, close to Heathrow. It outsources food preparation to major supermarket suppliers. This is then delivered to its facility for distribution to the aircraft of its clients. By using this model (against owning its own kitchens), it can cut costs to its clients and make a decent return on sales. AF has considerable spare capacity at Heston and it is possible, but not yet decided, that the ICL business could be moved there. We expect considerable reorganisation to take place and therefore there may be further exceptional costs this year. However there should be a substantial contribution in 2007. If we assume that AF can earn a net PBT margin of 8%, then the new business would add £1.5m to 2007 profits, equivalent to fully taxed and diluted EPS of marginally over 2p per share. That, assuming no change in other underlying profits, would raise clean 2007 EPS to around 13.5p per share. It is for that reason, that we consider the downside risk, if the putative bid were not to arise, has been reduced. We also consider that the possibility of a bid above the current share price has increased as potential private equity buyers will have now seen that at least one major airline has been willing to enter into this type of transaction. In our last comment, we gave various target prices based on EBITDA multiples. If we assume that this contract will add £1.5m to profits and that an EBITDA multiple of 5 is applied then the increase in the equity value would be £7.5m or over 15p per share. We have used 5 compared with previous multiples of 7, 8 and 9 as the additional profit applies to next year and should be discounted. The adjusted share value on multiples of 7, 8 and 9 could now be 125p, 143p and 161p respectively. But there is no guarantee that a bid will arise, or at what level. Those numbers are given for illustrative purposes only."
vassily: Rivaldo: Oil price rises seem to have a negative effect on the share price. I wonder how this will impact on your outlook for the company and the share price. Perhaps as you indicate, the growth and earnings of the company will in the end overcome fears related to oil issues and related problems such as customers going bust. So far as I know WMK has only had one customer go bust. That was Duo Airways, a small carrier. And WMK do have a lot of customers, which means the risk is well spread out. What WMK really needs is another large profit-making carrier to sign up to its Encompass system. That might just make the share price move. It would really vindicate Calcutt's plan and vision. V
stemis: Yes a half decent set of results should set the share price motoring again and reward we patient holders. Watermark made PAT of £3,117,000 in 2004, but there are £2,329,000 of exceptional costs which should drop out. Assuming 30% tax relief, then PAT should get to £4,747,000 without any growth. That's a fully diluted EPS of about 10.0p. Interim PAT was up 41%, but it might be hard to replicate such growth in the second half. Neverthless interim growth adds about 1p to EPS, so current consensus forecast EPS of 11.70p looks eminently beatable. I would certainly hope for 12p+ putting WMK on a P/E of little over 10. Could see WMK share price picking up 20% (to 150p) between now and results if everything is okay.
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