||EPS - Basic
||Market Cap (m)
|Software & Computer Services
Real-Time news about Xko Group (London Stock Exchange): 0 recent articles
|nurdin: That is excellent news...watch the share price move now! :o)|
|masurenguy: Makes a lot of sense but for some unfathomable reason a company name change often seems to have a high correlation with a subsequent decline in the share price. No logical reason why this should happen here but.............|
|masurenguy: PP - this has been on my Watchlist since they acquired UBM and Powerdebt during the latter part of last year. At the time the share price was around the same price that it is now.
I didn't buy in when it moved up to 120p earlier this year since I was a bit confused by their strategy and did not like the non disclosure of the price paid for Powerdebt.
Now that they have sold the software division and eliminated their net debt the company looks more focused both in strategic and financial terms. However it is still difficult to get a handle on their likely numbers since the acquisitions, disposals and restatement of their P & L criterion makes an historical perspective difficult to determine.
Do you have any clearer picture on current trading since without that it would be a bit speculative to buy in prior to the interims which are due out in a couple of weeks ?|
|papalpower: Here is the earlier write up over the summer by GCI :
XKO - BUY
Companies: XKO 21/06/2006
Under straight-talking chief executive Simon Beart, XKO has repositioned itself as a revenue assurance provider through acquisition and beaten forecasts for the year to March. 'We have sold and reinvested successfully, shown a good bit of footwork, and had a hell of a good year,' reflected Beart.
After selling its Government and Financial Services arm, XKO reinvested the proceeds via the August acquisition of UBM, followed by the smaller acquisition of Powerdebt in December, deals which built scale in the fast-growing revenue assurance sector, where XKO is now generating superior returns. Revenue assurance, which entails the identification of unbilled revenues as well as the collection of previously invoiced debt, provides the real excitement for investors, with UBM (whose core customers are the major UK energy utilities) having already won a substantial contract with an oil major since acquisition and Beart confident of taking further slices of the gas and electricity markets this year.
XKO also retains a software division supplying IT services and applications to the building supply chain and specialist distributors, where encouraging organic profits growth of 13% was struck last year.
Despite recent corporate machinations, XKO's adjusted pre-tax profits sparked up from £3.8m to £5.4m last year a 42% leap on revenues lifted 19% to £27.6m. Investors were also treated to a 9% rise in dividends to 1.2p on the back of strong cash flow.
XKO trades on a historic p/e of 8 times, with the market yet to grasp the significance of the UBM deal, which has dramatically improved the quality of earnings as well as prospects. We think XKO looks great value. Buy.
Market cap: £44.2m
PE Forecast: n/a
Share price: 106.5p|
|daz: Agree that the disposal price is disappointing. My guess is that the company have accepted a low price, to make acquisitions to crack the electricity market, where progress has been slow/non-existent.
The other effect of the disposal is that forecasts will be reduced because the reduced debt repayments won't compensate for the earnings being lost. I don't see the company getting a higher rating until growth in the electricity market is confirmed.
I also hope that the company will now use cash to pay the deferred consideration for UBM due next year, which would at least avoid the situation that happened this summer, where the consideration was paid in shares, which the vendor didn't want to hold and led to the overhang and share price slide.
[edit - I see from the post above Charles Stanley are making the same points]|
|a0148009: Extract from
Charles Stanley & Co research June 2006 "Management indicated that this division was not core and that they wished to expand further into the provision of business process outsourcing services to utilities. Therefore, we expect this division to be sold given time. However, we do not expect that to occur unless acquisitions are earmarked."
From conversations with company in the past I understand software has been extremely challenging over the last five years or more.
CS go on to say "If the software division were sold, there would be no debt and although there would be some dilution to EPS the quality of earnings would increase. If cash flow projections were realised.....the one year share price could rise between 128 and 143p. That, with further growth, because of energy prices and without the likely move into electricity market for the following year to March 2008 makes the shares look attractive."
Not forgeting profits for the next two years will be based on energy prices recently experienced over the last 2 years or more.|
|the prophet: -amazing,XKO is up!
-these guys have done everything right, in terms of running a profitable business with strong cash-flow, increasing margins and earnings-enhancing aquisitions.
-no wonder Simon Beart is balled-off with the share price, think the guy has got something like 1m share options that kick in at various prices around and over a £1.He has nother 400K shares that he owns outright.
-ever tried multiple choice?
-it's called guess the forward p/e
-here's the details, you just have to tick one box.
Company has a three year track record of eps growth
Company converts profits into cash-flow.
Earnings enhancing aquisitions funded mainly out of cash flow.
Good track record of integrating small bolt-on aqusitions.
High % of recurring revenue.
Good trend of improving margins, which are comparable or better than most other co's in the same sector.
No dependance on any one customer.
Further eps growth forecast
Increasing dividend paid.
There's load more, but that will do for now.
Given that the average forward p/e in the sector is around 14, would XKO merit:
a) An above average p/e (ie over 14), in recognition of the superior past performance compared to XKO's peers and recognition of growth prospects and succesful small aquisition policy.
b)An average p/e, given the smaller size of XKO compared to other co's in the same sector.
c)A p/e of around 10, a discount of 30% to the average p/e as we don't like the goodwill write-offs , even though they are operating a very prudent policy here + it has no effect on cash or cash flow.
d)A p/e of under 7, for no good reason at all.
Please tick whichever box is appropriate.
The corresponding share prices are:
a)share price over £1.50
b)share price around £1.40
c)share price around £1
d) share price around 70p.
Yes, current share price of XKO has to go down as just bloody stupid, I can see them being taking over at this level.|
|the prophet: -rivaldo
-I looked after the shop in your absence,but, what the hell, stick 'em up
-solid customer base, upturn in IT spending, earnings enhancing aquisition, 20%+ forecast eps growth....you wonder what more XKO have to do!
-although I'm reasonably pleased with the rate of increase of the XKO share price and these look set to continue getting re-rated....although the share price might have to motor to keep up with any broker's upgrades!|
|the prophet: -churchtower
-thanks for that explanation....I did'nt think you where suggesting 118/120 as the top....sorry if I did'nt make myself clear,just that I could'nt see where the possible resistance at 118/120p came from...can now, thanks.
-yes, did a bit of spread-betting last year, on a few shorts, but, must admit, I'm not over keen on it.....
-I just prefer to just pay for my shares + have done with it.....I've got the cash, just that I like to keep a decent cash cushion, but it's always tempting, esp. in situations like XKO, to go that further mile!
-just had another look at the chart...
-could we be forming a 'cup + handle' here....
-either way, feel the fundamentals on XKO are strong enough to drive it past the 95/100 level
-just had another look at the 'Quoted comparables' table, on the XKO web-site, recent analysts presentation
-on my reckoning, ignoring the highest P/E and the lowest P/E, the average forward p/e of the remaining 6 quoted comparable companies is 17.
-Those companies are Computerland, Morse, Synstar, ICM, Diagonal and Systems Union.
-XKO has a better recent track record than most of the above, margins are as good as any, with the exception of Systems Union, and forecast eps growth is higher than any of them!
-ie, imo, there is no good reason why XKO should not, as a minimum, be given the 'average' rating of it's peers.
-an average rating would give an XKO share price of £1.80, slight above average and the £2 level is on.|
|the prophet: -rivaldo,thanks for the info re EBG up-date note
-I feel XKO is a very strong buy at these levels, a good risk/reward ratio
-although it can be frustrating looking at the XKo share price, i would make a couple of comments:
-the market has recognised the situation at XKO, as the shares have been re-rated from a low of around 25p and have outperformed against the market, by 80% on a one year view
-the shares have consolidated between 70p and 90p odd over the last few months....a period of consolidation was inevitable after such a strong run up.
-the shares offer exceptional value at these levels, but I feel they are now ready for another leg up, as this financial years forecasts are confirmed by the recent interim results.
-the recent history of the share price has, in the main, been one of a substantial daily rise, followed by a bit of a pull back/quiet period, then another jump forward. Rises of 10% in a day have not been uncommon.
-this is what I feel we happen again.
-the spark for that could be press notice, news of a further aquisition or for no particular reason at all other than they are a stonking buy!|
Xko share price data is direct from the London Stock Exchange