Cellcast Share Discussion Threads

[the analyst] 10/3/2008 15:40

When I was buying, I had to just deal at market to get buys to go through and risk paying over the odds. There was no other way to do it at the time.

[the analyst] 10/3/2008 15:37

Results could be anytime, because year end was 31st December. They could release them as late as the end of June, though - six months after end of the trading period

The next £500k of the convertible loan can be converted on the 26th March and I would imagine that the cash they have available (until they take some more loan) will not last too much longer, so they should be planning a deal before that happens. Andrew Wilson seemed very determined to do something to avoid diluting the shares further, but who knows? This is a real gamble, albeit one with a great potential pay-off if things go well.

My guess is that we should get some sort of an update in the next few weeks

[cyclingnut] 10/3/2008 15:26

analyst,

thanks for your detailed posts. when are the next set of results?

[cyclingnut] 10/3/2008 15:23

Just ring up Si or get a real broker...have you read the header kindly provided by analyst...very comprehensive indeed.

[the analyst] 10/3/2008 14:49

An investment in CLTV really has become a 100% bet on the directors to do the right thing.

I personally think that they are going to do the right thing for investors and the fact that they bought so many shares at 4p seems to indicate that their interests are aligned with other shareholders. However, assessing directors intentions is extremely difficult - often even they live in a world where they have no idea how potential deals will turn out

Looking at what would be a really conservative estimate for the sum of the parts, you would think that the UK division, making £1m EBITDA should be worth at least £6m in these markets, the sumo business plus EPG slots another £3m and the rest, including Cellcast Asia another £1m. That would equate to well over 12p per share after paying off the £500k Headstart loan that comes up soon.

But what if the directors don't manage even that?

What would a fire sale get?

My thoughts would be that even in a fire sale, the UK business 'should' still fetch at least £4m, the Cellcast Asia holding another £500k and the EPG slots could be flogged of very quickly for another £1m. In a disaster situation, the sumo website could simply be abandoned. Even that, though, would put a market cap of £5m after the loan is paid off and that would equate to over 6p still.

It's all down to the directors...

[cyclingnut] 10/3/2008 14:06

yeah my little buy....the 144 and 145 sumo channels alone must be worth at least the current mkt cap of CLTV as a whole!!

[spurberry] 10/3/2008 13:37

when will we see this rise nicely like a few stocks lately eg. nng, seo, des and the rest

[moneymaker6] 10/3/2008 13:29

James and Alex look to be doing a fine job according to Alexa. lol

cycling > all the info you need you will find in the above excellent header by the analyst. Failing that, try the Co. website. I assume thats your 30k buy.

[cyclingnut] 10/3/2008 08:42

How is the cash position at present, I notice they have two channels on Sky and Sky are taking on no more...........therefore those two channels must be worth a few quid?!!

[thesageofsaint] 10/3/2008 06:43

Cycling

There have been a couple of rights issues since float. However, when the price was @ 80p the company's market cap was in excess of £25m, it is now less than £2m.

[cyclingnut] 09/3/2008 18:53

Has their been a share consolidation or was this really up at the 80p mark!!

[cyclingnut] 09/3/2008 17:18

MZJ,

Good question, that is also a concern of mine as usually when I buy a stock it dives!!

[mzj71852] 08/3/2008 16:45

why when you look at the chart has this come down from 11p? what makes the company better other than a cheaper price.

[cyclingnut] 08/3/2008 13:35

Cheers boys...so 84% ish held by institutions!!! I am in on these Monday.

[amotoor] 08/3/2008 12:30

Sardik Ltd OLD 1.99 mil 2.72% as well.

Amo

[cyclingnut] 08/3/2008 10:30

analyst I was kindly directed to this share from a kind chap over on the Jarvis thread. Your post has saved me hours of research....I am a buyer on Monday....thanks for your detailed post.

Sorry for being lazy but IF and only IF you have the details to hand could you post the following info....


The team who make up thre board

List of institutional investors so I can work out shares in "free float"

And....while your at it...can you make me a decent breakfast?!!

Lol

ps If you don't have the info to hand I will dig it out this avo after my bike ride.

[digger27] 05/3/2008 11:19

My portfolio is one huge senior moment. When will it stop?

[davidruk] 05/3/2008 10:47

I thought it was just me having a senior moment buying so many of these but its good to know you share the same risk analyst.

[the analyst] 05/3/2008 00:05

No problem

In the past, my best investments have started off very much like this one.

That is to say, the really big winners have been the ones where I was very nervous when I pressed the buy button because they seemed so undervalued that I felt I must be missing something obvious that everyone else could see, but I could not.

The best investments I have found have always been when fear grips the market and certianly that fear is hitting the market right now.

When you look at the assets of CLTV and then you look at the market cap, you have to wonder why there is such a discrepancy. Was I mad when I bought or was the market mad to have undervalued them so wildly?

I guess that only time will tell, but the answer will become clear either when the men in the white coats come to take me away, or when we are reporting £1m+ pa profits and trading at 20p+

[davidruk] 04/3/2008 21:29

the analyst - Many thanks for the report much appreciated. Dave

[spurberry] 04/3/2008 15:40

thank you a

[the analyst] 04/3/2008 15:07

Here you are spurberry:

Just to clarify, my update for MF, but promised I would do it at some stage.




"Cellcast PLC (CLTV)
- Share Price 2.5p
- Market cap < £2m
- Core business making £1m pa EBITDA
- £500k convertible loan taken
- £1m convertible loan available to draw down
- Looking to spin-off non-core, loss-making subsidiary, pay off loan and leave the company with the profit-making core business

Inspired by seeing my entry in the share price competition lying very near the bottom of the heap, I arranged a chat with the Cellcast CEO Andrew Wilson for an update.

We had a long conversation and as you may expect, he pointed out that in his opinion, the company are hugely undervalued. He is optimistic that they will get real value for investors from the company and pointed out the following very early on in the conversation:

- The core UK business has been turned around, is solidly profitable and is now making the equivalent of £1m+ EBITDA pa
- The company have several strategic 'options' available for the loss-making 'non-core' business to enable the company as a whole back into profitability.

As is the case for many microcaps, the current climate has made obtaining funding very difficult – impossible from banks and unattractive to do so with equity when the share price is low. So, the company has been restructuring instead - building up the core business to become highly profitable, whilst either culling or spinning-off non-core, loss-making businesses.

The restructuring is, apparently reaching its final stages. There were, in all, three loss-making subsidiaries that needed attention, now only one remains to be addressed.

The first was their Asian business, which has now been spun-off into a joint venture with funding from Canaan partners. This means the business is now separate from Cellcast, is well-funded with over £2m in the bank and Cellcast retain a 37.5% holding in this private venture. The second, the South American business, has been put on hold and mp longer drains any resources from the group, either.

So, this just leave the final money-draining non-core business to be addressed – a Peer-to-Peer (P2P) video-based business that integrates mobile, terrestrial and internet video, called sumo.tv

Sumo.tv consists of a website that is very similar to youtube (www.sumo.tv), two channels on Sky, found on the EPG positions 144 and 145 and integrated into this is technology allowing easy uploading from mobiles to the web or TV and back again. The technology is apparently unique and has attracted a lot of outside interest. There should be quite some value to be extracted from this business, as the website gets a healthy 4m users per month and its sales were reported to be rising over 10% per month, having reached the equivalent of £500k pa in the last trading update. The Sky channel EPG slots are of some worth too - they are very high up on the list (the highest slot owned by an independent). Andrew Wilson informed me that a recent, similar EPG sale went through for £1m and that they have a lot of interest in their slots.

The company has also had interest in the website and came close to a deal on two occsassions, worth 'more than Cellcast at the time'. Unfortunately, P2P sites are no being snapped up like they were two years ago. Highly regarded peers like Blinkx (BLNX) losing 60-70% of its market cap in the few months since it floated has not helped. Two years ago, the sumo business may have been snapped up for over £20m, but now the climate is quite different, so it is difficult to value. The impression I get, though, is that the value of the sumo business as a whole runs into the millions, which if spun-off would achieve the goal of getting the group debt free, cash in the bank and having the profitable £1m pa EBITDA core-business to concentrate on.

Despite the apparent anomaly between net assets and profitable core, the low share price is quite easy to explain – sentiment is very poor and the company have some £500k debt in the form of a loan note, making the financial position for the company look a little touch and go until they secure a deal.

The big question for investors, then, is whether the company can extract value from sumo.tv in time to avoid taking on more of the convertible loan and diluting the shares further. Andrew Wilson seems to think they will. Certainly, he made it very clear to me that he is not keen on diluting the share any more. He and fellow directors have just pumped £280k into the company, buying shares in a placing at 4p per share to avoid dilution last time a loan-note came up for conversion.

So, it will be interesting to see what develops over the next few weeks.

A decent spin-off deal for sumo could transform Cellcast immediately into a company making £1m+ pa and with retained investments in both Cellcast Asia and sumo.tv spin-offs. Failure to make a deal could result in huge dilution, or worse..."