Cellcast Share Discussion Threads

[moneymaker6] 24/3/2008 16:12

cyc> news was anticipated either last week or this due to Headstart expiry. So, educated guess or in the know? Anyhow, yes he was right but i was only jesting.
edit. Cellcast got a mention in the business section of the Times (sat).

[cyclingnut] 23/3/2008 17:27

nice answer thesage,

I was just reading the cellcast.com website and was very encouraged reading the previous business success Andrew Wilson had at VISL....talk about business growth or what....have you read the figures?!!!

Regarding Brazil, I was questioning why Cellcast did not comment on this in the latest RNS?

[thesageofsaint] 23/3/2008 17:05

CN

It depends what you mean by strength. 3 years ago they had £5m to spend. Today it has been spent. The question is: has it been wisely invested and does it make the company both more resilient and able to turn a reliable and healthy profit looking forward? I believe the answer is yes. Currently CLTV generates @£25m annually. It has been unable to hold onto any of this income because it has been growing organically, which has consumed the income, and a bit more (headstart loan). There comes a point when all growing companies must translate income into a cash generative business. CLTV is moving to this next level of corporate maturity. You asked why I did not mention Brazil, well it has been made clear that the Board has placed the SA operations in a state of dormancy to ensure the kernel of the company is able to mature as I suggest without both further draw on crucial cash and ensure management attention is focused where it needs to be. Once the necessary stability is assured (which I believe we are now seeing) and self-generative cash is available, then the SA operations will be restarted. It is interesting to note that the SA business took off like a fanned fire last year and was essentially a victim of its own success.

In summary, CLTV needs to produce its own cash. I believe it will next year. The £20m float valuation was based upon a projected growth rate, which CLTV has delivered against, just not the bottom line. This will happen next year. I project that there will be at least £3m at EBITDA in 2008. Couple this with the intrinsic growth potential across all CLTV revenue streams and CLTV 2008 is a much more assured proposition than CLTV 2005. So to answer your question - YES.

The Sage

[cyclingnut] 23/3/2008 16:33

Am I right in assuming that at 3.25p CLTV is in a much stronger position than it was when it floated in 2005 at 71p?!!

[cyclingnut] 23/3/2008 15:21

BUT HE WAS RIGHT......

[cyclingnut] 23/3/2008 14:38

£35K per month and growing month on month at a current rate of 25% is quite impressive in my book....they may well not be profitable yet but IMHO it won't be long before they are...."Cellcast Asia is profitable at the operational level..."


IMHO there are more reasons to be in this stock than out of it.

thesage....nice post.... I wonder why no mention of Brazil?

[21st century media company] 22/3/2008 12:07

The reason why the share price did not rise more was because they did not take the opportuntity to update the market on current trading - gross profit - ebit/ebitda/positive or negative - any information could have been supplied, but they chose not to.

My interpretation is that the group continues to operate overall, at a EBITDA negative level, as they did in the last results.

The Headstart loan will still need to be repaid in Dec.

All they have done is raise 1.4m and defer repayment - a nice chunk of working capital, but that is all that's happened.

Certainly not enough financial information in the trading statement for me to make a positive investment decision.

[thesageofsaint] 22/3/2008 11:11

To find a datum for a valuation it is not unreasonable to review the company at the time of its floatation in Sep 05. At this point the placing price was 71p and raised £5m in funding, valuing CLTV at £20m. The turnover at the time of floatation was pro rata annualised (from 2005 interim) at £11m. The company was essentially UK centric with in excess of 90% of its revenue throughout 2006 from the UK. It had therefore no presence in the rapidly expanding Asian market, no UGC website (SUMO) nor had it yet developed the eclectic portfolio of revenue streams. Yet it was oversubscribed and a valuation of @£25m was afforded at its peak in early 2006. We all know the history of the warning in the summer of 2006 due to the EPG issues, which illustrated the company's critical dependence on its Sky audience and made it ever more an imperative to diversify the company's portfolio.

This diversification has happened at a most impressive pace. The Asia deal in August was the most significant event in CLTV's past year. It provided the prop to CLTV's most lucrative market exposure and coupled CLTV's nascent presence to a proven partner with both finance and influence. That this facet of the company is now profit making at the gross level is a real testament to the strategic foresight shown. It is also here where I believe CLTV will be next looking to extract value. It is not unrealistic, given the realising potential of this market place that CLTV's 37.5% stake could be worth between £10-20m in the next year. I believe this is conservative.

With profit in the UK, SUMO costs reducing and the 3G revenues growing so impressively, I would expect that the forwarding looking statement with the annual report will forecast a profit next year. If this is the case, we should expect the price adjustment that the latent value suggests. From £30m a year TO, it is not unrealistic to expect a margin of 10%. £3m a year profit, with the growth potential we all understand, and with the strategic assets of the Asian stable and Sumo, why would we not expect a value of @£40m in 2 years. After all, which company would you rather invest in CLTV 2005 or CLTV 2008?

Without further dilution (75m shares) a £40m valuation equates to 53p. QED – I would expect a takeout at @50p in 2009/10. Make no mistake; the exit strategy of the major holders is near term. These individuals are entrepreneurs not grey suits waiting to retire on an annual dividend.

A pie in the sky price or a rational considered view. That is for you to decide.

The Sage

[cyclingnut] 22/3/2008 09:41

Read the RNS again....last week they signed up with Joost and Blinkx....wonder why they did not announce it at the time....

Celcast Asia...PROFITABLE AT THE OPERATIONAL LEVEL!!
3G growing at 25% per month from a base of £35k a month!
Rolling out this platform worldwide!
Company turnover as stated in Sept of £11.4million

RV, Analyst....as per my post of yesterday, how much would a bidder have to pay for the business in your opinions..?

Virtually debt free and generating decent revenues....

[cyclingnut] 22/3/2008 09:27

RV,

Unless I missed it not much was said about the South American biz.....any ideas?

[recto verso] 22/3/2008 06:41

Just got back from a business trip.

Great news, which significantly reduces risk of further dilution.

Core business would appear to be back on track, if growth continues we could see 6 figure earnings over the next few years (possibly sooner).

Hopefully the money will also take the pressure of selling Sumo too quickly. JB should be given enough time to implement his strategy before any decision is taken to sell Sumo. Unless of course a uyer is willing to pay the right price for the enormous potential that Sumo and the technology holds.

RV

[cyclingnut] 21/3/2008 11:30

Why spin off a cash cow?

CLTV will be a very attractive target for those players who understand this industry....let's not forget they own one of the busiest Bollywood sites in India!!

I am absolutely flabbergasted over the fact this is still a low, single figure share price. I am not sure whether they employ a PR company but you don't get the chance to invest in companies like this everyday. I bought at 2.2p and if it dips I will keep adding to my holding.

I believe this is one of those stocks that you can safely tuck away without watching everyday and over the course of time it could easily 5-10 bag....it may seem over the top, but do the maths.....on the 3g growth alone we should be circa 10-12p ...when you add all of the other branches of the business together this is grossly undervalued.

It would be interesting to see what the board would accept by way of a take over price....I would imagine they have a full handle on the future profit projections and forecasts for the biz.....I will throw my hat in the ring and suggest they would take no offer under 20p...

Please discuss....analyst, thesage and co.......

[zoo123] 20/3/2008 20:11

Hi,

has anyone considered that Sumo.tv isn't being spun-off!


Kind regards,

MN

[bw123] 20/3/2008 19:45

...have bought as many as pot would allow!

[moneymaker6] 20/3/2008 19:43

If you're confident its maybe a good thing to buy as many first b4 shouting about it. Interesting valuation being placed on the enterprise now as cash (including the Headstart loan) currently equates to circa 65% of entire mcap (circa 42% excluding the loan).

[rp3406] 20/3/2008 19:38

Has anyone checked with CLTV, over what period the £1.4m will be received?

The header on the RNS states " Cellcast receives £1.4 million in SKY channel swap" but the first line of the RNS reads "Cellcast to receive £1.4 million in an arrangement to swap channel"

There is a big difference between 'receives' and 'to receive' and payment in instalments may account for the deferred settlement of the Headstart loan. I can't see any other reason not to settle the loan immediately.

Thoughts?

RP3406

[bw123] 20/3/2008 19:30

Cyclingnut I totally agree, I'm in a couple of stocks that have great potential but income wise they are a couple of years away from making a decent profit. CLTV has a great income now and it's growing, their potential to expand is also pretty damn good as well!

[cyclingnut] 20/3/2008 17:40

if you know anyone who buys shares, tell them about CLTV...all they need to do is read analysts detailed header and todays RNS....this is a NO BRAINER............period.

[cyclingnut] 20/3/2008 17:25

I would suggest that the cash burn is being reduced on a monthly basis

3G-Feb base of £35 a month and growing month on month at a rate of 25%....that MUST be eating into the cash burn....plus all of the other arms of the business.

They will be snapped up as the technology is awesome and generates immediate revenue....not pipe dreams but revenue TODAY!

[ldmachin] 20/3/2008 17:24

A pretty disappoint rise for you CLTV guys... this should be at least 4p on the bid in my opinion. Looks like the market needs more convincing of CLTVs future profit potential... but at least the money from todays deal gives them time to demonstrate this.

[darcon] 20/3/2008 17:10

Presumably "maintaining operational flexibility" means that they still have the option to burn the cash and elect not to repay it in which case we are back to a potential equity dilution scenario. However, that is putting too negative a spin on it. In the current market it's wise to retain the flexibility to repay a bit later.

Hopefully, by December 2008 the markets will have recovered from their current bout of volatility and this company will be creating cash rather than burning it.

[bw123] 20/3/2008 16:48

Thats how I read it. I think the share price was based on a share dilution needed to keep running costs going (and to pay this debt), however now that fear is out of the way for now this should reach an share price that reflects the companies income and potential.

[amotoor] 20/3/2008 16:44

Guys am I correct in reading they not paying 500k right away but by Dec 08 and Headstart wont convert as long as loan is paid by agreed date??


The net proceeds of £1.4 million from the transaction will be used to provide
general working capital and to repay the £500,000 outstanding under the existing
facility provided by Headstart. The Company has entered into an agreement with
Headstart to repay the amount outstanding under the Headstart facility in full
before December 2008. During this period Headstart has agreed to waive its
rights of conversion subject to the repayments being made. The Company considers
that this is the best use of the net proceeds, maintaining operational
flexibility while removing the potential equity dilution.


Amo

[bw123] 20/3/2008 16:20

"So common sense says avoid!"

yes but we like a punt dont we!!! Upside could be a 10 bagger....so prob only a small punt at that.

[cyclingnut] 20/3/2008 16:06

"so they are totally in need of some finances!"

So common sense says avoid!