Cellcast Share Discussion Threads

[superbarnet] 30/9/2008 13:55

The chart indicates game over.

[the analyst] 30/9/2008 13:31

LDM, there is also the extra revenue from the exclusive channel on freeview that just launched - that could bring in and extra £1m-£2m revenue pa, with very little extra cost base to the company (all in with that £90k pm).

Of course, if margins are only 5%, the gross profit will mean only an extra £100k dropping through.

I just don't understand why margins on phone calls and texts aren't 30%+, never mind the 15% I was hoping for...

[the analyst] 30/9/2008 13:28

I agree - the low margins may make people raise those questions that were being made earlier in the year - that is the question as to whether the directors are somehow creaming the profit from the company through their SMS Media company.

I don't think that is the case, but I have no idea what happened tot he gross profit. It looks to be a disaster...

Maybe someone else has more idea why margins are so low?

[ldmachin] 30/9/2008 13:19

The interims state admin expensives from now on will be £90,000 pm x 12 = £1,080,000 p.a.

If Cellcast can increase margins as cost of sales is currently way too high... then, with the £350k they have in cash, the sale of sumo.tv or similar assets in H2 and a bit of competence from management... they should be able to make a good £1m per annual before tax next year at least.

[the analyst] 30/9/2008 12:36

I guess that could be the reason sans souci.

If so, that is very very disappointing and it blows all of my 'hopes' for them making £1m+ next year out of the window.

Looking at continuing operations, margins in H2 last year had grown impressively to 11.3% (£634,658 profit on £5,612,684 revenue) and I had expected that to grow further to around 15% given what should be high margin 3G and internet take-up.

So, with the revenue rising to £6,704,265 in H1 just reported, things looked good and we could have expected gross profit of £1m if they managed 15% margins and that would have given them a decent operating profit.

However, margins actually DECLINED to 5,7%, which is massive and unexpected. This resulted in gross profit of only £384k, rather than anywhere near £1m.

They may have done well in reducing admin costs, but they will never make a profit on margins below 10%, never mind a measly 5.7%.

Can they make take the price of the text messages up 25% or so and get away with it?

[sans souci] 30/9/2008 12:04

I suspect SMS messaging have upped their fees

[lord santafe] 30/9/2008 10:19

2 big sales, but that is so silly since if the company does keep on loosing money, then it still may have a million left to give out to us shareholders. These market conditions over the long term should not effect fundamentaly strong companys like Cellcast.

[lord santafe] 30/9/2008 10:01

The cash burn rate is 90K per month for staff expenses. At this burn rate it would take over 2 years to completely rid the company of its cash and assetts.

Not sure about the drop in margins unless it is cause of Cellcast adopting a more cautious stragegy to be ready for a not so favourable OFCOM decision.

[the analyst] 30/9/2008 09:41

Well, nothing except an enormous drop in gross margins between H2 last year and H1 reported today.

Is there any obvious reason for this drop in margins? I'd have thought they would be improving due to revenues from the 3G, websites etc.

[lord santafe] 30/9/2008 09:08

Very true, but nothing in there to stop the possible potential that has been already talked about.

[the analyst] 30/9/2008 09:06

It's a very thin statement, with very little meat on the bones. I don't understand why there is no mention of the new freeview channel or current trading. No mention of the websites they have been developing, very little about 3G revenues.

[lord santafe] 30/9/2008 08:21

Thankyou for your reply,
I did read the results so I would of been able to tell if there was any truth in any of the comments about the results.
I will not aquire the extra quick buck shares here then that I was looking to aquire to offload on the massive spike.
However be looking to increase sometime from end of Nov to Dec.

[topgunns] 30/9/2008 07:57

MG lives!!! Nice to see you buddy. No guilt. People shouldn't buy based on bulletin board posts. These are only our opinions.

Results say

Sumo not dead
OFCOM unknown
Operating profit but really its a 600k loss i think

Does not say whether profitable on a monthly basis

[lord santafe] 30/9/2008 07:53

well how is one supposed to make any money in this market if no one will give some clue to how the share price will react from this news?.

By the time I get an answer the price may already have gone up.

[lord santafe] 30/9/2008 07:27

Results look excellent news to me, but what is everyone elses take on the results?.

[morning_glory] 30/9/2008 06:59

Morning All

I haven't posted here in a long time.
I feel that my belief in this company caused others to buy and that they lost money as a result.
I decided to stop posting anything else.
If it's any comfort I have significant paper losses too.

Fingers crossed

[the analyst] 29/9/2008 17:47

News of funding for Cellcast Asia would be good too

Hopefully, at a premium to it's value when the VC deal was made last year :)

[ldmachin] 29/9/2008 17:18

Cellcast.tv have updated the date on their website today for the interims:



They are released tomorrow. Should be interesting... i hope to see sumo.tv sold off and for them to report that the revenue from 'adult' ventures is rising nicely.

[zoo123] 29/9/2008 01:57

Hi,


I agree LDM, and thanks for your tenaciousness.


I think the company started, and in the long-term still has plans to have a broader business base, but the recent environment (last year+) has taken them off that original ambition and made them retrench.

I believe they still have those ambitions, and in time, they will get back on track, so that the current bread and butter doesn't remain so. when I looked at old reports, for some reason I still got some sense of what they were involved in even when it didn't say so explicitly.



Kind regards,


MN

[ldmachin] 28/9/2008 17:26

zoo123,

Yes, i understand that point. However, it is frustrating for shareholders, and potential shareholders, not to be able to have clarity on such a 'substantial' part of their business, i.e. the adult channels and related websites, this is essentially Cellcast's bread and butter.

Cellcast should find some way of letting shareholders and potential shareholders see clarity on this side of the business... either through settings up a subsiduary company which would give clarity and also distance the adult business away from the main cellcast operations or by using a simple section on www.cellcast.tv.

Eitherway, clarity is needed in my opinion... as depending on the extent cellcast are benefitting from the 'adult content', it is a make or break decision as to whether cellcast PLC are worth investing in...

[zoo123] 28/9/2008 17:03

Hi,


LDM, you raise very many valid points, however wrt the corporate website, if you were initially actually more of a technology company that licensed your technology and services to a wide range of clients, including those in the middle east (inc. where one such company is a substantial share-holder) as well as other parts of the world or were trying to sell to those markets, would you really want to plaster around the more seedy aspects to all and sundry.


If you look at almost all company communications, you might note that they only seem to refer to "PRS services", a great euphemism, it's very clever and how I personally would prefer it.


Maybe if there was a separate sub-site that listed all this, but then there's also the thing about not wanting all the customers to see just one company -the whole point of separate brands.



Kind regards,


MN

[topgunns] 28/9/2008 15:34

Are you also expecting news in the next two days?

[the analyst] 28/9/2008 15:13

Yup, agreed with that 100% topgun