Cellcast Share Discussion Threads

[zangdook] 19/10/2009 14:26

Pardon my laziness, but what caused the massive fall from 90p in 2006? Was it something reversible - ie is there any chance we might get up there again one day?

[the analyst] 19/10/2009 14:26

I'm still of the opinion that Cellcast should be trading at around £3m market cap, right now even with the Ofcom risk attached, but much more if ofcom rule in our favour

If Ofcom do rule in our favour, then would then expect the company to trade on a PE of 6x-10x expected profits. That should, imo, mean a market cao of around £6-£10m market cap based on profits of around £1m pa from the UK businesses, now they have the freesat and freeview space (is this space still at monopoly level?)

So, that 'could' mean looking at 8-13p per share in a year or so, should things go to plan

Then, we also have Cellcast Asia. Hard to say what that could be worth, but it could be a lot (millions) if it continues to progress the way it has been....

[the analyst] 19/10/2009 14:20

Cheers RV,

All good stuff!

[the analyst] 13/10/2009 23:43

You could have a point there Topgun,

On the one hand, the deficit on trade payables/receivables reported at the interims was £673k, up from £502k at the year end. But, it was £1,025k at the time of last year's interims, so it has actually dropped £352k since the previous year. That has to be good

Of course, the business has changed, so figures are not as that easy to compare directly, but it's something worth considering...

[recto verso] 13/10/2009 19:56

Rupee to pound



Very favourable, lets hope the trend continues !

[recto verso] 13/10/2009 19:36

Cellcast Asia.

From the results :

*monthly profits from March to June
*losses of GBP47,500 in January and February 2009
*share of losses in CAH in the six months to 30 June 2009 of GBP15,000 compared to GBP179,000 in the same period in 2008.
*CAH has now achieved six months of sustained profitability and has seen significant revenue growth quarter by quarter.

As I see it :

*March to June = share of profit of 32 500 (8 k per month)
*assuming that Cellcast touch 37.5 % of profit, this means Cellcast Asia made a profit of at least c. 87 000 in 4 months; equal to around 22k per month.

Therefore a minimum H2 CAH profit of c. 132k.

Should be more if the significant quaterly growth continues.

[topgunns] 13/10/2009 11:03

I see what you're saying but isn't that deficit always there? Have they not used 180k of "profit" to pay off most of the loan (which also means no dilution i would add)

[the analyst] 10/10/2009 17:29

Hi Topgun,

An earlier comment from Metaphysicalman might help explain some of the loan repayment...

"It's worth noting that while they have paid off most of their debt, they run a relatively large deficit on trade payables/receivables (£673k) which is essentially a funding gap, albeit hopefully mostly sustainable"

[topgunns] 10/10/2009 08:59

Having read the statement again, i remain convinced that they actually made about 250k for the six months.

Gross profit-operating expenses+180 loan repayment. And ignore the tax credit and amortisation costs.

Any opinions????

I'm holding 600k but considering adding. Now that it's profitable, it's an india play too.

[the analyst] 07/10/2009 10:59

Cheers MetaphyscalMan

Always useful to have an accountant to hand!

The £88k was the figure I came up with for EBITDA, so good to have it explained. I guess that's the figure to go on, rather than cash inflow, then. Still not too shabby, considering the Q1 warning - if Q1 was loss-making, it probably means they made £100k+ in Q2

Well, the 20p 'hope' relies heavily on Cellcast Asia getting flogged off for a big premium (which could happen), but the 8p should be achievable in 15 months or so, if the new channels do well and they really push on with improving margins...

[metaphysicalman] 07/10/2009 09:20

As I'm an accountant... :)

They have produced the EBITDA figure by taking PBT (-£383k) and adding depreciation and amortisation (£367k) and interest payable (£70k) back; so, a pretty literal interpretation of EBITDA.

Another option would have been to also add back share option expenses and associates results (total £34k) as they are non-cash expenses to come to £88k.

I think the net cash inflow figure is flattered by working capital movements, particularly increase in creditors which may have to be unwound. It's worth noting that while they have paid off most of their debt, they run a relatively large deficit on trade payables/receivables (£673k) which is essentially a funding gap, albeit hopefully mostly sustainable.

I like your aspiration of 20p a share - here's hoping!

Regards
MetaphysicalMan

[the analyst] 06/10/2009 16:49

So, my target is for a price of over 8p

That would be based on £1m+ cash-flow positive trading, a positive ofcom result earlier in that year and a historic PE of 6x (£6m market cap = 8p per share), probably falling to 4x in the 2011-2012 year, if growth continues and new apps succeed

Of course, that hope puts a low PE on the company, and it could in fact, be double that quite easily if there is any bid speculation. It also attributes zero value to the Cellcast Asia business which could be worth millions too. Then there is also sumo.tv - maybe that is worth a few hundred grand to someone now that youtube is meant to be making money?

All in all, I'm looking for 8p, but there is also a 'hope' of getting that up to 20p, given the right trading, ofcom, Cellcast Asia and a possible bid...

OR, ofcom could ruin it all and we'd be back to square one - it's a gamble...

[the analyst] 06/10/2009 16:41

Just looking at the results again... whichever way I look at them, I see them as being positive, especially considering they come from the worst period of the recession during a time when they had lost their freeview slot in Q1 (which they later regained and added to).

Interestingly, the EBITDA mentioned was £54k profit, but for the life of me I don;t see that figure in the accounts.

I do see the net cash inflow from operations at £326,884 for the first six months

I'm not an accountant, but it seems to me they are, for the first time, playing down the results rather than talking them up.

I'm looking at the current half (H2 2009/2010) as being the one where the company gets all there 'ducks in a row', as it were. By the end of the year, they should have all the new channels in place and be making good profit from them. Next year should then be cash-cow time, imo.

I would expect a minimum of £1m cash-flow positive for the 2010-2011 year, given that we just had £326k during a period of the worst doom and gloom of the recession, plus having lost their freeview channel during that period (which they now have back, and more...). Plus, now the freesat channels, which look like they could be a monopoly. Plus the freeview retune, which will have introduced loads of new people to the channels.

Someone pointed out to me that whilst many people have Sky in their living room, they only have freeview or freesat in the bedroom. Go figure!

[the analyst] 06/10/2009 16:24

It is very difficult to buy in quantity

If anyone wants to buy, possibly search for LDM on the boards - maybe he might sell some off-market at mid-price?

[topgunns] 06/10/2009 15:59

Going to 5p for PE 10 - risk of ofcom = 3p at PE 6

[mister md] 06/10/2009 12:26

online will allow me to sell all my CLTV shares, but not buy any...seems like major shortage of stock?
So decided to buy another 40k, hoping it gets filled!

[metaphysicalman] 05/10/2009 14:53

Thanks for updating the header!

[metaphysicalman] 05/10/2009 10:47

the analsyt

Also, bit cheeky of me, but if you have time, maybe an update of the header for recent results?

Thanks
MetaphysicalMan

[metaphysicalman] 05/10/2009 10:46

the analyst

Interesting to hear that directors are looking for an exit - given their substantial shareholdings, their interests should be well and truly aligned with ours... were they the ones who mentioned US take-out, or is that your own speculation?

I'm also allowing myself to be a little more optimistic about Cellcast's future - as long as they can overcome short term cash constraints, the future does look more promising than it has done for a while.

Regarding Cellcast India, thinking about how this might play out, hopefully it really is cash generative as well as profitable and so won't need any further funding rounds which might dilute Cellcast's holding. The majority investor is a VC, so will be looking to exit at some point, probably in the next 2 years given their typical investment timeframes. This could be either IPO or trade sale.. hopefully Cellcast would be able to tag along and monetise their 37.5% stake. I could see Cellcast's share being £1m+ depending on just how fast India is growing. Until then, it may start improving the P&L and balance sheet, but I doubt it will help cashflow as cash won't find its way back from Inda to UK.

Regards
MetaphysicalMan

[topgunns] 02/10/2009 07:21

If my analysis above is correct, we will head to 3p very quickly

[the analyst] 01/10/2009 23:07

Overall, I think there is probably a massive opportunity for anyone willing to take a gamble on the ofcom decision and buy shares at 3p or lower

If LDM is right on the EU law and we see no negative regulation, then we could easily be looking at a company making £1m+ profit in a year or so...

(and that's without the Cellcast Asia contribution)