Cellcast Share Discussion Threads

[mister md] 14/10/2011 21:37

How much of CAH do we still have then ?
_____
14 October 2011

Cellcast plc

("Cellcast", or the "Group")

Update on Cellcast Asia Holdings

The Board of Cellcast plc (AIM: CLTV) are pleased to announce that the Group has finalised agreements with its associate company, Cellcast Asia Holdings' ("CAH"), for CAH to buy back 3,221,555 shares in CAH from Cellcast for a consideration of US$1.5m, further details of which were contained in the Group's interim results announced on 30 September 2011.

[davydoo] 05/10/2011 13:21

Someone's keen. 516,000 just bought.

When you consider the amount of shares held by the major holders, 516,000 is a quite a chunk of the free float.

Whilst at the moment I don't think we can be 100% confident that all the major holders still have the positions they are declared to have, if any seller was to stop, or finish selling, then any buyer is going to have to pay well to pick up that many shares in future.

[mister md] 03/10/2011 12:37

bit of stakebuilding RNS'd today

[davydoo] 03/10/2011 08:18

Looks like its the Market makers who are the ones making money out of CLTV at the moment, buying this morning at 1.61 and selling at 1.26.

[lyonst5] 02/10/2011 13:12

Yes well summed up davydoo. We have had a large seller over the past months that has cast serious doubt on what was going to be released in the interims.
So it was a pleasant surprise that they have been to able to pull a rabbit or two out of the bag as such. So looking to pocket £2m in cash. And importantly CAH should now be fully funded now to launch its channels, but we still retain 12%.
We are sitting on Market cap that will be at a discount to our cash position and we also have the major assets of our Sky, Freeview and Freesat EPG slots.

We were warned in the finals last year that the revenues and margins of UK side would be negatively affected in 2011. The board has given us fare warning about this and thankfully has not tried to sweep it under the carpet. And as such has been cost cutting and looking at other revenue avenues. They have proved that they can make money out of the UK side but its a changing landscape and other players are trying to get a piece of the action, namely Richard Desmonds group i guess. But has this has been foreseen by the management, so they are looking at other revenue streams. They have the know how and hardware to move into other areas. I hope we can hear more about our plan going forward as we don't want to now fritter away our new cash pile in competing with someone like Richard Desmond.

So overall we currently have hard cash value and no debt and have an exciting prospect for a fully funded CAH. All for £1m Market cap. I just hope now that the company makes some shrewd decisions going forward.

[davydoo] 02/10/2011 12:33

Thanks Norbert, you are quite correct, and I have amended my post to show 24 months not 12

TopgunNS, I don't know where to start with your comments.

1. Profit warnings are preferable to profit shocks, I have been impressed by the way CLTV have referred to post period trading in their recent reports both positive and negative and shows theyre in control of their business, if not necessarily their customers spending power.

2. What is your source to say their UK Market share is falling?

3. You seem overly concerned with valuing things at a multiple of earnings. whilst ambitious growth forecasts can justify any lofty valuation, to me they do not represent real value. If you want that then there are investments out there for you, but you will not find it in a £20m turnover business valued at £1m, you'll find it in a £1m turnover business valued at £20m

We own 12% of nothing? Luckily the new investors in Cellcast India don't think so. Perhaps you overvalued the expansion, I don't think I did.

I invested because I saw a valuation anomaly, with a large potential upside, primarily because of CAH, but I recognised the importance of the UK business in achieving this, as I have stated previously on this board.

[topgunns] 02/10/2011 12:11

1 Profit warning

2 UK market share falling and margins falling

3 We own 12% of nothing. We used to own 37% of a rapidly expanding Indian business

You are crazy if you invested for the UK operations. Everybody else invested for CAH

Sub 1p on the way. They need to find a new way of growing.

[norbert colon] 02/10/2011 12:02

Thanks Davydoo for your usual high quality posts. Please not that the further 1.5m US$ is payable over 24 months not 12 - you have mentioned both in think in error?

Positives:

Market cap covered 10% by cash now.
Return on Equity (ROE) no positive
Possible net / gross profit (no tax) of 900k GBP at year end equals PE of 1.3

Negatives:

Gross margins still very poor
Depreciation still very high

I have maintained my holding through the recent price correction (slump..!) but these results seem to offer light at the end of the tunnel.

[davydoo] 02/10/2011 11:18

Some of my initial thoughts post results

I dont think anyone expected the following headline figures;

Revenue for the six months ended 30 June 2011 up 25%
First half profit before tax of £609,000

Thats a phenomenal peformance, especially the profit figure, which was actually held back by the performance of India. The Mkt cap is only just over £1m, so a current p/e of less than 2.

The following statement is key to me;

'The Group is not committed to providing funding to Cellcast India and the Group has received neither dividends nor fees from this associate for the period ended 30 June 2011'

Since I invested here, it was always on the basis that CAH was non core, and was an asset that would be realised at some point in the future. My greatest concern was whether the UK business would be profitable and sustainable to ensure an orderly exit from this position, this concern is now greatly reduced. Sadly the growth of profitability in India, has not been as projected, or as guessed by many on this board over the past 2 years. (but thats why i stated previously i was not valuing this on forecast earnings, im a value investor at heart)

So the gradual exit from CAH gives approx £1m now, and £1m over the next 24 months, whilst owning a remaining 18% of CAH representing 12% of Cellcast India. I would therefore assign approx $500,000 to this. This is well above the carrying value on the balance sheet. Again remember we're only capitalised at little over £1m.

Whilst talking about valuations, there is £8m of retained losses on the balance sheet. That has a value, hopefully it means future gains are not taxable, but worst case it could be used by an acquisitor.

Also, in the period all debt was paid off, and with it goes the cost of that debt. last year it was £147,000, if that drops to the bottomline thats very significant for a £1m mkt cap co. Other costs to have gone is a chairmans salary of £35,000, although for sad reasons, following the death of Julian Paul.

So in summary, the business today, is not remotely like what I would have forecasted 12 months ago, but value is being realised by disposing of an asset where there appears to be little control and influence on, at a time when it has started making losses and faces a risky future as it embarks on a new stratgey, whilst retaining a stake to beneift from any future upside.

There is a debt free balance sheet, with approx £2m to come over the next 24 months, and a UK business that has proven its abaility to make a profit. The saturated market is a concern, which should at least mean no new entrants, and the business now is well funded to take the actions it needs to, at what is clearly a difficult time, but thats hardly a surprise is it.

Finally, I am a member of the Share Society and am very keen to see greater rights for shareholders, with this though comes responsibilities, which is something I take very seriously.

If there is major holder selling, I would like to politely remind them, that if such selling moves their holding though a 1% band, then they are required to declare this, if this is you, please could you do so.

I added to my holding on Friday afternoon

[topgunns] 30/9/2011 19:08

Well it's a profit warning along with a reduction in stake in the only growth area from 37% to 12%. But the share price is so low already. I'm voting for under 1p again.

[mister md] 30/9/2011 14:44

positives and negatives in there, not quite sure what to make of it. Was considering pressing the "sell" button, but at a marketcap of 1 million I think I'll hold on

[davydoo] 30/9/2011 14:25

Looks like 655,000 of buys since the announcement, almost 1% of the company.

I will post more detailed thoughts of the results over the weekend.

[topgunns] 30/9/2011 13:45

Outlook

Over the last year the Group consolidated its position as a market leader in all the sectors in which it operates in the UK although the Directors recognised that there has been some saturation of the UK market and some decline in consumer demand that is expected to impact our profitability going forward. Following the strong first quarter, traffic and revenue dropped in consecutive months and we expect the remainder of the year to be challenging given that current trading below the same period last year.


I take my previous comment back. This is going down.

[topgunns] 30/9/2011 13:42

Down to 12% of CAH is the standout. But profits made here better than i thought. I'll take a look. No current position but more interested.

[mister md] 30/9/2011 13:31

recovering a bit after the half-year results

[lyonst5] 30/9/2011 13:30

Looking a lot better than the share price fall suggested, will pick through it later as i need to go out.

Made £600k in the first 6 months with $1.5m sale to follow and also Licence Agreement sale $1.5m. So at present a £1m market cap...

[topinfo] 30/9/2011 13:18

DJ Cellcast plc Half Yearly Report

TIDMCLTV

RNS Number : 3203P

Cellcast plc

30 September 2011

30 September 2011

Cellcast plc

(the "Company")

Interim Results for the six months ended 30 June 2011

Update on Cellcast Asia Holdings

The Board of Cellcast plc (AIM: CLTV) are pleased to announce the Group's interims results for the six months ended 30 June 2011 and to provide an update on the Group's Indian Associate held though Cellcast Asia Holdings and Cellcast India.

Financial highlights

-- Revenue for the six months ended 30 June 2011 up 25% to GBP11.4m (H1 2010: GBP9.1m)

-- First half profit before tax of GBP609,000 (H1 2010: loss before tax of GBP434,000); earnings per share of 0.8p (H1 2010: loss per share of 0.6p)

-- Operating costs similar to previous period at GBP870,000 (H1 2010: GBP845,000)

-- The Group's Indian Associate attributed a loss in the period of GBP94,000 (H1 2010: profit of GBP77,000)

Update on Cellcast Asia Holdings and Cellcast India

-- Cellcast India's financial position to be reinforced through significant capital raise with existing and new venture capital group, subject only to the signing of the relevant agreements

-- The Group is finalising agreements to sell part of the its stake in Cellcast India for a consideration of US$1.5m. The Board expect that these agreements will be signed shortly

-- Following entry into the sale agreement relating to the partial sale of its stake it is anticipated that the Group's fully diluted ownership in Cellcast India will be approximately 12%

-- The Group has secured a Sale Licence Agreement with Cellcast India valued at $US1.5m

Andrew Wilson, CEO of Cellcast plc, commented:

"Our growth in revenue and profitability in the first half of the year is attributable to the Group's program of investment in expanded distribution over the last couple of years. After a very encouraging start to the year the second quarter of 2011 has witnessed a decline in both revenue and profitability due to an increase in competition and a decline in consumer demand for our services that was a consequence, we believe, of the general economic downturn."

For further information:

Cellcast plc

Andrew Wilson, CEO Tel: [phone]

9420
[e-mail] www.cellcast.tv

Allenby Capital Limited

Nick Naylor/James Reeve Tel: [phone]

5656

[lyonst5] 23/9/2011 13:25

So we still have no RNS out yet about our seller. The last 8 months of selling down a large position in bite size bite pieces have brought us to this, a Market Cap close to £1m. The shares that have been sold have also been bought as well, The confidance of investors in Cellcast has taken a bit of a kicking.
So hopefully we can see a clearer picture next week.

I thought we best have a quick recap before the Interims next week.

UK.

As far as we know they are running a tight ship.
We made a group loss of £200k in the year end of 2010. The second half of 2010 was at breakeven. Revenue and profit grew in the first half of 2011
We are still the leader in premium TV market in the UK.
The investments in channels and infrastructure starting to be realised
Looking at other markets for growth
Looking to launch Indian genre show.
New guidelines came in for premium chat lines
Expected competition and costs in second half of 2011
But aiming to return to full year profitability in 2011

India.

Growth continued in 2010 up 83% but profits fell to $900k due to increased cost of airtime, which in due was a result of the fast growing media/TV sector.
Ongoing recruitment for its current and future operations.
Canaan Partners option in 2012 ?
Looking to launch it's own channel(s) and looking at funding to do this.
---------------------------------

So that's what we all know at the moment. But there are a couple more things I've found out as well.

Cellcast UK. Is broadcasting and monetizing shows out to the Caribbean, from the London office.

And the big one.

In July CAH applied to the Foreign Investment Promotion Board of India. This government board deals with foreign investments.
On September 2nd the board met, and at the moment it has been deferred for a later meeting.

This I believe is the major importance for the future CAH, we know only that they are planning to launch 3 channels. The details of the deal is of yet are still unknown.



Number 12. in the agenda.

Hopefully we can find more about this and more of the above in the Interims.

I also have added a few more over the past days as well.

[rb1206] 22/9/2011 20:35

TG: Low share price is due to a seller about...imho...dyor.

[topgunns] 22/9/2011 18:19

Yup, there is a total lack of any strength or buying. Nobody wants to catch a falling knife.

Of course i've changed my target buy price.

Instead of moaning at me, why doesn't one of you, anyone, please make a case for a value of this company based on numbers?

You can't because you have no idea what CAH could earn and they have told us that UK profits will go down.

[davydoo] 22/9/2011 16:30

TopgunNS - 3 Jun'11 - 15:46 - 3491 of 3594

I think i'd be looking to buy back at 1 - 2.5p.


TopgunNS - 28 Jul'11 - 16:27 - 3543 of 3594

Almost in the 1-2p hunting ground


TopgunNS - 23 Aug'11 - 19:09 - 3554 of 3594

I was out on results day. I'll take a punt at 1.5p though


TopgunNS - 22 Sep'11 - 09:50 - 3592 of 3594

I'm holding my gunpowder for below 1p now.


Its easy to keep saying you'll buy below the current price on any share.

[topgunns] 22/9/2011 15:59

It hit 1.28p today.

It's fallen 70% in three and a half months.

I'm not the one missing something here.

[lyonst5] 22/9/2011 11:31

I think you will be holding for a long time then, carefull it does'nt get damp.

[topgunns] 22/9/2011 09:50

I'm holding my gunpowder for below 1p now.

[norbert colon] 19/9/2011 11:08

Thanks Lyons. Yes, I will be very interested to understand the position of the business via the Interims. Good luck to all.