Danakali Share Discussion Threads

[easykill] 19/6/2002 14:12

oaks

well said. Especially your last paragraph. All the so called "holes" that forfaiter is picking on regarding DNK can be more than applied to LGD But he conveniently seems to overlook that. Instead, what does he do ? He ramps LGD.

[oaklandsway] 19/6/2002 14:05

Funny Fans, I had explained to you few weeks ago that "the most important is to stabilise the gross profit to run the business, pay the debt and complete re-engineering" and after that "thinking about dividend from new business model". All recovery play will take the same strategy.

Revenue growth is useless if the company's gross profit can not grow to sort out debt problem and not enough to pay the cost of re-engineering. But gross profit growth is very meaningful (although revenue declining) as long as the company can get back to give dividend in sensible time frame.

Once again, will the revenue of your favourite LGD grow? NO.
You will be happy if LGD can avoid administration, pay off debt and concentrate in Aerospace Division as smaller company but with dividend in 2050 if you still a life.

[easykill] 19/6/2002 14:00

Forfaiter

why have you bought LGD when there will be no significant upturn before 2004 ?

in your own words, "So who wants to be holding a stock that MIGHT return to growth in 2004....."


you leave trails of hypocrisy everywhere. youre a bumbling clown.

[easykill] 19/6/2002 13:56

LOL everyone read this :

"I can't imagine long termers selling at these levels"

guess who said that ?

[easykill] 19/6/2002 13:52

forfaiter

a bit like LGD ?

[forfaiter] 19/6/2002 13:38

Its not the reason for the falling revenues that is relevant...but the markets reaction to it .....very hard to justify a high PE ratio with no growth for the next year..

Look at the markets reaction to the last set of results.....

Who wants to be holding a stock that MIGHT return to growth in 2004.....

[oaklandsway] 19/6/2002 13:29

Hello friends,
I found the reason of the estimated Danka decline in revenue. Please read the Beeson Gregory's estimation page 19 and graph page 15.

Below my post in yahoo.

sourgrapes77 may need to read the report page 19 and the graph on page 15.

Revenue is estimated to decline £120 million or $180 million but the gross profit stay around £400 million ($600 million) or improve to 39.1% from 35.4% last year.


$$$$$$
The transition from the analogue business model does give rise to the
expectation of a dip in revenues on a like-for-like basis.
As discussed in the preceding section, the networked digital equipment
business model leads on a like-for-like basis to reduced customer hardware
needs (Danka management estimate that in a connected environment the
hardware requirement reduces to seven machines for every ten machines in an
unconnected environment). Thus until the digital to analogue switch nears
completion market wide, aggregate hardware sales will remain under
pressure.
Service revenues related to the installed machines (machines in field - MIF)
will trend lower (see page 15) with a lag, before growing as the throughput per
machine rises faster than the slowing decline in the MIF. Usage patterns in a
connected environment reveal strong growth trends in throughput per
machine. However this must be set in the context of our expectation for the
MIF population to fall again this year.
As discussed above, to maintain service network utilisation and more
importantly also to provide a new source of long-term revenue growth, it is a
strategic objective of management to win service contracts for machines not
originally installed by Danka and to extend the service offering to other
networked devices.
We have modelled a further fall in service revenues for this year, with growth
returning in FY 04, as the turn flowing from the twin benefits of growing MIF
usage rates and the initiative to extend the service footprint are realised.
We have, conservatively, based our equipment revenue model on Danka's
sales growth this year underperforming that of its markets as the process of
focusing on switching sales efforts to gross margin gains momentum. From
next year, with the transition completed, we expect Danka to be able to
maintain its market share of copier placements. In the medium-term, we
believe that, although not included in our model, the new customer-driven
sales approach should enable the Group to make market share gains.
Moreover, increasing numbers of systems deliveries will help also to broaden
the service revenues beyond the installed copier base.

[tizo] 19/6/2002 12:44

I think the longs will be very happy when they have read this report and it may get rid of the derampers if they read it as well.Go to the website and register you will obtain the comprehensive 28 page report FREE.VERY IMPRESSIVE.
I will definately top up on any weakness of the share price!

[easykill] 19/6/2002 11:51

forfaiter - that p/e of 12.5 for GISX.. is it current or forward ?

[easykill] 19/6/2002 11:50

hey forfaiter, how's that "trevor brown" big buy order progressing for LGD .. LOL... what a clown you are ff.

ps by the way, in case you didnt know, you are RAMPING arent you.

[easykill] 19/6/2002 11:48

smoketrader

LOL - its a perfect definition of forfaiter.

[smoketrader] 19/6/2002 11:47

Still laughing at post 5651 :)

[easykill] 19/6/2002 11:44

and the price falling from 14p to 8.5p... LOL

[forfaiter] 19/6/2002 11:43

And the price falling from 85p to 59p.......LOL

[easykill] 19/6/2002 11:43

solis

thanks for that. Clearly forfaiter likes to pluck the P/E ratios out of thin air to match his stance.

[easykill] 19/6/2002 11:42

forfaiter = LGD holder = loser !!

[easykill] 19/6/2002 11:41

forfaiter is the master of subjectivity. He has completely ignored all the positive aspects in the report and just highlihted his favoured points. How about mentioning some points like :

•Profitability recovering as revenues still slide
Operating profit on continuing activities for the year was £15.4m,a huge
jump from the £11.7m loss for the preceding year.This improvement
was despite a 9%fall in revenues to £1,086m as the effects of the market
transition to digital,the de-emphasising of low margin sales and the
economic slowdown weighed.

•Net debt cut by £288m
Free cash flow of £56m combined with proceeds of £203m from the
disposal of DSI in June 2001,brought net debt down to £166m,restoring
financial solidity.

•Outlook
We expect one more year of revenue decline as implementation of the
new business model is completed,then a return to growth.Even so,this
year,with gross margins continuing to rise and costs again top sliced,
should see a strong move into the black.

•Price target of 120p per share (US$7.0 per ADS)
This year ’ s rapid share price rise reflects the removal of the financial
distress discount,but the longer term earnings potential still argues for
more.On EV/Revenues,the Group is at a 50%discount to the sector and
our conservative DCF model gives a value of 122p.

[solis] 19/6/2002 11:40

ff you do make me laugh.

Have a look at the pe's of Canon (136) or Ikon (28) and also see how they compare against the Nasdaq or S&P.

4.5p earnings at 136 = 612p
4.5p earnings at 28 = 126p

Brokers estimate Ikon growth this current year at 20% with past forecasts coming out 20% over their previous forecasts. That would put their future pe at 23.3.

Similarly, Canon are forecast to grow 18% this year.

No brokers are recommending a sell on either share.

As I see it the Donkey on 11.8p earnings even on a lower pe of 15 would be 177p

35p ... I wish.......I could then buy some more.

[357aman] 19/6/2002 11:37

Doon't let the schoool booy get too yoou!!

[easykill] 19/6/2002 11:29

lovely response from the yahoo board for forfaiter :

"I don't know what you look like but I can't get this picture out of my mind of some animated and rather demented cyborg who is programed to pop up every time there is any slight weakness in the Danka share price. "

[easykill] 19/6/2002 11:24

forfaiter

can you please advise why you have used a forward P/E of 8 - 10 ? whats the industry average please ?

[easykill] 19/6/2002 11:22

forfaiter

hows your LGD doing ? looks like those waiting for 5p to 6p will get them at that price soon

[forfaiter] 19/6/2002 11:03

Interesting read......they expect the revenues to decline for the rest of the year which will effect sentiment.......so with no growth and earnings of 4.5p... a PE ratio of between 8- 10 is being fair in this market.....which gives a share price between 35p-45p.......

Long term they highlight the risk from suppliers increaing their market share through direct selling......Canon make up 80% of the US sales.....have a look at the rumours on the Canon Yahoo BB(CAJ)......