Danakali Share Discussion Threads

[mooch] 31/1/2002 13:58

How many of you are still in? Or am I the only sucker left?... Sod it - I'm riding this one right to the bottom and back up again.

[jbat] 31/1/2002 13:57

Danger is, if it drops too much further, people will start wholesale abandoning ship!

[redman2] 31/1/2002 13:56

there goes my stop loss at 37. What a huge dissapointment

[webley] 31/1/2002 13:56

Could be shorters.

[johnnyamerica] 31/1/2002 13:53

Mooch - tree shaking is what's happening now. Selling stock to scare people into selling. Look for round numbers at the end of the last 20 trades.

[pistonbroke1] 31/1/2002 13:50

is it that the results are already factored into the recent hipe in the share price or should it still be higher

[jagluthra] 31/1/2002 13:50

oaklandsway:
turnover down for this quarter and last 9 mths, gross margins of profit down as well, what about the future, i am not so sure

[jbat] 31/1/2002 13:50

Stop loss at 33.

[serious punter] 31/1/2002 13:49

I agree jayno - management are moving the company forward quarter on quarter. If we hold hard, price will rebound up

[redman2] 31/1/2002 13:49

hmmm. not so confident now

[jbat] 31/1/2002 13:48

Its taking a lot of nerve to keep my finger off the button, but holding anyway!

[mooch] 31/1/2002 13:48

I might sound like a paluka, but what exactly is tree shaking?

[serious punter] 31/1/2002 13:46

MMs tree shaking - no sells yet price movement

[jayno] 31/1/2002 13:46

You always get some people who have profit, waiting to see if there's anymore to be had just after results, but who sell quick if the price doesn't spike to protect their gains. The good news is that there doesn't seem to be too many of them and the price is holding. Probably we'll see similar pattern on NAS at first, but there's nothing I can see that should stop this stock moving north now - today or over coming days and weeks

Jayno

[webley] 31/1/2002 13:45

Given 9.11 etc then reduced turnover was to be expected surely.

[jbat] 31/1/2002 13:45

Into the red! What the hell is happening!

[redman2] 31/1/2002 13:45

Could someone explain why the ridiculous drop?

[redman2] 31/1/2002 13:43

Still I can't understand why people have sold? Doesn't make sense?

[itstelboy] 31/1/2002 13:42

Thats excellent news back into positive earnings terittory!! Turnover was always going to be below previous years because of sell-offs and closure of non profitable outlets.

[jayno] 31/1/2002 13:41

Reading the results more closely the bad news is reduced turnover, but the good news is increased volume and margin for profit, third off operating costs, half of debt removed. It'll do fine this afternoon.

Jayno

[serious punter] 31/1/2002 13:41

Look pretty good to me oaklands -

[webley] 31/1/2002 13:40

Thanks nix100 - they look alright to me!

[johnnyamerica] 31/1/2002 13:40

Embargoed until 13.30 31 January 2002

DANKA BUSINESS SYSTEMS PLC

("DANKA" OR "THE GROUP")

DANKA REPORTS THIRD QUARTER RESULTS

FOR THE THREE MONTHS ENDED 31 DECEMBER 2001

Danka Business Systems PLC today announced its third quarter results for the
three months ended 31 December 2001.

The Group reported an operating profit from continuing operations of £7.2
million for the third quarter as compared to an operating loss from continuing
operations of £6.7 million for the third quarter of the year ended 31 March
2001. The prior year's third quarter earnings included an exceptional charge
related to restructuring of £7.5 million. Excluding these exceptional items, the
operating profit from continuing operations was £0.9 million for the prior year
third quarter. This compares to an operating profit from continuing operations
of £3.2 million for the quarter ended 30 September 2001 adjusted for an
exceptional charge related to restructuring of £0.5 million.

EBITDA (defined as earnings before interest, taxes, depreciation and
amortisation, excluding exceptional items) from continuing operations was £19.1
million or 6.9% of turnover in the third quarter compared to £13.8 million or
4.7% of turnover in the prior year's third quarter and £15.6 million or 5.9% of
turnover, sequentially.

Danka's Chairman and Chief Executive Officer, Lang Lowrey, commented: "This
marks the third consecutive quarter of EBITDA improvement. We are pleased with
this progress and will continue our efforts to improve on this and all other
aspects of our financial performance."



Total turnover from continuing operations for the third quarter declined by
£17.0 million or 5.8% to £277.2 million from £294.1 million in the prior year's
third quarter, while total turnover from continuing operations for the nine
months ended 31 December 2001 declined by £83.3 million or 9.2% to £824.4
million from £907.7 million for the nine months ended 31 December, 2000. Foreign
currency movements positively affected the Group's total turnover from
continuing operations during the third quarter by approximately £0.4 million and
£27.9 million for the year to date. Turnover is down primarily due to a decrease
in service and rentals in the U.S. resulting from the continuing transition from
analogue to digital equipment, negative market trends and a weakening of global
economic conditions. Worldwide, retail equipment sales from continuing
operations were down £4.6 million as compared to the third quarter of the prior
year. Retail equipment sales in the U.S. were flat in the third quarter as
compared to the prior year's third quarter despite a 46% reduction in the number
of sales representatives in the U.S. This reduction was partially offset by a
49% increase in U.S. sales productivity (i.e. hardware sales divided by the
average number of sales representatives) and the addition of a large national
account. The reduction in U.S. sales representatives is part of the Group's
strategic plan to improve sales productivity while reducing costs.

The Group's combined gross profit margin (before exceptional items) for the
third quarter was 35.2% compared to 34.2% for continuing operations in the prior
year's third quarter and 34.0% sequentially. For the nine months ended 31
December 2001, the Group's combined gross margin from continuing operations was
34.7% compared to 35.3% (excluding the exceptional inventory and rental asset
write-down recorded in the second quarter of £21.9 million) for the prior year.

The retail equipment sales margin from continuing operations was 25.0% for the
third quarter of the year ending 31 March 2002 as compared to 23.8% for the
prior year's third quarter and 23.4% sequentially. The retail service, supplies
and rental margin from continuing operations for the third quarter of the year
ending 31 March, 2002 was 42.7% as compared to 42.4% for the prior year's third
quarter and 41.1% sequentially.

Operating expenses of continuing operations excluding exceptional items
decreased by £9.6 million to £90.2 million or 32.6% of turnover for the quarter
ended 31 December 2001, from £99.8 million or 33.9% of turnover for the quarter
ended 31 December 2000 (excluding £7.5 million of restructuring costs) primarily
due to our plan to reduce expenses while increasing productivity. Operating
expenses from continuing operations excluding exceptional items were 32.8% of
turnover for the quarter ended 30 September 2001.

For the nine months ended 31 December 2001, the Group reported an operating
profit from continuing operations of £16.0 million compared to an operating loss
of £13.7 million in the nine months ended 31 December 2000. The current year
operating profit includes an exceptional expense of £0.8 million related to
restructuring charges while the prior year's operating loss included exceptional
expenses related to the write-down of analogue inventory and rental equipment in
the U.S. and Europe and to restructuring of £21.9 million and £3.7 million
respectively. Excluding these exceptional items, operating profit from
continuing operations is £16.9 million for the nine months ended 31 December
2001 and £11.8 million for the nine months ended 31 December 2000.

Recurring interest expense decreased by £8.4 million to £4.5 million for the
quarter ended 31 December 2001 from £12.9 million for the quarter ended 31
December 2000 and has decreased by £1.5 million from £5.9 million for the
quarter ended 30 September 2001. The decrease is primarily due to lower interest
rates and reduced outstanding debt.

The Group had a pre-tax profit of £0.3 million for the quarter ended 31 December
2001 compared to a pre-tax loss of £17.6 million for the quarter ended 31
December 2000 and a pre-tax loss of £7.8 million for the quarter ended 30
September 2001. For the nine months ended 31 December 2001, the Group had a
pre-tax profit of £151.1 million compared to a pre-tax loss of £47.8 million for
the comparative period. Pre-tax profits for the nine months ended 31 December
2001 include £119.2 million for the gain on disposal of Danka Services
International and an exceptional gain from the early retirement of debt of £33.0
million.

The Group recorded a post-tax profit of £6.9 million for the quarter ended 31
December 2001 before financial costs of non-equity shares compared to post-tax
losses of £15.8 million for the quarter ended 31 December 2000 and a post-tax
loss of £1.4 million for the quarter ended 30 September 2001. The Group recorded
post-tax profits of £115.9 million for the nine months ended 31 December 2001
before financial costs of non-equity shares compared to a post-tax loss of £51.2
million for the nine months ended 31 December 2000.

The Group reported basic earnings of 0.8 pence per share in the third quarter of
the year ending 31 March 2002 compared to a basic loss of 7.3 pence per share in
the corresponding period of the prior year and adjusted basic earnings of 1.3
pence per share and an adjusted basic loss of 4.2 pence per share for those
quarters. Basic earnings for the Group were 43.8 pence per share for the nine
months ended 31 December 2001 compared to a basic loss of 28.8 pence per share
in the corresponding period of the prior year while adjusted basic earnings per
share were 5.5 pence per share and an adjusted loss of 18.2 pence per share for
those nine-month periods.

The Group generated free cash flow (defined as operating cash flow less interest
and tax paid and capital expenditure) of £9.2 million in the quarter ended 31
December 2001 compared to £8.2 million in the comparable prior year period and a
negative £0.4 million cash flow, sequentially. Total debt decreased by £19
million sequentially to £229.9 million from £248.9 million. Danka's Chief
Financial Officer Mark Wolfinger, commented: "Due to our financial
restructuring, the sale of DSI and our continued progress in generating free
cash flow from improved operations, the Group's total debt has decreased by
£272.5 million or 54.2% from £502.5 million at the beginning of the fiscal
year."

In summary, Lang Lowrey stated: "I would like to compliment Danka's employees on
the Group's achievements in the third quarter. Much of the Group's continued
operational improvement can be attributed to them and the efforts of the Group's
new senior management team, including its three recently appointed divisional
operating officers: Dr. Peter Williams, President Europe; David Berg, President
Canada, Latin America, Asia Pacific; and Todd Mavis, President U.S. The combined
efforts of this team have significantly contributed to our improved financial
performance and they are implementing programs which place more emphasis on
providing value to our customers. Danka's focus remains on debt reduction,
improving cash generation and providing outstanding customer satisfaction."

The Group has a credit agreement with a consortium of international bank lenders
which expires on 31 March 2004. The credit facility requires that the Group
maintain minimum levels of adjusted consolidated net worth and cumulative
consolidated EBITDA and a minimum ratio of consolidated EBITDA to interest
expense, contains limitations on the amounts of capital expenditures, each as
defined in the credit agreement. The Group was in compliance with all of the
applicable covenants as of 31 December 2001.

-Ends-

[oaklandsway] 31/1/2002 13:40

The Group reported basic earnings of 0.8 pence per share in the third quarter, please just wait as Danka has entered new history (recovery.