Danakali Share Discussion Threads

[lowtrawler] 30/4/2004 16:17

With only 4 weeks to the results, it looks like the market is getting jittery. However, the volumes both here and in the US are pretty low. Coupling this to the fact that Ikon results disappointed, I don't read this fall in price as any inside knowledge of the results. It seems to me that the Ikon news has impacted Danka and the lack of news / volumes has allowed the price to fall. Anyone else have a take on the situation?

[zedder] 22/4/2004 16:24

With the $ getting stronger again, couldn't resist a top-up at a bargain price (2229 @ 59.25p). US DANKY price as I type is $4.285 mid, at $1.77 to the pound, that equates to 60.5p.

[lowtrawler] 21/4/2004 17:12

Equivalent of 60p in the US today. Think we'll see the extra 1.5p in the UK?

[zedder] 05/4/2004 14:03

With the $ having strengthened again to 1.81, should be more like 64-66p.

[mjele1] 05/4/2004 10:58

Danky finished at its high for the day on Friday @ $4.75.
This should augur well for this pm.
Also, based on that close price I would expect the bid - offer to be around 63p - 65p.
Looks like we are lagging again. Top up opportunity ?

[johnymac] 02/4/2004 16:32

Have DNK being buying companies ?
Anyone know ?

[lowtrawler] 02/4/2004 16:27

I notice it has increased today but so has the US, still 2p below the US. Good time to buy.

[johnymac] 02/4/2004 15:55

Lets hope for a push through the $5 in the US with the good jobs news today.
And lets hope it stays there, that will be when dnk will motor.

[lowtrawler] 02/4/2004 08:52

This mornings increase is still 2p short of the US - a good buying opportunity for everyone.

[willjam] 26/3/2004 18:00

The revenue is about £250000 per annum profit about £150000 I estimate, no big deal

Their big problem is they havent been able to ship stock in Europe for three months due to A computer meltdown

That is more revevent

[johnymac] 26/3/2004 09:40

Anyone know how much yesterdays contract announcement could be worth ?

Danka Business Systems PLC, a leading independent global provider of office imaging systems and services, today announced that its Canadian subsidiary, Danka Canada, Inc., has won a contract to install and service eight Heidelberg Digimaster(R) 9110 print systems at five municipal government locations in Toronto, Canada. These systems, along with the four Toshiba e-STUDIO 810 large workgroup devices provided by Danka, will generate 70 million images per year and meet the city government's document production requirements in all five boroughs

An RNS must be 10% turnover or new business, therefore this contract could we worth as much as 80mill, Does anyone agree ?
It is generating 70 million images per year, so it is plausible.
Dnk could also be providing the consumables as well as the hardware, and they are also providing installation of their own front-end Danka @ the DesktopTM software, and all the technical service and support.
It could be very juicy, im suprised at the lack of interest in DNK shares today.

[miamisteve] 24/3/2004 23:28

Danka Business Systems PLC
Detailed Broker Forecasts
I was researching the company with the view to investing. I found only one broker forecast for 2005 @ 3.70 p a share, that would give a pe of 15. Is this estimate unrealistic? Previous posters were talking about 7p+.


2004 ESTIMATES 2005 ESTIMATES
Date Rec Pretax Eps Dps Pretax Eps Dps
£m p p £m p p
Evolution Beeson Gregory
8-Mar-04 BUY + -1.60 + -7.70 - - 29.1 + 3.70 + -

Consensus -1.60 -7.70 - 29.1 3.70 -

1M change +2.70 -2.00 +0.10 +0.10
3M change +2.70 -2.00 +0.10 +0.10


23th March 2004

[yogibaer] 23/3/2004 14:45

Lowtrawler, very much in agreement with your first post. I couldn't name another company with a Price to sales ratio of 0.2 that could be debtfree within the next 12-24 months. The last conference call states that revenues are now >50% from digital and that revenues have stabilized; onwards and upwards to £1 -£1.50 over the next 12-18/12

[lowtrawler] 22/3/2004 16:43

zedder

Thanks for the response. I was beginning to talk to myself lol. My first post is also the one I believe in. However, I like to see debate covering all sides.

[zedder] 22/3/2004 14:41

Lowtrawler,
I tend to go with the first of your recent posts. As I have said several times before, the major driving force for the DNK share price is what DANKY does in the US. A potentially very significant event for DANKY will be if it can move back to the NASDAQ National Market from the NASDAQ Small Cap (needs to hold $5+ for a set number of trading days). Various funds in the US will then be buyers. In fact, having tracked the Institutional Ownership of DANKY for the last 18 months, this ownership has already started to increase significantly:



In the second of your recent posts, you questioned whether the promised cost savings would be achieved. Given that DNK actually announced to the market an increase in the forecast cost savings, a few weeks after the initial estimate in their H1 report, I am confident that these savings will be achieved:

[lowtrawler] 22/3/2004 13:55

OK, now it's time for ultra-bull.

DNK can repay debt over the next 2 years which will virtually eliminate interest payments. Hence, base profitability for shareholders is really $80m and not $46m. A more realistic P/E ratio for such a growth company is around 15 – so they should be valued at $1.2bn.

The improved IT infrastructure will allow them to target the most profitable customers / products and geographic regions whilst properly incentivising the sales force. This will allow them to attract and retain the best salesmen. They will "cream-off" the most profitable areas and the competition won't even see it coming. Profit growth of 20% + is very realistic. This would underpin a $1.2bn valuation and possibly extend it to $1.5bn.

Everyone should be looking for £2.50 per share ($18 per ADR) within 18 months.

[lowtrawler] 18/3/2004 19:26

johnymac

I would take issue with £1.75 - £2.00 but not with it being a cracking buy. Effectively, Gross Profit has stabilised around $120m a Quarter. SG&A costs should also settle down to around $100m a Quarter from the 3rd quarter of this year onwards. This will give base EBIT of around $80m annually. However, they are incurring interest costs of around $8.5m a Quarter, giving a profit attributable to shareholders of $46m (they have a sufficiently large tax creditor that they are unlikely to pay tax in the forseeable future). They are currently valued at $281m. On a realistic P/E of 10, they should be valued at around $460m. This equates to around £1 per share or $7 per ADR.

These financials assume no growth. This is unrealistic as Danka are now well placed to take advantage of what is a fast growing market. Building in growth expectations of only around 5% p.a would increase the price target to about £1.50 per share or $10 per ADR.

Why are they not already trading at these levels? The short answer is history. They have been very badly managed in the past and the market has a long memory. On a slightly more cautious note, they also have quite onerous banking covenants and costs of capital (they pay LIBOR plus 8.5%). This reflects the poor credit risk they have been in the past and some investors still worry that they will fall back into bad habits and the banks will foreclose. This is highly unlikely given their current low level of indebtedness. There is also the risk that they fail to deliver lower SG&A costs or start losing market share. I see no evidence for either of these circumstances arising.

In summary, I see no reason why they shouldn't be trading at £1 this year and possibly as high as £1.50. However, £2 is a bit farther away.

[mjele1] 15/3/2004 17:23

Somebody likes Danka
--------------------------------------------------------------------------------
Danka Business Systems PLC
('the Company')

Holding in Company

The Company was notified on 12th March 2004 that as at close of business on 10th
March 2004, The Goldman Sachs Group, Inc., of 85 Broad Street, New York, NY
10004, USA, was interested in 10,078,896 shares representing 4.02% of the
Company's issued Ordinary Share capital. This represents an increase in the
holding of the Goldman Sachs Group, Inc. which on 12th January 2004 totalled
3.03%.

Of these 10,078,896 shares,

a)An interest in 9,078,164 shares arose from the interest held by Goldman
Sachs & Co. ('GS&Co.'), acting as custodian of 2,269,541 American Depositary
Receipts ('ADRs'). These ADRs are, or will be, held at The Depositary Trust
Company, New York ('DTC').

b)An interest in 359,352 shares arose from GS&Co. acting as discretionary
manager and custodian of 89,838 ADRs. These ADRs are, or will be, held at DTC.

c)An interest in 1,380 shares arose from a beneficial interest of 345 ADRs
held by GS&Co. These ADRs are, or will be, held at DTC.

d)An interest in 640,000 shares arose from a beneficial interest of
160,000 ADRs held by Goldman Sachs Financial Markets L.P. These ADRs are, or
will be, held at DTC.

-ends-

[lowtrawler] 10/3/2004 10:06

Interesting - we have been complaining that the UK price is always below the US price but it closed in the US last night at 65.5p equivalent and you can currently sell in the UK for 66p. MMs in the UK must be expecting a rise today in the US.

[lowtrawler] 08/3/2004 16:42

zedder

The rules are 30 consecutive trading days - so a minimum of 6 weeks.

[zedder] 08/3/2004 14:05

If the US NASDAQ listed DANKY can maintain a share price of $5+ for 90 days (I think it's 90 days), they move from the NASDAQ Small Cap to NASDAQ National Market. As Lowtrawler says, this then opens the shares up to be purchased by funds that will not trade Small Cap shares of $5 and below. I suppose it's the equivalent of say moving from the FTSE All Share to the FTSE 250. This should easily create enough demand for the move from $5 to $7. If the predicted EPS next year does come in at 50c then that could see the further move to $9+.