Dm Share Discussion Threads

[jeff h] 16/10/2008 19:28

I was thinking any buybacks before xd are effectively at 3.5p below the
purchase price, so they might have been tempted to mop up any surplus
shares.

[aa29] 16/10/2008 17:38

I wouldn't expect to see too much in the way of buy backs in the near future. The interim dividend will be stripping out most of the cash leaving them with net borrowings of £4m or so.

[jeff h] 16/10/2008 16:32

AA29 - it's just that I expected to see more Buy trades going though...
you can see from the chart that it took a couple of hours before the price
was marked up much.

As you say all the trades are not likely to be showing...a buyback would
re-inforce today's good news.

[aa29] 16/10/2008 14:16

Jeff, I suggest that relatively speaking, we have had a wave of buying -it's just that the MMs haven't had the shares to sell or the inclination to move the price up accordingly. For example, at the current quoted spread of 9-10, I can sell at 9.75p and doubt if I could buy any at 10.


Not all today's trades are showing.

[jeff h] 16/10/2008 11:00

I added another 25k on opening...surprised there wasn't a wave of buying,
everybody probably shellshocked at the recent market falls.

[aa29] 16/10/2008 09:12

Good news:

The Board has now concluded that, at the current time and in light of the wider market backdrop, any such transaction would not sufficiently maximise shareholder value, and that shareholders interests would be best served by maintaining the Company's listing and utilising the surplus cash on the balance sheet to return £5.08 million of value to shareholders by way of a substantial interim dividend of 3.5 pence. The Strategic Review has now been concluded and there are no longer any discussions regarding the sale of the Company.

This substantial interim dividend will be paid on 25 November 2008 to shareholders who are on the register as at 24 October 2008.

DM has now firmly established itself as the UK market leader in its two core market sectors of response based customer recruitment and direct mail. Based on past experience in recessionary periods and the positive response trends in the first half of this year, the Board believe that the Group will continue to perform robustly during any economic slowdown.

The Board continues to believe that the Company is fundamentally undervalued and that this is demonstrated by DM's ability and the Board's confidence in making such a dividend payment. The Board remains committed to maximising shareholder value and continues to identify and assess both further growth via acquisition and general corporate activity such as a recommencement of the previous share buyback programme.

[guru11] 14/10/2008 19:51

Effectively the price has been pushed down by market conditions, and not volume.
I see someone bought 100k at 8.5p which made no difference to the price.
The share price should pick up again when more news comes out and more buyers enter the field which may take time.

As AA29 says our biggest fear is being bought out on the cheap at not much more than these extremely low prices. AW already has 80% so why would he want the rest of the stock. Lets hope that he does not want the rest of the stock.

[skyracer] 10/10/2008 18:27

Its sensible for AW to do nothing until the current turmoil has subsided and we know where we are.

[aa29] 10/10/2008 13:51

Yes, Guru, at a mid price of 8p, I get the forward PE to be 2.5.

So you can buy them at 8.5p and you get a company growing profits at 30% pa on a forward PE of 2.7 (at 8.5p), a PEG ratio of 0.09 !! IF AW takes the company private, the immediate profit is at least 30% and maybe higher. Current trading reassured in two recent statements.

Mmmm ........

[guru11] 08/10/2008 12:07

AA29 - I agree with your last sentence, we want no buyout on the cheap.
What are we now on a pe of 2.5?

I know all about mortgages having passed the Chartered Insurance Institutes Mortgage Profession exam. last year when I was out of work. Unfornately or fortunately I did not get a job in the mortgage field, but the good news was I changed my mortgage last December from 1.5 above Libor to 0.47% tracker above base rate. I believe that they said Libor was now at 6.75%, so that has made a huge difference in my repayments.

Maybe with the mornings government help to free money up to lend things may get a little easier.

[aa29] 08/10/2008 11:55

Guru, with retained profit and no dividend for the last three months, I'd be surprised if the company wasn't net cash positive. Another £450k will have been paid off the loan (even though this will correspondingly reduce cash).

The only negative I can see is that the term loan costs interest at 2% over LIBOR so this will be expensive with LIBOR high.

The main concern I have is not a trading downturn but that the general markdown affecting share prices drives us nearer to AW being able to buy us out on the cheap. Hopefully banks/others won't want to lend at the moment even for deals such as this.

[guru11] 08/10/2008 10:46

The only worry with DMP as I can see is if the loan arrangement is withdrawn by the banks - that could have a serious effect. On the news the banks did this to a builder who was doing good business and it pushed him under. Still one has to wait for more news. Is it the share price being marked down or is there is serious problem lending money now?

[guru11] 05/10/2008 21:09

Looks like a few more weeks could now drag on.
Although we do not want a cheap buy out now.

It was said that trading in the second half would be better than the first half -

The question is - are we still on song for this or not.
_____________________________________________________________________________

I noticed in the I.C. that even one of the recruitment companies are only on a pe of not much more than 3 and with a 6% yield.

[bsg] 03/10/2008 09:33

He could just de-list ?

[guru11] 30/9/2008 11:30

Buyers in again today - yet still they fall!
What can one say but wait and see!
Thought 13p was cheap, but what are they at 9p on the offer now?
Believe we could see some buys at these prices to firm up the current price.

[aa29] 29/9/2008 20:10

Maximum shareholder value for a 81% holder or for the remaining 19% ? That's the risk of the current situation.

[guru11] 27/9/2008 09:53

CatsWhiskas - Although DMP appears to be a very good stock with a good four year record the share price has not exactly tanked up as yet, and has been very vunerable. at 9.00 bid now this is the lowest it has been for some time. The share price is going down on very thin volumes.

The question in all of our minds is - as in football - what happens next!
Does the Chairman buy out the rest of the stock? - hopefully not on the cheap.
Was it a ploy not to increase shareholder value, but to get it down for a MBO.
What has happened to restoring shareholder value - (which has gone pear shape)
What about the interim dividend - (although not much)
And more importantly - has anything changed with trading or is there unexpected bad weather / news just around the corner.

We of course all hope - as the guy Friday who bought in 25k x 2 - that this is just a blip - and a good buying oportunity - but no one except AW really does know the true current story - and shareholders always learn the current story - six weeks down the line. So here is hoping that we are still on track.

Imagine if even profits equal that of the first half what the prospective pe is now - pe of 3 ? now that is silly if it is still true. Why should we not think that the company is still not on track, as the business model is very good and past performance has been very good. People still buy lottery tickets and scratch cards and then there is the database for direct marketing, so it is not a one product business.

All the same - one has now to wait for more news good or bad to come.
On the good side the debt is rapidly decreasing - so it is not all bad news - at least at the moment.

[paulcaine2003a] 26/9/2008 08:34

They havent stated a dividend reinstatement and this share is technically still in the process of a potential bid from the chairman. Looks a very good investment at these prices although not sure how long it will take to recoup money.

[catswhiskas] 25/9/2008 22:08

i got stung in Invox lost 5k this bought Invoxs business .As I remember invox made big profits and then the share price just started to tank every day no one had a clue why including paulypilot who continued to buy like me then all of a sudden the bad news it went from making about 5 million a year to a loss making company and we all lost our money..ouch ! The point is have the wheels fallen off the same business again ?

[guru11] 25/9/2008 21:50

Well who would have thought one could have picked up DMP on the offer for 10p - what is really happening - more than meets the eye? Bid now 9.2p after 2 very small sales. Are the MM milking the bucket, by scaring punters into selling, and then selling on at much higher prices, or is there more in this than Joe Public shareholder is aware.

Mind you the biggest loosing on a downturn is AW himself.
But then is this not just a big blip???

[guru11] 24/9/2008 16:52

Nick - true - bid today now 10p.

Question is - has anything - trading / prospective pe ration - really changed since interim results? The only thing we know has changed is an outside party is now withdrawn from making an offer for DMP.

3 thinks could happen -
AW could bid for the rest of DMP on the cheap
There be no change in trading or prospective profits
A black cloud or bad news could be around the corner.

The a snowball gather more snow when it starts rolling -
the same as when sellers come in, more sellers join the queue to sell, and we gather more sellers. But are they justified on selling?

[nick faldo] 23/9/2008 21:09

Evening guru.

The share price is just dipping like many in this sector if you ask me.

Cheap: Maybe, but its a brave man who calls the bottom now.

[guru11] 23/9/2008 21:01

Maybe the talks offer which fell down, and cause the price drop was a ploy by AW to not just get shareholder value, but to buy the remainder on the cheap!!!
DMP has not been so low for some time now. Yet has the forecast profits this year actual gone down, or are things just as good as they were just after results. I think nothing has changed just the stock is much better value now.
In fact too cheap!!!! Maybe I am sinical.