Dm Share Discussion Threads

[guru11] 04/3/2011 23:45

I am beginning to think the the share price will come good.
One has to weigh up the cost of the OFT investigation and lawyers,
against the profit generated in the last six months.
Presumably the Company has set aside in the accounts a certain amount
of this already so all will not hit the last six months.
Results time is the important time but if they can reduce debt further,
they could be in a cash rich situation, and there could be dividend.
I am optimistic.

[guru11] 22/2/2011 08:20

It will be a case of what percentage of profits the OFT investigation has cost DMP to resolve. Time will tell what effect the ruling will have on overall profits. Part of the business should be uneffected, but then where did the majority of the profits come from and how much will turnover be affected.

Surely DMP can go into other areas that are still for Joe Public grade D lot, such as these tv competitions where there is an easy answer, dial 090 at 60p per phone call with a one in 500,000 chance of winning £25,000. Or a tv program that you have to phone in which costs 60p whether you get through or not with a chance of winning £5,000. One night such a program took 400,000 calls. People are prepared to waste money - X factor has taken I believe £5m in calls to vote.
Hopefully Mr Williams will think of other ways to exploit Joe Public grade D.

What is a grade B, C & D person. One who plays the lottery with little hope of winning or fruit machines which pays out 72% of takings, or those who play bingo.

What is a grade A person - you and me who don't chuck money away on a nearly hopeless cause.

DMP could just have a 'honest' scratch card which is gauranteed to pay out say 75% of takings, with a big prize of say £1,000 for £1. That is no difference from the lottery. What percentage winnings do you get back on the lottery? 50% 60% ?

Turnover could triple !!!!

[jeff h] 04/2/2011 09:42

Here's the HB view:-

DM Group (LON:DMP, 6.125p, £10.19m) The high court test of the OFT proceeding against DM concerning some of its activities was concluded yesterday. A mixed result with some aspects of the OFT proceedings being upheld, while some turned down. It now seems there is little prospect of a fine while the ruling on costs will be made later. Overall this is a good outcome with the law clarified and the OFT and the group will now enter a period of discussion before a final order is made by the court. With the end in sight we maintain our buy recommendation, noting of course the danger of the unknown fine. BUY (Julian Tolley)

[guru11] 03/2/2011 22:28

Sounds to me more positive and negative, as in my view things could have been worse. No fine as the law was not clear, although 'there has been no ruling in relation to costs' could prove to be a bit negative on coming results. Is it going to be the cost of an industrial tribunal marginal for some companies or the cost of employing specialist barristers for hours on end at £500 per hour or more.

The unanswered question is what impact this clarity has on potential profits, and how much of DMP's business is affected in this area of question.
I still believe that the share price is oversold due to the undue worry, but I did think that this currently was not affecting the next set of results too much, and if DMP can continue to repay debt it could be in a cash rich situation quite soon.
I am certainly staying with the stock at this stage, as this year will clarify the position - as they say in marriage - for better or for worse.

[aa29] 03/2/2011 13:37

Hard to say how positive or negative that is.

[aa29] 03/2/2011 13:35

Today's RNS

The Group has previously announced that proceedings were being taken by the Office of Fair Trading ("OFT") in relation to certain promotions undertaken by certain Group companies. Following a hearing which took place in January 2011, the High Court has now handed down a judgment, made on 2 February 2011, in relation to those proceedings.

There had for some time been uncertainty surrounding the relevant law applying to the industry sector within which those Group companies operate. This uncertainty resulted in lengthy discussions between the OFT and the Group companies. The discussions did not resolve the uncertainty such that it was concluded that clarification of the law in relation to promotions was necessary which meant that the issues were referred to the Court for clarification.

The major issues in the case had not been tested before a Court previously. The Court has now delivered a detailed and considered judgment and DM welcome the clarity brought by it. In making its decision the Court decided that in certain respects the promotions concerned did infringe the relevant regulations. In other respects the Court did not accept the OFT's contentions of infringement.

There will now follow a period of discussion between the OFT and the Group companies before a final order is made by the Court. The proceedings will not result in a fine of any kind on the Group and at this stage there has been no ruling in relation to costs.

[guru11] 17/1/2011 22:07

The price is going to be a bit volatile, but they are still raking in the cash at present, and after paying so much debt down last time, I am sure that they must be doing the same again. Even with the OFT investigation, which can't at worst affect all of their profit, I still believe that the share price is on a low point now. The share price fall has been over done, but punters won't believe it until the OFT investigation is out of the way. Could we be looking at a dividend, or is a lot of the surplus cash going to go in legal fees?

[jeff h] 07/1/2011 16:07

Blimey I paid 5.95p this am for a 15k top up and this pm someone paid 6.75p for 20k

[jeff h] 07/1/2011 14:56

..some old news after the Interim results:-

DM Group (DMP, 6.75p, £11.23m) Interims to June 2010 saw revenues of £13.45m (£11.60m) with gross profits of £7.06m (£6.52m), gross margins of 52.4% (56.2%) and lower admin charges of £3.99m (£4.04m) leaving op profits up at £3.06m (£2.48m) with lower finance charges boosting the result further with PBT of £2.98m (£2.28m) and EPS at 1.32p (1.14p). Net debt ended the period at £2.54m (£4.43m at the Dec year end) despite a £0.77m adverse movement in working capital. These are good results with the overhang of the OFT investigation now not expected to deliver its conclusions to 2011. Never the less the rating is attractive and we rate the group a BUY with a modest 10p price target. (Julian Tolley)

[jeff h] 07/1/2011 14:49

I wonder if todays 500k+ trade is another buyback?

I've been adding to my holding recently at 6p and below think the company will have traded well in H2 to give full year profits of perhaps over £6m with no/minimal net debt when the current market cap for the whole business is only £10m...surely too cheap.

In H2 I've found DM scratchcards in The Times, Daily Express and my local Trinity-Mirror paper and I only buy the dailies infrequently so they could easily be appearing in other newspapers.

The ongoing OFT/EU regulatory legislation for the scratchcards no doubt is partly to blame for the low share price but the other sides to the business are also of major interest.

Recently I mailed Adrian Williams with what I thought to be 2 potential customers for the database rental side...the 2 I had in mind are both quoted companies that I have invested in...the response was they had recently had an initial order from one of the companies and they would approach the other I suggested for orders.

Looking forward to the results.

[jeff h] 30/11/2010 21:45

guru - the punter was the company, it was a share buyback.

[guru11] 30/11/2010 20:26

Some punter Monday bought £100,000 shares in DMP = 1,625,000
Is DMP a one product company, and is he due to get conned?
Is the share price about to turn, and is it now too cheap. Time will tell!

[boadicea] 30/11/2010 17:20

Should I assume people here know what they're investing in?
If you invest in con-merchants you should expect to be conned.

[guru11] 24/11/2010 20:52

AA29,
It does not really make sense as the fundamentals have always appeared to be good. The prospective pe ratio is now 2.1. Is that now not silly?

The share price suggests that they will definately not maintain the profit track and bad news is on the way, but the question is 'Is bad news on the way' and 'Are eps now about to fall' cause if not thenthe share price is very cheap. The pe ratio has always been low, but now it is low, low.

I think that sometimes a share price can be like a snowball, some punters sell the price goes lower, which attracts more sellers to sell, regardless of the fundamentals and anything else.

The fall in the share price suggests that DMP is going under, but is it after they repaid £4m worth of debt last year, and this years eps could be 2.64p.

Time will tell. The next set of results will be very interesting.

It keeps falling - now 5.25 / 5.75 and for larger sells now 4.75p -

What can one expect next - a share price rise or some very bad news.

[aa29] 24/11/2010 15:50

Guru, the depressing thing is going back to the start of this thread and you'll see you were saying essentially the same things five years ago.

The last five years show that Mr Williams doesn't have a great track record of delivering value growth to his minority shareholders.

Recent trades are interesting in so far as MMs are actually taking stock off people so there has been some liquidity out there.

[guru11] 24/11/2010 08:13

Price now 5.5 / 5/9 prospective pe ratio 2.2.

Where do we see the share price after the next set of results ?

Do we look at the gloom and doom of the current share price,
or the past record of results ?

Are these very very cheap, or are there problems for the Company.

[guru11] 18/11/2010 08:35

Another month of no change in the share price and no further news. This could continue until next set of result and the OFT outcome. However if DMP is paying back debt at the rate it was then things are looking towards a debt free company.
Correct me if I am wrong but not all their business depends on scratch cards and 090 number income. The problem with DMP since I have been a shareholder it has all been anticipation of a higher share price which has not happened. Was not PDV sales at record levels in one report?

2011 should be an interesting year, as DMP share price must now be at rock bottom, as well as the pe ratio which is really now quite silly. Touch wood - surely there must be too much bad news built into the share price now, the only fly in the appointment is how much DMP will be spending on legal fees on the OFT problem.

[guru11] 18/10/2010 20:58

Masurenguy - I've had letters from Ross-On-Wye and have just ignored them, but then as you and I are rated as a class A person and who uses money carefully. But think of the thousands of people who waste telephone money on these elementry pick the answer from A, B or C questions. The companies that run these must make thousands. A late night quiz program on T.V. where it cost 65p to ring, - and you may not even get through - in one night had 400,000 calls. Did you know that X factor has taken £5 million in calls, I am not sure what perod this is over but £5 million, so people are prepared to waste money. Being an A rated person I don't waste money on voting.

The question is 'what percentage of DM's profits are made from the 090 numbers,
and how will it affect profits? Hopefully they do make profit from other areas. Maybe that is why they are on a prospective pe of less than 3. But then the board are quite clever, so who knows what the future holds for DMP and its shareholders.

Could DMP get fined is another question and how much could legal fees be. But then they may be doing things immorally wrong but are they actually illegal?
I don't suspose that the Board knows anything else until the OFT enquiry is over, and meantime the share price will remain flat.

[guru11] 05/10/2010 14:00

Jeff H - Too true, but a lot of people I suspect must be doing just that. How many people ring 090 at £1.50 with the elementary answer to these A, B, or C questions - 1,000's I suspect.

Would the OFT report outcome have any effect to DMP on this, cause if it does then it would effect DMP's profits? If DMP has cut down debts by £4m then sooner or later they should be in a net cash position, and does that not mean that we could be looking at some dividend payment?

The problem in the interim is that we will again see thin selling, and the share price will not now do anything until final results next April, and it wil be another waiting game before any share price rise, sadly. But long term logically and in theory the price should double.

[jeff h] 01/10/2010 13:53

guru - I prefer to buy the shares than make the scratchcard phone calls at up to 6 mins @ £1.50 a min.

So more like £9.00 and double the £4.50 you quote.....wish the share price would double!

[guru11] 01/10/2010 08:36

Jefff H - Does that mean that you did not spend £4.50 on a telephone phone call with a one in ten thousand chance of winning £1,000? Oh dear!
Mind you there are probably a lot of people who would have done.
I have a policy - not to ring premium rate numbers,
unless there is a very strong reason to do so, like on Bid Up tv.

These 090 numbers are very clever in the way that they take their time in coming in the end to giving one a claim number. How long does it take 2, 3 4 or 5 miniutes at £1.50 per minute?

I agree though that there is now a lot of potential for an upside in the share price, even if we have to wait for it. It is not a case of if the share price goes up, but when.

[jeff h] 27/9/2010 08:39

Ron - you have to get a claim number first via a premium line telephone number or write with a SAE to obtain one....I didn't bother!

[ron atkinson] 27/9/2010 08:35

Did you win anything?

(Scratchcard)

[jeff h] 27/9/2010 08:32

Topped up today and last week.

Received another scratchcard in my local paper (a Trinity Mirror title).

A month or so ago also had one in and at the same period one in a Times and a Sunday Times so I reckon H2 should be good for this side of the business.

Anyone else know of any other publications they are in?