Xps Pensions Share Discussion Threads

[yasx] 02/3/2012 12:36

The bottom line is that although I am bearish the retail secotr generally, I think that the mterics here, coupled with the dpeth of talent in the Boardroom, justifies a long position.

dyor

[yasx] 02/3/2012 12:35

TBF,

My pleasure.

[yasx] 02/3/2012 12:34

Saucepan,

I highlighted XPS at 1p or so back in the summer last year, with a 3p target which was met. At the time the squabblers (who have since disappeared) raised fictitious bear points and the doom and gloom abut Japan. If it is of interest, here is my post which refuted all these bear concerns back then. It went on to treble as I had anticipated, and I recenlty declared going long again at 1.5p or thereabouts.



yasX - 28 May'11 - 22:29 - 945 of 1231 edit


All,

I indicated earlier I would say a little more in relation to Expansys given the claims by some so called experts that it is heading for the graveyard – it is already up over 10% since the gracious and sagacious chap suggested it the other day.

Now, the clearly deluded bears have not done their homework. One suggests he has been looking at it for over two years – I suggest he head to the opticians. But being a sagacious chap, I am not one to dismiss the concerns highlighted by the bears without offering an appropriate and robust counter. So here goes:

Bear Concern 1: The Japan crisis has destroyed any chance of growth in that region

I have already discussed the issue the other day. In the short term the proportion of the business derived from Japan in the overall scheme of things is relatively small, though it was clearly been earmarked as a growth driver in the years ahead. It goes without saying that consumers have reigned back spending since the disaster and a glance ot consumer confidence in the latest month suggests an abysmal outlook. It could take as long as 18 months to get things back on track. But as they indicated in the last update (with sales in Asia up by nearly 200% largely on the back of Japan) once things stabilise then the tremendous opportunities can be taken advantage of.

The Japanese telecom market has only recently been deregulated and so the opportunity is at the nascent stage. They have partnered with JCI and have established a good relationship.

But despite the difficulties highlighted about Japan, the deterioration as a result of the climatic disaster is offset significantly by robust growth in the web business in China, Singapore and Australia. So the view held by Expansys that international markets shall be the ones that drive growth in the months and years ahead is still intact given the response from these markets and the growth thus far in the US as well. The potential in China is considerable when you consider that the online consumer market in China is still not very mature, with more people now gaining access to broadband.

The US mobile market is where the UK market was some five years ago, and this represents another strong growth area. Expansys have made a great start here, with sales up nearly 50% and the recent appointment of Tim Eltze, who really understands the US business, to oversee operations there is a key appointment.

Bear Concern 2: XPS retail offering and site is poor:

Well, they have recently overhauled everything and the new site is said to be considerably improved. Now, I am not one who is well positioned to judge these things since I don't have the vaguest idea what makes customers who see these things tick. But I can say that based on assessments undertaken by Expansys themselves it seems that customers perceive the new site as being much better. They look at the design effectiveness by considering all sorts of customer contact statistics and conversion rates are probably better as a result.

Bear Concern 3: EPS is heading down:

Well, the level of competition is difficult and is contributing to eroding margins, especially in the UK. The dynamics of the industry cannot be changed, but what they can do is improve themselves in an attempt to arrest the slide. They have taken on a new Senior Category Manager in an operational move to work with suppliers as well as building and raising the brand profile.

The issue of margins is a concern, but absent formal guidance to the contrary from the company I am comfortable with 2011 earnings forecast of around 0.3p.

Bear Concern 4: Organic growth is insufficient:

Well, I have already discussed above the issue of growth in the various regions. But I suspect there might be acquisitions down the line to both support and enhance the business. In terms of having the funds for these, well, I seem to recall they have in place a debt facility at a competitive rate that they can tap if necessary.



Bear Case 5: Directors not buying at these depressed prices, especially Jones given he though his businesses were worth more when he sold them a year ago than the entire worth of the Group now based on the EV.

Well, this is a fair point from the bears. It is rich for Jones to flog DSNS and PJ Media to holders with a highly dilutive raising at 5p and then not having some shares himself at well below 2p. I cannot speak for the Directors, but thus far they have not been buying, so there is an element of caution. I do not think they are, or have been in a closed period in the last few weeks, but I think (but do not know) results are due around late July so they might soon be in a closed period fairly shortly. It would be good to see some Director purchases in advance of that, but don't count on it.



So, in summary, there are risks, but there is some cause for optimism given where the price sits. I am long and looking for 3p in due course.

Dyor – my views only.

[the big fella] 02/3/2012 12:31

Some interesting posts / views. Thanks

[yasx] 02/3/2012 12:29

Incidnetally, although they have taken considerable steps to improve the design and functionality of the web offering, as someone raised above, they need to raise awareness of it. I am aware that they embraced the idea of improving the marketing aspect last year, so it is certainly not being ignored.

dyor.

[yasx] 02/3/2012 12:28

Incidentally, the idea of partnering to drive growth is one they have placed considerabke emphasis on over the past year.

We have recently seen this deal with the Government of Qatar, and I seem to recall the idea of engaging other outfits in that part of the world was being pursued around the same time.

Separately, I suspect there could be interest emanating in the mobile mrket from places like Malaysia and Thailand and so on. BUt all this is speculation, until we see tangible deals and hard numbers. As you will know, all companies engage potential customers all the time - translating them into partners and customers is a different thing.

dyor

[yasx] 02/3/2012 12:21

Saucepan,

A few points re the concerns you raise:

* Expansys has spent a significant amount of resource on web development over the past two years, and especially last year.

* The bulk of the revenues are still generated in the UK and Europe, and although other markets are growing at a faster rate, they are still smaller in terms of bottom line to Expansys. Some of the factors (consumer scaling back and so on) are beyond the control of the company, but they have to be efficient to capitalise in a difficult environment.

* As regards the website, I know they take seriously the KPI's for web traffic, not least the conversion rates, and are aware of comparative conversion rates across the different parts of the world (from memory the mean is around 40% with the greatest impact from Japan and the US).

* The traffic trajectory improved considerably after 2010 (it had been on a slide since 2008) and this was achieved due to the web development effort and better functionality. Conversion rates were boradly flat between 2008-2010, but have picked up considerably since.

* The other thing to note is that the typical order is now considerably larger than was the case in the past, with sales of tablets etc., although tablets account for less than 10% of total sales, the bulk from phones which account for over half of revenue. But the growth rate in this area is staggering on a yoy basis, by far across all the different product groups by many multiples, there really is no other way to put it.

* As for specific comparisons with other sites, well, I am not sure of the numbers. But a direct read across from one site to another for a specific product is largely meaningless. It is akin to saying that you can buy something in Tesco for less than Waitrose and therefore the latter should be out of business.

* Re customer services, well, I am not sure since I have never bought anything from Expansys. But I know that they take this seriously.

dyor - my personal opinions only.

[longshanks] 02/3/2012 11:56

I wouldnt believe yassus minimus, Saucepan - he is a fraud of the first order - and certainly doesn't dig as deep into company fundamentals as he suggests; he only follows momentum from a contrarian perspective. I very much doubt he has the connections he alleges to have. If this reaches 3p he will be out from his £1000pp long spread and that is all he is after.

I think the point you and magpie make about expansys' web presence is a valid one. To compete against the likes of Amazon is always going to be challenging and worth considering. Amazon has a model of operation where they have suppliers fronted by Amazon and sometimes this throws up pricing anomalies where a supplier has a low headline price for the item - but p+p takes the price above that of other suppliers. I find this "EBayesque" factor rather off-putting and have had some disappointing purchases through Amazon.

I have only just started my research into XPS - but I would like to think that they are trying to carve out a niche presence for certain product lines and service.

There is no doubt that XPS are achieving growing sales from their web presence and this aspect of retailing is one that is still relatively fragmented with one or two huge players. Brand is important but I would say in a world where Google levels the playing field - price, reliability and quality of after-service are the areas which need to be fought over.

The current market cap illustrates that XPS are a minnow in this market; and as such perhaps we shouldn't expect them to have everything running perfectly yet. However it won't take much for them to grab sufficient market share to catapult them to revenues justifying a mid-cap valuation - and that is what personally attracts me as an investor.

I have a relatively small holding but will pick up more on any weakness or as the fundamentals prove up.

[hamidahamida] 02/3/2012 11:19

Big buyer in the market mopping up any sells

[saucepan] 02/3/2012 11:13

Thanks, yasX, that's good to know. In this instance, I did however send an email off to the Company this morning.

Incidentally, do you have any thoughts on the matters raised by myself and Magpie99?

[saucepan] 02/3/2012 07:21

Good point, Magpie, and you have just provoked me to do some further research.

I Googled Expansys, and simulated wanting to buy an IPad.

Here is the page I ended up with:



Take a look at the bottom of the page: the support forum.

There are only five threads, with one of the most recent being April 2011!

There is a prominent complaint there about lack of a refund and no communication from the Company. That would certainly put me off buying from Xpansys! I am also astounded that one of the hottest electronic products on the Internet (the Ipad) does not seem to be flying off the shelves at Xpansys, judging by the Forum. Expansys are also more expensive than Amazon for the Ipad.

That is hardly reassuring and causes me some concern. I shall write to the Company to see what they have to say.

[magpie99] 01/3/2012 23:19

The Expansys site never seems to be advertised. I only know of them because of the shares. I have never ever seen an advert for their products. I assume Joe Public is unaware of the service they offer.

[saucepan] 01/3/2012 17:50

Yes, Paul. I agree. For me, too, it was Xpansys.com that was (and still is) the major attraction of this company: with customers in over 100 countries and 60 websites in 16 languages.

However, the contribution of DSNS and P J Media should not be overlooked.

I have just checked back on December interims and their significance for the bottom line is clear:

Total turnover for the Group in the period was £46.6 million representing an increase of 42% compared to the same period last year (H1 2010: £32.7 million). Turnover for the period includes a full six months of contribution from DSNS and PJ Media, acquired in July 2010, compared to only three months of H1 2010. Turnover from the EXPANSYS.com retail business increased by 28% to £34.5 million (H1 2010: £26.9 million).

[paul442] 01/3/2012 17:02

I have Been busy today, just catching up on the good news. If they could start rolling this out to other governments or agencies it could become a very profitable part of the company. What first attracted me to XPS was its retail operation but it certainly looks like we have another winner in PJMedia.

[the big fella] 01/3/2012 16:59

It looks like we have a large buyer about. All those sales today been mopped up in one hit. I suspect those selling today hoping to buy back much lower could well be disappointed.

[saud2237] 01/3/2012 11:28

This is such a good news. Should see a substantial rise

[hamidahamida] 01/3/2012 09:55

mms want your stock will pay above bid

[hamidahamida] 01/3/2012 08:01

pezza4
maybe 3p today who knows but The Mighty

[hamidahamida] 01/3/2012 07:59

Contract with Qatari government

[pezza4] 01/3/2012 07:58

wonder if we can gain another 20% today!

[hamidahamida] 01/3/2012 07:57

another RNS keep it coming

[hamidahamida] 01/3/2012 07:56

Expansys plc

01 March 2012

Embargoed: 0700hrs 1 March 2012

EXPANSYS plc

("EXPANSYS" or the "Group")

PJMedia Contract Win: ICT ministry, Qatar

EXPANSYS (AIM: XPS), a leading global online retailer of consumer wireless technology and provider of mobile network and eCommerce services and solutions, announces another new contract win by its eCommerce services subsidiary, PJMedia, to provide mobile capabilities to the Information, Communication and Technology (ICT) Ministry in Qatar. The project is one of a number of initiatives by the forward-looking government, as part of the 'Mobile Qatar' evolution.

PJMedia will design, develop and implement the capability for Qataris to interact with their government by mobile, across a wide number of applications and processes such as visa status, parking fines, citizen feedback and information dispersal. This is an important component of the PJMedia differentiated service, to provide cutting edge technology to emerging markets which are looking to exploit new developments in mobile commerce.

Anthony Catterson, CEO of EXPANSYS, commented:

"We are delighted to be working with the Qatari government, as it looks to enhance the interaction with its citizens using smartphone capabilities. Through an existing operation based in Doha, PJMedia has shown tremendous creativity, flexibility and efficiency in creating mobile services and solutions that the government can trust to deploy. We believe that these solutions could be attractive to other governments and agencies worldwide, and they showcase the capabilities of PJMedia, who excel in the mobile network solution market."

Enquiries:

EXPANSYS plc

Anthony Catterson, CEO

Chris Ogle, CFO

[georgia103] 01/3/2012 07:54

Offer 2.4 and bid 2.3 already

[pezza4] 01/3/2012 07:32

maybe the numbers were known to the recent buyers that pushed up the share price