Idox Share Discussion Threads

[kendonagasaki] 15/12/2017 18:43

Wont be long before its in recievership here?

[sharki9] 15/12/2017 18:03

Some of the last trades made a decent volume, it does not look like the selling on low volume any more, I was thinking to double the position as I was entering much higher 0.70 and 0.51 but now I think I will wait couple more days

[smithie6] 15/12/2017 16:18

reading H1

'turnover up due to 3 acquisitions....overall PBT DOWN ....(infers something wrong imo)

'confident for H2 & the year due to blah blah

& just after H2 ends ...new MD & RNS that accounting is screwed..& perf. is DOWN...& nett debt (& one assumes/infers bank debt) is worryingly high

...& MD for H1 results is 'away'
(Im expecting a bank covenants RNS !!)
(& I expect the co. sitting together with a bank rep. are now ringing up everyone on the list of ~£40M of claimed receivables ...nervously listening to each reply !)

& RNS infers that H1 accounts will be re-stated....& hence can be ignored until that is done...!!

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if calculate EPS from cashflow at H1 then for an annual number then I get 1.4p EPS...with current share price at 31p that gives a P/E of around 22. And with the RNS stating that claimed revenue is wrong since some revenue can in fact not be booked as revenue the real EPS calculated from cashflow could be well below 1.4p.
What was the true revenue for H1 ? we dont know

I note that H1 accounts mention that the co. is 'refocussing for the public sector" and has closed some UK and overseas offices. Very quietly written and buried amongst lots of text saying "we are doing great"....but the warning text is there (although one could say that it was intentionally mis-reported and should have said "we have challenges in some parts of our public sector business". (I get the impression that the MD away on sick leave ignored the signs and went ahead gung ho on acquisitions etc...and it is now partly exploding as 'the chickens come home to roost'

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btw
EBITDA (using IDOX accounting !) reduced from 23M to 20M
taking ratio of it being about 25% of turnover (as a rough number) this produces a number for the revenue that was in the draft annual report to being removed from the new draft annual report of 12M !! since that revenue was in fact not bookable, (I assume the old MD had claimed future sales/turnover as already having happened, looks dodgy conduct to me)

12M squid !!

(12M out of a total of 65-80M, who knows what real turnover is, it is a massive % of turnover to suddenly be removed)

it is not imho "small revenue items" as the new MD Mr KC or the FD have claimed in the RNS
and puts the honour of the new MD in question imo, not just that of the old MD who is apparently on sick leave

[smithie6] 15/12/2017 16:07

btw
ppl agree with me that nett cash has reduced since end of H1 (april) by £1.5M after removing the cash used in acquisition of £3.5M ?

'if' IDOX is generating cash how come its like for like nett cash is 1.5M worse !! since end of H1
(its 5M worse but 3.5M was used in acquistn. so really it is 1.5M worse if that acquisition hadnt happened)
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if anyone wants any IDOX shares for idea of recovery...imo there is no rush....since results not due till Feb.


& instis probably cant buy until those accounts are issued & then analysed...H1 accounts imo have been declared as not true so no current accounts imo....& breaking bank covenants looks real risk which again phps prohibits most instis from buying...& imo the divi is toast until debt is reduced (how many yrs to do that ?) so divi funds cant now buy imo.

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what could the share price do between now & publication of results. no idea

[clocktower] 15/12/2017 16:04

trytotakeiteasy, If I could change the header I would, maybe too "Warning This Dog Bites"

[smithie6] 15/12/2017 15:42

IDOX is perhaps/definitely also being affected by a move to SAAP which many will know often hits a share price for a number of years

[trytotakeiteasy] 15/12/2017 15:41

This header now appears to be incorrect. Turns out IDOX was a dog all along.

[smithie6] 15/12/2017 15:37

value viper

cash generation is fairly easy to estimate imo from the cashflow numbers....
I came up with 6M for the year...
(before or after tax ?)

but
note that H1 reported divi cost of 3M...& annual interest cost of 3M

big % of my annual cash generation number


& that assumes that H1 revenue numbers are true which RNSs say is not the case !

conclusions
- divi is history ! ( debt is at bank limit or over it ( MD replacement creates risk it is over it !)

- ah. I assume that bank debt includes ratios wrt cash generation. with revenue nos. being reduced (ref RNS) the ratio rules may well be being broken, causing the ex MD to suddenly take over
Banks probably also not happy about receivables jumping by 10M in H1. 10M !!
(if some of the receivables MOUNTAIN (~40M !!) is declared as bad debt, uf, hate think of effects)

- H1 claimed revenue growth appears false, see RNS


imo the underlying business has seen a DROP in performance. (has anyone calcd perf. excl. acquisitions ?) If so then the mkt wont like it when H1 accounts claimed growth.

if annual accounts are used as a kitchen sink job (common) then there could be more to come.

[clocktower] 15/12/2017 15:26

I doubt there is a true bull left willing to take that risk on. Only real hope is that someone makes an offer for the company, and once DD is done any offer may not look attractive imo.

[value viper] 15/12/2017 15:15

you are def playing bear (not necessarily wrong btw) ; wonder what is wrong with the CEO -seriously - timing is chronic for sure

EBITDA is earnings before tax (so PBT) but also b4 ammortisation (goodwill right offs)
agreed, but it should be an underlying operating profit figure - could obviously be reduced but in the books only i believe. I know earnings can nowhere near = cash profit in hand.

[smithie6] 15/12/2017 15:01

H1

receivables up 10M
payables up 12M

claimed revenue 44M

the % of these number wrt revenue is too high imho
(although part of it might perhaps be due to incorporating 6PM onto accounts ?)
fishy imo...as confirmed by the recent RNSs and share price crash

[smithie6] 15/12/2017 14:42

shall I continue to play a bear....and maybe someone can post the bull points, to give some balance

trade and other receivables. 46M (H1)

if take annual turnover as 70M (since some 'sales' appear to now not actually be 'sales')

then

the receivables is 66% of annual sales

whereas if you assumed that payment delay was 90 days (3 months) then you would expect receivables of around 25% of annual turnover, imo (actual normal payment delay from councils etc, I have no idea but perhaps slow due to councils abusing their power as a big customer and occasionally due to council's sometimes having cash flow problems)

receivables at such a high % ....imo perhaps show real accounting problems

either with claiming sales that are not actually sales (a la Globo) (claiming sales is fairly easy, only if someone actually pays real cash it is confirmed as a real sale imo)

or

claiming sales well in advance of those 'sales' actually happening and being claimable from a client, tricks in accounting with timescales, so perhaps real sales but just being booked in advance to fluff up the numbers...

[value viper] 15/12/2017 14:30

well at £20 million EBITDA (revised) , stock currently trading on 6.5 times that figure ...whilst I understand the caution in the air, unless we are gonna be informed of more bad news (possible), or covenant trouble (?), this looks low and down on low volumes.

[smithie6] 15/12/2017 14:11

slowly putting some pieces on this jigsaw !!

"The Group's total signed debt facilities at 30 April 2017 stood at GBP33.75m, "

and nett debt is 32M

nett debt is of course basically debt and cash added together. precise definition may be bigger....

so, it infers imo that the bank debt is perhaps higher than 32M hitting 33.75M or is close to it

(as an FD if the co. hits some bumps in the road (as per IDOX) then routes for finance are banks or by not paying your suppliers ....)

which creates the horrible idea of the mention of 'bank covenants'
which is about as popular with stock markets as a leper with sores at a party

if so then it might help explain the mention of sick leave of previous MD...and previous MD stepping back in to be the MD

(I also believe it was the returning MD that discovered the mistatement of revenue since imo it happened after he took over)

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imo bye bye to any real divi

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just giving my guesses...as input to discussion board...
happy for any mistakes to be pointed out by others

[smithie6] 15/12/2017 14:00

nett debt and consumption of cash in H2 is interesting imo

just tweeted about that

possibly part of the reason for the share price crash



@fulltimeinvest

[smithie6] 15/12/2017 13:50

I see nett debt was 14M at end of H1 2016...and 32M now...
and significant number of new shares issued

to fund acquisitions

yet EBITDA is down !..ouch

[smithie6] 15/12/2017 13:28

ah
apologies for any mistakes in my IDOX posts...
I havent been watching IDOX...so I dont know much..


just adding/posting my spec. of sand to the discussions.....

[value viper] 15/12/2017 11:34

this is a mess....guess we won't see or hear anything about CEO til New Year now either

[phillis] 15/12/2017 10:35

Can you not read?

[110543407] 15/12/2017 08:00

Smithie6. Your posts are a breath of fresh air and rationality. Well done. If I can add, the main shareholders who previously owned 6PM and ran the company as Chairman and CEO of the company, have made a killing here. Vassallo is one of the wealthiest men in Malta as he has pulled off a number of significant deals and Bartolo, is now pretty well off. If these people acted dishonestly, and I stress on the if, then the board of IDOX have a duty towards its shareholders to take all steps against these people and anyone else concerned to recover the money invested in 6PM. If they do not, then they either know a thing or two more than we do or, who knows???

[rp19] 15/12/2017 00:04

This was the note I found re 6pm

[phillis] 14/12/2017 17:43

Smithie
I presume the vendor Directors gave warranties - pretty normal
Depends what was disclosed
And if everything material was disclosed it follows that the adjustments to net assets acquired contain no surprises

From the offer document
"The value of 6PM net assets reported in FY2015 was £15.8m. Following the Acquisition, the Directors expect that the value of the net assets of 6PM under Idox's accounting policies will be reduced materially."



As RL has said - all the comments on 6PM under Idox ownership have been positive

[roger-lawson] 14/12/2017 17:28

Smithie6: You seem to be jumping to conclusions. There has been no indication that the recent announcement refers to issues at 6PM. Might be something else entirely. Unfortunately the recent announcement was so non-specific about anything that speculation about what it means is the result.

I am trying to persuade them to clarify it. At least before next February!