ILX Share Discussion Threads

[graham1ty] 26/6/2012 21:54

Have now read the statement.....it is all about growth, opportunity, new marketing initiatives, "continued growth", "as strong as ever", "global preeminence" and then "recover the growth trajectory".

Have they failed to notice.....90% share price fall in one of the worst one-way sliding share graphs I have ever seen ? And it has still managed to fall off a cliff in the last two days. Are they blind to the valuation ? And then kick shareholders in the teeth with the divi cut ? Central costs are up by £500,000 despite the higher debt, which is twice what the divi would have cost ? So alright to pay new marketing men big salaries at the expense of shareholders ? And they say divis paid have totalled £1.15m but, as I keep reporting, ken scott's pay over the last ten years is over £2m.......twice the total payout to shareholders who actually own the bloody company. Ken has shares now worth £15,000. Does he care if the share price is 10p or 100p......notnif the pay cheque keeps coming.

This damned company has always been excuses and "jam tomorrow". Being the pre-eminent PRINCE 2 trainer means diddly swat if there is no profit, debt rising, divis cut and the share price down 90%.

Grrrrrrrr

[markt] 26/6/2012 14:31

...imo a fair comment to mention the exec. pay and benefits....

imo it is and has been too high...

[spaceparallax] 26/6/2012 09:30

In fairness to the Company, they're doing okay in these tough times and suspending the divi makes sense

[graham1ty] 25/6/2012 15:18

If the Banks are worried about covenants, how about demanding the Board take a massive pay cut. Shareholders have lost 90%. ken, how about a 90% pay cut this year ? Then the divi would have been affordable......

[graham1ty] 25/6/2012 15:16

Ken Scott has been paid £2m while CEO. The board has taken out £4m. Ken has a holding now worth c£15,000. The company is now worth less than his accumulated pay. Awful and criminal

[graham1ty] 25/6/2012 15:13

This is appalling. Should have cancelled divi months ago, .....so much for committed to final divi. I curse the day I bought these. They looked cheap at 50p, cheap at 30p, cheap at the trading statement, cheap at 15p, yet all the time actually a dog.

Never trust a company where the CEO is paid grillions, yet has only a negligible shareholding. This has been a play think for KS, and he has milked it at the same time, not caring about the share price as has no exposure. Awful

[markt] 25/6/2012 10:35

imho.....no divi can be paid for future next 2 years due to loan repayment time and ILX profit rate.....

making me think that ILX shares are about correctly priced when you add the debt...( unless someone makes an offer for them, unlikely imo)...personally I can't see the shares doing much (famous last words !)...unless start announcing a noticeable increase in turnover, which I can't see happening soon...(although if 2 of the 3 execs. (KS and JP) and the chairman were to leave !, then the shares may be more tempting imo !)
----

Ouch...those results didn't go down very well.....
selling at 12.6p near the end of the day....and all trades have been sells...and most at below the quoted price, indicating that MMs didn't want to take on any stock above quoted market size, probably small amount.

[markt] 25/6/2012 10:20

Stegrego 25 Jun'12 - 07:25 - 1590 of 1591

· "Dividend suspended to allow net debt to be reduced

Quelle surprise.

I bet Ken Scott wages don't get suspended.

....."


Nice one !

[markt] 25/6/2012 10:19

Dividend suspended.....

I only get a % of decisions right ....that the divi would be suspended was one of them. Obvious imo, since it was easy to calculate that the co. did not have the cash to pay it, and with its debt repayment dates it could not pay it by taking on more debt.

(disgraceful imo that they did not inform shareholders/market before now...)

(got the decision to buy ILX wrong, and not to have bailed out earlier as it broke its up trend around 28-30p, fortunately I did get out on the way day so didn't lose too much....and I happened to be holding on one of the years when ILX decided to in fact pay a large divi !, so that eased the pain a bit)

[stegrego] 25/6/2012 07:25

·    Dividend suspended to allow net debt to be reduced

Quelle surprise.

I bet Ken Scott wages don't get suspended.

Very poor company IMO.

[spaceparallax] 25/5/2012 13:13

They need to achieve a consistent performance

[poombear] 25/5/2012 13:12

£3.7M Cap, PE of less than 4, but also if they maintain the dividend (Agree big if), thats almost 11%.

[markt] 15/5/2012 12:55

...not often that you see such a straight line for a share price over so many weeks !...

[markt] 03/5/2012 15:21

"These loans were refinanced during October with HSBC and were replaced by a £2.0 million term loan, amortising over a 3 year period, at an interest rate of 3.3% over base rate. In addition, a 2-year revolving credit facility of £2.0 million has been made available to finance working capital and expansion."


Hi
read your post...

but I think the point stays the same....

that have to pay back the bank...and not pay a divi....

2M over 3 years is approx. 0.7M per year to be paid back....and PAT is expected to be approx.
0.5M (see my earlier post)....while cash generated would be a bit higher, but can not avoid paying the chunk of tax...so 0.5M is not far off

so looks to me like , after paying back the bank there is almost nothing left to use to pay a big divi.....and 1.5p paid in the past is/was a big divi...."big" total cost.

approx. 414K if all shareholders took as cash and not as new shares.

(and even if there was any amount that did not need paying back to comply with bank loan rules....if it was me, I would keep it in the co. bank account....since next year or year after the cash may be needed to make up any profit shortfall in order to pay back the bank
if you don't pay back the bank IAW their rules....they could, in theory, call in the loan (which ILX could not pay)

('if' co. decided to pay the same previous 1.5p divi....then the risk of not paying the bank back next year increases.....and/or cash float in the accounts reduces ....
taking risk with debt by paying a large divi....not worth the risk imo....
always possibilities....perhaps change loan repayment from 3 years to 5 years (but if I was the bank I wouldn't, large amount of ILX profits come from 1 product, PRINCE2 and products have a life cycle, who knows what PRINCE2 sales will be over next 5 years...or what % of that will ILX achieve) ....or .....or....

(exact details of amount of cash held, size of loans, amount of working capital needed and amounts needed during next 12-18 months....and amount needed to be available in case of changes/problems.....always changing...and only co. FD and F. managers know that info.)

...I can't think of any small tech company with debt/loans of 3-4 X PAT that has ever paid out almost all of its profit as a divi....so imo the probability of ILX not paying 1.5p divi this year are around 90% from my viewpoint of the numbers, of course could be wrong...

[poombear] 03/5/2012 13:40

Your debt figures are out of date, from the last interims.

The Group delivered positive cash flow from operating activities of £0.603 million (2010: £0.622 million, from continuing operations). Net debt continues to reduce, down to £1.722 million at 30 September 2011 (at 30 September 2010: £3.688 million and at 31 March 2011: £1.886 million). The debt repayment of £1.05 million during the period comprises payments of £0.50 million reducing term debt and the repayment of £0.55 million drawn down on our revolving credit facility with Barclays which expired at the end of September.



Post period, the Group refinanced its debt at far more advantageous rates with HSBC and I will cover this and the implications in the section below.



Refinancing

At the balance sheet date, the Group's outstanding loans with Barclays Bank were as follows: a £1.8 million term loan, amortising over a further 2 year period, at an interest rate of 6% over LIBOR, and a £0.3 million bullet term loan, repayable September 2013, at an interest rate of 12% over LIBOR.



These loans were refinanced during October with HSBC and were replaced by a £2.0 million term loan, amortising over a 3 year period, at an interest rate of 3.3% over base rate. In addition, a 2-year revolving credit facility of £2.0 million has been made available to finance working capital and expansion.



The refinance will result in a one-off non-cash charge to profits in relation to previously paid arrangement fees for the Barclays loans, which were being spread over the period of those loans. However the Group will see the benefit of substantially reduced finance costs in the next financial year.

[markt] 03/5/2012 10:54

well, I went to have a look at past results

1.73M op. profit last year.
1M for this year.

ie. collapse/crash in op. profits.

ie. not a time to buy the shares imo....falling knife....who knows how low it will go or if any more bad news...

(about 3M bank loans....noticeable compared to cap. value and PAT)
----

Looks like I was wrong on bottom line profit...
but on "no divi", I think I was right

2010 had 1.06M op. profit...and reported 543 K PAT. and 2.64p EPS (but now there are more shares I think so EPS would be lower)
(if no other costs, could be various one offs to take that profit, noting company has declared "op. profit" so could be hiding things imo
'we' have no info)


approx. 3M bank loan at last annual report
and interim profit was small so most of debt will still be there...
and in fact I think they have no choice but to use all that cash to pay down debt !....or could/will break the bank loan covenants.

approx. 2.6M is on 3 year re-payment terms...
approx. 0.9M per year.
if pay 543k...in fact will be a bit short.


so....imho.....from my quick look at the numbers there is absolutely no chance of a divi of any size compared to 1.5p in the past.
And if this is declared then impact on share price ...won't be helpful imo.

I could be wrong.

(Could they sell something to create cash to pay down debt and use profits to pay a divi ?....imho, NO !, I don't think they have anything to sell to raise cash !)

[markt] 03/5/2012 10:37

sadly....I think that Graham1TY is right....the 2 main exec. dirs. are the 2 main beneficiaries of the operation of ILX, not the shareholders....
Ken Scott
Jon Pickles

mega salaries for a tiny company.....with a bad record.....not good...and not correct...imho


-----
Poombear
"so not sure why you think full year op profit of £1M equates to a bottom line loss".

(PBT prediction was I think for 1.8M.....so if achieve 1M it is a massive 'miss'....that means the broker predictions can not be trusted....damages confidence in the company imo)

'bottom line loss or around break even....'
my logic is that op. profit I am pretty sure excludes central costs such as the BOD and AIM listing costs and finance costs. And that lot adds up to approx. 1M I think. +/- X.
but happy to be corrected if I am wrong

Maybe you can print a calculation that shows the expected profit and finance cost and cash for debt reduction....and whether there is any money left to pay a divi.

If they had no debt then they could afford to pay the divi....but with the debt they have I don't think they can pay 1.5p divi.....(maybe they pay a symbolic divi...but of no use... 0.1p or something)

(I'm not going to dig through the results....since at the moment ...ILX shares don't interest me at all.....in part since poorer results then the debt ratio gets worse and divi possibility reduces/crashes...and the % of raw profits that goes to the exec. dirs. becomes higher (and a problem imo).....and the graph is a disaster, strong down trend)

I lost some money investing in ILX, luckily not too bad, 1 big divi helped, I was a big fan (but I often moaned about excessive dir. pay)....luckily that money is now growing/recovering in other shares now...
I guess I was partly hoping that the broker's prediction of 1.8M PBT would happen. If it had then ILX would have been a high growth stock...with a high P/E and price to match and I would have made loads. It did not happen. (lesson for me to try to ignore any broker forecasts !)


One could argue that the intrinsic value in the company is still there....
and if the co. was bought...or do some good deal... then the shares could jump...but for me, at this instant...there are better shares out there.
...and many people say that having good directors is very important when picking shares...and I don't have much confidence in KS and JP nor the chairman at the moment. I think they should keep the new exec. dir. (played large part in products etc so looks to me to 'useful'/skilled) and replace KS and JP (perhaps by internal promotions.....or make the 3rd exec. the new CEO, or bring in a new CEO, and bring in a new FD (easy, plenty out there). Without any pay offs to departing dirs. and if I could I would have as much of their bonuses off them as well ! (excessive, unjustified).

[poombear] 30/4/2012 15:16

I've emailed the company and asked about the dividend payment status, let see if I get reply.

[graham1ty] 30/4/2012 13:54

poombear, hope you are right.

They have cancelled a divi before......even after announcing it !!

This mob have faile again and again and let down shareholders consistently over a long, long period. Look at my earlier posts: Ken has been paid millions, has a negligible stake in the business and has taken it nowhere.

It will always look cheap. mrkt tend to agree with you.

There is no size at all: have tried selling more of my near valueless holding

[poombear] 30/4/2012 09:55

From the interims

"As in previous years the Group does not intend to declare an interim dividend but remains committed to maintaining an annual dividend."

If this has changed, they should have stated.

Markt,

Also in the interims they made an op profit of 200K and still made a profit before tax of 100K, so not sure why you think full year op profit of £1M equates to a bottom line loss.

Also they refinanced their debt arrangement in the same interim RNS, and debt cost has reduced (although there was a one off non cash impairment due to settlement of old arrangement).

I think at the current shareprice there is plenty of upside, and with 8.3% dividend (assuming it is maintained).

[markt] 30/4/2012 09:33

imho 1.5p divi was cancelled months ago.....but not announced....imho its cancellation will be announced in the future....

unless they get a block of free cash from somewhere...and I don't think they have anything to sell for that

imho co. can not imho afford to pay it and has debt....can not increase debt in order to pay same 1.5p divi as in past....

----


op. profit of 1M.....
imho that makes a bottom line of a loss.

---

...imho ...fiddling the news.....

...needs KS and EP to go imho..and the chairman..and bring in some new dirs....(keep the other exec.)

[spaceparallax] 30/4/2012 09:26

True, but at least the TS is reasonably positive.