Infonic Share Discussion Threads

[broomsticks] 29/9/2008 16:30

retford1.

What a vivid imagination you have!

Confucius could have said, man who work in sewer have rats for friends.

All in my opinion of course.

[retford1] 29/9/2008 16:23

I'm suggesting that maybe you're suggesting that if "someone wants this technology very badly on the cheap" the market makers have taken advantage of the release of the results to force the price down to allow an order to be filled. Surely that could never happen.

[sambre] 29/9/2008 16:12

How many dogs have you got egoi?

[broomsticks] 29/9/2008 15:48

retford1,

What are you suggesting?

[retford1] 29/9/2008 15:46

broomsticks, are you suggesting price manipulation to fulfill an order?

[broomsticks] 29/9/2008 15:36

IMO Someone wants this technology very badly and on the cheap.

[joestraughan] 29/9/2008 15:11

egoi - I seem to recall that the directors made small purchases (I'm too lazy to check this at the moment!).

But it seems they will have to give a further stake of the business away, face dilution and director changes? The current climate certainly gives opportunities to others and I guess their competitors and partners will be fully aware of this fact. I guess a merger or sale of part of the business is a possibility to strenghthen their resources? Certainly, the lexalytics deal didn't help short-term resources, although it might be very profitable in the long-term?

[egoi] 29/9/2008 14:52

Joe given that Directors were buying at over 5p recently I'm not sure what the impact of a buy below 3p (the price PacCon bought apparently was 2.88p) will be.

It is cash though you're right Joe, that's the big worry for me especially in the current climate, if they want more the institutions will surely demand a discount.

Edit: A bad day to release less than stellar news.

[joestraughan] 29/9/2008 14:48

egoi - we can only hope that cash is flowing more positively in this half of the year - the new CFO will have to act quickly to prove his worth? The directors need to buy to reassure their investors otherwise they will have to give a large stake of the company away at a low price? Perhaps a change of directors is required?

[egoi] 29/9/2008 14:25

I'd say this board is around 80% positivity - perhaps more.

Given that rate of cashburn - in six months not a year too, when will the next fundraising be, and more pertinently, at what price? In the current climate a takeover may be some way off. Truly I had some cash available to invest today so I am as disappointed as others.

[h101] 29/9/2008 12:26

Broomsticks - please don't give up. Your contribution here has been excellent and I for one appreciate it. I'm afraid it is the nature of the beast to criticise.

The mark down is completely unwarranted on so few sales. I don't know exactly what the company can do to stop the negativity. I was really pleased to see the effort they had put into the RNS. OK there are still some questions over cashflow, but I'm prepared to believe the thrust of the RNS which is positive and upbeat.

[joestraughan] 29/9/2008 12:15

Broomsticks - don't give up, we need you! ;-)

We're only seeing the picture at certain snapshots in time. If the pipeline is as strong as they say it is, hopefully the future is much brighter. Undoubtedly, their previous financing of the business, aborted acquistions, bridging loans etc looks inept, to say the least.

Of course, they lay themselves open to takeover on the cheap, but it is highly likely that they will tap big investors through a placing, who will take large stakes at a knockdown price?

[retford1] 29/9/2008 12:04

Spot on spaceparallax, good products, unsustainable cash burn = takeover target. Sitting tight and looking forward to the white knight appearing soon.

[spaceparallax] 29/9/2008 12:00

Broom,

I think that in fairness, many here have maintained a buoyant outlook for quite a while and genuinely do like what the Company has to offer - sadly, in these extremely tough times, issues such as cash-burn are critical, especially when they show little sign of diminishing, despite the business growth.

Infonic looks an increasingly likely takeover target for a larger software outfit that can carry the loss and offer growth opportunities until break even. SDL springs to mind as just such a compnay, having a potential synergy.

[egoi] 29/9/2008 11:36

I think we all appreciate your in-depth research and knowledge of the company broom, your input here is invaluable; but ultimately others too are entitled to a view on the numbers presented to them this morning.

Armchair maybe, expert not, but the fact remains these accounts do not look pretty to me.

[broomsticks] 29/9/2008 11:32

What the hell does a company have to do to stop the constant drip, drip, drip of negativity? It is soul destroying, I'll leave you all to wallow in it.
Armschair eperts imo.

I've had enough, I give up.

[joestraughan] 29/9/2008 11:27

H101 - I guess aim will survive, but in a smaller size and more regulated. After this crisis blows over, there will be serious legislation to regulate these markets better?

Agreed - cash burn is dire - where is the MOD money? If sales pipeline is so good, will we see a second half turnaround? I was previously just speculating on them splitting the business and floating off part of it, now I think it may be needed more than ever. The new CFO needs to think of something quickly (no more placings please)!

[egoi] 29/9/2008 11:01

Sorry h101 even my holiday couldn't ease my Monday morning gloom when I saw the results. I was sincerely hoping to get in - but at least as has been said the sum of the parts remains interesting!

[barryrog] 29/9/2008 10:38

was looking to possibly buy back in at the results but cash burn situation is dire.

[h101] 29/9/2008 10:11

OK thanks for the comments. I guess we gave to wait and see whether the promised savings and new income mean a change to positive cashflow.

OT - Has anyone any opinions on whether AIM is going to survive in its present form? Compared to the main market, AIM is getting savaged. I suspect very few AIM PIs are sitting on a profit. I see a few sells this morning on Infonic pushing the price down out of proportion again.

Like spaceparallax I'm sitting tight but not adding. If I sold what I have the price would drop a lot quicker than the paltry sales today have made happen. I made that mistake with BPRG a few years ago when hindsight taught me the price will pick up eventually.

[spaceparallax] 29/9/2008 09:39

I see lots of positives in the results, but am concerned about the ongoing operating loss (plus the exceptional finance charge). The Company really do seem to be making progress, but in these times of credit restriction it's not good to continue gobbling funds at such a rate.

Sitting tight but not adding.

[egoi] 29/9/2008 09:21

Glad someone is happy - not got time to say much as on hol, but erm intanglibles over 10 million net assets over 4 million and they appear to have burnt most of the cash.

Without the fundraising a fire sale would have been necessary imho, either that or they would be bust by now imho.

Net increase / (decrease) in cash and cash equivalents


(4,416,635)
879,942

Cash and cash equivalents at beginning of period


4,387,956
(586,682)

Cash and cash equivalents at end of period
6
(28,679)
293,260


Dreadful imho, even if business is buoyant, profits are not, and it remains to be seen if cash-saving is as effective as they hope. It will need to be.

Staying out.

[h101] 29/9/2008 07:52

Well this now looks like Infonic have definitely turned the corner and well done to them. I am very comfortable to ride this out with them. The share price did not deserve to fall as it did recently.

Egoi - please let us know what you feel about cash.

On sentiment I'm encouraged by several statements, and also in the level of detail we, the investors, have been exposed to in the RNS.

"The main result of this first half investment has been the increase of our sales pipeline to in excess of £25 million."
What is a sales pipeline exactly?

"We are currently taking active measures to reduce our ongoing overhead and expect significant cash receipts in the next two months."
Excellent more out-cashflow reductions and in-cashflow increases.

"one military customer alone that is expected to procure a significant contract for delivery in the fourth quarter of this year."
Where's the £4m from the MOD then?

"we now have an enlarged entity which creates the most accurate sentiment analysis solution available on the market...Allied to other sentiment business we aim to achieve in excess of ten times last year's revenue in this division during 2008."
Excellent - this division needs to be making a larger contribution and it looks as though it will.

So after a quick perusal, I'm pretty happy with the results.

[joestraughan] 28/9/2008 22:41

Broomsticks - I'm sure you're probably right about Lexalytics - just that when MT put his "valuation" on it, it gave the impression that they might float it down the road. They could still maintain a link to infonic through licence agreements and post de-merger holdings. They need to create shareholder value sometime, otherwise they could have a hard time in the future. This way would raise money for both entities and enable them to compete better in the future?

Still, the numbers will give us a clue as to how they are doing, although I'm not holding my breath!

[h101] 26/9/2008 23:48

Mike Marshall is CTO and heads up the development side at Irvine, Scotland. He may not be involved at a business management level. I'd venture that the new business is based in the UK because Infonic is there and it had the clout to base it where it was most convenient to them.

The Lexalytics software clearly can be developed anywhere - it's developed in Scotland when Lexalytics is in the US. I wonder if Lexalytics Ltd/Infonic will transfer software development to a single location in the UK.

I see from following a link on the Infonic site they delivered £4m worth of software to the MOD within 90 days of the Nov 2007 contract, i.e. probably at the beginning of 2008. I hope that money will have rolled into the coffers.