Internet Business Share Discussion Threads

[the analyst] 06/7/2007 14:03

"Is a share buy-back right for you"



A tax efficient alternative to share buy-back is to return money to shareholders through B shares. Investors can choose to pay CGT or income tax. I guess this would not be an efficient alternative here because IBG do not have much cash and the costs associated with such a move would be too high in relation to the cash being returned. However, still an interesting read from page 35 onwards of this document for those interested in the tax implications of such a move.

[the analyst] 06/7/2007 13:57

That's the impression I get THB, the core business should still be doing very well.

The bit I still can't fathom is what the 'new advertising products' were that had to be launched to obtain the forecast profit for this year. Also, why was nobody made aware of these products and their importance to the groups profits? As far as I had been aware, the ongoing business was solely responsible for the projected earnings. Even the broker didn't seem to know that there were apparently crucial new products that had to be launched to keep up with their forecasts.

Maz didn't explain why unlaunched products were so fundamental to expected profitability in his letter to readers of this board. Personally, I'm hoping to get some sort of explanation with the interims.

Has anybody here any idea what these products are and why they are so important to attaining the previously forecast H2 earnings?

[thehardestbutton] 06/7/2007 13:44

Quoted from the RNS

'The Company is pleased to report that trading in the core advertising business remains robust.'

Am I right in thinking this is where the bulk of IBG's profits are made? As has been mentioned on this board by others more knowledgeable than me the wording of the rest of the RNS detracted from the fact this is still a profitable company with further growth potential based on its existing platform. After all they appear to be making money in this area with the core IT investment having been made.

The addition of another 200 merchants in the last twelve months would surely be testament to the model working - or am I missing something obvious??

[the analyst] 06/7/2007 12:52

I'd agree with that Omylaysouse.

Unless the company make some serious board appointments and really work the city to convince them of the long-term benefits of holding IBG stock, then I think that most long-term investors expect the possibility of a lengthy wait for value to be realised in the share price.

Looking forward, we are just about to get H1 results and we already have a warning for H2, so not many would be hoping for much from those figures. Some would be hoping for H1 next year to begin to show signs of progress and to begin to outperform expectations. However, as H1 is the 'weak' half and we have been told to expect most profit in a given year in H2, then that leads to the possibility that we have to wait and hope until H2 results for the 2007-2008 year for getting back on track.

Those results could be published as late as April 30th 2009

[omlaysause] 06/7/2007 12:13

12345th
It may be worth holding off until after the interims, this may help the price a bit for you but that's your call. But unless you're prepared to wait it out for another 12 months at least, you may find yourself getting ever more frustrated and annoyed.
I think it's pretty obvious now, that things aren't going to change dramatically unless IBG do see revenues increasing much quicker than they expected with the new course they are taking and the city are happy that they are no more 'surprises' in store over the next 24 months.
There are still a lot of people p!ssed off but the bottom line is this, it's happened, it ain't going to change much over the short term, so you either ride it out and make a decision in 12,18 or 24 months time or get out now and move on.

[12345th] 06/7/2007 10:12

I haven't shorted bonio, I've never shorted a share, have always wanted to invest in a share that goes up ... and stays up. Never in my wildest nightmares did I think that IBG would do a dgm. I'm deciding whether to sell now or continue holding.

[valustar1] 06/7/2007 09:50

Interims might help!

[bonio10000] 06/7/2007 09:43

Stemis

Don't bother - some obviously have shorted and have agendas to suit that end.

Time will out.

[stemis] 06/7/2007 09:37

12345th

For the sake of accuracy I'll respond to your points

on the one hand we are about to grow in a dramatic way but on the other I am going to have to sell the company.

Maz never said he had to sell the company. What he said was that before deciding to sacrifice short term profits in a bid to create longer term value he considered it appropriate to see if he could obtain that value for shareholders (of which he is the largest) through a sale of the company.

Obviously he couldn't.

The fact that no-one now has a clue what the company is worth says it all.

If IBG was some loss making blue sky company, I might have some sympathy with that view. However it isn't. What is unclear is just how quickly IBG is going to grow in the next few years. That's hardly unusual for growth companies. Try reading the RCG board, for example.

On a purely historic basis, IBG made an operating profit (pre w/b provision of investments and intangible amortisation) of £1,150,000. Knock off 30% notional tax gives you £805,000. IBG had cash of £1,375,000.

At the current share price of 14.25p, IBG's market capitalisation is £11.0M. So its trading on a cash adjusted fully taxed P/E of 12. If it hits its 2007 forecast then that will be somewhere around 8. 2007 ends in less than 4 months. The results should be out in 7 months.

[the analyst] 06/7/2007 09:15

Cheers Stemis.

Anyone got hold of the revised revenue forecast? I think at this stage of investment into the technology, that could be the most important aspect to follow.

[stemis] 06/7/2007 09:02

You have to remember that EPS growth over the next 2 years is depressed by the run out of tax losses. A more illustrative analysis is PBT which is Previous Current
Forecast Forecast
2006A 1,116k 1,116k
2007F 1,870k 1,600k
2008F 3,149k 2,100kThe 2007F is an increase of 43% and 2008F an increase of 31%. In normal circumstances these would be considered very good. However until the market sees IBG starting to meet forecast again its seems unlikely to give them much credence.

We are, of course, less than 16 months from the end of 2008.

[oiliphant] 06/7/2007 08:52

CHECK OUT jhl IF YOURE INTERESTED - NEW ISSUE

[the analyst] 06/7/2007 08:38

Just been looking at the eps forecasts from Altium. The eps currently runs at 1.5p and is now forecast to only rise to 1.7p this year, then 2.0p in 2008

That only represents a 13% increase this year and 18% next year.

Previous forecasts had stated 1.9p, followed by 2.9p, which would have represented an increase of 27% this year, followed by 53% next year.

Does anyone have the new note? I'd be very interested in how revenue forecasts have changed. One would expect, with the planned investments, that revenue should now be far higher for 2008.

[muffinhead] 05/7/2007 23:49

can come back to this one in a years time....that mega spike in 2005 was about time Ken, LRR et al hoovered up lots. A bit difficult to sell now in a low cap stock. Avoid like the plague!

[taurusthebear] 05/7/2007 23:43

Out of these last week for the first time in 3 years. Seems that the market thinks IBG may turn into another DGM (though that seems ridiculous, given the already low market cap., better management and affiliate feedback).

Have to say, though, that if this slide continues to nearer 10p, I`d be interested again! :0)

[muffinhead] 05/7/2007 23:26

better story unfolding over at LEAD

[knowing] 05/7/2007 22:41

People which hold the stock will always look at adverse comments the wrong way but at the end of the day they should take a deep breath and re read them.Sometimes people are not trying to deramp but to state what they see as facts about a share.Clutching straws never helps.

[68steve] 05/7/2007 20:03

Maz can`t say much now as the next 2 years have been pretty well mapped out.Nothing up his sleeve,no sale forthcoming,no dividend,just keep plugging away at what HE knows best= stagnant share price once it`s found it`s level...IMHO.

[hirschnathan] 05/7/2007 19:38

The truth is there is a limit was Maz can do at this stage.

I agree he messed things up, but what do you want him to say now?

Things will improve and this will just be part of the ibg history

[renew] 05/7/2007 19:37

Sadly a certain amount of truth in the above.

[12345th] 05/7/2007 19:25

In this hottest of hot sectors (apparently) IBG should have been offered a very nice premium to its (then) share price. SIMPLE. Maz, who we all credited with being a cautious but clever guy, blew all of his credit in one go. He acted like a child by saying: on the one hand we are about to grow in a dramatic way but on the other I am going to have to sell the company. He had always told people that he wanted to sell IBG so we assumed he had indeed had some very real interest from potential buyers. He must have known there was a problem with profitability on the horizon when he announced the "strategic review". I don't think Maz is a conman but, effectively just as bad, someone who was naive in the extreme and utterly unqualified to run a public company. The fact that no-one now has a clue what the company is worth says it all. And we will have to ride out this nightmare until he announces results at the end of July. No doubt they will be just as frustrating because he won't be clear and will sound uninspiring and cautiously pessimisitic in any information he gives.

[yump] 05/7/2007 19:23

"good number of shareholders who've amassed maximum BATR on shares bought sub 5p and the selling will go on and on"

That's exactly why I sold out, despite the apparent good progress being made in the core business and despite it looking reasonable value based on that. I'm saving mine for the next proper market dip and then stick it into a few gems when they hit silly low prices.

[krakow] 05/7/2007 18:04

It's a certain fact that for at least 18 months there has been something about this company that the City didn't like. It's another certain fact that the ill-judged decision to have a strategic review and the conlusion that the best course of action would be to do nothing means that the City will like it even less.

A strategic review should crystallise some value, imo. That's the point. I would think there are a good number of shareholders who've amassed maximum BATR on shares bought sub 5p and the selling will go on and on, especially as there are some great opportunities presenting themselves elsewhere on the Market.

The whole episode of the last few weeks has been terribly managed.

[yump] 05/7/2007 17:44

Also deleted !