Internet Business Share Discussion Threads

[the analyst] 04/10/2007 11:27

"The Blackster - 2 Oct'07 - 20:32 - 3114 of 3117

Isn't this next period supposed to be the one where profts get hit? Maz was rambling on about H2 being less profitable than expected in that horrendous rns we had. If so why is anyone expectng a positive trading update, isn't this going to be a period of underperformance?"

Maz comes over as being a very genuine, honest and understated person, so it wouldn't surprise me if he has been a bit over-cautious in that rns. I guess we just have to wait and see. My thoughts are that the results won't be anywhere near as bad as you would expect from 99% of companies that issue a warning.

I have a feeling that we are now at a stage where current holders are in for the long-term and most of the selling is over. Results are not expected to be good, so any positive announcmeent on current trading could be met with the share price going back to more reasonable levels - perhaps the 20p levels it was bouncing around at the end of 2005?

The price looks ready to move imo, but that's just a feeling I have...

[the analyst] 03/10/2007 17:35

I really like the idea of the community review section - very much in the format of tripadvisor.com, which is extremely useful.

Once the text content builds up it could really help with the site's position on search engines. So, here's hoping it gains momentum.

[baheid101] 03/10/2007 11:03

From Travolution:

CheapHolidayDeals adds user-generated content


CheapHolidayDeals.co.uk has launched a new website featuring holiday news and independent destination reviews.

It hopes the user-generated content will help develop a community of bargain holiday seekers.

There are currently 50 articles and new articles will be added at a rate of 50-60 per month.

Instead of individual property reviews, it has decided to showcase resort reviews.

Nic Costa, marketing director for the website's owner IBG, said: "Our decision to focus on resort-level reviews is aimed at filling a gap in the market. We feel that we can engage our existing travellers to help their peers distinguish between which resorts to got to, rather than which specific hotels to stay in.

"For example, many people need advice on whether they should holiday in Palma Nova or Magaluf when going on a holiday to Majorca. The final choice of specific property is as likely to be down to the deals available at the time of booking."

[stemis] 02/10/2007 22:08

That's already been taken account of in the broker's forecast.

The previous forecast for 2007 was £1,870,000 (and EPS of 1.9p). After the June RNS to which you refer, this was reduced to £1,600,000 (although the EPS was subsequently upgraded to 1.9p as a result of greater tax losses).

The major effect of the RNS was to reduce the 2008 PBT forecast from £3,149,000 (EPS of 2.9p) to £2,100,000 (an EPS of 2.0p).

[the blackster] 02/10/2007 20:32

Isn't this next period supposed to be the one where profts get hit? Maz was rambling on about H2 being less profitable than expected in that horrendous rns we had. If so why is anyone expectng a positive trading update, isn't this going to be a period of underperformance?

[stemis] 02/10/2007 17:36

Yes, looking forward to the trading update I hope we can expect at the end of the month.

On current broker forecast P/E is now 7.4 (or 9.6 on a fully taxed basis). In line will do for me.

[the analyst] 02/10/2007 17:29

I bet it's a big relief for Maz to be able to concentrate on his business again after the distractions of the profit warning, review etc. I hope he's enjoying it.

[baheid101] 02/10/2007 17:04

cheapholidaydeals now has a 'news and reviews' section. Good to see some development of the media assets.

[baheid101] 02/10/2007 13:34

Thinking about the seasonality of IBG's business due to its exposure to travel, I thought I would have a look on Google Trends to see how search volumes for travel related search terms compared with the previous year



My impression is that while the delayed launch of new products may have been a contributing factor, the main reason for the cautious trading update / downgrade in June was the slower than expected holiday booking season. At that stage the noises coming from tour operators was that volumes were down considerably year on year and that it was unclear if it was entirely weather related, or evidence of a geniune downturn in demand. Luckily the former outcome seems to have been accurate with most tour operator's trading statements pointing to a strong recovery in July/August. The graph above, where I have used the search term 'cheap holidays' as it is a popular term and where IBG's Cheapholidaydeals.co.uk gets a lot of its traffic (mainly variations, such as 'cheap holidays to cuba'), seems to back up this analysis.

You can see clearly that what has happened was a phasing of demand to the later summer months, supporting the evidence from the tour operators, and this suggests that IBG's guidance should be met and possibly exceeded, if you subscribe to my contention that uncertainty about travel demand was a key factor in the management's decision to downgrade expectations for the current year.

At only 8.75x this year's current broker EPS forecasts, even meeting expectations accompanied by a positive management statement should see the shares recover substantially. here's hoping anyway

Cheers

BH

[hirschnathan] 02/10/2007 12:23

value

When af usa started there where lots of junk merchants, real junk, the merchant base is much much better now then it has been

[aleman] 02/10/2007 11:54

I would imagine that IBG will concentrate more on merchants that sell well across its different markets (perhaps still retaining the best of those that don't) so it will still be on a learning curve where costs are higher to cope with 3 markets. Over time I suspect the US and Europe will grow while the UK shrinks a little (in terms of merchant numbers) but this will probably improve margins after being held back for a period.

Thanks, andnmand.

[valustar1] 02/10/2007 08:40

When the USA network was launched Maz was saying that the aim was that it would add significantly to profits n 2008.

The merchant numbers have not increased much in the last 12 months although the churn will mean that the quality has.

Did Maz mention USA at the investors meeting in August, I was abroad and missed it.

[the analyst] 01/10/2007 21:51

Cheers andnmand, nice to see the US pciking up again.

Looks like a good month.

[andnmand] 01/10/2007 21:27

Merchant numbers updated for the end of September.   UK USA EURO Total OUT IN CHANGE Jul-06 543 116 16 675 26 44 18 Aug-06 556 124 16 696 26 47 21 Sep-06 555 129 17 701 24 29 5 Oct-06 571 142 18 731 25 55 30 Nov-06 590 149 19 758 33 60 27 Dec-06 602 151 20 773 10 25 15 Jan-07 611 155 22 788 26 41 15 Feb-07 620 161 24 805 22 39 17 Mar-07 623 158 24 805 50 50 0 Apr-07 635 158 28 821 28 44 16 May-07 642 168 31 841 32 52 20 Jun-07 662 173 35 870 20 49 29 Jul-07 665 168 36 869 43 42 -1 Aug-07 667 157 41 865 52 48 -4 Sep-07 661 166 45 872 43 50 7  

[stemis] 01/10/2007 15:15

Sounds very positive:-

AffiliateFuture, the leading content-based affiliate network with a global network of offices
the latest additions to the (AffiliateFuture) network, which already boasts a stronghold in the travel sector and is rapidly becoming expert in education products and consumer technology

2And as our (AffiliateFuture's) own development plans bear fruit we're expecting to attract even more big names to our community."

Let's hope at least some of it is true!

[hirschnathan] 01/10/2007 14:25

stemis here it is

[stemis] 01/10/2007 14:15

What was the source of BAHEID's announcement?

[the analyst] 01/10/2007 14:01

I find many of Maz's answers confusing as they quite often go on far too long and begin to ramble

When someone asks a simple question, what you want to hear is a simple, efficient answer. 30 seconds is probably enough to explain most simple questions, or possibly a minute to expand on technical issues.

I really do worry about the ability of the IBG board to answer questions simply and quickly to people they are presenting to, and in particualr, to instituions.

Perhaps that worry is unfounded, I don't know.

I wonder if they have had much training in that area or if they feel that they do not need training for question and answer sessions?

[aleman] 01/10/2007 13:51

Thanks, the analyst.

[the analyst] 01/10/2007 13:47

That's what I asked Maz at the investors meeting Aleman, after seeing that the accounts seemed to be showing that the terms had been changing - i.e longer times for the merchants to pay.

The answer was a typical long rambling Maz style answer (god, I hope he doesn't talk like that when he is trying to explain the business model to institutions), but the end result after pushing was a 'no'. However, this 'no' was due to semantics as Maz sees them 'offering' better terms and the merchants 'demanding' better terms as quite different. So when he says 'no we haven't offered better terms' it may not necessarily mean that the new big merchants are not getting better terms and that those terms are a crucial factor in encouraging them to sign up.

It was a confusing answer.

[the analyst] 01/10/2007 13:33

Thanks hirsch, very interesting and quite encouranging

[aleman] 01/10/2007 13:25

Have they changed payment terms in some way which will accommodate bigger merchants? Perhaps IBG can accommodate the slower paying large companies now that they have more cash.

[hirschnathan] 01/10/2007 13:22

"And as our own development plans bear fruit we're expecting to attract even more big names to our community."?

what does that mean