Internet Business Share Discussion Threads

[baheid101] 09/10/2007 14:12

it would be an excellent acquisition as they could easily integrate AF travel inventory into it rather than the current horrible Google adverts that are quite intrusive. Holiday Watchdog has first class organic search for people looking for holiday reviews, and while noticibly some way behind tripadvisor, has built up a vibrant community of users and associated content.

Holiday Watchdog coupled with Henoo and Cheapholidaydeals etc would create a pretty powerful online travel media portfolio

[the analyst] 09/10/2007 13:55

Just a thought - maybe IBG can buy Holiday Watchdog?

[the analyst] 09/10/2007 13:55

Cheers for those posts, andnmand, baheid

[andnmand] 09/10/2007 00:16

My invoice on affiliate future has been updated for the end of September. The following is the increase in my invoice number month by month. Date Increase in Invoice No.   30/09/2007 102070 31/08/2007 98586 31/07/2007 95987 30/06/2007 93665 31/05/2007 91558 30/04/2007 89224 31/03/2007 86404 28/02/2007 84182 31/01/2007 81814 31/12/2006 80062 30/11/2006 76698 31/10/2006 68459 30/09/2006 65667 31/08/2006 61558 31/07/2006 59445 30/06/2006 57358 31/05/2006 55665 30/04/2006 54586 31/03/2006 45138 28/02/2006 45881 31/01/2006 45891 31/12/2005 35514 30/11/2005 33479 31/10/2005 31663 30/09/2005 18944 31/08/2005 39575 31/07/2005 27075 30/06/2005 18944 31/05/2005 35057 30/04/2005 14864 31/03/2005 23056 28/02/2005 23269  

[the analyst] 05/10/2007 13:08

I know alexa is near to uselss a lot of the time, Maz did explain that it bears no relationship to traffic levels at all because their traffic is always breaking new highs, yet alexa is in downtrend.

Thought it was interesting, though, the way that affiliatefuture and affiliatewindow seem to trend in line with each other:

[the analyst] 05/10/2007 12:54

From the same article:


Where are they now?
Deal Group Media
A lot has happened since Business XL last spoke to Adrian Moss (pictured), CEO of online marketing group Deal Group Media, which took the number one spot in 2005.
He says: 'I was pleased to be a Rising Star. In retrospect, however, there was a material trough very soon after that peak.' The AIM-listed company took 'two massive hits' due to the premature launch of some crucial software and the loss of a key client. This bad news led to two profit warnings being issued in six weeks. By January 2006 the company's shares had crashed from 24p to 10p, and now languish at 2.5p.
To the slaughter
'We were crucified,' Moss admits. 'The board and the City participated in "Plc politics" and short-termism, which eventually led to my leaving the group.'
Moss resigned in June 2006. Six months later he was back, spearheading ambitious plans for international expansion. It's worth pointing out that the group's turnover has continued to show healthy growth â" the result of a move away from the intensely competitive UK market into the 'virgin territory' of Australia. Now Moss is eyeing the massive markets of China and India from a regional base in Singapore.
'China is forecast to spend £750 million on online advertising this year, up 50 per cent on 2006,' he says. 'There are 140 million internet users there, compared with 30 or 40 million in the UK. It's a phenomenal opportunity.'

[the analyst] 05/10/2007 12:54

Top 50 Rising Stars
Sep 07 issue


Phenomenal sales growth, healthy profits and service excellence are some of the qualities that make a rising star. Celebrating enterprise and innovation, Business XL's annual survey brings you the UK's 50 hottest mid-sized ventures to watch




26. Digital Window
Turnover: £9.7 million
Pre-tax profits: £1.1 million
Location: London
Online affiliate marketing has only been around for about eight years, says Digital Window's communications director, David Hall. 'It's part of the zeitgeist,' he says. 'We're lucky to be in the right game at the right time.' Digital Window has developed software that enables affiliates to protect their brands, combat spyware or add price comparison tools to their website. Both turnover and pre-tax profits have more than doubled over the past year, with the former now approaching £10 million and the latter £2 million.

[the analyst] 05/10/2007 12:13

I'm quite optimisitc we will continue to see growth figures around 40% as long as the media division continues to grow and the company start to generate cash (which they should do).

Maz has said that cash generated will be used to make bolt-on acquisitions that will add revenue and profit straight through to the bottom line. As far as I'm aware, this extra revenue has not been factored into forecasts, so potential for upgrades exists

So, looking at a potential scenario of 40% growth in profits, we could see something like:

2007 - £1.6m
2008 - £2.2m
2009 - £3.1m
2010 - £4.4m

The share price is obviously going to depend on market sentiment as well as forecast growth at that point in time. By the time 2009 results are released, perhaps they will trade on a something like a historic PE of 20x and a one year forward PE of 15. Doesn't seem to be stretching it too far for a high growth company, making cash.

That would be a market cap of £66m, which if there were around 100m shares in issue by then, would equate to a share price of 66p.

[the analyst] 05/10/2007 12:04

Yes, OBR, that would be quite some market cap - £1.6m x 76.99m shares in issue :0

[old boy returns] 05/10/2007 10:51

Hi Stemis - I know IBG is a great company but EPS of £1.6M for 2007 seems a tad optimistic ;-)

SteMiS - 5 Oct'07 - 08:14 - 3131 of 3132

I haven't the time to work out underlying EPS but

2006 Actual PBT = £1.1M
2007 Forecast EPS = £1.6M up 45%
2008 Forecast EPS = £2.1M up 31%
2009 Forecast EPS = ? but £2.8M would be up 33%
2010 Forecast EPS = ? but £3.7M would be up 32%

[clond] 05/10/2007 08:26

On that basis the shares could have a value of 60p in 2010.

[stemis] 05/10/2007 08:14

I haven't the time to work out underlying EPS but

2006 Actual PBT = £1.1M
2007 Forecast PBT = £1.6M up 45%
2008 Forecast PBT = £2.1M up 31%
2009 Forecast PBT = ? but £2.8M would be up 33%
2010 Forecast PBT = ? but £3.7M would be up 32%

[Edited following post 3133]

[valustar1] 05/10/2007 08:03

A F seems to have passed through its rapid growth period so increases of 30% a year for them would be great. This would of changed if the USA takes off, but growth there seems very steady rather than massive

The area that I do not have a feel for is the media division. We could quite easily be surprised on how its done/doing.

Maz no doubt has learnt his lesson and not counted his chickens to early on its performance this time.

[stemis] 05/10/2007 07:49

Clearly there is still a lot of bitterness and scepticism over the 'announcement' which is keeping the share price down. All the IBG management can really do now is beaver away and deliver the strategy they have put in place. If they hit the numbers in the analysts forecast (and an in line trading statement at the end of the month would be the first step) then the current rating is far too low. A business with net cash growing EPS at even 30% per annum deserves a rating (on a fully taxed basis) of at least 15, which would be 20-25p increasing towards 30p on a 12 month outlook.

Not really where we expected to be 12 months ago



but better than where we are now!

[thehardestbutton] 05/10/2007 07:40

Smashingguy knows nothing of this company much as he knows nothing of most of the other company threads he post random negative comments on.... his financial investment acumen is about as good as his typing!!

He's a wind up merchant and basically an 'oxygen thief' - isn't that right Colin?

[the analyst] 04/10/2007 22:49

Anything is possible smashingguy, but I don't think that is likely.

[niggle] 04/10/2007 20:41

SmashingGuy - why do you say that?

[smashingguy] 04/10/2007 20:03

maybe a nother strateguc review and another profit warning is likely

[the analyst] 04/10/2007 20:01

Interesting to see those updated figures again, Stemis, it's been a while since I had a look at them.

As we are now very near year end, it won't be long before that 2007 £1.6m profit is a historic one, which with a current market cap of £10.8m, will put them on a historic PE of around 6.7x

At that stage, looking on to the 1 year PE for 2008, it goes down to 5.1x profit, with 30% growth pencilled in. As that years forecast has a lot of extra investment built into it, that should bode well for growth into 2009. Maybe we could expect a £3m profit in 2009? That would put them on a two year forward PE of just over 3x, with 50% growth between 2008 and 2009. Maybe that is a little optimistic at this stage, I don't know, but it shows the type of value there could be here, if the business plan comes together nicely.

The broker did mention that they would be producing a more thorough analysis of the company, as in an initiating coverage note. I wonder if we will see that at the same time as any trading update we may get in October or whether they will wait for the time of the results?



"SteMiS - 2 Oct'07 - 22:08 - 3115 of 3123

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 analyst] 04/10/2007 15:50

If last year is anything to go by, the trading update should be in about three weeks time. This was last year's update:

"RNS Number:9850K
Internet Business Group
25 October 2006

Internet Business Group plc
("IBG" or the "Company")

Trading Update

Internet Business Group plc, the AIM listed online advertising and e-commerce
specialist announces an update on trading for the financial year ended 31
October 2006.

Financial Update

Following a positive outlook reported at the time of our interim results trading
has remained strong. As a result, turnover for the financial year ending 31
October 2006 is anticipated to grow by at least 105% to #13.0 million (2005:
#6.32 million), representing an increase of 13% above current market
expectations of #11.54 million. As a result of this increase and the operational
gearing of IBG, earnings before interest, tax, depreciation, amortisation and
movement on investments are anticipated to grow by almost 175% to approximately
#1.15 million (2005: #0.42 million), 20% above current market expectations of
#0.96 million. Profit before tax is anticipated to be in the region of #1.1
million (2005: #0.41 million), 9% over current market expectations of #1.01
million.

This strong performance is primarily attributable to the better than anticipated
trading of IBG's performance advertising division, AffiliateFuture, supported by
solid progress in the newly established media division of the Company.

IBG will be adopting International Financial Reporting Standards early and will
be reporting in line with the new standard from the financial year commencing on
1 November 2006.

Operational Update

IBG is in the preliminary stages of establishing a discrete media division,
incorporating the two key websites acquired from Cheap Flights Limited, as
reported on 5 July 2006. These acquisitions have been successfully integrated
and the newly recruited commercial team seek to exploit the on-going
opportunities. Since IBG's acquisition of the websites the consumer experience
has remained unchanged, however, the underlying platform has been completely
replaced and upgraded by an IBG in-house designed platform. IBG's media team in
London has been supplemented by further recruitment in our Spanish office.

IBG's own travel search engine, Henoo.com, is undergoing significant levels of
commercial and technical development. The Directors believe that whilst this
activity is strictly a media operation, it provides our performance advertising
business, AffiliateFuture, with technologies that significantly differentiate us
within the travel sector.

AffiliateFuture Inc., the US online advertising division, is continuing to make
good progress and to increase its client base. Whilst the operation's earnings
have not broken even on a monthly basis in the current financial year, it is
expected to make a small contribution to profit during the course of the 2007
financial year and remains important to the medium-to-long term development of
IBG.

Maziar Darvish, Chief Executive, commented: "We are pleased, once more, to be
providing a positive trading update which re-iterates the strength of our
business model and the growth in our underlying markets. I believe strongly that
our core competencies of technology and online marketing, coupled with a solid
strategy, differentiate our offering and provide us with strong competitive
advantages in the sector. We continue to invest in both infrastructure and
people in order to exploit the substantial market opportunities available."

The Company expects to report its preliminary results for the year ended 31
October 2006 by early February 2007"

[the analyst] 04/10/2007 15:16

It has been a welcome move up today. Been watching L2 and it seems the market makers are very short on stock.

[valustar1] 04/10/2007 15:14

Are we seeing the build up in the share price to a positve trading update

Hope so!!

[the analyst] 04/10/2007 14:49

Another possibility would be an introduction to the AIM market. Could be floated or could come to market through a merger or reverse takeover.

I guess that if the directors are looking for an exit, then they could take cash at the same time of the introduction if they sell some of their shares into a placing.

There could be synergies with media-owning companies, which could create a model similar to that which Maz is developing with affiliate sites like cheapholidays, cheapaccommodation etc.