Internet Business Share Discussion Threads

[the analyst] 12/11/2007 20:36

Yes, cheers andnmand

[hirschnathan] 12/11/2007 19:45

Thanks andmand, for your religious monthly posting

[andnmand] 12/11/2007 18:53

My invoice on affiliate future has been updated for the end of October. The following is the increase in my invoice number month by month. Date Increase in Invoice No.   31/10/2007 105594 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  

[old boy returns] 08/11/2007 17:46

OK - get the message - next time I will stick to a good old fashioned English c*ck-up rather than fancy foreign stuff!

Took a look at the IBG cash movement following recent posts voicing concern that profits are not being matched by cashflow. I suppose there are 2 ways of looking at it. The glass half full way of looking at it is that IBG has managed to grow the business turnover substantially by funding the increased working capital requirement, development costs and moving to /fitting out larger premises costs out of profit rather then having to take on debt or issue equity. It does seem that the working capital requirement of the business has become a larger percentage of turnover of late which is probably due to the need to offer competitive credit terms to attract larger merchants in order to grow turnover. I would also suspect that IBG's finance function is not sophisticated enough to try window dressing reported cash via a pulling in debtors, delaying payments exercise just before the reporting date.

[nunc] 08/11/2007 11:41

Bit of a fopar, what?

Or should I say nesspa...

[puffin tickler] 08/11/2007 04:50

Old boy, for info it is "faux pas" not fopar.

[niggle] 07/11/2007 23:41

'fopar' ? :O)

[the analyst] 07/11/2007 18:21

I'm not sure I understand the upset over the statement "the expected peak in demand for holidays in January 2008" - it seems perfectly reasonable to me for the company to have two holiday peaks during a year, with that being one of them. I guess it just depends whether you read the statament as January being the MAIN peak of the year or if is A peak during the year. Maz mentioned there were two peaks in the recent investors meeting.

[the analyst] 07/11/2007 18:21

The trading update was pretty much as expected for me too. That said, I was hoping for more revenue. Just hoping the weather would have helped them out a bit. Maybe without the monsoon things would have been a lot worse?

I'm not sure how the year has been one of transition. Last year they were a group with most of the revenue coming from AF and this year it has been the same. OK, they have developed the media side a bit, but I'm not sure that consitutes a year of transition, does it?

The fact that they keep stating that management focus is essential for revenue and profit and that doing basic plc work has negatively affected revenue and profit is not good. It says to me the board is not strong enough and they need experienced plc directors on board. It may be that Maz's ego will not allow that - any thoughts?

I think the main thing suppressing the share price is the cash generation, or lack of it I should say. Last year they made £1.1m profit, but only generated £300k cash and this year they have made £1.4m profit, but only added £120k to the bank account. That's with no major acquisitions, so where is the cash going? During the investors meeting someone asked why they don't generate cash and Maz denied it, saying they generated lots of cash. The investor then read the accounts out to back it up, which made Maz look bad. Later I asked whether it has somehting to do with the extended payment terms being given to larger merchants, which again Maz denied was having an effect. Looking at the broker note, though, there is a specific paragraph saying that larger merchants are being given better terms and that this is affecting cash and is likely to do so in the future as revenue grows. I wonder whether Maz understood my question or whether he was fobbing me off? Again, it didn't fill me with confidence that Maz can get the company generating the cash necessary. Without cash, how will they make the extra 'bolt on' acquisitions he talked about?

Had IBG banked £1m cash on that £1.4m profit then I think we would be trading on a PE of 20 or so, but without making cash from operations I think many investors will stay away.

[kenatbabken] 07/11/2007 17:35

OBR

Whilst I bought the majority of my shares at around 3p I also invested at 8p
and spent £150k at 14p ( Two years ago to now as it happens)so my average is not that low.I,m not gloomy about IBG in fact I can see a good recovery in the
SP next year as long as AIM is not decimated my the proposed tax changes.

The trading update was ok in my opinion.

I can however understand people complaining as a differently worded RNS might
have saved a lot of grief.

Ken

[hirschnathan] 07/11/2007 16:43

qxl pe of 50 and talks of offers, if ibg fortunes turn for the better and we get bought out at next years earnings x 50, it would be nice.

[hirschnathan] 07/11/2007 16:37

And now the tax break is to disappear lets see what happens, possibly a uturn

[coffeelito] 07/11/2007 14:40

And those of us who didn't fill our boots at 4p?! Who bought in at 13p, waited patiently for the 2-year tax break, only to see all profit wiped out! Never expected such a shocking outcome. And now the tax break is to disappear. What a total waste of time and money.

[old boy returns] 07/11/2007 13:50

Deary me - what a gloomy old lot we are ! Look on the bright side - those of us (and that includes you Ken !) who bought our shares in the sub 4p days have still made a damn fine return and, in reality, those paper gains which have diminished since the 30p+ days could not have been realised for a large holding. But I am sure our chance will come. Also don't forget that we benefited from some quirky behaviour at IBG when they took out the bizaar equity drawdown facility which enabled some of us to fill our boots at very low levels. I put the mismanagement of market sentiment down to too few people trying to do too much at the top end of IBG and a lack of sensible professional advice from the advisors.

[kenatbabken] 06/11/2007 07:14

Blackster,

I,m not too despondent as I,ve pulled backed around a fifth in other shares
including £30k in the last week on GDP,This one will come back as sentiment
returns just a question of time

Ken

[kenatbabken] 04/11/2007 22:42

Aleman

The Digitalook figures are Atiums and allow for full taxation


IBG Fundamentals
Year Ending Revenue (£m) Pre-tax (£m) EPS P/E PEG EPS Grth. Div Yield
31-Oct-02 1.39 (0.54) (0.87)p n/a n/a n/a n/a 0.0%
31-Oct-03 2.66 (0.33) (0.53)p n/a n/a n/a n/a 0.0%
31-Oct-04 2.98 (0.02) (0.04)p n/a n/a n/a n/a 0.0%
31-Oct-05 6.32 0.41 0.66p 29.2 n/a n/a n/a 0.0%
31-Oct-06 13.40 1.12 1.50p 19.8 0.2 +127% n/a 0.0%

IBG Forecasts
Year Ending Revenue (£m) Pre-tax (£m) EPS P/E PEG EPS Grth. Div Yield
31-Oct-07 18.00 1.90 1.70p 7.9 0.6 +13% n/a 0.0%
31-Oct-08 22.50 2.10 2.00p 6.8 0.4 +18% n/a 0.0%

Internet Business Group forecasts
Covering analysts: Altium Securities

Niggle

The way I see it is the update is confirmation of what was said in the RNS
of the 21st June,I don,t really see it as a second profit warning.I,m
obviously not pleased to see 500k wiped off my investment and with hindsight
should of sold some more above 30p,Greed and fear is my excuse.Greed because
I expected the share price might go a lot higher and Fear that if I sold it most probably would of.I suppose the signs where there 12 months ago when after
that update the share price fell even though that was a cracking update.

Ken

[stemis] 04/11/2007 11:02

Niggle,

I agree that the management of expectation by IBG is dreadful and the cause of the pitiful share price. I don't accept this is some sort of plot to steal the company with a low priced MBO.

I'm not saying Maz isn't interested in shareholders anymore but it probably isn't (as) high up his list. No news on non exec chairman. No developments on making research available to PIs.

I suspect that Maz has, either consciously or sub consciously, decided it doesn't matter what they do now the market isn't going to forgive them. So the best thing they can do is get on with the 'growth strategy' as quickly as possible. Hence they've brought forward elements of the "scaling up of operations" and be damned with the impact on the share price.

This is now more like a private equity involvement than a stock market investment. I don't think we can rely on the stock market to deliver 'fair value' for this share, so the share price becomes almost irrelevant. Its all down to whether IBG can turn themselves into something a buyer will pay 50p/£1 a share for in a couple of years. I'd prefer otherwise but we are where we are.

It's reassuring that the brokers are holding their forecast for 2008, but I guess the market won't believe them. There are elements of the trading statement I don't understand. Cash of £1.5M + is only a couple of hundred k above that at 31.10.06. So where has the rest of the £1.4M profit gone? Why do they talk about normalised profit of £1.4M? Normalised for what?

[niggle] 04/11/2007 09:11

Krakow, I sold 2/3 rds before the crash so have no particular axe to grind, I have made a lot of money on this share. It just saddens me that the company is so badly represented. Fine, invest for the medium term but don't keep slinging profit warnings in to the market like confetti. There are ways of sending out good news and Maz more than anyone should know about the hard road back from disaster.

The key to the statement was '10% below market expectation' the rest of the statement is immaterial compared to th eeffects of that one short line. The share price is based solely on 'Market Expectation' whether given last week, six months or a year ago. Everyone knows that the market loves a company, the 'just' beats expectation look at ASOS, they always just slightly surprise and the market loves it.

Call it bad PR, call it what you want but statements like this are bad for the company, bad for the shareprice and bad for future confidence. (Unless there is an underlying reason!)

[krakow] 04/11/2007 01:04

niggle, I think you may be right. I sold the last few tranches of mine in June between 25p and 18p because I felt Maz had given me a rather large two-fingered salute. That strategic review and the nonsense that followed it told me that Maz was just playing with something he doesn't understand. It was shockingly bad.

I simply don't believe he knows what he's doing on the management front and as my main investment criteria is share price performance I'm afraid I had to ditch it.

I put the bulk of the money into GNG which looks an infinitely better bet.

[niggle] 03/11/2007 23:55

And in BIG bold letters above all that is this:

Internet Business Gr Internet Business warns FY profit to be 10 pct below market forecasts -

Thats what people see first; the profit warning.

[aleman] 03/11/2007 22:38

Pathetically weak? Talking down the company? Are you talking about this? Nobody has mentioned the critical words: "substantially larger".

IBG is a growing business with a strong balance sheet, including in excess of
#1.5 million of cash at the year-end and no debt. These factors, together with
the measures outlined above, ensure that the Group is well placed both
financially and operationally for the future. The Group continues to maintain a
clear focus on delivering value to its shareholders and the Board looks forward
to the 2008 financial year as we continue to implement new products and
operational procedures with a view to building a substantially larger
advertising and media business over the medium term."