Ithaca Energy Share Discussion Threads

[orange1] 18/7/2007 09:18

Judge
As a matter of interest, how did you access that report? I don't seem to have it when I search under ITH news.

[judge jury] 18/7/2007 08:21

STOCKWATCH ITIS Holdings lower after contract loss; Altium cuts target price
17 July 2007
AFX International Focus

LONDON (Thomson Financial) - Shares in ITIS Holdings PLC were lower late morning after rival traffic data supplier Trafficmaster said it had won a contract with the Department for Transport, for which ITIS is the incumbent supplier.

The news prompted Altium Securities to cut its price target for ITIS to 85 pence, from 95 pence.

At 11.28 am, ITIS shares were 7 pence lower at 62-1/2 pence.

Trafficmaster said it has won a 3 mln stg contract to supply journey time data to the UK Department for Transport over three and a half years, effective July 3. The company said the six month transition from ITIS will be completed by end 2007.

In a note responding to the news, Altium Securities said the contract was ITIS's largest and most profitable to date and added that the loss is clearly therefore a significant blow to ITIS in the short term.

The broker said it meant 1 mln stg per year to the bottom line as it involved negligible incremental collection costs. It estimates it will reduce profit by 17 pct in 2009. But while the loss is obviously disappointing, it does not unduly damage the long term investment case for ITIS.

Although it cut the target price, Altium has retained its 'buy' recommendation on ITIS shares.

[e-mail]

[meenashah] 17/7/2007 12:34

I think the price fall is unreasonable and a very good opportunity to pick up a good stock in a long term growth sector.

[russianlinesman] 17/7/2007 10:05

I suppose all it highlights is that TFC is now at last a serious competitor in the UK, and this added to TomTom entering the market, means more competition on all fronts for ITIS. The market view seems to be that the competition is growing faster than the pie, and ITH is nowhere near entrenched enough to rely on either market position or technology advantage to kill off the competition.

TFC will not be able to replicate the sensor system overseas as mobile data is much cheaper, but now we all know mobile data is much cheaper (as evidenced by the TomTom/Vod deal), there will be tough competition for international business as well, with the same pricing pressures we have seen in the UK today.

[zipstuck] 17/7/2007 09:45

If it was £1m for a year its now 3m for 3 1/2 years. Agree cost was the driver tech requirements may not be current.

[orange1] 17/7/2007 09:34

There was no mention of the value of the contract to ITIS in the announcement last October:



The point is that the contract was awarded pursuant to an invitation to tender. The contract will be awarded to the company which meets the specified technical requirements and has the cheapest bid. So even though it may look to the outsider that TFC have the better product that is not necessarily the case. TFC were most probably just the cheapest of all the bidders that met the technical requirements.

[lucky punter] 17/7/2007 08:57

Orange
If I remember correctly about a year ago the Itis deal was extended by one year to the value of 1 million so it appears to be a very similar deal. It is data supply only so I would suggest the margins would of been good.
It is not really the money but the suggestion that TFC is better than Itis which will impact the share price big time.

[hew] 17/7/2007 08:14

Given the general bother of making the change, I imagine the DoT must have had a fairly strong motivation.

My reasoning is:

- the quality of the ITH and TFC data must be comparable - my uninformed impression is that ITH data might have had the edge if anything - or DoT would not have changed;
- there is financial pressure right across all Departments;
- thus the change is most likely to have been justified by a cost reduction.

The incremental production cost of the data is unlikely to be high for either company as the raw data must be collected in any case, thus the pricing of their offers was substantially a matter of judgement for both companies. I suspect TFC decided that kudos was more important than cash and went in low. I believe that, if so, they were right.

Of course it is also possible that a "buggins turn" approach was used by the DoT but by itself I see that as insufficient.

A distinct loss for ITH, and perhaps not a good sign of their sales and marketing.

As usual, the share price seems to have been ahead of the game well before today's announcement!

[wjccghcc] 17/7/2007 08:13

6 month transition means it will hardly impact this financial year, and next year we have a lot of the international business kicking in.

Also, I would hardly describe it as an easy 1mm a year since it requires a lot of work for the DoT. I suspect the margins were slim so impact on profitability will be slight.

[orange1] 17/7/2007 07:30

The contract may be worth 3mio to TFC for 3 1/2 years but are we sure that ITH were being paid at the same rate. It seems to me that the scope of the new contract may well be much larger than the old.

[lucky punter] 17/7/2007 07:19

It looks like that Department of Transport contract that ITH have had for the last few years has been taken by TFC. It was extended last year for one extra year but it looks like it has finally gone now. Its an easy 3 million for TFC and 1 million a year less for Ith.

[judge jury] 14/7/2007 09:57

Surely TomTom should just put a 150p price on the table for ITIS? I am sure most shareholders would accept this and it would save them a lot of time and effort trying to recreate the same system.

[judge jury] 14/7/2007 09:55

"That system is due to be introduced in the Netherlands in the second half of the year and in the rest of the world in 2008"

BROKERWATCH TomTom price target upgraded to 43 eur from 35
13 July 2007
AFX International Focus


AMSTERDAM (Thomson Financial) - UBS has raised its price target on shares in TomTom NV to 43 eur from 35 on the anticipated revenues of an interactive information system.

In a note to clients, UBS analysts said the price target increase went hand in hand with raised estimates based on the expected revenues for an interactive traffic information system that enables TomTom's customers to calculate their best route with real-time data.

That system is due to be introduced in the Netherlands in the second half of the year and in the rest of the world in 2008.

The analysts said the increased forecasts also reflect a higher rate of market penetration.

The brokerage reiterated its 'neutral' rating on the personal navigation device maker.

At 12.07 pm, TomTom shares were up 0.65 pct at 41.99, while the AEX was 0.36 pct higher at 562.15.

Dave van Ginhoven, [e-mail]

[a1canary] 13/7/2007 11:33

I'm afraid Paul that rns' involving software roll outs and licence agreements never have and never will do much for the share price here because there's no money involved. not immediately anyway. "revenues up 20% following european software roll out" is what will get things moving but the software roll out alone will not interest the market. on the whole the market remains very circumspect of hi-tech tiddlers until the money's on the table! then and only then can they really fly.

i learnt this from ITIS the hard way - was stuck in them for 2.5 years before i realised any profit but it was worth it in the end! you won't have to wait that long now but, major overseas contracts nothwithstanding, you'll at least have to wait until the interims before you see any more serious gains.

[lucky punter] 10/7/2007 16:36

Paul
Itis has always suffered between financial updates at interims and year end. The company will be performing very well again this year although the headline figures may be less due to the sale of Navtrak. This is a sound investment and although I do not hold at the moment as I am heavily into CYH this will only ever make you money over the long term. I suspect you will see a bottom at 69p then a hold until the run up to interims.
Good or excellent contract news has rarely done much for the share price It is probably due to the large market cap and the fact that they generally do not comment on the financials of any deal.

[paulcaine2003a] 10/7/2007 16:28

Yeah, point taken.

Was just hoping for a fair increase. Been 2 positive rns's since i got in at 75 and yet were still lower.

Will have to be more patient

[wjccghcc] 10/7/2007 16:15

Be fair, the FTSE is down 1.2%.

[paulcaine2003a] 05/7/2007 11:09

Maybe the decline has found a support level at 70p. Maybe now well see an increase?

[a1canary] 02/7/2007 14:40

The drop is absolutely typical ITH (and others) behaviour post results. We're in a sector that is extremely news hungry and which wants regular positive newsflow to drive the share price When it comes, it can fly, when it drys up, it tanks. The good news is that ITH has built up enough respect in the market to have the support to prevent a total tanking (although it has had its fair share) but expect this to level out around mid 60s until more news comes forward about foreign expansion.

The Tom Tom news is pretty immaterial as it's all old news, as has been mentioned. They're talking about how drivers will, shock, be able to navigate and plan their way around congestion as if it's this amazing new facility when ITIS has been providing it for years! Ditto this nonsense by TTs CEO:
"By working with Vodafone to bring the granularity of information from their mobile network to solve everyday navigation needs, we will redefine traffic mobility in the UK."
Again, ITIS have been doing this for years and are way ahead of them.

[russianlinesman] 26/6/2007 18:00

ITH share price fell after TomTom made that acquisition, but only fairly recently tomtom extended their contract with ITH so they must have something tomtom want.

The competition in this market was always the operators, that was what caught Cambridge Positioning. If Vod is in with TomTom, ok because ITH has O2. Would be good to have a Europe-wide deal with O2.

Given how long it has taken to roll out Estimotion in small targets, will be astonished if TT can roll out continent-wide so quickly. They still have the issue of parallel roads, motorways crossing, and other stuff, which require a lot of processing and tailoring.

All that has happened today is TT has signed an MOU with Vod. It is far from the end of the world.

[tom306] 26/6/2007 15:45

WJCCGHCC
"how are TomTom going to get the info into the car if they don't use RDS-TMC"

By DAB/GSM/GPRS/3G in the same way internet, telecoms and digital TV have all gained additional bandwidth.

"Estimotion was never going to be deployed in the UK"

"It is TomTom's ambition to cover 50% of our installed European base by 2008" and Vodafone has access to other European networks.

"I suspect Vodafone want to transmit the data over their network - I can't see how that's going to be cheaper"

With the EU Directive on emergency location provision due towards 2010 and the aggregation of telematic services using telecoms in to the car, RDS TMC could have a short remaining shelf life

[wjccghcc] 26/6/2007 14:44

Agree with Orange. Estimotion was never going to be deployed in the UK - they have FVD for this market which is more accurate. Also, I don't think TomTom are a major customer - it's the motor manufacturers that matter. Moreover, how are TomTom going to get the info into the car if they don't use RDS-TMC? I suspect Vodafone want to transmit the data over their network - I can't see how that's going to be cheaper.

Also, be interested to see how well it works given the difficulties with other similar CFVD developments.

[orange1] 26/6/2007 14:11

This is actually old news.
The story starts in January 2006 when TomTom acquired Scottish compant Applied Generics, a company specialising in the field of real-time traffic information. They were working then with Vodafone and Logica. In October 2006 Tom Tom and Vodafone Netherlands announced that they were working on a revolutionary traffic information system whic would go live in the second half of 2007.
It looks now as it won't happen until 2008 when TomTom hopes to have covered 50% of their installed European base by 2008.
It remains to be seen whether they can a. make it work satisfactorily and b. achieve the roll-out on schedule.