Ithaca Energy Share Discussion Threads

[russianlinesman] 08/12/2007 10:02

hang on malgowland

offsetting the 10.5m against profits saves ITS the tax (say 30%) on the profits, i.e. 4.5m - i.e. the price paid is headline minus 4.5m which is what 6m plus future incentives.

You are right it makes a big difference to the calcs, but they are not getting it entirely for free.

Explains why they didn't increase the dividend since Stuart had plans for the cash already - earnings enhancing is only compared to the interest they are earning on the cash, so my question is whether the margins are better or worse on the new business.

Looks to me like a good fit though, given that ITIS had generally concentrated first on the car makers, and then on satnav makers, with CFVD used for governments, and trafficlink seems to be in the media area, where aside from the AA (admittedly a biggie) Itis has not really concentrated. So, there's no cannibalisation, another competitor gone which should improve margins, and maybe ITIS information will get even better.

Can't see any immediate changes to the share price, as like so many smaller shares, this has been being sold for months for no particular reason.

[tom306] 07/12/2007 14:14

Quickmind
the 2007 results match 2006 for revenue but are below in PBT if you ignore a very large interest adjustment. ITIS is a big customer of Trafficlink so presumably the inter-company revenue and profit will disappear on consolidation? If so does anyone know how much that is?

[malgowland] 07/12/2007 13:18

Thought you would have spotted this one guys.....read the whole statement...Stuart is no dummy :-)

"Trafficlink had tax losses of #10.53 million at 30 June 2007, which can be
utilised against future trading profits."

Great deal...pay £10.5m for the co. then offseet the tax losses of £10.5m v. ITIS future profits = the biz for nowt!

LOL

MG

[quickmind] 07/12/2007 10:38

"The business employs 130 permanent staff and ... For the year to 30 June 2007, Trafficlink generated an audited EBITDA of £0.74 million and profit before taxation of £0.56 million on revenues of £4.7 million."

The above means PBT per head £4.3k and revenue per head £36.2k (In contrast, staff cost at ITH has been above £40k.) Trafficlink appears to be a low margin business.

"immediately earnings enhancing." ?
On £10.5m initial cash consideration, maybe. But the total cost could be as high as £16.5m!

[sdavis] 07/12/2007 09:31

LP: have to agree.... these private equity guys must be laughing all the way to the bank. £10.5m of the £15m current assets spent at a stroke of the pen. Mind you, the business must be performing well or they would not have done the deal. So my view is, bloody expensive but will not put the business in danger.

[lucky punter] 07/12/2007 09:18

Well those figures must be wrong. 16.5 million for .5 million a year. That is about the worst ratio I have ever seen.

[hew] 07/12/2007 08:45

Yes, financially it makes the eyes water, but I don't see that as the important perspective. This is strategy and the future, and knowing nothing but what is in the RNS, I see it as a great move. Although technology remains as the engine room of the business, the new entity is now strongly a service/media operation, and as the RNS says, focussed on the digital future.

The Government links are significant - can we forsee where and when making better use of the roads will lead to your route being "allocated" for you?

Need to study more, but note also whose quote comes first in the RNS and how, apart from the finances, this could be seen as much of a merger. It looks good on fundamentals, key staff to remain, earnings ok, cross-selling. ITIS is buying a platform for the future. Yes, very pricy but I'm happy.

[thailand] 07/12/2007 08:09

but immediately earnings enhancing which sounds good

[sdavis] 07/12/2007 07:08

HOW MUCH!!!!! Seems they are paying top dollar for this.

[lucky punter] 18/11/2007 10:47

Russian
The dividend was only ever proposed on an annual basis. It is that way for the few small companies that pay a dividend. Personally I would rather they did not pay one and invested in the company.
The NU insurance product is a deal between TFC and NU where TFC provide a Black box and receive data in exchange for the opportunity to sell extra services to the customer.
The problem TFC face is that the NU product is aimed at fringe users who do few miles and are money focused. These are just the people least likely to want the extra services.
ITH have signed a deal with NU to process and deliver the data in a useable fashion to NU. ITH receive a undisclosed fee and also the use of the data to increase accuracy of its product. Win .win for ITIS and a vote of No confidence in TFC.
Good Luck.

PS Itis are planning world domination, with CFVD in every civilised country of the world, that will make 100's of millions but cost a few million in the meantime. Its a great mid to long punt.

[russianlinesman] 18/11/2007 07:46

I hate to mention TFC in this thread, given the usual hysterical reaction from TFC holders, but I thought the Norwich Union pay as you go system used TFC equipment, and this was one of TFC's big 'prospects'.

Am I remembering wrong?

For me, the results are only disappointing in that we don't get another dividend. The 1.5p was announced 6 months ago, and could have been paid with what £1.5m from the £11 cash. Since then cash has risen another £1m+, so another 1p on the dividend would have been in order. Not doing so seems to me to betray a lack of confidence. I mean, what are they going to buy for £10m, surely this has all got to be organic.

[lucky punter] 15/11/2007 22:38

It seems to me that the UK income will be quite insignificant once the income starts coming in from Royalty type deals around the rest of the world. I certainly would not worry about the likes of Tomtom. Itis have spent years abd millions developing their combinations and Tomtom are not going to do that overnight. Itis have a significant cash pile which should not be touched by the current rapid worldwide expansion. The deployment will be completed by accredited local agents on a royalty basis for using the platform. Itis can replicate the platform at very little cost.
The deal for itis to work with NU is excellent news and demonstrates how much higher Itis are regarded over TFC.

[cyberpost] 15/11/2007 19:18

from UKAnalayst :

ITIS Holdings (ITH), the road traffic and data specialist said that pre-tax profits for the six months to end-September came in at 2.1 million pounds, up from 1.7 million pounds last time, on revenues up by 23% to 8.09 million pounds. "The board is encouraged by the group's performance overall and we remain confident that our strategy of closely managing the UK business whilst generating increasingly significant international revenues will provide an exciting platform for further growth," it said. Currently the UK business accounts for 94% of revenues. The company also said that it intends to pay a maiden dividend of 1.5p due to the strong results. The shares edged 1p higher to 53.5p.

[jimmycarter] 15/11/2007 09:09

Expansion abroad is the key. It seems to be making inroads. We have a population on circa 60m. Different scenario in other countries. Breakthrough into Asia would be significant to say the least. It still has to perform but so far it has. Good to be pessimistic as nothing is a certainty.

[wjccghcc] 15/11/2007 08:30

Agree the market will continue to grow quite significantly, but unfortunately so is the competition. They've lost DoT and Vauxhall for 2008 and I suspect TomTom will also go once they launch their own traffic info system next year. I guess it's a question of running hard to inch forward. Still, maybe I'm being too pessimistic - management have certainly proved their worth so far.

[jimmycarter] 15/11/2007 08:19

For me it is doing well in its current market. A market that could grow quite significantly. To support UK sales it will be a question of developing contracts and gaining notoriety abroad. If it can do this in the next 1-3 years the outlook for is very good. Still a growth company but now paying dividends it start to become even more attractive.

[wjccghcc] 15/11/2007 08:05

Doesn't really do it for me although the cash pile is nice. Good results although the tax adjustment means they'll miss earnings for the year and reminds us at some point they will be paying tax.

More importantly, they're a bit wishy-washy about the outlook - it's clear the international side isn't going to contribute much for a few years and with the increased competition in the UK and loss of contracts, I suspect profits will plateau for at least 1-2 years. Good luck with it though.

[lucky punter] 15/11/2007 07:19

That is a great set of results, showing that Itis are capable of drawing much extra income from existing contracts. The venture into South Africa is a huge step along with the progress in Australia which should add to the bottom line in the near future.
ITIS/TFC This bit of news has just been released to the market, I wonder how TFC will take it.

ITIS is now working with the Norwich Union, on a revenue share basis, to process
de-personalised data derived from their "Pay As You Drive"TM insurance products
and to provide the public sector with historical traffic analysis that will help
measure congestion and assist with network monitoring. ITIS will offer combined
and separate datasets to local government and transport consultants throughout
the UK and will manage processing, display and delivery of the data.

[lucky punter] 08/11/2007 22:00

The interim results are next week and the company have already billed them as the best H1 ever. Last year they turned over 8.9 million and produced 1.8 million in the first six months, obviously we can expect these figures to be exceeded but by how much. I am looking for a substantial increase in the user numbers from 550000.
Possibly more importantly I am looking for some solid news of how the recent expansion drive is going with the rest of the world. It would be good to see some agreements with strong local partners to get the Itis platform into several large major countries.
The potential is huge for Itis as the platform is so easily deployed and at very little cost. I suspect they will be looking for a royalty type agreement on fully funded projects.
Good luck holders.

[lucky punter] 02/11/2007 08:41

This must be a good bet to rise to mid sixties pre interims on the 15th. Some solid news of expansion overseas with the "best ever H1" results should see some significant share price progress from these low levels.

[lucky punter] 01/11/2007 08:57

I think it was a bit of dead reconing that finished slightly off, it tidys things up now anyway.
The move to remove the unfortunate deficit is really just a paper exercise but I would think they are struggling to get the divi through court with that huge figure on the P&L.

[grgkecer] 31/10/2007 14:48

Thanks, lucky punter. I was puzzled about the 2,450 share discrepancy - just careless arithmetic apparently.

[lucky punter] 31/10/2007 11:10

grgkecer
regards.

[grgkecer] 31/10/2007 08:59

A copy of the circular sent to shareholders will from tomorrow morning be
available on the Company's website, www.itisholding.com

I have been unable to find this. If anybody else could will you please provide a link.