Leadcom Integrated Solutions Share Discussion Threads

[papalpower] 15/4/2008 13:55

NJP, the company has breached its banking covenants.

Thats a simple reality. Can they put this right now ? I think not without an injection of funds.

Therefore, they need money.

Therefore, they are in a very weak position. It would make perfect sense for someone to borrow and sell down the price, and then offer to Leadcom the desired amount of cash, for a big dilutive amount of shares at a very low price. That would allow them to gain a very large percentage holding for minimal investment, and then allow them to be in a position to "buy the rest" for a takeover.

Elco ? Who knows.

[njp] 15/4/2008 13:49

PP

Then you have to ask yourself 'who might be doing this and how feasible is it?' Do you have any ideas as to who the predator is and how many shares they could acquire? Will the disposition of shareholdings make it difficult? In short, is it feasible, and at what sort of price level?

Strikes me there's little risk / reward in moving it much lower.

[papalpower] 15/4/2008 13:37

NJP, the aim is already stated, that is to force the share price down such that a takeover becomes very cheap indeed.

[njp] 15/4/2008 13:35

To respond to the above, which I see as an embellishment to your post 86:

Aversion to risk, of course, but 'past costs', i.e your average cost price is logically irrelevant. If you think the price will come back, you hold, regardless of your average. The only relevant issues are 'how fast', 'how much' (and 'risk' of course) and could you do better elsewhere.

Manipulation obviously can have an impact if the company is likely to need to issue shares in the near to medium term, and this IS relevant to LEAD, but you need to come to a view as to WHY the manipulation is occurring. There's always a reason and it helps to understand what the aims are.

[papalpower] 15/4/2008 13:20

NJP, that depends on what level your present holding is averaging, in terms of the "hold on" or not, and also your aversion to risk.

Manipulation might make the company unable to meet its obligations and move into "distress" - in which case, most would not want to be holding, obviously.

[njp] 15/4/2008 13:02

I honestly don't think it matters, PP. The essential message I took from it was 'if you think it's distressed selling, or manipulation, or both - HANG ON; if you think it might be bad news coming - GET RID'.

Essential message is the same whether the distressed selling is partnered by manipulation or not.

[papalpower] 15/4/2008 12:53

You missed the middle word, you say "or", I said "and".......which makes the difference.

distressed selling or manipulation

[papalpower] 15/4/2008 12:26

No NJP incorrect.

The act of distressed selling here may well be bad news coming, or it could be, as I have said, an attempt to get the price crashed, so a cheap takeover can be plotted.

RCG has only posted good news, lots of it.......and so, given Leadcom has 2 profit warnings already done, there is no comparison at all.

[papalpower] 15/4/2008 09:37

NJP, slightly different here.

LEAD have broken the bank covenants, they have accepted an offer (enough to do DD) for cash for shares.......therefore, in their present circumstance it would make sense for an aggressive fund to short them down into submission, and take a controlling stake as cheap as possible.

The question is, do LEAD need the cash ? If not then so be it, carry on.

If yes, then will Old Lane go through with the 31p offer ?

If yes and Old Lane also pull out, they are in dire trouble and Elco/Old Lane might then offer 15p a share or something.

So, given they have had 2 profit warnings and are present in breach of bank covenants, I would say totally different to RCG.

[njp] 15/4/2008 07:53

PP

'It will either become apparent that there is a distressed seller...'

Sounds suspiciously like the RCG situation with ML, which holders are hanging onto because the complete disconnect between the way the business is performing and the share price.

Good luck with it, but just hope the business truly is doing as well as RCG.

[papalpower] 15/4/2008 03:50

Gryphon2, cannot say I blame you. At this juncture its one of two events thats going to happen imv

It will either become apparent that there is a distressed seller and someone is shorting this down hoping to collapse the price and force a large discount placing to happen.

OR

There is some real bad news ahead on the Q1 front, a continuation of warnings and the third profit warning...........


If you think its the first one, its worth it as a punt staying in. If you think its the second one, its best to get out.

[gryphon2] 14/4/2008 16:53

out!!!!!!!!!!!!

lost a packet from 70 p to 16p!

Thanks management .. will you volunteer to pay my losses caused by your incompetence!

[papalpower] 14/4/2008 13:00

Selling still going on, and strong.

Either a very distressed seller in the fold........or another profit warning is coming up with Q1.

Given the way things have gone, I would not put money against another profit warning........you never know.

10p coming ?

[masurenguy] 11/4/2008 00:18

A Mystery in the Middle East
By George Friedman

The Arab-Israeli region of the Middle East is filled with rumors of war.

[haywards26] 07/4/2008 16:16

I am not soo happy after having been tempted to press the sell button in the early 70s a few months back, but not doing so, and then seeing this free fall.

Hope the markets confidence will return as mine is :)

[papalpower] 07/4/2008 15:47

I am hoping that the "provisions" have been overdone by some margin. And also, that the levels of "Ytlecom 2007 profits" that had to be moved from 2007 to 2008 are decent enough.

We did see in the past a cessation of "contract win" news.......and now its returned.

Who knows, all I know is I am happy to be just sub 20p average on my holding, and lets see what happens.

[haywards26] 07/4/2008 15:43

The Old Lane investment will ease balance sheet concerns, bring us back into line with the terms of banking covenants.

I would be very disappointed to see a 3rd profit warning, it would be disatorous for market confidence. I can't see why there should be a 3rd profit warning with all the costs for Nokia fall out recognised and provided for in 2007, allowing a clear deck going forwards.

I am feeling more confident here now mid-long term.

[papalpower] 07/4/2008 15:07

Someone is still selling though......so do they know a third profit warning is coming ? Hard selling happened before the first and second warnings, the eternal "seller" in the wings. Thats the question that will worry many people.

Aside from that, they have announced orders so far in excess of the current market cap, and we are not far into the year.

Present market cap against potential revenue, you have one of the lowest PSR's anywhere.

At least they have returned to the "contract win" RNS stream.........so perhaps things are changing. What would be nice would be to see the Old Lane deal go through.

[haywards26] 07/4/2008 14:54

Very good news, another contract announcement in maybe the Indian territory prior Qtr 1 trading update would be a welcome boost.

Where does this latest contract announcement leave 2008 forecast revenue? Must be in the region of $350 million.

A Qtr 1 showing profitability, cash flow positive and with margins brought back to usual expected levels, should sound the start of our recovery.

IMO 30-40p miniumum for fair value. Aslong as margins have returned.

They have hedged against exchange losses on the debentures so should not see a repeat this year of 2007 unrealised exchange loss.

[papalpower] 07/4/2008 14:20

Some more contract wins, seems to be back in favour of them releasing contract win news.......

Mind you, with such a small market cap now, any contracts are now "big"..........LOL


Leadcom Integrated Solutions Ltd

Leadcom Announces New Wins in MEA Region

April 7, 2008, Hod Hasharon, Israel - Leadcom Integrated Solutions Ltd.
('Leadcom' or 'the Company'), (AIM: LEAD), is pleased to announce it has
concluded two significant long term frame agreements with two pan-African
operators, both existing customers of the Company and its YTelcom subsidiary.

The first is a long-term frame agreement with a major global operator, for turn
key construction of telecom sites and related equipment throughout the
operator's African operations.

The second is a long-term frame agreement with a significant pan-African
operator, for similar services. This operator has been working closely with
YTelcom as well as with Leadcom, all through the African continent.

The Company has already received orders under these frame agreements for a value in excess of US$12 million, all to be recognized in 2008.

For further information, please contact:

Yael Margoninsky - Leadcom Integrated Solutions Ltd.
Tel: [phone]

Andrew Godber - Panmure Gordon (UK) Limited
Direct: [phone]

[haywards26] 04/4/2008 15:57

The catalist here will be Q1 results, and completion of due dilligence with Old Lane investments.

If as I am hoping qtr1 show improved efficiency and return to profitability the share price should start to head north.

I still see good potential here. Some new Indian or African work would also not go a miss to continue the growth. We know management are looking at cost efficiency as a key tool to returning the margins into the buiness.

[yorked] 04/4/2008 15:31

By the look of it, the share price will languish in between 15-20p for some more weeks.