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| Share Name | Share Symbol | Market | Stock Type |
|---|---|---|---|
| March Networks | MNW | London | Ordinary Share |
| Price Change | Price Change % | Share Price | Last Trade
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| 0.00 | 0.00% | 220.00 | 01:00:00 |
| Open Price | Low Price | High Price | Close Price | Previous Close |
|---|---|---|---|---|
| 220.00 |
| Top Posts |
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Posted at 15/1/2007 10:25 by edmondj What goes up like a rocket is liable to fall like a stick!Especially flotations, with early investors taking profits. Same old market moral, whatever sector/era. |
Posted at 13/10/2006 11:19 by lordcoco T Matthews wesley clover selling could be one reason why the price was surpressed Tillman but by no means the only one, plenty of bearish scenarios for investors to dwell upon too. Have a read back through the thread, I posted some analysts comments too, all generally very bullish on March.Or have a look at the "management discussion and analysis" in the filing docs, I found some of it pretty uncomfortable reading. That said, I'm still pretty optimistic about the future for March. I took the opportunity to add a few yesterday as the latest win takes them another move away from reliance in the future on their big customer WalMart. If March Fever takes hold again in Canada (lot of the move probably down to the locality of recent win imo) then we could move pretty quickly from here, though without further news before next quarterly results I can't see much of a push from here. |
Posted at 13/6/2006 00:37 by elsworth I now have revised my entry point to below £5...with a target range of £3-£3.50Hope it helps ==================== Federal government bailing out of troubled March stock Bert Hill, The Ottawa Citizen Published: Friday, June 09, 2006 The federal government is trying to sell a big stake in March Networks as its paper profits get burned in the technology market bonfire. As the price of the once-hot stock slides -- down 44 per cent since March -- the value of the federal government's stake has fallen by more than $16 million. Shares of March Networks tumbled 11 per cent yesterday after it forecast that profits will lag far behind expected strong sales growth in the new fiscal year that began in April. March revealed during a conference call that the government plans to issue a tender next week seeking bids to take over the portfolio. March said that half of the government's stake can be sold now, but rest can't be sold until a later date. In 2002, the government received warrants to buy 967,000 March shares in return for $5 million in research and development assistance under the Technology Partnerships Canada program. An Industry Canada spokesperson could not be reached for comment yesterday. With its stake equal to about five per cent of March Networks, the federal government is the second-largest stakeholder after Terry Matthews, who owns 28 per cent of the company he founded. At yesterday's $22 closing price, the government's stake is worth about $21 million -- about four times its initial investment. But that's a far cry from the peak of $38 million three months, or even the $25 million its was worth when it and other insiders were first able to sell their interests on April 26, one year after March went public. March is forecasting sales of digital video surveillance recorders will reach $97 million to $107 million -- a gain of as much as 40 per cent -- in the new fiscal year that began in April. But anticipated profits of $12.5 million to $14.5 million will be well below the $20.6 million reported last year. March is pouring resources into a major sales force expansion and the acquisition of Trax Retail Solutions, a Texas theft-management software company that it bought this week for $7.5 million U.S. Investors are also concerned that, while March reported a healthy 59-per-cent sales growth to $21.4 million for the April-ending quarter, revenues have been stuck in the $20-million range now for three straight quarters. Chief executive Peter Strom was unapologetic, saying that while it might be "a flattish year," the results of "a year of investment" will be good for the company and investors. March's results for the latest quarter were hurt by declines in the value of the U.S. dollar, which knocked sales down $4.5 million and profits about $2 million. March revealed that Wal-Mart is the company's biggest single customer, generating 42 per cent of sales, or about $8 million, during the quarter. The retail giant had accounted for a majority of company sales in the past, raising fears about dependence on a single big customer. March now generates more than half of sales from banks, public transit and non-retail commercial customers. The company also revealed yesterday that it has closed a struggling e-health services division and is trying to find a buyer for it. |
Posted at 11/5/2006 09:30 by lordcoco Had another go (but left out the tables as cannot tabulate):10, 2006 All values in C$ unless otherwise noted.(TSX: MN; AIM: MNW) Outperform Above Average Risk Sharp Decline Unwarranted; Upgrading To Outperform Event MN shares have continued to decline in recent weeks, with no new fundamental reason evident. We view current risk/reward as compelling, and upgrade our rating on MN to Outperform. Investment Opinion 45% Decline From Recent Highs; No Sufficient Fundamental Explanation Evident: MN shares have plummeted roughly 45% since just before FQ3 results, with no identifiable changes in the fundamentals or outlook for the company. There are a number of "partial explanations" for the decline (itemized below), but nowhere can we find a lost contract, product issue, imminent new competitive threats, financial shortfall, etc. Clearly there are risks out there for MN, but we do not see major new threats that would justify such a move. Risk/Reward Now Compelling: At current levels, MN trades at 21.8x our C2007E GAAP EPS estimate, now in-line with peer companies. On this we note several points: MN has much a much higher growth rate than peers almost 2x earnings growth and 3x revenue growth(see table below). 1-2 months ago, MN traded at a 5-7 P/E multiple premium, which we viewed as justifiable given MN's higher growth outlook. MN will pay no taxes for several years, though they are applied at a 36% rate in the GAAP EPS calculation a higher rate than peers (see discussion and exhibit 3 below). On an untaxed basis, MN now trades at roughly 14.2x our C2007E Adj. EPS of $1.63. We note that this is now below the IPO valuation level (which at the time was roughly 16x forward year untaxed EPS). Netting out cash (mostly built through the IPO) and the cash benefit of the tax shields (which seems fair if we are to look at taxed EPS), then MN trades at approximately 15x 2007E GAAP EPS. FQ4 Results To Be Reported on June 7th: We expect a solid quarter, with revenue of $21.6 million yielding EPS of $0.27. We will publish a full preview closer to the release. Valuation: Our target remains $40.00, reflecting roughly 25x C2007E cash EPS of $1.63. This multiple is in line with our expected growth rate for MN over the next 3-5 years. Viewed another way, the target reflects roughly 30x C2007E GAAP EPS, plus cash (including the effect of the tax shield). We now rate MN Outperform, AAR with a $40.00 target.Priced as of prior trading day's market close, EST (unless otherwisestated). RBC Capital Markets March Networks Shares Were Arguably Overbought A Quarter Ago, But 40%+ Selloff Unwarranted, In Our View At their peak just before FQ3 results (late February, 2006), MN shares traded as high as $42. At that time the shares appeared fully valued i.e., fully reflecting a premium valuation for very strong execution and market outlook. Since then, the shares have plummeted roughly 45%, with no identifiable changes in the fundamentals or outlook for the company. There are a number of "partial explanations" for the decline (itemized below), but nowhere can we find a lost contract, product issue, imminent new competitive threats, financial shortfall, etc. Clearly there are risks out there for MN, but we do not see major new threats that would justify such a move. Accordingly, we are upgrading the shares to Outperform, Above Average Risk from Sector Perform, Above Average Risk. Looking for Explanations There are a number of items frequently discussed to explain the move. In our view, many of these are 'after thefact'explanations FQ4 (ended April), though we can never find a source, or even a reasonable discussion as to why this may be the case. We are comfortable with and reiterate our FQ4 forecast (revenue of $21.6 million yielding EPS of $0.27). We note several points: o We are now 10 days past quarter-end with no pre-announcement. While this does not necessarily preclude one, we note that the company's only previous pre-announcement (to the upside) came on November 3, 2005 3 days after the quarter end. o Our top-line forecast has relatively modest assumptions, in our view: We look for "Large Customer" revenue to rebound from $7.5 million in FQ3 to approximately $9 million this quarter. This compares to $9.7 million in FQ2, with the FQ3 dropoff related to a seasonal slowdown in deployments (the customer is a retailer). All other revenue is flat in our forecast quite a conservative stance, in our view. o FQ4 expenses may be higher: March intends to aggressively hire additional salespeople, so it is possible that we are light on our Opex forecast. If so, we would expect a modest ($0.01-0.03 per share) impact to earnings, which is more than adequately reflected in the share price, in our view. May 10, 2006 2 RBC Capital Markets March Networks F2007 guidance may be more of an issue: Following FQ4 results wee expect March to issue F2007 annual guidance (as it did last year). We again expect management to be quite conservative in its forecast, including primarily revenue to be derived from current customer rollouts or firm contracts. Last year, we saw numbers far in excess of initial guidance, which was followed using the same principals. We expect revenue guidance to be on the order of 30% growth. We currently forecast 34% growth with relatively flat margins (EBT down 40 bps to 23%), and are comfortable with this given the firm nature of the revenue guidance. We may see some investor concern should official revenue guidance fall modestly short of consensus expectations, but we would be comfortable with revenue growth guidance in the 30% range. Profit-taking: In the recent decline we sometimes forget that MN shares are still up just under 100% from their $12 IPO price a year ago (though down from their one-time 240% gain). With uncertainty as to why the shares have been in decline, we expect some investors have opted to "take some off the table until they figure it out" a direct quote from one former holder. In a sense, this becomes self-fulfilling, though does not offer a better explanation. Current Valuation Parameters At current levels, MN trades at 21.8x our C2007E GAAP EPS estimate, now in-line with peer companies. On this we note several points: MN has much a much higher growth rate than peers almost 2x earnings growth and 3x revenue growth. 1-2 months ago, MN traded at a 5-7 P/E multiple premium, which we viewed as justifiable given MN's higher growth outlook. MN will pay no taxes for several years, though they are applied at a 36% rate in the GAAP EPS calculation a higher rate than peers. On an untaxed basis, MN now trades at roughly 14.2x our C2007E Adj. EPS of $1.63. We note that this is now below the IPO valuation level (which at the time was roughly 16x forward year untaxed EPS). Netting out cash (mostly built through the IPO) and the cash benefit of the tax shields (which seems fair if we are to look at taxed EPS), then MN trades at approximately 15x 2007E GAAP EPS. RBC Capital Markets March Networks RBC Capital Markets estimates Given a 50%+ EPS growth rate for MN over 2004-2007 (74% pre-tax growth), we view current multiples as very compelling. On a sustainable basis over the next 3-4 years, we anticipate EPS growth on the order of 30%+. Taxes skew the valuation and peer comparison: March's tax situation complicates the measurements somewhat, and unfairly depicts EPS trends as we move from F2006 to F2007. As discussed at the end of Q3/06, March will begin accounting for Income Tax at a 36% tax rate beginning in Q1/07, though previous losses, etc. will shield the company from paying cash taxes for several years. On a cash basis, we expect MN to generate EPS of approx. $1.60 in C2007, implying a P/E multiple of 14.2x on Cash EPS. Further complicating the comparison, NICE and Verint have expected tax rates of 19.5% and 25% respectively for F2007, well below MN's accounting levels. RBC Capital Markets estimates Note this table assumes constant share counts for all companies, unlike our calculation above (14.2x for MN) which assumes growth in share count through C2007. Notably, on an untaxed basis MN trades at a discount to the peer group, despite higher projected growth rates. Looking for Upside Potential New Enterprise Deals: The first and most obvious driver of the share price will be large contract announcements. We have seen several moderate deals in recent months, with Union Pacific being the last "large" deal. Watching the news releases is not a reliable measure of contract wins, however, with many customers not permitting MN to publicize their security initiatives. New deals are difficult to forecast, though we expect a relatively steady flow (including in the transportation vertical) in F2007. Potential Acquisition: An acquisition by MN would likely be viewed positively by the market. Assuming MN stays within their specified parameters for such a deal complementary software offerings, customer base in a defined vertical (likely retail), and accretive to earnings, then this should boost the growth outlook and alleviate some longer-term concerns as the company diversifies beyond hardware. Stronger Revenue Growth: In our view, the real upside driver will be higher levels of revenue growth, along with sustained or improved operating margins. Currently, MN is operating with very strong gross margins and controlled OpEx, yielding Operating Margins around 22%. It will be difficult to improve margins beyond current levels, in our view. In fact, we could see margins decline modestly in coming quarters/years as the sales force grows more aggressively (with expenses likely leading their contribution). So earnings growth over the next several years will primarily be driven by revenue growth, in our view. Revenue Growth Sensitivities: We are forecasting 34% revenue growth in F2007. Each 2% increment in revenue growth adds $0.03 to EPS. This implies the following range of P/E multiples based on sensitivity to revenue growth: May 10, 2006 4 RBC Capital Markets March Networks RBC Capital Markets estimates Valuation and Recommendation With the recent share price weakness and no evident change in fundamental outlook, we believe the risk/reward profile of MN is compelling and upgrade the shares to Outperform, Above Average Risk. We remain firm believers in the market opportunity facing March over the next several years, and in their product strategy and execution ability to capitalize on that. Valuation has been our primary concern in recent months, but we believe the declining share price has mitigated the risks that are out there. MN now trades at similar multiples to the peer group, yet has a higher projected growth rate and faces many of the same risks. Our price target remains at $40.00, reflecting roughly 25x C2007E Cash EPS of $1.63. This multiple is in line with our expected growth rate for MN over the next 3-5 years. Viewed another way, our price target reflects roughly 30x C2007E GAAP EPS, plus Cash (including the effect of the tax shield). We upgrade our recommendation on MN to Outperform, Above Average Risk (from Sector Perform) with a price target of $40.00. Price Target Impediments Our financial forecasts are predicated on the continued deployment of March's solutions at existing customers, and continued wins with new customers to replenish the backlog. Severe pricing pressure, or major technological advances by competitors would threaten these assumptions and therefore impede achievement of our price target. Company Description March Networks is a leading provider of IP-based digital video surveillance solutions to the banking, retail and transportation sectors. March introduced its networked Digital Video Recorder (DVR) product in 2002, and since then has grown its installed base to over 21,500 DVRs worldwide. The company has an impressive list of clientele including U.S. Bancorp, Wachovia Corp., DHL International, Cadillac Fairview, Singapore Mass Rapid Transit, and the Royal Bank of Canada. |
Posted at 09/5/2006 11:11 by lordcoco My comment was unnecessary, wrong side of the bed day.Lowered earnings figures, though continued strong growth. The lower figures are, afaiaa, purely down to the accounting measures in that they begin accounting for taxes in 07, though I believe they do not actually start paying tax until 09 or later, therefore there is no net effect on their cash position but a huge dent in their eps when the tax is accounted for. I'm not sure why their tax rate is at 36% or if it will continue to be so into 2009 when they actually start paying. Their competitors appear to have a much lower rate, 20-25%. If the company continues to grow it's business, I see no argument as to why they should not, I can't see the problem with them paying taxes come 2009, afterall it's not unusual for a succesful, profitable company to have to pay taxes! And considering the (imo) likelihood that the company continues to grow and only adds what it has the previous quarter ($2m) per quarter, so in effect the growth slows, it still more than makes up for the tax payable come 2009. As said, I still don't fully understand the tax matter and what happens to the cash, maybe it is banked and used to offset the tax in 2009? As for margins, at last results they were higher which is not an indication that they are under pressure from competition. WalMart, it is a risk having such a high percentage of revenues coming from one client, I've always thought as much. I think the company have effectively denied the rumours that WalMart have sourced another supplier, though it is perhaps likely that they could squeeze them on margins given their reliance, but given the nature of the equipment it seems unlikely that WalMart would want to complicate matters by running two sets of software and equipment mid deployment when the essence I'd imagine of choosing such is to simplify and streamline their set-up with one comprehensive package, accessable and cross referenceable to all their users. So perhaps they are interdependent to some extent. If a company the size of WalMart have chosen March over all the competition I also think that speaks volumes about their product, and who's to say similar size contracts may not come their way? That would certainly put an end to the concern over the distribution of revenues. As for the placing, that was pure speculation on my part. Perhaps TM will place his shares at some point but I suspect it will be much further down the line than this considering it is still early days for the sector and the company and it would appear that he is not exactly short of a few bob. There are hundreds of stocks that have large amounts of shares held by various investors in similar lock-ups, be they directors, institutions, whatever, this does not automatically equate imo as to "uncertainty" as to what they may or may not do with their position. In this case it obviously does as people search for possible reasons for the continued slide, it does not however make it more or less likely that the shares will be placed when the lock-up expires. Sector analysts have recently upgraded the growth prospects for the sector as a whole, March are clearly a very highly regarded company within the sector mainly due to the very strong positive reponse they receive from their customers, regardless of how they are perceived in the (stock) market which also afaiaa is with very high regard, they appear to be a quality setup. I'd find it hard to make an argument to suggest March weren't extremely well placed to continue taking advantage of this growth. I look forward to results next month, though what will happen in the interim I guess is anybodys guess, and I wont bark at anyone else for guessing. |
Posted at 09/5/2006 09:57 by kdwilson sadly im not short, just waiting to go long.Nasty susprises? New lowered earnings figures on tax guidance?; comments about Walmart's strategy (given over 30% revenues); impact on margins of competition? a lot possible discount placing? - doubt any institution will take a large line of stock at a premium to the price. Of course may not be a placing if investors want to hold but then that just extends uncertainty. Im calling it as i see it so please dont draw jusgement on what i know about the sector/fundamentals. I appreciate holders are hurting and that isnt fun but surely boards are for discussion not just bullish spivvery ? |
Posted at 08/5/2006 21:50 by lordcoco I have been watching the decimation of March's share price with a mixture of shock and awe!I've been expecting a bottoming out for some time now and have bought back the shares I sold plus a few more over the last week or so. :( Aplogies to Umaluka - should have kept my trap shut. The share price now fully takes into account and then some (as far as I can make out) the tax situation which has seemingly spooked a lot of investors, if that equates to knocking off some 36% odd from March's bottom line and suggests a real flattening of growth. Fearing some other nasty I had a chat with investor relations in Ottowa earlier this evening. They/he/Anil Dilawri seemed pretty frustrated with the hammering that March is getting - there is no material news coming from the company, it appears their hands are tied until results early June before they can dispel any fears (or confirm them as the case may be). He appeared to be eager for that date's arrival though fwiw. Re the share price movement, Mr Dilwari commented on the fact that it had "had a good run" last year, as far as they could make out no institutional investors were offloading and the sales appeared those of smaller (PIs?) investors driving the price down. There appears to be no concerns with their major customer (Wal-Mart), they are happy with March and the deployment continues apace. Stock options/lock-up - TM cannot sell until after results and then, obviously, they would be placed rather than dumped on the market. There was no outright denial that this may happen. My observation - TM had made comment about a merger between March and Mitel maybe this was badly recieved by March and now TM wants out, who knows? GAAP/tax matters - my theory, once again, is blown out of the water - it is a requirement of March due to Canadian tax regulations to start booking taxes in 07, not a decision by them, no effect on cash balance so not a means to strengthen the balance sheet prior to an acquisition as I had thought. I'll leave it there as I honestly still don't really understand the implications beside knocking EPS forecasts for six. They are continuing to "focus on sales and growing the business" and from the intonation I suspect they are doing just that. Pleased with the way things are going in the UK, see significant prospects here, expect to ramp up sales later in the year... Not much to report beyond what's already been reported really. I think I'll hold off buying any more until results now and then if, as I suspect, there is plenty of scope for March to take advantage of the still growing market I'll probably load up. Pleasant evening all. |
Posted at 07/4/2006 07:58 by lordcoco Taken from another board, sums up situation pretty well. RBC note:------- MN shares are off approximately $6 over the past 2 weeks, with no real fundamental news. We review valuation parameters and drivers after the decline of ~30% from February highs. Investment Opinion Fundamentals Appear Solid Though Valuation Has Been Our Concern: In recent months we have remained very positive on MN's market opportunity, product line-up and execution record. Our Sector Perform rating (please see our note dated February 28, 2006) reflected valuation concerns as the stock approached $40. Industry Peers Down, But Not As Much As MN: MN has traded at a premium multiple to its peers, largely justified by its higher growth record and outlook. Even after a steeper share price decline, on a GAAP basis MN trades at 27.6x C2007E GAAP EPS, compared to the peer avg of 21x. Tax Situation Unduly Penalizes MN's GAAP EPS, And Complicates Comparisons: MN is shielded from paying cash taxes for several years, but must begin accounting for tax expenses in F2007 at 36%. On a pre-tax basis MN trades at 17.6x C2007E Cash EPS. Industry peers NICE and VRNT have 19.5% and 25% tax rates respectively, and average 14x Cash EPS on a pre-tax basis. Revenue Growth Is Driver For Upside To Earnings Expectations: MN currently runs at near-optimal Gross Margins and OpEx, in our view. With 22% Operating Margins, incremental revenue growth is the key source for upside earnings revisions. We currently forecast 34% revenue growth into 2007. Each 2% increment would add ~$0.03 to EPS (e.g. 50% revenue growth should yield C2007E EPS of ~ $1.30, vs. $1.06 current forecast). Valuation Getting Interesting, But Remaining Neutral For Now: We are comfortable accumulating positions in MN at these levels, though are reluctant to become aggressive buyers immediately. MN fundamentals and execution remain positive, though we see no immediate catalysts to reverse the recent trend. Valuation seems reasonable, though a deep value argument is difficult on GAAP earnings (which many investors screen). In short, we anticipate somewhat of a sideways drift in the near-term, and would wait before becoming aggressive buyers at this stage. Valuation: Our target remains $40.00, based reflecting 25x C2007E cash EPS of $1.60. This multiple is in line with our expected growth rate for MN over the next 3-5 years. Viewed another way, the target reflects roughly 30x C2007E GAAP EPS, plus cash (including the effect of the tax shield). We rate MN Sector Perform, AAR with a $40.00 target. RBC Capital Markets March Networks April 6, 2006 |
Posted at 20/3/2006 13:46 by milesy U,Subscription to tomorrow's AIM float is likely to have been closed to private investors, so you're left to fight it out with everyone else when dealing starts tomorrow if you want some. Expect a scramble and hefty premium to the listing price if they're 8 times subscribed...might be worth waiting for the market to settle before committing funds. >M |
Posted at 04/3/2006 14:57 by sivadnoj SunnyThe KBC piece you linked to makes a distinction between GAAP eps and cash eps. Presumably GAAP eps reflects the 36% tax charge while cash eps is higher because the brought forward losses are available to offset the tax charge. I think the accounting entries would probably look something like this: On recognition of the tax losses at the end of FY 06: Dr Tax Asset (B/S) X Cr Reserves X with the full amount of the tax losses available - some $30m. Then from Q1 07 onwards: Dr Tax payable (P&L) X Cr Tax asset X with the quarterly tax charge based on profits x 36% The problem becomes one of perception. The KBC piece suggests that investors will use GAAP eps to calculate the pe ratio and as such, the valuation will look (even more) stretched. Using cash eps, however, nothing has changed. I don't see this as any reason for downgrading forecasts. Its simply an accounting entry with no cash impact. I think its unfortunate that this is threatening to overshadow some excellent numbers and an increase in management guidance based on improved margins. I though I also heard on the cc that the patent action had been settled for an immaterial amount. regards |
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