Neteller Share Discussion Threads

[topgunns] 19/7/2007 22:17

Unbelievably, i partially agree with Cawky. Looking through the old announcements, i think the feds have take the entire cash balance (as of interims last year).

I agree there will be large costs for organisation charges but surely they will be valued much more than 12 million quid.

Cawky at least post a few words of truth. Rover is being cruel giving people false hope.

[25cent] 19/7/2007 21:15

LOL ha ha said the clown, seem to recall you saying this was dead upon suspension? whats this selective edit?

[simon cawkwell] 19/7/2007 21:03

Gentlemen,

I am not sure what to make of this NLR prosecution judgement. It looks to me as if all the cash has been stripped out - but I can't be sure since I am unclear from the announcement what of clients' cash has gone as part of the settlement. I rather think that none of their cash has gone - after all, why would the US government have a case against the clients? And, if there were a case, why would NLR be the source of funds?

So it looks to me as if NLR has taken a USD136m cash hit. Added to that are the reorganisation costs and losses consequent upon the debacle. This could be enough to reduce the TNAV to a negligible figure with no discernible business. Given that there are 120m+ shares, it would be hard to value them above 10p or 20p at the time of writing.

Simon Cawkwell

[toledo100] 19/7/2007 20:44

From the interim they had
CASH AND CASH EQUIVALENTS, END OF PERIOD $135,921,390

[brian1944] 19/7/2007 15:06

polaris v/good report.

[marlene72] 19/7/2007 15:02

wd polaris.. class

[polaris] 19/7/2007 14:38

The auditors can only have been waiting for the post balance sheet events and what do do for the $55-60m that had been frozen. Now they know that that has to be written off the balance sheet along with another $76m and the costs for the probe. There should be no reason why the accounts cannot be signed off today if the agreement is formal and signed by all parties. However i would expect that they will need a few days to put together an in depth summary of current trading. That must be released to market at the same time as the audited results and preferably before the relisting (ie 7am on the day of relisting) so that the shares open with all the info in the open. That will be the only reaslistic way to avoid a malinformed stampede by investors (though i think this will happen anyway to a certain extent). With the full figures in hand i can do a proper valuation and work out some scenrios for valuation on this and next years estimated figures.

Paul

[multisync 5] 19/7/2007 14:34

Polaris, Many thanks.

[robow] 19/7/2007 14:27

many thanks for your number crunching. When do you estimate they will sign off the accounts?

[polaris] 19/7/2007 14:18

Ouch! $136m in fines...that is well ahead of anything i had thought they would settle on. I really cant even begin to value the business properly as it is a completely different animal since suspension with the loss of the Canadian business as well. To my mind, the best case scenario is that they have $100m in cash after all US and Canadian accounts are settled, paid the fine and paid the accounting firm. However, ill give it a rough go on what info i have.

from the release of the 18th January
Operational Highlights

Average daily receipts from customers was approximately US $5.75 million during
Q4 2006 (Q4 2005: US $4.18 million) - representing an increase of 38 %. Q4
average daily receipts from customers were up by 8 % on the Q3 2006 average
daily receipts of US $5.31 million. Average daily receipts from customers for
the full year 2006 were US $5.11 million, up by 50% on average daily receipts
for 2005 of US $3.44 million.

As at 31 December 2006, NETELLER had 3,526,325 signed-up customers, an increase
of 1,205,656 or 52 % from 2,320,670 since 31 December 2005. Average daily
sign-ups of new customers was 3,493 during Q4 2006 (Q3 2006: 3,197) -
representing an increase of 9 %. North American sign ups were 74 % of total sign
ups in the fourth quarter, with the Americas outside the United States
accounting for 8 %. European sign ups represented 20 % of total Q4 2006 sign
ups, while Asia / ROW represented 6 %. Average daily sign-ups were 3,303 for the
year to 31 December 2006 compared to 2,930 for 2005 - representing an increase
of 13%.

Total active customers in the quarter were 640,701, an increase of 29 % from Q4
2005 and an increase of 3 % from Q3 2006. Of these, 24 % of our active customers
in Q4 2006 came from outside of the US, compared with 23 % in Q3 2006. 548,870
were from North America, including 59,335 from the Americas outside the United
States (9 % of the total), 11 % (71,421) were from Europe, and 3 % (20,410) were
from Asia / ROW.

Then from 8th February release
NETELLER remains committed to developing its business in line with its stated
strategic objectives including geographical and product diversification for all
markets. The Group will focus on its continuing business and the opportunities
available in the growing markets of Europe, Asia and the Americas outside of the
United States. Since the Group's withdrawal from the US market on 18 January
2007, average daily new account sign-ups of new customers from non-US markets
has been around 1,400. This compares to average daily sign ups of 3,303 for the
year to 31 December 2006. Daily fee revenue since 18 January 2007 has averaged
over US$ 200,000 per day (excluding any revenues from Netbanx, 1-Pay and
interest income). These metrics demonstrate the resilience of the Group's
ongoing business. NETELLER customers not resident in the US continue to be
minimally affected by this withdrawal from the US market.




If there have been no other real losses of customers then the number of active customers will be somewhere around 100k compared to 640k when US business was pulled. Canadian business was around 1/3rd of the remaining revenues, excluding Netbanx, 1-pay and interest. That would mean after the feb release that daily revenues would be in the $130-150k region allowing for expansion. (say $25m in revenues) They will have also taken the interest on all holdings for the last 6 months on $250m or so of cash holdings (say $5m). Netbanx and 1-pay to yield another $2m. So 6-month revenues of around $32m. There will be costs associated with the restructuring and pullout from Canada and so i think there will be no profit for H1 2007. However, FY should come in around $70m and a profit of $10m allowing for all costs. Cash in bank to be $100m on readmission and $110m by YE. Forecast for 2008 to be revenues around $90-100m and a profit of $30-35m (though these are guesses without a full trading update when relisting occurs). To value i would take a much lower P/E than before on the 2008 estimates of 10 and so value the company around $400m (£190m). That equates to a price around £1.59 per share.

However, if the profits are much lower than i have guessed then this could easily open at cash level plus 10 times prospective earnings...whatever that turns out to be from the trading update - could be as low as £1 or as high as £2.

Thee is also the issue of how the big holders view the settlement by NLR and whether there is a case for sueing the company for misrepresentation. I am no expert here but to sign away 130odd million plus pulling out of two of the biggest markets suggests they knew all along that this was dodgy...

It will be an interesting opening whenever it occurs - ill be here to have a good look at the numbers thats for sure!!

regards,

Paul

[macer] 19/7/2007 12:33

No doubt there will be a whirlwind when this relists, but what we need to figure out is the price once the dust has settled.

[clarea] 19/7/2007 12:17

anyone who thinks these will relist at over £1 is welcome to my shares any takers

[macer] 19/7/2007 11:32

More interestingly, optimal group is trading about about a third of their previous highs, mainly due to the loss of business in the States. So if we take NLR's high of 9 quid and divide that by 3, we get 3 quid. Then, if we remove the cash that will be paid out due to the fine 80p per share, we end up with a price of 220p. My gut tells me this is a little high, but, I suppose it is enirely possible.

At the end of the day, I look forward to getting rid of my holding in this thing and just drawing a line under the whole thing.

[macer] 19/7/2007 11:20

It is FirePay, not play.

FirePay was a wholly owned subsidiary of Fire One Group, which was listed on AIM until December 2006. However, a controlling stake of Fire One Group was and has always been owned by Optimal Group which is listed on the NASDAQ. In December last year, Optimal repurchased all of the outstanding stock of Fire One (at a significantly reduced price to the original listing price).

The directors of Optimal reside in the US, and seem to have come out of the entire thing unscathed.

[roverisback] 19/7/2007 10:27

macer..is fireplay listed on market?

[recruiter] 19/7/2007 09:21

because the yanks have a set of laws for themselves & then another for the rest of the world.

[macer] 19/7/2007 09:16

I still find it strange that Firepay, a direct competitor to Neteller based in the US, have avoided all of this.

[recruiter] 19/7/2007 09:16

lol & it will be all sells.

To be honest I wrote it off, if I can get back 10p in the £ I am happier than I am now.

[recruiter] 19/7/2007 09:12

hmmm, so NLR get stuffed big time, but partypoker, 888, sportingbet get away without handing over a penny.

can we have their management please/