Netstore Share Discussion Threads

[cfb2] 17/2/2004 12:09

Evolution Beeson Gregory has just rated NES "Add".

CFB

[pacman88] 17/2/2004 12:07

17 February 2004
Evolution Beeson Gregory
100 Wood Street, London, EC2V 7AN 020 7071 4300
Netstore (NES) Add (unchanged)
Mkt cap: £41m Net cash: £12m Interims
Price/Target: 43p/48p
Good Interims show second quarter operating profit
Interims confirm a good 6 months trading on the back of the two big
contract wins. Meanwhile it is restructuring its management team for the
future and disposing of the last of its old SME-focused businesses.
Turnover of £10.6m is up 70% on 1H03 and up 33% on 2H03. This allowed
the business to generate a maiden operating profit in 2Q04, and reduce the
overall loss for the half to just -£0.2m (1H03; -£1.7m & 2H03; -£1.5m). The
group is thus steadily building its way to profitability. The business broke
even at the EBITDA stage in 2H03 and is now well ahead.
The business has been cash positive through the period and generated £1.5m
over the six months. The capex, heavy in 1H03 to gear up for the major
contract wins, is now steadily declining; to just £0.5m this half which left the
balance to pay for the EMS Global acquisition. This left net cash balances
steady at £12.2m for the period end.
The overall strategy continues to revolve around reducing exposure to the
vagaries of the SME marketplace and focusing on gaining a greater share of
the IT spend of fewer, much larger clients, with a strong focus on the public
sector. To this end the SME hosted exchange business was sold last year and
this has been followed by the sale to BT of the SME OnLine Backup service in
December, and most recently the sale of RedRock Technologies to its
management this month. At the same time the Group has sought to build
additional services to broaden its offering to gain a larger share of the IT
wallet of those larger clients. It added the NetConnect Internet security
business last year and in December it added a second in EMS Global, the
London operations of a New Zealand internet security business. This will
enable it to offer secure connectivity solutions to client's employees working
away from the office, a very 'hot' area of the IT market at present.
There is a restructuring of the Board to reflect the growing corporate
maturity of the business with Paul Barry-Walsh reducing his role to that of
Executive Chairman and handing over his CEO tasks to the more-thancapable
Neil Lloyd. Neil's position as CFO will be filled by a very
experienced new recruit, Sugi Sugunasingha.
The interim numbers and outlook suggest that trading is going well and we
are not changing our FY04 forecasts despite the sale of some minor non-core
businesses. Approximately £1m of turnover has been lost with the disposals
and around £0.5m gained with the purchase of EMWS Global. Nevertheless
we expect current trading strength to make up the shortfall and we are not
changing our FY04 expectations. There would be negligible effect on the
bottom line. In fact it may even be positive since RedRock was loss making.
At 43p this year's forecast EPS of 0.3p offers a multiple of over 100x and
seems pricey but the Company has only just broken into profit in FY04 and
in FY05 is likely to see a full year's worth of the major Housing Corporation
and Hackney Council contracts with correspondingly higher EPS.

[the jaber man] 17/2/2004 10:00

Simeon

everyone has nailed Sue (optimist 23)

lol

[simeon7] 17/2/2004 09:58

Sue - my mate Dell says that these are a sell. Could you comment please, as he always seems to hit it just right.

He also says he's nailed you....is that true.

Cheers

Hank

[sue helen] 17/2/2004 09:29

divina a good point but that is big bucks?

[divina] 17/2/2004 09:28

Sue H i wouldnt be suprized if they are not directors (+ new director) buying

[sue helen] 17/2/2004 09:26

207k and 182k buy just in looks like institutions topping up

[sue helen] 17/2/2004 09:16

fantastic reading
NetStore (NES) first half turnover £10.6 million versus £6.2 million; operating loss of £0.2 million versus loss of £1.5 million with operating profits achieved for the first time in the second quarter; operating cash flow of £1.4 million; cash balances £12.2 million versus £12.5 million; first half pretax loss £672,000 versus loss of £1.88 million; sales up 70% to £10.6 million; trading strong for third and fourth quarters; sees full-year income of £18 million from deferred revenue contract; names Sugi Sugunasingha as chief financial officer.

[sue helen] 17/2/2004 08:59

RATFPML! your so funny jab

[widemouthfrog] 17/2/2004 08:39

well done netstore and all holders :]

[sue helen] 17/2/2004 08:09

looks like NES could be one of the top risers today just broke out rerating on the way 1 mm left on the offer

[sue helen] 17/2/2004 08:04

did u get any?

[davidcod] 17/2/2004 07:57

44.0-45.0
4 bid 1 offer

desperately trying to buy some this morning!

[davidcod] 17/2/2004 07:55

what absolutely fantastic results

read three times now.. they get better on every read

[the jaber man] 17/2/2004 07:54

coddy

u should be in the diplomatic core, u are a top guy

[divina] 17/2/2004 07:53

Current Trading and Prospects

Current trading is progressing well for the current and final quarter. Income
from deferred revenue and contracted renewals, plus revenue from other projects
signed but not yet completed and billed, will total approximately #18m in the
current year. Costs remain under tight control with no plans to increase
materially the current level of overheads in the second half.

The high level of revenue visibility and the stability of our cost base give a
great deal of confidence that short-term targets will be met; the continuing
success of our corporate strategy and strengthening of our management team place
us well for future growth and sustained profitability. We can look forward with
confidence.

I am delighted that the improvement in the tradingof Netstore continues and,
once again, thanks are owed to our staff for their commitment and contribution
to a milestone trading period for us.

[davidcod] 17/2/2004 07:53

sue - no more deramping on DTC thread please

after all, life is too short

[divina] 17/2/2004 07:51

Highlights:

* Turnover increased by 70% to #10.6m compared with the same period in the
previous year (2002:#6.2m) and by 33% compared with the previous six months
of trading

* Operating profits were achieved for the first time, in the second quarter;
although there was an operating loss for the period of #0.2m compared with a
loss of #1.5m in the previous six months of trading (2002: a loss of #1.7m)
(before charges for goodwill)

* Operationally cash positive throughout the six month period; operating
cash in flow of #1.4m

* Cash balances of #12.2m compared with #12.5m at 30 June 2003 (2002:
#15.8m)

* Acquisition of the managed service business ofEMS Global completed in
December 2003; trading profitably post acquisition

* Restructuring and strengthening of the Board and senior management

[the jaber man] 17/2/2004 07:45

david

sue scared off you, after all her vitriol on dtc

whats goes round comes around

sue, david wouldnt stoop to your level, hes a top man

[sue helen] 17/2/2004 07:42

morning david keep it clean over here please

fantastic results shes on the launch pad up pre market

[davidcod] 17/2/2004 07:21

very nice results - expect this share to react positively today