Opsec Security Share Discussion Threads

[harrogate] 12/1/2011 14:12

I think we will find that the sell price moves up to close the spread again. This really is the forgotten share ...the only thing in my whole portfolio that didn't have decent 2010!!!

[seahorsel3isure] 12/1/2011 13:59

Yes, agree. Just seems strange that its gone to this today - not suggesting anything really, just that its a bit strange and its been a while since this has had such a large spread.

[harrogate] 12/1/2011 13:09

Yes but there has been plenty of chance to have bought at a tight spread at about 22p or less in the last week or so.

[seahorsel3isure] 12/1/2011 12:34

The spread is currently 21.5 - 25p.

Slightly offputting!

[harrogate] 21/12/2010 16:01

I do agree that based on deals that have been done in the market they are in they could be cheap and I hae always seen them as a buy for soemone in the US . I can't see them going mega though. If they have agood 18 months trade wise they could be a good buy at these levels.I hope your mates mates is right!!

[jonno1] 21/12/2010 15:56

...Someone told him it was about to go mega , and that he had nearly a million shares, my mate doesn't trade , but knows I do so told me, took a look as I was unaware of this stock... haven't touched it yet, the only reason I could see it going higher was if there was a bidder out there.
It certainly hasn't acted like that in the last month has it...
I have no current position, but am curious, and have it watch listed

[harrogate] 21/12/2010 15:37

Spread is much narrower now I think since Shore Capital came on ...22p - 22.5p smallest spread in years. It could drift down from here without news. What was the basis for the tip do you know?...they do some work in Middle East and there are certainly large contracts out there that could be important to them.

[jonno1] 21/12/2010 15:28

A friend of mine actually got tipped this last month in the middle East, told me about it but the spread was something like 25.5p - 28p + very illiquid so didn't bother with it... however how low does it go?
Is it attractive here?

[harrogate] 21/12/2010 15:24

Oh yes ...got too many of these. They need to get the Investcorp loan refinanced before next June and keep sales moving forward ...without that we are in a for a really tough time. if they do keep growing we could gte some value .. A very patient and not that happy large holder!

[jonno1] 21/12/2010 11:02

I guess this has to be a buy at some stage, anyone in this???

[diku] 17/11/2010 23:16

That looks like a new name on the share register...

[diku] 15/11/2010 11:13

When you have consumer retail boom this does well...

[techno2trader] 14/11/2010 21:35

Harrogate,

Really helpful - thanks.

Not a very pretty story. However;

2007 saw £5m in profit on £33m sales, and EPS of almost 9p, with what is fundamentally the same business - so plan to keep the faith for now!

[harrogate] 14/11/2010 08:23

Hi

I agree on the growth but have you tried to work out what sales will be needed to be to make a decent EPS and allow us ordinary shareholders to have some value from this company.. I suspect it is £50m + sales to get us anywhere near a decent EPS of say 4p/5p.

In terms of the debt

It is in 2 parts
20,000,000 prefs at 35p( £7m ) which we think of as shares with a 9.75% divi are actually being treated as debt under UK accounting rules. That is £7m debt which is not repayable but will convert to ordinary shares at some point if Investcorp want.

$13m loan with an interest of 9% ... this actually doesn't have a repayment schedule and should be repaid in one lump according to the original announcement about this but the results say it is being repaid. Interestingly this has to be repaid in full by June 2011 or else OPSEC get a 10% penalty and I have confirmed with the FD that they fully intend to refinance this before then. It will be interesting to see if they can. If not the $1.3m penalty will be a hit to profits next year ..and there are further penalties upto 40% of the loan if not repaid in future years.

The trouble with the cash on the balance sheet is that they need it to run the business..In mid Oct the cash might have been £2m less with creditor payments etc etc. I am sure they will use any real excess cash to reduce debt.

Hope that helps

[techno2trader] 13/11/2010 18:49

Have to say i thought it was hard to fault the results. Any organisation driving top line growth of 21% and 100%+ in operating profit must deserve some credit. Particularly pleased with the positive comments on on-line brand protection, which must be the most attractive part of the business for would-be purchasers.

The debt repayment is clearly the key issue and one that will act as a drag on the shares. This is where I'm struggling to get my head around the situation.

From memory there were a number of components of the Investec deal, which included both the issuance of preference shares and the availability of a funding facility. Both paying around 9%. Is the H1 debt payment on one or both of these components? I assume its not the latter given the cash in the bank?

Either way - is there anything stopping the business from using the £4m+ in cash to re-pay these facilities? Seems a lot more sensible than using the money for acquisitions.

Any thoughts much appreciated.

[diku] 13/11/2010 12:16

The new investor will probably facilitate with the management to invite US bidders...

[bearfoot] 12/11/2010 16:46

Harrogate...I agree that the sales volumes are good/positive....and yes it would be lovely to think/hope/pray someone would value the company at 2 or even 3 x sales!.... I'm holding because I got a lot of them....and there is really little prospect of being able to sell them through the market given that it is so illiquid. Ignoring the two 100k (internal?) trades today (see below) trading has be almost zilch...and this after the accounts are out!

I fear the absorbtion of sales will prove to be yet more shares being added to the employee/director benefit share trust scheme! If so, we will one of the uusual announcements in a couple of days. I agree about the pecking order...I can't see the situation becoming anything other than worse...

Hope I'm wrong and you are right with your positive exit hopes!

[harrogate] 12/11/2010 12:32

Hard to argue really. The one thing that is stopping me selling is the sales growth..it is pretty impressive and if they did £20m+ in H2 the annual growth is not to be sniffed at. In the market they are in that makes them a bid target and a rare entry into brand protection Deals have been done at 2 or 3 times revenue in this market in the past. But you are right we are below management and the new investor in the pecking order. Also the MMs seem to be absorbing a lot of selling in the last week or so ..Curious to understand that.

[bearfoot] 11/11/2010 18:23

Harrogate and ALS....I agree with both of you. The deal that they did to raise the cash backing looks unattratctive/penal and I fear reflects the level of desparation (and lack of options) they had. It looks as though the dog is now wagging the dog and, in the menatime, all ('adjusted' = fiddled) profits are being paid back to the recent backers to pay for their ludicruously expensive finance. Not looking very clever, really......if OSG had come out with a rights issue and raised the funds that way then eps would be looking v positive and shareholder value would have been protected and not potentially chronically diluted. Is this yet another case of OSG management making shocking decisions....or perhaps acquistion by stealth/'cunning' on the cheap by the backers?

[arthur_lame_stocks] 11/11/2010 12:53

Opsec looks like a company which is purely funding their private equity backers now with shareholders along for the ride.

[harrogate] 11/11/2010 10:38

I think the results were pretty poor infortunately ...great sales growth, margin increases and they still can't make enough monry to pay the interest bill?? Disappointed in the opex increase ...always something... fee amortisation, exchange rates etc etc .. They need to be taken over.

[diku] 10/11/2010 11:11

Wonder if there is bid news with the results tomorrow?...hence the early results date...

[harrogate] 09/11/2010 18:23

I don't really follow trades and MM activity etc since I don't really trade short term but as far as I can see over the last 4 or 5 trading days including volume on PLUS we have had about 300,000 shares sold without much buying at all. Again sounds as if there is a possibility of good news on Thursday I think !!!

[diku] 02/11/2010 19:14

Hope so!...

[harrogate] 02/11/2010 11:35

Just seen on the website that the interims are out on 11th November...next Thursday. Much earlier than last year which with my optimistic nature I am takig as a positive sign. I suspect the new shareholder has pushed them along on reporting. Fingers crossed.