Research Now Share Discussion Threads

[darcon] 03/7/2007 18:40

There are some positives in today's statement:

- the unrecorded costs appear to be temporary and will reduce once the company has built its own panels in US and Asia - possibly by next year;

- the growth in sales of 130% reported in May is correct and sales have continued to grow strongly in May and June

- "A full reconciliation of gross margin in the year to date has now
been completed and all amounts owed to suppliers identified and accounted for." - so no more accounting surprises

- "The Company has also taken steps to strengthen its accounting function and
expects to be able to announce the appointment of a new, permanent Chief
Financial Officer in due course"

Next 3 days until release of RNOW's interims may be volatile though.

[darcon] 03/7/2007 18:18

The following article is from Investors Chronicle:

"Shares in online market research specialist Research Now have slumped 38 per cent after the company issued a profit warning, detailing breakdowns in accounting and financial controls, just three days before its interim results."

"The company had already warned of a £0.5m hit to pretax profit after the unforeseen closure of its offices following the murder of one of its employees in January. It now says it's unearthed £0.6m of previously unrecorded costs that will hit profit still further."

"In areas like the US and Asia, where the company has yet to build up its own panels, it bought in research - but failed to account for the costs of doing so properly. Staff turnover is blamed, and it hardly helps that the company is currently without a finance director. An internal review has been launched."

"House broker Canaccord Adams is predicting a 10 per cent fall in gross margins this year, and although it agrees with the company line that this is a blip, it is cutting its current 19.92p earnings forecast by up to 30 per cent."

"All this leaves Research Now rated at around 15 times revised earnings forecasts - a significant discount to rivals such as YouGov, which trades on 30 times earnings. Research Now remains ahead of our original buy recommendation (185p 3 February 2006) but the uncertainty is likely to hold the shares back in the short term. Fairly priced at 257.5p."

Generally, when IC says a stock is "fairly priced" it means it is likely to fall.

[robbie12] 03/7/2007 18:14

Love to know how they are going to pay for all this;


In respect of the year ending 31 October 2007, additional consideration of
C$0.65 per C$1 of gross margin achieved by OpenVenue will be payable up to a
maximum additional consideration of C$15.0m, provided that OpenVenue exceeds a
minimum gross margin target of C$10.8m. For the year ending 31 October 2008,
additional consideration of C$0.60 per C$1 of gross margin achieved by OpenVenue
will be payable up to a maximum additional consideration of C$15.2m, provided
that OpenVenue exceeds a minimum gross margin target of C$11.9m. The total
consideration for this two year earn-out period is subject to an overall cap of
C$25m (#10.8m). Such conditional consideration will be satisfied 50% in cash
and 50% in new Research Now shares, or such higher proportion in cash as
Research Now elects.

[luchan] 03/7/2007 18:09

Chaps,

market does not like uncertainty which is worse than bad news without unknowns.
SP on it's way down I'm afraid but I do feel there could be a bargain to be had for those looking to buy at the bottom, a few weeks off yet though.

I'll keep it on the radar.

Holders must be tempted to sell & buy back later.IMHO, DYOR

Good luck all.

luchan.

[qs9] 03/7/2007 16:26

yes good luck Jojaken, this IMO is heading for around £1 IMO as too much of an unknown / lack of controls etc etc and still on a very head rating BEFORE the downgrades that are likely at least for this year....see my email above, why should it be on such a high rating?

And it only generates cash if it is profitable.......I'll stay short thanks.

Biggest thing I do not think the market has picked up on is the pricing pressure....

[cr4zyness] 03/7/2007 14:43

Jojaken,

A lack of financial reporting is the cardinal sin re the markets, I wouldnt touch with a barge pole. good luck

[jojaken] 03/7/2007 13:05

Why would they need a placing? They are in cash generating position are they not?

Interesting to note that their peers in the sector are completely unaffected by this mornings shenanigans. Huge difference in the way the market now valuates these enterprises. YOU and TOL must surely be vulnerable now to a reappraisal if this persists? If not, RNOW could become an interesting morsel for some hungry predator as a relatively cheap way to buy sales and sector strength. Just look at the consolidation that has gone on in the last year already.

[geologic] 03/7/2007 12:06

ya.lets drive this baby down.

[singsing] 03/7/2007 11:57

Management will not be able to increase margins enough, to pay for costly mistakes by previous FD. Possible placing on the cards, if that is the case its anyones guess at what price that will be. Staying out for now.
D.Y.O.R. Etc...

[qs9] 03/7/2007 09:39

1 accounting errors (look at SMC, more came to light), this is a very bad sign IMO

2 with the £0.5m + £0.6m this may make £1m IMO?/DYOR full year.

3 it is capitalised still despite fall at around £34m I believe from my screen (correct me if I am wrong please).

4 confidence is knocked, is pricing coming down in this area as well, therefore longer term margin matinenance at GM level may not IMO be achieveable

5 I do not know why this is still above £2!!!

[singsing] 03/7/2007 09:27

This will go below float, likely to test 135p ultimate support.

[henryatkin] 03/7/2007 08:54

Pug, whats the point. It don't look like the company know themselves. Thinking about a short down to float imo.

[pugugly] 03/7/2007 08:44

Price to sales ratio still far too high (imo & dyor). Have not yet looked at cash position - anyone know what the finacials are like?

[sirhokko] 03/7/2007 08:10

Explains yesterday's drop. I got stopped out in it. Better than today I guess.

[parvez] 03/7/2007 08:04

ouch! good buying opportunity though

[tsigoloroh] 03/7/2007 07:50

On 4 May 2007 Research Now plc ("Research Now" or the "Company") announced that profit before tax for the year to 30 October 2007 would be reduced by £0.5m as a result of a tragic incident that occurred at the Company's premises on 13 January 2007 and that operating profit would otherwise have been on budget for the first half.

However, Research Now has recently identified previously unrecorded costs totalling £0.6m incurred during the first half. These costs arose principally from purchasing access to online panels in countries in which the Company had yet to build its own panels, primarily the USA and in Asia.

An internal review has identified that the system for accounting for these costs had broken down, a problem compounded by personnel changes in Research Now's accounting function and the late submission of invoices and statements from suppliers. A full reconciliation of gross margin in the year to date has now been completed and all amounts owed to suppliers identified and accounted for. The Company has also taken steps to strengthen its accounting function and expects to be able to announce the appointment of a new, permanent Chief Financial Officer in due course.




PROFIT WARNING!!! Sorry for those holding

[dosullivan] 12/6/2007 23:47

You have to follow his buy and sell rules closely

[diogenesj] 12/6/2007 21:33

Of course, you could say much the same about shares that he hasn't tipped. :-)

[dosullivan] 04/6/2007 18:08

Its hard to know which of his tips will take off .Pick the right ones and you are quids in.

[netsdeal] 29/5/2007 15:17

doing well today - others must have realised it and piled in as well.

I first got the tip from TSW. This guy is pretty good. i also bought VEL on tip Friday, also doing nicely today.

if anyone's interest, his full list is at:

[branbud] 29/5/2007 13:10

surely the daily mail tip cant be the only reason for this move??? up 60p on low volume thus far.

[jakleeds] 29/5/2007 13:07

Tipped in the Mail

[kirbydon] 29/5/2007 13:02

Tipped,where, ?.It,s a scecret

[sirhokko] 29/5/2007 10:06

Anybody know what's poked this in to life?

[parvez] 29/5/2007 08:43

nurdin, looks like the whole sector is about to take off - see Toluna this morning too.