Spectrum Interactive Share Discussion Threads

[outsider] 20/3/2008 08:00

LOoking at the "new" website I didn't realise either that we had a presence in THIRTEEN German airports, thought we had about 4!

[outsider] 20/3/2008 07:57

You learn everyday....always thought www.spectruminteractive.co.uk was the only webstite for spectrum

I see a better version here:

[outsider] 20/3/2008 07:44

Article from last summer:

Spectrum Interactive
Source: Case Studies


Two years after it floated on AIM, Spectrum Interactive is pushing an open door as it tries to keep up with demand for its wide access internet services.

Written by John O'Hanlon & produced by Kiron Chavda

Walking through my local railway station recently I saw, in the concourse close to the main entrance, an internet access point with three screens. How long it had been there I am not sure, but it must have been a while. Facilities like this have quickly become part of the scenery, even though they represent a radical change in the way we live our lives.

In 2002, when the payphone operator NW (New World Payphones) called in the receivers Mark Lewarne, as a director, thought there was little that could be salvaged from the failure of its venture into the mobile phones market. While he was still thinking it might be time to go and do something else, he was approached by a number of the payphone customers, spurred on by the good service that they had always received on that side of the business, who told him they would support him if he decided to bring the business out of receivership.

This was quite unusual because normally when a company goes into receivership it loses the confidence of its clients, he says. "Working with the Bank of Scotland I managed to do a management buyout," "The core activity of the company was the pay phone business, and we were able to keep the excellent clients that we already had among airports, railway stations, hotel groups and shopping centres. And that footprint has allowed the company to move into new product areas so it has been quite a remarkable turnaround really."

Replacement communications

"Clearly I didn't want to bring the company out of receivership just to run it down over a number of years," he continues. "Because of the really good relationships we had with our clients I always thought we had the potential to bring the business into what you might call 'replacement communications'."

By this he means that whereas fifteen or twenty years ago travellers were constantly using payphones to make necessary calls, now that they all have mobile phones there is very much less demand for that. The payphone evolved from a cash machine to a card machine and back again to a hybrid, and has now settled down as a necessary service but one that is much less used than it used to be. "What people want to do now is to send e-mail, check their electronic communications, and access the intent for anything from timetables to their office intranet."

Sharp as a razor, I pointed out that more people have BlackBerries and other WAP enabled devices, but on reflection these are very limited. On the small screen and with the mobile keypad it is difficult to read or compose anything but the simplest messages. It is very hard to deal with attachments, and the much-vaunted internet access they provide is fine if all you want to do is check the football scores or catch the news. For anything more serious you need the big screen, and you can't carry that around with you.

Between 2002 and 2004 Spectrum started to provide simple internet terminals for people to use at airports and hotels. "It was very plain to us that the revenue streams from those types of units would be good and we would be able to charge economic prices," says Lewarne. "At an airport people are used to spending £2 on a cup of coffee and a fiver on a sandwich. A pound for ten minutes on the internet is a bargain in terms of the benefit you get. We feel it is good value for money, and the customers tell us they agree."

The beauty of this model is that it is really no more difficult to provide an internet terminal than to install a payphone. The connections are similar, and the equipment basic – just a PC with broadband, he points out. "In many ways the business model was incredibly similar. You're buying a piece of capital equipment and looking for return on investment over a number of years. You reach a commercial deal with the site owner to share profits. It is an uncomplicated business model. You just have to pick your sites very well."

Even that isn't too hard. People who are on the move, away from office or home base, will constantly need internet access – while airports and railway stations are prime sites, and the hotels they head to after that. Shopping malls and leisure complexes or tourist sites like theme parks are secondary opportunities.

For people on the move

The business grew fast: "We also did some acquisitions when we came across other companies out there were doing similar things to us. Most of those companies didn't have the scale that we had so we were able to buy two or three competing businesses that helped us to scale up. We now operate over 2,000 internet terminals in the UK and in 24 out of the 25 busiest UK airports. The reason we have been able to do that is that we provide a very good service that is really easy to use. All people really want is to be able to replicate the speed and reliability they get at home or at the office.

As more people travel, and more of them travel on low-cost flights without the club class privileges of a free, wired up executive lounge, the demand will only increase. Of course a lot of people travel with their laptops and handheld communicators, but such people cannot go online without finding a WiFi connection.

Naturally BAA is a vital partner here. It is said that it now gets more revenue from its retail areas than from air traffic movements, and accordingly service to the passengers that use its airports is very important. So when the new Terminal 5 opens at Heathrow in March 2008 the 30 million passengers who go through it annually will be able to go online using no fewer than 60 Spectrum terminals.

Mark Lewarne sees the internet terminals as complementary to the WiFi provision – almost seamless in fact, and WiFi connectivity is a small but increasing part of the business that last year netted around £1 million and is expected to grow annually by around 30 percent. "We provide wireless access, and if they have a laptop they can connect to that, if not they can use one of the terminals. We are seeing good growth in WiFi revenues this year are and we are sure that is going to grow as more WiFi enabled devices come onto the market. It makes us a bit of a one stop shop in places like airports and hotels."

As recently as June 2007 Spectrum announced an agreement to provide exclusive WiFi services to all Travelodge hotels until 2014. It already covers 25 percent of Travelodge's 306 hotels, and will have rolled out the service to most of the others by the end of this year. But Travelodge is expanding too – by 2012 it expects to have 500 premises

Expansion abroad

This year's turnover of around £17 million is still mainly generated from the declining estate of payphones. As they become unprofitable they are being taken out, but this is mainly happening on private premises: the high street locations continue to be profitable, and as the public face of Spectrum are one of the few places where the brand is flaunted. Nevertheless Lewarne estimates that 50 percent of Spectrum's profits already derive from its internet business which he expects to grow from around £4 million in 2006 to nearly £5 million in 2007 and £6.5 million in 2008 – an annual growth rate between 25 and 30 percent.

This growth, together with that in WiFi, will more than compensate for the expected 10 percent decline in payphone revenues, he says. The company is now well grounded and leading in its markets, which are clearly defined. Mark Lewarne is not interested in diversifying into new product areas while there is so much room for further expansion both in the UK and internationally.

"Our first objective is to win new sites in the UK and to add value to them as we did with our recently launched Spectrum Casino. Then we will consider further acquisitions either in the UK or abroad. There are two or three key markets in Europe that we believe are absolutely perfect for us: we can either set up offices there or buy a company." Spectrum's first overseas subsidiary in Germany has already won an exclusive contract to install terminals at Hamburg Airport.

The equipment has to be rugged, reliable, and familiar to the user. So Spectrum sources its computers from popular manufacturers like Dell, and uses a simple desk design that it has developed with a manufacturing supplier in Poole. "Software is developed for us by small company that we have partnered with for about eight years," says Lewarne. "They are based in Sheffield, and designed the new software for the terminals."

Of course the computers go wrong sometimes. However there is a nationwide engineering force controlled centrally from the company's offices at Hemel Hempstead that aims to keep the servers running at 99 percent availability – breakdowns hurt Spectrum its client and the service user in equal proportions and is not an option.

[outsider] 19/3/2008 12:18

Cost of 25,000 online just gone up 1p from 13.25p to 14.25p

[outsider] 19/3/2008 09:44

Not sure BB, I think many just fed up of stockmarket & AIM after a long long slog downwards.

You can only sell 1500 online & buy 25,000 so pressure is downwards right now.

[battlebus] 19/3/2008 08:15

Seems everyone except us thinks results will be bad! Not expeting miracles but certainly hope for a higher shareprice than this afterwards.

[outsider] 19/3/2008 08:12

can buy 25k at mid 13.25p online.

[outsider] 19/3/2008 05:13

jimmycarter - 18 Mar'08 - 14:25 - 222 of 223 (premium)

I am not sure where this share price should be. I do not think it will fall sub 10p but does have potential for 20p+. Results will be interesting



Agree results will be interesting. We were trading ahead of expectations in the first 4 months & we know expectations are for 700,000 or 2p eps. (p/e 7) I am expecting some one-off charges relating to the discontinuation of payphones in Germany.


With recent announcements of Casino, printing services, advertising at airports for up to 50k per annum per client, I would hope that further progress has been made.




Really it's 2008-9 I'm thinking of, obviously I'm bullish and like battlebus have a six figure shareholding, but I'm taking a stab, that 2m profit can be acheived, which depending on tax charge could give a prospective p/e of around 2.5, if the momentum is good, a p/e of 12 would maybe give a price of around 72p per share.


Not so many if & buts, as we have a lot of long term contracts here, and 1 pound on the internet, isn't like a 'big ticket item' that the slowdowns really hit. Also the momentum, like the doubling of Wi-fi, should more than offset any small slowdown in spending. Furthermore the budget hotels have announced they are busier as the more expensive ones suffer, especially good for us & I believe Premier & Travelodge are our two biggest clients.



Debt has reduced vastly from pre-IPO, it has been reduced every year & furthermore prospective interest rate cuts will help further, also cash flow is very strong, Germany should start gathering momentum too, following the UK interactive model.

I really can see a strong upward movement in shareprice over the next 12 months which I believe started it's course in late November 2007 after hitting 9p. The interactive division is the future,and Spectrum have already told us, it is a "consistently growing business is demonstrating healthy gross margins and profitability."

[outsider] 18/3/2008 16:34

No it's 50k of buys Jimmy, because I know who bought, also you can still buy in 25k lots on selftrade at 14.25p...was 14.2p.

[jimmycarter] 18/3/2008 14:25

Outsider see it as 105k sells but not something to lull about. I am not sure where this share price should be. I do not think it will fall sub 10p but does have potential for 20p+. Results will be interesting

[outsider] 18/3/2008 11:10

Yes.

4 versions of the same video on Youtube too!

[battlebus] 18/3/2008 10:59

As he says we are looking forward to the future! very impressive.

[outsider] 18/3/2008 10:56

Not seen that video before worth a look for those who haven't seen it.

[outsider] 18/3/2008 10:50

CHECK OUT THE VIDEO ON THE LINK

spectrum case study

With over 600 internet desks spread throughout the UK's busiest airports, Spectrum Interactive saw an opportunity to capitalise on the advertising potential of these prime locations. The Beaver Group worked in partnership with Spectrum to provide a digital signage solution which would attract users to the desks, support the airport operators and generate additional income.

The "Desk Media Screens", are a set of PC style screens running various forms of digital media including flash animation, video and web based content, positioned close to existing Spectrum Internet Desks. The screens operate independently from the Desks, and are monitored and updated remotely in real-time using Scala InfoChannel 5, supplied and monitored by Beaver Solutions. The Desk Media Screens provide new opportunities for media sales revenue, airport messaging, and additional promotion of the Internet Desks themselves.

For advertisers, in addition to the extremely high foot fall at these sites, there are opportunities to gain an immediate response through the association and link with the Internet Desks. Advertisers will be able to promote their online presence on the Desk Media Screens, drawing attention to their online marketing campaign, and the user can immediately access the campaign online, through free access on the Internet Desks.

The agreement with BAA allows Spectrum to add Desk Media Screens, to their existing Internet Desks at all seven UK airports. 17 sets have already been installed across Heathrow, Gatwick and Stansted, with other BAA airports being added as media sales are secured. Spectrum operates in 25 airports across the UK, and is also negotiating with other existing airport partners for Desk Media Screen rights.

Helen Regan, BAA Telecoms and Media Account Manager said "It's not only important to BAA as a source of revenue for both Spectrum and BAA, but it is also an added passenger service that we can utilise."

Peter Critchley, Managing Director of Beaver Solutions: "We were asked by Spectrum Interactive to provide a digital signage software solution. It was really important that solution was centrally managed, had content that looked good, and worked on the screens. We are proud to have been selected to provide and maintain this high impact Scala InfoChannel 5 project"

Daniel Gray, Spectrum's Head of Marketing and Product Innovation stated, "This is a perfect additional product to our existing Internet Desks. We believe that our airport Desk Media Screens will generate new revenues for Spectrum and its partners, and help further develop Spectrum's growing media sales activity. Our site partners are reacting very positively to the flexibility that we can offer to help promote specific localised messages (like airport wayfinding), and potential Desk Media Screen advertisers have expressed strong interest in maximising the link between Desk Media Screens and the Internet Desks."

"We needed to find a proper operator, with the right experience in this market place. We quickly found that Beaver Group were the right people for our needs"

Spectrum CEO, Mark Lewarne added "This is a significant new product, and has received very positive reaction from our partners. We are looking to grow the online media sales element of our business and this new contract represents a great step forward in developing that strategy."

"Spectrum Interactive knew exactly what they wanted for their digital signage, we listened very closely, and between us, I think we got it just right" commented Barry Thurston, Chairman of the Beaver Group.

Spectrum Interactive launched is media sales website earlier this summer with the promotion called "YOULooked!" and found at www.YOULooked.co.uk. This website was designed and is maintained by Beaver Design, the media arm of the Beaver Group.

[outsider] 18/3/2008 10:05

50k bought, 55k sold, at least two way trade.

[battlebus] 18/3/2008 07:56

Yes i would be happy with 500 profitable ones.

[outsider] 18/3/2008 04:32

Spectrum Website suggests we are down to 5,400 phones, if that is true, then that's great news indeed getting rid of the loss makers so quickly.

[outsider] 17/3/2008 08:58

Exactly, although this share has risks, so do Big blue chips, ask Bear Stearns! But for me long term contracts have considerably reduced such risks, not just with Travelodge, but all their major clients, says a great deal for the commercial relationships established & service provided.

[battlebus] 17/3/2008 08:53

That,s the benefit of long term contracts.

[outsider] 17/3/2008 08:41

Ah thanks for that BB. Logically if money is getting tighter it follows that the better value chains will gain business & Travelodge is one major client for Spectrum right up to 2014.

[battlebus] 17/3/2008 08:28

Travelodge reports that trade is brisk and that it's taking trade from more upmarket hotels.Also that talks have begun with Whitbread about the possibility of a merger between Premier inns and Travelodge. All good news for Spectrum.

[battlebus] 15/3/2008 18:12

Looking good Outsider a great design it would nearly want to make you live there and spend every hour on the internet.

[outsider] 14/3/2008 05:07

Only 10 working days to wait now!

[battlebus] 13/3/2008 18:03

Seller still around. i expect he sees bad results ahead but the forward looking statement is really what we want to hear.