Spectrum Interactive Share Discussion Threads

[daz2004] 21/6/2006 11:58

Its cheap if you go long....1-2yrs to turnaround companies reliance from payphones...how they din't anticipate German mobile costs reducing is poor management judgment of the market imo. Competition in the mobile sector pretty well signalled that mobile rates would be cut to attract customers, and hence people not using payphones...

[ok,yah] 21/6/2006 11:55

Its getting so cheap it cant be ignored - and the director buy probably alerts people to the value

[spaceparallax] 21/6/2006 10:45

What's with all these posts? More people choosing SIN?

[brixlaven] 21/6/2006 09:20

I may get hooked.

[wiganer] 21/6/2006 09:17

They spiked it up last thing yestreday, and then dropped it back down on opening first thing today, so yes, it does look like fishing.

[brixlaven] 21/6/2006 09:10

I missed the wee move,are they fishing for support and some vol?

[wiganer] 21/6/2006 08:09

And an interesting open today.

[wiganer] 20/6/2006 16:42

Interesting close to the day.

[wiganer] 20/6/2006 16:07

Ah thanks Bruce- yes, I had overlooked the tax credit. Apologies.

[bruce the goldfish] 20/6/2006 15:55

Wiganer, you have started your above analysis in post 102 from PAT which included a tax gain of £733,738 - deduct that from your PAT of £2,460,561
to arrive at PBT of £1,726,823. The company has stated that it will start paying tax next year and therefore trading profits (after interest received / paid) should only really be used for any future analysis imo....

BTG

[wiganer] 20/6/2006 14:54

daz- BRTR's not looking too great at the moment! But I do think it's all short-term guff with them. They are now my largest position so I certainly hope so...

With SIN, I do think the bear points are genuine concerns, and certainly support a considerable correction from the IPO price, but it does now look overdone. Operating cashflow is the key.

[daz2004] 20/6/2006 14:46

The director buy is a reassurance measure, trying to draw a line imho...

Wiganer - I've seen you on Bartercard BB and so know you pick good un's but this, as I stated months ago, is a long haul to reposition itself away from the payphone sector. It's going to a tough job imo with competition from VOIP focussed companies...

Lesson here is to be very very wary of Hoodless companies, they do get it right sometimes however mostly I'm extra careful & thorough when they are involved.

[wiganer] 20/6/2006 14:41

daz
I don't think anyone disputes that the IPO price was too high.
The point is, is 21.5p now too low?

[wiganer] 20/6/2006 14:40

OOps, that didn't come out especially readbable, but you get the drift.

[daz2004] 20/6/2006 14:39

Another Hoodless gem;-)

Did say its 1-2 yrs to realign the business model...how the ipo was placed so high is disgraceful on the part of Hoodless...

[wiganer] 20/6/2006 14:39

Also from the interims:


Consolidated cash flow statement as at 31 December 2005


6 months to 6 m to 12m to
31 Dec 31 Dec 30 June
2005 2004 2005
(Unaudited) (Audited) (Audited)
£ £ £

Net cash inflow fr. operating activities 1,687,715 1,392,124 3,500,672

[wiganer] 20/6/2006 14:37

I don't recognise your figure of £1.7m for prior year PBT. Here are the figures from the interim results (


4. Earnings before interest, tax, depreciation, and amortisation

6 months to 6 months to 12 months to
31 December 2005 31 December 2004 30 June 2005
(Unaudited) (Audited) (Audited)
£ £ £
Profit on ordinary
activities after tax 1,214,060 1,908,284 2,460,561
Interest 192,466 463,006 910,994
Tax - (691,370) (733,738)
Depreciation 829,749 512,979 1,122,677
Amortisation 220,635 169,933 357,968
EBITDA 2,456,910 2,362,832 4,118,462

[lqs] 20/6/2006 14:36

I wouldnt read too much into the director buy. Its very small compared to what he already holds. It may be a "trick" to get PIs to buy in.

[bruce the goldfish] 20/6/2006 14:33

I have been watching SIN for a while, however, I do have a number of concerns:-

- the payphone side of the business is obviously the cash cow at present, but the question is for how long? It is worrying to see the significant rate of decline in the avg call revenue per unit (over 20% year on year) due to the increased penetration and competitveness of mobile phones as an alternative. If such a decline continues then the payphone business will no longer be viable in the short to medium term, therefore a lot would rest on the performance of interactive services.

- the German side of the business is struggling - on interim revenues of £1.6 million the company turned in a tiny PBT of only £6k. With further price cutting from the major German mobile operators this part of the business could easily become loss-making and may already be so.

- the new products of interactive services are very much at the introduction stage of their potential life-cycle and as yet only represent a small part of the business, growth is expected but not assured. The ATM business has also hit planning problems which is likely to delay the roll-out.

- the amount of debt within the company (net debt = £5.7 million at 31 Dec 2005) is not to be ignored. At the current 21.5p shareprice this gives an enterprise value for the company over £13 million - so even at the current price it may not be the bargain that many think it is, particularly if the decline in payphone revenues continues as expected.

- the company announced a profit warning at the interim stage stating that "the current market expectations will not be met". The prior year PBT was £1.7 million. Does anyone know what the current market expectaions are?

All of the above of course is imo, but I am intrigued to hear the opinions of others...

BTG

[ok,yah] 20/6/2006 10:42

Yes of course, spacep. the largish director buy gives me confidence. You would think that this was on the brink of collapse But looking at info in the public domain this is turning in decent profits and has potential to grow (admittedly there has been a hiccup with the phone business falling revenues). But the smaller internet business is growing rapidly and the phone business is still cash generative...I think there has been a large (forced?) seller. This combined with an illiquid unproven company = dramatic falls.

[spaceparallax] 20/6/2006 10:33

Ok,

So much depends on the rate of death of their phone element and the growth of the internet side - rather an unknown, but at these prices, as long as we stay afloat, it seems a reasonable risk.

[ok,yah] 20/6/2006 09:39

Bought 2500 - looks irresistable but... didnt want to tie up too much money in such a potential slowburner.. Just for the dividend it should be worth it- Seymour Pierce forecast 6.9% yield for this year..and earnings per share 6.5p. Price to earnings less than 4

[spaceparallax] 19/6/2006 19:22

Am still hanging in there and trying to forget about it until 2007 at least.

[brixlaven] 19/6/2006 19:11

I will try a punt at this SP,good luck all.