Touch Group Share Discussion Threads

[masurenguy] 27/10/2006 15:45

Touch Group will not get 25% of future revenues from Touch Local. They are now a minority shareholder in this privately owned company. Consequently sales by Touch Local Ltd do not accrue to the Touch Group.

They will record the value of this investment (currently circa £2.65m) in their balance sheet as an investment and they will be entitled to 27.5% of any dividend payments that may be made in the future. In due course, if and when Benchmark decide to sell Touch Local Ltd then the Touch Group will be entitled to 27.5% of the consideration.

[rossstar3] 27/10/2006 14:55

its a shame they couldnt break usa earlier as there was a good nich a year ago but that might still be possible now.im expecting a few good rns next year and i think they will grow fast now we might even be in profit in 9 months.

[jailbird] 27/10/2006 14:54

And yes the cost of investment needed for touch local has now been sorted and this injection will bring finally into being a profitable business.
But at a cost!

Vertical and briefings is what touch pls will need to be valued at for now.

[jailbird] 27/10/2006 14:49

BF,

thanks for the reply,

So touch plc will only get 25% of future revenues? from touch local.

[the big fella] 27/10/2006 14:38

You are wrong. 7 mil being injected into Touch Local - so it is now funded. The cost of that funding was to only retain 27.5% of the subsidiary. I feel this is a good deal for touch holders as it solves the funding issue, reduces the risk to touch holders considerably.

Touch is stake in Touch local is valued at about 2.5 mil by this deal. But the real difference they have the funding to see this through to fruition. TL could be valued at a multiple of todays valuation in a couple of years time.

But most on here have been saying for a while that the real jewels are briefings and verticals. These have been retained in their entirety and will generate substancial revenues.

Touch is cheap at todays price and I am glad I bought a few more after the recent results to average down my holding. From where we were in March to were we are now this is an entirely different proposition.

[jailbird] 27/10/2006 14:24

ok just read the RNS,

correct me if i'm wrong.

£7M cash for 75% of touch local..so touch plc will only get 25% of future revenues. Vertical and briefings expected to do well this yr.
So balance sheet looks healthier...what the costs of operating touch local which obviously still requires investment..is this shares 75/25 and what are the board gonna do with the £7M? and how did they decide to sell this proportion..why nt 50/50%..maybe the buyer wnated more of it otherwise it is no deal...(thinking aloud).

what are the board gonna do with the £7M.
it look like they have sold one of the 2 crown jewels!

[seconduser] 27/10/2006 12:41

Hi Haydock,
I don't post much but have been on advfn for several years. Yes I am willing to look ahead and will keep these for some time. I have been involved in a number of ventures, and the one killer we had was financing or losing control. With this solved they have a better than average chance of making a go of it.

[haydock] 27/10/2006 11:59

The above point of view of course needs some modification.

They still have Local as well & can grow that faster too, but they don't have the financial problem any more.
I suppose we can go forward still as a growing two part business, as this time they have 25% & control?
Unlike the MDZ sale which proved so far a mistake.

I still think the Briefings/Verticles are the future niche company.

[haydock] 27/10/2006 11:32

Seconduser: you seem to be willing to look as I hope I do 18 months ahead.

Even now the valuations I have been reading on these web companies has been quite staggering.
Verticles could even now be the subject of a raid by someone like the Ft goup or the media group: UBm listed above.
The prices paid particularly by the new FD at the pink one have been amazing, but the companies have been in profit.
TOU will be in profit & growing, & they can now storm ahead with the Veticles on a weekly basis without having to look over their shoulder at the finance director.
It makes a huge difference to a growing company.

I always thought from my reading somebody would be willing to pay money for the work done by Touch & today that opinion has been vindicated, but don't forget even with what they paid they were buying a loss maker under severe financial constraints & competition, very much a work in progress, with far less chance to be a huge company than thay had 12 months ago when they could have stormed the USA.
In short they have chopped away the dead wood that was making the company a risk & moved on to the area which we all thought could be the real money making niche:
Verticles, this years model, not a five year old model.
Joined up forward thinking for me,the board has done well for once.

[hamidahamida] 27/10/2006 11:26

Lets talk about.......THE VERTICALS
.............The Jewel in the Crown

Each vertical will have 1000 suppliers they are charging 2000 pound per year per supplier

Briefings aims to get 30 verticals fully functional by the end of 2006

1000 suppliers* 2000= 2 million pound per year per vertical

They will have 30 verticals =========potential 60 million revenue per year

I think verticals have the potential to be the bigggggggest part of the group

Check out the big names they have signed up already









Touch Briefings is now a
profitable company of real substance, content driven with a clear focus on
delivery. We are on course to publish 60 journals in 2006, realising record
published revenues for the year.

[seconduser] 27/10/2006 11:12

cir to be fair I think the discussion is between intrinsic value (P&L, balance sheet) versus new business model/prospective value. It all comes down to whether or not they make it work. I am attracted by the lifting of financial constraints. Also the statement from one month ago....
The group said its Touch Local and Touch Briefings units both achieved strong sales growth in the period and said it anticipates record revenues for the full year from both businesses.
In this new world (Internet based business model) revenue is more valuable than profit.

[seconduser] 27/10/2006 10:29

masurenguy, a very measured response, but boy do you remond me of my old FD - all finance no vision! The 100k "dump" is part of 175k sells versus 350k buys... with later trades coming through late. The 100k "dump" may not even be a sell as the 50k buy @ 6.1 is mine. Had it been listed earlier it would have shown as a sell.
I have never seen you on any BB before, but I do know Haydock. On balance I'll go with Haydock and the reviews once the reaction to the RNS sets in.

[haydock] 27/10/2006 10:20

My wider reading on the area now becomes even more relevant.

I refer to last weeks Sunday Times Business section.
Publisher puts it finger on the pulse.

United Business Media launches www. searchmedica.co.uk as a general search engine for G.P.s
The move of the online print to the web, about which they know little & are light years back.
They are betting there is good business here.
Not a problem for Verticles, but highlights the problems of the print side & it's advertising base.

I hinted I expected a fall from number 8 , early days but we can now sleep at nights.

[masurenguy] 27/10/2006 10:20

A few buys this morning around 6.35p but really not much market reaction to this announcement. Somebody dumped 100K shares at 6p about 45 minutes ago. Current mid price of 6p (up 6%) values the remaining business (inc Mediazest) at 2.2p.

[masurenguy] 27/10/2006 09:52

It would appear that the Benchmark investment of £7m in TL values that company at £9.65m. Therefore £2.65m (or £0.038p per share) will appear on the Touch plc Balance Sheet as an investment in a minority owned subsidary. If you deduct the £2.65m in Touch Local Ltd then that currently values the publishing business at circa £1.85m or £01.95p per share (including the Mediazest holding).

Profit takers have already acted and the initial 8% rise in the share price has been expunged.

Need to get a real handle on the publishing financials to determine what this really might be worth. In the meantime the share in Touch Local Ltd is now in a privately held company which Benchmark will seek to develop and subsequently sell at some point in the future. This minority investment could ultimately be worth more than the current share price of £0.0575p in its own right but the timeframe involved here is anyones guess.

Now appears to have long term potential but investors will probably have to remain patient with this one too.

[patviera] 27/10/2006 09:49

pe of 15 on publishing..i dont think so!!

[cir] 27/10/2006 09:40

TOU's 27.5% in touchlocal is worth about #3m.

the publishing business is worth about #5.25m (assuming #7m sales, 5# profit margin and a PE multiple of 15)

the stake in mediazest is worth #500,000?

#8.75M in total and 12.5p per share.

[patviera] 27/10/2006 09:32

they dont have 7 mill cash...local is now valued at 10 mill with touchs part worth 2.3 mill...is briefings worth 2 mill?? how much does it make now??

[rossstar3] 27/10/2006 09:29

This is the dream coming true,Touch local can acheive at last.Its a credit to all the good posters on here particuly haydock and thinkbig.

[haydock] 27/10/2006 09:19

Early days yet, but we are already nunber 8 on the most up list, would you believe it.
Vincent will probably have left the country or something by afternoon!!!!

[seconduser] 27/10/2006 09:11

Surprised more aren't moving in given the market cap versus cash position. Is there a catch somewhere?

[haydock] 27/10/2006 09:10

TOU always was going to split into 2 parts.
The Local was the bottomless pit for money.
Once again this morning the question is even more relevant.
What are Verticles worth?

One things for certain we now have a good investment in Local, & a profitable business in Verticles.
They say the market looks 18 months ahead, well its profits folks , not losses. Lets see that reflected in the share price

This is all good news at last.

[beckham7] 27/10/2006 09:10

THERE YOU GO THATS MINE

[cir] 27/10/2006 09:07

My understanding is that, subsequent to the #7m investment into "touch local" from Benchmark Capital Europe, the business has been divested with TOU retaining a 27.5% stake.

In other words, TOU now has a 27.5% interest in the 'new' touch local that has #7m of cash on its balance sheet.