Vale Int Share Discussion Threads

[deswalker] 28/9/2006 08:00

PLN offer is for 29p a share. Their Prelims (released today) are worth a look for comparison purposes.

[tyranosaurus] 25/9/2006 18:14

They were profitable when they floated but I think the cost of the listing didn`t help.
They always manage to increase turnover but can`t seem to make a decent profit.

[valhamos] 25/9/2006 14:21

Rainmaker

"1.17 eps forecast for the current year is with a ridiculous 50% tax charge."

Yes I can see that. The broker had a higher PBT than my forecast yet my eps was higher at 1.36p, hence my comment about it depends on the tax charge or more particularly the Italian IRAP, a subject where I don't profess any real insight other than it will be shortly abolished (unless the EU does a complete about-face)

I'm not very good at guessing where share prices will be in the short-term. I'm in this at least until March 2008 for tax reasons. Whilst I would naturally be delighted if the price were 17p in a couple of months, as long as the company is showing an improving trend in its results I'm happy.



tyranosaurus

50p in April 1998? What sort of profits were they making then, and what went wrong?

[rainmaker] 25/9/2006 13:13

Tyranosaurus-The fact they were floated at 50p really just illustrates their potential upside!

regards

[rainmaker] 25/9/2006 13:11

Valhamos-Sorry forgot to mention but 1.17 eps forecast for the current year is with a ridiculous 50% tax charge.Without Italian tax treatment EPS would be 1.5p by my calculation so share price could in theory rise to 22/23p

regards

[rainmaker] 25/9/2006 13:07

Valhamos-Believe that 17p v probable in the next month or two. As previously explained VIG were trading on a prospective P/E as high as 14.66 so applying that to the current estimates gives +17p-have used bids.There has been some buying this morning and there will be more this afternoon so lets see what happens!

regards

[tyranosaurus] 24/9/2006 10:55

These were floated in April 1998 at 50p per share.

[rainmaker] 22/9/2006 16:43

Previous EPS estimate for 2006 was 0.75p and VIG went as high as 11p bid. If estimate has now risen to 1.17p then the shares can rise to 17p bid ahead of the results for the year to 31 Dec 06-explanation as follows - 11 divided 0.75 is 14.66 so 14.66 times 1.17 is 17

regards

[rainmaker] 21/9/2006 17:15

Sorry forgot to mention but you have probably already guessed by now-there are no forecasts by Corporate Synergy for 2007!!

regards

[deswalker] 13/9/2006 13:46

Valhamos,

I've now had chance to go through the numbers and agree with your forecasts pretty closely. Personally I think you're being slightly ambitious hoping for £11 mill sales but I think the resulting shortfall in EBITDA ought to be made up for by continuing strong gross margins and a watchful eye on fixed expenses (even allowing for a sizeable increase in Product Development costs).

Your numbers for below the EBITDA line also seem perfectly reasonable to me (altho I'm guessing here due to the Italian tax situation).

Very happy with the cashflow and net cash numbers.

Des

[rainmaker] 11/9/2006 12:46

Thanks Valhamos-I understand waht you are saying will investigate further. As for new Broker estimates, feel we may be waiting some time...But feel that you estimates are a good closer than their previous effort!

regards

[valhamos] 08/9/2006 22:07

Rainmaker

Pretty sure it is not goodwill being amortised here but intangible assets consisting of software licences and certain development costs, the latter now being capitalised under IFRS.

In the P&L in the finals under UKGAAP there is a charge of £422k 'Amortisation of goodwill and other intangible assets'. The goodwill element (£310k in 2005) as you say is no longer amortised under IFRS (although note this is partly offset by a £70k impairment charge in the restatement of 2005), which leaves the intangible asset amortisation.

Awaiting updated broker forecast with interest.

[rainmaker] 08/9/2006 13:19

Admit that I haven't looked too closely but a bit confused as to why goodwill is being amortised through the P & L when they have already adopted IFRS?

regards

[deswalker] 08/9/2006 08:23

Valhamos

Thanks for sharing your thoughts.

I'll try and figure out my projections this weekend. One thing I won't be doing is assuming a stellar H2 although I'm hoping for something rather better than last year ...

Des

[valhamos] 07/9/2006 23:25

Having digested these numbers a bit more and the impact of the IFRS restatement, I have arrived at some estimates for the full year:

Sales £11,000k
Ebitda £1,162k
PBT £767k
Net Profit £507k

giving eps of 1.36p.

I have assumed higher sales growth rate in H2 in line with previous company statements to give 8% for the year overall, and increased product development costs in line with H1. Bottom line H2 profit comes out similar to 2005 which could be too conservative.

Any thoughts anyone?

[pugugly] 07/9/2006 14:54

tyranosaurus;. More like the old Selective Employment Tax (non recoverable) but as you say a cost of employing labour in Italy. VAT or TVA (in Italy) is fully recoverable.

Still awaiting (so far as I am aware a European Court Judgement on this subject.

Anyone any update on the Court progress?

[tyranosaurus] 07/9/2006 14:49

The only ridiculous thing about the tax charge is the place VIG put it in the accounts. It is vaguely like VAT and should be shown as a cost of sale.
They don`t show it here as it would reduce the gross and net profit figures.

[hugepants] 07/9/2006 14:43

Unfortunately the tax charge is still ridiculous

[valhamos] 07/9/2006 08:28

Good set of results and positive going forward. Don't forget comments in finals earlier this year and at AGM about strong 2nd half.

[pugugly] 07/9/2006 08:28

DW:> Agreed cashflow looks good. Got to do a lowt of number crunching to really understand the difference IFRS makes the the accounts. As depreciation is such a large figure (relatively) I want to assess before making further comments.;

[deswalker] 07/9/2006 08:08

Yes. The 10% mark down with about 10 mins to go got me a little worried though.

Cashflow is excellent. Balance sheet cash is up at the expense of debtors which is good. The reconciliation to GAAP shows how stuff gets added back in the second half under IFRS, thus giving a historical PE of 10 for last year.

But it is the cashflow that shows just how undervalued this is IMO.