Vanco Share Discussion Threads

[handycam] 15/7/2007 18:06

For Vanco read Carter and Carter. One had better read the accounts from back to front to see why. It's called cash-flow, or rather lack of.

[jaydeee] 15/7/2007 00:33

wipo1 - u r right about post tax profits being £10m to January 2007.
BUT
all the forecasts are predicting about £15m after tax and interest to January 2008. The company is more than half way though the year and has said 2 or 3 times that they are at least on target, and they have also said they had the highest growth in the 1st quarter than they have ever had before (so I suspect they will do even better than forecast).
It would be very misleading to go on last year profits when they are half way through the year already (or just about there)
With a current market cap of £244m, that's 16 times profits, which for a company that is predicting to grow bottom line profits at somewhere between 35% - 50% per annum, is ridiculously low.
If you are betting against the company meeting their forecasts then the current price is fair, even though they have a guaranteed revenue stream of £400m (from existing contracts). If on the otherhand, you look at their track record, there is no reason not to believe the forecasts, in which case this share should be trading at 40 times profits, or somewhere around £8.
We won't know the real story until they come out with their results in September, but if they do come in on target, any bottom fishers who buy down here or lower (if, as it looks right now, these shares have no support and could well go lower according to the charts), will be richly rewarded.

[jaydeee] 15/7/2007 00:16

I think there is a misconception on this Board. The so called exiting FD, Simon Hargreaves, is not actually exiting. Simon Hargreaves is moving to a more operational role within Vanco, taking over as head of one of the units. His FD role is being filled in by a new guy joining the company in September. It is not a promotion or demotion as far as I can tell for Hargreaves, I just think he wanted a new challenge, and rather than moving to a new company, he opted to stay with Vanco, which obviously proves he believes in its future.

As to Simon Hargreaves recent sale of shares, this was quoted in a recent RNS announcement, which is on one of the links above:

"As regards Simon Hargreaves, the sale of shares reported above is principally in order to provide sufficient funds to cover, both the acquisition price for
175,000 Ordinary Shares in Vanco plc issued on 18 April 2007 (pursuant to the
vesting and exchange of shares under the Vanco Group Limited Incentive Scheme
which took place on that date) and the resulting PAYE and capital gains tax
liabilities resulting from that vesting.


Over the twelve month period to date, Simon Hargreaves' shareholding in Vanco
increased from 571,373 Ordinary Shares to 756,373 Ordinary Shares and following
the sale, he now holds 596,373 Ordinary Shares in Vanco. A further 175,000
Ordinary shares are due to be issued to him under the terms of the scheme in
April 2008."

Hope that clears it up.

[mike456] 14/7/2007 12:50

I have to admit to buying into Vanco on Friday afternoon when the share price headed towards £3.80 as I believe the fall in share price since mid June may be an overdone reaction to the disposal by the exiting FD, who according to the recent anouncement needed the cash to pay personal tax liabilities and apparently they were going to be bought back at a later date.

Having seen the share price fall by 15% I got to thinking that the other directors wouldn't want to see a continued fall in the share price of what I believe to be a fundamentally excellent company that is winning good contracts, because of a perceived lack of confidence of one person ... especially when that person maintains an involvement at board level going forward.

So my belief that it wouldn't be too much longer before the director delivered on his promise to buy the shares back was my rationale for buying the shares, and I have to admit to being pleased when I saw someone buying 200,000 shares at 4.25pm on Friday afternoon.

Could this be the aforementioned director buying his shares back? .... even if it isn't, someone out there is showing quite a lot of confidence in the company.

Any thoughts?

[gswredland] 13/7/2007 20:48

Anyone know how many shares Simon Hargreaves has left now after his recent sale?

[wipo1] 13/7/2007 15:15

bottom fishers be carefull, still looks expensive to me. Interest payments on debt hits the bottom line profit which was only £10 million for 2007 after tax and interest payments.

[eire voyager] 13/7/2007 13:27

Not sure if we have seen the bottom but this is excellent value i'm in.

[holts] 13/7/2007 13:14

wonder if the barbecue hater is still short ?

[wipo1] 12/7/2007 13:24

not so sure, could test nov 2006 lows?

[sarahbudd] 12/7/2007 08:22

I'm in @ 399p- no brainer for a quick buck I think? Market picking up

[holts] 12/7/2007 08:15

I think we have to assume someone has done a successful hatchet job around the city, sufficient to depress the price for some time.

[gswredland] 12/7/2007 07:14

thanks robow

[robow] 11/7/2007 23:08

yes indeed

[gswredland] 11/7/2007 22:53

i am assuming these are ISABLE guys?

[silver_bullet] 27/6/2007 18:35

Cheers JayDee. Lets just hope the market soon comes to agree with us!

[jaydeee] 27/6/2007 15:35

welcome to the board silver bullet. Suggest you read through it and you will get a general picture. There have been a lot of bad unfounded rumours going around about Vanco. Bridgewell have been slagging the stock off to anyone who asks about it. The Daily Telegraph wrote a nasty piece and so a lot of people have either been selling their holdings or going short. Anyone who has the balls to ride it out, will be rewarded, since the main complaint is mainly about free cash flow. Assuming the company hits its targets and generates free cash flow by January 2008, then all the sellers will be proved wrong and the stock will have to be re-rated. That's a brief summary. Anyone want to add anything?

[silver_bullet] 27/6/2007 15:14

Can someone explain what is going on with this stock. Numerous buy recommendations, price targets nearing 500p, directors buying, good results and yet this stock falls day-by-day. Ideas?

[02bursar] 27/6/2007 07:29

Many thanks for the info JayDee.

[jaydeee] 26/6/2007 17:27

This was on the RNS in relation to director share sales.
That explains Hargreaves. Not sure about Raffetto - could be similar reason.....

As regards Simon Hargreaves, the sale of shares reported above is principally in order to provide sufficient funds to cover, both the acquisition price for
175,000 Ordinary Shares in Vanco plc issued on 18 April 2007 (pursuant to the
vesting and exchange of shares under the Vanco Group Limited Incentive Scheme
which took place on that date) and the resulting PAYE and capital gains tax
liabilities resulting from that vesting.


Over the twelve month period to date, Simon Hargreaves' shareholding in Vanco
increased from 571,373 Ordinary Shares to 756,373 Ordinary Shares and following
the sale, he now holds 596,373 Ordinary Shares in Vanco. A further 175,000
Ordinary shares are due to be issued to him under the terms of the scheme in
April 2008.

[02bursar] 26/6/2007 16:57

Does anyone have an insight into the director share sales @ 430p notified today?

[fayde] 26/6/2007 10:23

Just a curious point on Vanco; these last few days it has closed around the 440 mark (yesterday 438) but always opens significantly lower (today 431.25). I just wondered if someone more enlightened than myself could offer an explanation for this.

[jaydeee] 22/6/2007 17:34

UBS started cover today. Neutral stance but valuation of 480p

[monkeymutha] 22/6/2007 12:55

Buy rec in IC today.

[jaydeee] 19/6/2007 12:02

more good news - not that it seems to help very much today.....

Vanco - Interim Management Statement



Vanco plc, the global Virtual Network Operator (VNO), today publishes its first
Interim Management Statement as required by the revised Listing Authority
Disclosure and Transparency rules. This statement relates to the period from 1
February 2007 to 18 June 2007.



Current Trading



Trading in the year to date has been strong and in line with management's
expectations. Since 31 January 2007, new contracts with a value of £89.5 million
have been signed with new and existing customers. This includes the landmark
contract signed with a leading professional services firm announced on 26 March
2007. Additionally, it excludes account management (including revenue arising
from moves, additions and changes to existing customers' networks) which
continues to be in line with the historic average.



During the period, we also announced that Vanco had entered into a major channel
partner agreement with T-Systems, the business customer brand of Deutsche
Telekom. Further channel agreements have also been entered into with Deutsche
Telekom's International Carrier Sales and Solutions unit (ICSS) and FLAG
Telecom. We continue to believe that our channel partner strategy remains a
highly attractive way of significantly extending Vanco's customer base as well
as its range of services.



We continue to benefit from having a substantial base of contracted revenue and
this provides a high level of visibility on the likely outcome for the year
ending 31 January 2008. Looking at the contracted revenue which falls to be
recognised in the year ending 31 January 2008, we need to achieve revenue of
approximately £49m from new name business (as distinct from further business we
expect to receive from accounts that existed at 1 February 2007) during this
financial year in order to report revenue in line with consensus market
expectations.



Based on the contracts signed during the period from 1 February 2007 to 31 May
2007 and an estimate of how much work will be done in respect of those contracts
in the current financial year, it is expected that revenue of approximately
£15.6 million will be recognised in the period from new contracts signed to
date. Therefore, after one third of the year, it is estimated that deals have
been signed which will deliver 32% of the new name business revenue needed to
meet the consensus market revenue expectation for the year ending 31 January
2008. This is significantly ahead of the position at the same point in previous
years and is against a background of the first four months of the financial year
typically being the weakest trading period.



Gross margins in the year to date are in line with our expectations.



Free cash flow (FCF)



Cash generation remains a key performance indicator and, although the early part
of the financial year is always the weakest, the likely cash generative effect
on the results for the year ending 31 January 2008 as a result of new name
business signed in the year to date, has been better than normal. We estimate
that, of the £15.6 million revenue from new name business signed in the period
and to be recognised in the current financial year, some £12.6m will be received
in cash and £3.0 million will be recognised from accrued income. This represents
a higher proportion attributable to cash than was achieved in both the year
ended 31 January 2007 and the year ended 31 January 2006. For the full year
ending 31 January 2008, as previously indicated, we expect the split of initial
phase revenue supported by cash and that accounted for via accrued income will
be around 50:50 which is in line with what was achieved in the year ended 31
January 2006 and is substantially better than the split achieved in the year
ended 31 January 2007.



Free Cash Flow (FCF) is defined as cash generated from operating activities,
less tax paid, interest paid, cash capital expenditure and finance lease
repayments. FCF for the six months ending 31 July 2007 is expected to be better
than in the six months ended 31 July 2006. Trading is always weighted to the
second half of the financial year. Finance lease and capital expenditure
payments have a disproportionate effect on the FCF trend in relation to cash
generated from operating activities in the first half as they are paid fairly
evenly throughout the year. In addition interest payments will be greater in the
first half of the year ending 31 January 2008 and tax payments are greater in
the second half of the year.



Historically, net debt is at its highest in the first part of the year. The peak
net debt in the first part of the current financial year was approximately 2%
higher than during the equivalent period last year despite the fact that the
market expectation is that revenue for the full year ending 31 January 2008 will
be some 25% higher than in the previous year. The Directors believe that the
current position is likely to result in an improved net debt position for the
year and reflects our expectation that FCF for the year to 31 January 2008 will
be neutral to slightly positive.



Appointment of Finance Director



Peter Johnston has been appointed as Group Finance Director with effect from 1
September 2007. Further details of this appointment are set out in a separate
announcement dated 19 June 2007.



Outlook



The markets in which we operate remain buoyant and we believe that many
opportunities exist to extend and develop our customer base. We remain committed
to delivering the best possible service to our customers and to developing our
business via direct sales to enterprise customers and in collaboration with our
channel partners. We remain confident that results for the year ending 31
January 2008 will be in line with market expectations and that the longer term
prospects for the business remain very encouraging.