Vanco Share Discussion Threads

[taffee] 13/2/2008 08:45

sounds like vanco are close to reassuring the market all is okay

funny old credit crunch....banks still funding takeovers and lending money from what I can see.

[evalongoria] 13/2/2008 08:31

Debt is a problem in the credit Crunch
profit warnings also often come in 3rs

[masurenguy] 13/2/2008 08:21

Adding back debt results in an EV of circa 9, assuming this years PAT is around £14m.

[02bursar] 13/2/2008 02:26

With share price standing at 80p, Vanco's MV now £50m and represents 72% of equity shareholders funds reported at it's July 07 interims; Will move to just over 60% of shareholders funds if full year profitability is on target.

P/E based on Jan 07 earnings now less than 5 - on a par with the major banks who have massive writedowns to make. VAN's will move to 3 when full year earnings are reported - assuming no change in the share price by then.

[taffee] 12/2/2008 17:49

not in the context.

[sadone] 12/2/2008 17:08

Masurenguy

PE = Price Earnings Ratio

[02bursar] 12/2/2008 10:34

M672

"What about the depreciation charge?"

If that's a serious question, could you be more specific?

[evalongoria] 12/2/2008 10:27

Simon Cawkwell - 18 Apr'07 - 08:57 - 8 of 671


Gentlemen,

It might be the case that VAN is in the clear. But I doubt it. It just does not smell quite right.

What about the depreciation charge?

Has this business really turned cash flow positive?

These and other questions are far from settled by this statement.

I remain short and have increased my position this morning.

Simon Cawkwell

[taffee] 11/2/2008 18:26

private equity

[masurenguy] 11/2/2008 18:17

Who or what is pe ?

[taffee] 11/2/2008 18:15

pe also interested in 477 mill pipeline and list of blue chip clients

[whiterussians] 11/2/2008 17:39

35p would be an ace dream

[pugugly] 11/2/2008 17:13

The company is burning cash - Most investors and certainly most Private Equity boys are inly intersted in both strong cash flows and EBITDA in the region of 5x. On both counts VAN is out - irrespective of the business model.

[02bursar] 08/2/2008 16:10

M665

So be it. I'm a long term investor.

Have a good weekend.

[masurenguy] 08/2/2008 16:02

Whether you or I think that it's justified or not is immaterial - the market ultimately determines the share price and highly geared companies are getting slaugthered at the moment !

[02bursar] 08/2/2008 15:54

M663

Still not justified IMO.

It's a quality business, a going concern, with a low risk to the bank.

Interest rates are steady and it negotiates fixed interest deals.

[02bursar] 08/2/2008 15:29

M661

IMO The finance risk doesn't justify an 80% drop in share price

The debt is medium term so is the cash profile of phase 1 contracts.

The gearing is high but not catastrophic. It's a choice of finance. What's the return on capital? What's the cost of debt?

New equity is long term; the directors are indicating it's short term timing and addressible.

[masurenguy] 08/2/2008 14:53

Vanco is a VAR with a credible, successful and scalable business model. Their sales and profits have enjoyed secular growth for 5 consecutive years.

The problem that this company has is undercapitalization. That is why the share price has fallen by more than 80% over the past 10 months.

[02bursar] 08/2/2008 13:39

richardbonny M658

That is business risk not finance risk.

How big do you think the wholesale telecoms market is? Is it growing or shrinking?

Of that market, how competitive do you think it is?



The VNO model is a route to market for those carriers.

It isn't a middle man in the traditional sense of just buying and selling on capacity. It actually builds and manages scalable, end to end business critical networks for global enterprises. It's all bespoke. It has the ability to shop around the global wholesale market using its own technology and change carriers on its networks for the benefit of those enterprises.



If the business risk scenario that you describe was so plausible, why would global enterprises want to consider the VNO solution? Is there any evidence that global business enterprises share your view of that risk? The real evidence is in the contract order book and client base.

[windjammer] 08/2/2008 12:54

richardbonny

isn`t that like saying the russians or norwegans will bill you directly for your gas post mark " from the Kremlin "

[richardbonny] 08/2/2008 12:14

O2bursar - it looks like a growth stock but I believe its business model is subject to risk. It is not a telco but just a middle man which buys capacity from telcos to sell on to customers. So far it has been successful at doing that and the business is growing. But what if telcos collectively decide they do not want to sell line capacity through a middle man? They might eventually wake up to the fact that it simply allows someone else to cream off some of the profits from their investment in fixed telephone lines. Fixed line operators have the potential to undercut Vanco if they want simply by offering its customers better terms.

[02bursar] 08/2/2008 10:01

M655

"So I take it that you are loading up with shares at this 'massive discount' price !"

Correct. I more than doubled my holding on the fall after the latest update.

[02bursar] 08/2/2008 09:59

M654

"The point here is that Vanco needs to address their undercapitalization."

Is it long term undercapitalization or is it short term timing addressable by other strategies?

[masurenguy] 08/2/2008 09:50

O2bursar: "a growth stock with a track record of delivering at a massive discount".

So I take it that you are loading up with shares at this 'massive discount' price !