Vantis Share Discussion Threads

[quickmind] 11/1/2007 12:19

Very interesting discussion! egoi, spaceparallax, agrreable keep the good work going.

VTS appeared on my radar screen a few times in the past. I thought about it as I have been looking for people business stocks to "counter-balance" my asset/facility play. There're two reasons that I didn't invest in VTS.

Uuwieldy Cost Base
VTS have over 1000 staff and growing. Obviously the company's main cost is employees' wage. How easy is it to control, never mind to reduce, wage cost? Last year's PBT is £4.4m, translating to £4,800 per head. In other words, were all staff, mostly accountants, paid £4.8k more for 2006, VTS would have not made a single penny!

Considerable Dilution
The number of shares in issue has increased dramatically in the past. Check it for yourself. Since VTS don't have much cash reserve, further acquisitions will be probably paper-based and are thus dilutive. The dilutive effect is particularly acute when VTS' own shares are, as they currently appear to be, lowly rated.

(Edited to correct typos)

[spaceparallax] 11/1/2007 10:32

It'll be interesting to see how things develop or settle down over the coming quarter.

[egoi] 10/1/2007 22:16

According to Citywire:
"Broker Charles Stanley said it expects Vantis to 'withdraw from offering this type of investment planning going forward'.

The disruption caused by the enquiries obliged it to cut current year profit estimates by £500,000. Together with higher than expected interest charges it is now forecasting £12.7 million for 2007 and £14.6 million for 2008.

The shares, which are back from their peak of 278p because of the Customs investigation, were 4p better at 240p valuing the firm at £108 million. Citywire tipped the shares at 222p in January 2006."

12.7 million would put it on a single figure p/e.

Still cheap.

[egoi] 10/1/2007 19:03

agreeable - 10 Jan'07 - 17:17 - 321 of 321 (premium)

'I will happily wager half a crown with you as to whether share price hits 300p before it hits 200p
I suspect you know where my money will be
Happy Days'

Why 'Happy Days'?

I can only think of three possible reasons as to why you would be 'happy' to see 200p, assuming you (or someone you work for) really are not short;

1))You are a failed ex-employee with some axe to grind.
2) You really rather like the company deep down and hope to buy the shares more cheaply.
3) You are the Journo who wrote a piece that the company calls 'inaccurate'.

I will consider answering your questions when you answer my earlier one about why you continue to post here.

PS: VTS has been a successful acquirer for the best part of 30 years.

Half a crown - the market rise today says the uncertainty has gone. I'll make it a tenner.

The fact that I no longer hold should be getting through to you by now, agreeable, if I think you are way over the top in your negativity, I think holders will be less charitable than I have been to you.

PS: Do you post as numbersman123 on iii?

[agreeable] 10/1/2007 17:17

egoi
Lets see, you still have not answered my question as to why Debtors represent 8 months turnover....well let me give you a clue.
If you sell a tax scheme based upon a fee calculated as a share of the tax saving, then book the sale but dont receive the money until Revenue pays up this is how you end up with high debtor book.
That is why i suggest cash is under such pressure and ultimately as we say
'cash does not lie' and 'its debt that kills'
Now that the Company is cash restrained and with weak share price it will find it difficult to acquire other businesses and so top line growth stalls etc etc etc
I will happily wager half a crown with you as to whether share price hits 300p before it hits 200p
I suspect you know where my money will be
Happy Days

[egoi] 10/1/2007 16:32

T trades are 'delayed' - and not even necessarily on the same day - hence there is no guarantee as to whether they are buys or sells, the market maker merely reports a trade and does not register buy or sell.

The computer, like the rest of us, can therefore only guess as to what such trades are.

The intra day shows a move up around 13:45, just after the first T and M trades were reported.

My guess is the 98k in three T trades were buys, or else the share price would not have been rising all afternoon.

Not strange atall then.

I think we are all beginning to wonder why you are posting here agreeable given your (apparent) dislike of the stock.

Can't be to 'warn' people about a 'bad' stock, or you'd be on dozens of threads every day and I don't see you............

First you tried negative gossip. When that angle flopped, it was the numbers. Now it's the trades, and the evidence suggests you are probably way off message there too.......

[agreeable] 10/1/2007 14:59

a stgrange kind of short covering, 3,500 bought nearly 70,000 sold

[spaceparallax] 10/1/2007 14:04

Agreeable,

Thanks for your further detailed thoughts.

Clearly, you are not a fan of VTS - but I do appreciate that you go into some detail and appear to be able to support your concerns with anecdotal evidence.

Orbit,

If that's the figure, then it's not good enough. However, I suspect that there are a few more factors that will need to be included.

[egoi] 10/1/2007 13:43

Although I sold as a matter of prudence until the new banking arrangements are confirmed, i hope to buy back after; it is clear things are looking positive and the gossips to me are sounding increasingly wild - witness that 200 million anecdote, LOL!

Market seems to agree with me, another tick up just now. Shorts realising the game's up and starting to cover?

AFX: 'Accountancy and professional advisory group Vantis PLC said current trading is in line with its expectations as it reported a strong rise in first half profit.
The company reported a first half pretax profit of 3.7 mln stg compared with 1.4 mln stg year ago. Turnover increased 29 pct to 42.7 mln stg.
It also said it has identified a number of potential acquisitions for 2007...'

From the company:
'Recent inaccurate press articles have commented on Vantis Tax ....[who].... are co-operating with HMR&C with their enquiries, although to date they have not been interviewed and any wrongdoing is strenuously denied.'

Outlook

'I am pleased to report that the Group has continued to perform in line with our
expectations since 31 October 2006. Our profile in the market ensures a steady
stream of acquisition opportunities and a number have been identified for 2007.
We are well positioned for the future as our core business of accountancy, tax,
business recovery, IFA and consultancy continues to grow in a stable market and
we continue to develop our higher margin specialist services.'

[0rb1t] 10/1/2007 11:53

Adding back Amortisation and deducting tax should give adjusted EPS. I make it 6.9p which is probably why they didn't want to use it!

[agreeable] 10/1/2007 11:48

egoi and SP
I note your commentts
It is easy to book Turnover, it only counts when you collect it.
Let me giuve you an insight into some of their methods, in order to avoid paying over vat they issue to clients a 'request for payment', which looks like an invoice but isnt. When eventually the client pays they issue a vat invoice with a tax point on date of payment. They therefore only account for vat when money received. This , if not illegal, is close to mark and by my reckoning would if challenged by HMRC lead to £3-5m increase in borrowings.
Secondly, on the issue of HMRC raids. The Inland Revenue as opposed to Customs who have general powers to enter and seize, can only do so if major fraud is suspected. We are talking about the likes of Botnar and the Nissan UK £200m fraud.
see quote from ST report
carrying out the raids, the Revenue board had to apply to a judge for a special warrant, providing him with evidence that "an offence involving serious fraud in connection with tax is being committed".
The IR dont actually need to do anything, all they do is refuse to give participants in the scheme the tax relief that Vantis has promised. The participants have already lost their original money because the scheme relies upon them giving the shares they invested in to a charity.
So here is the rub, 400 clients of Vantis are out of pocket and will now be asked to pay tax they were not expecting to pay, IR refuses to play ball

You decide Good News or Bad News

[egoi] 10/1/2007 11:16

Thanks for your measured response share price

I hadn't seen agreeable's post before making mine, so it was slightly disconcerting to see him/her make similar comments to my initial thoughts; noted, though, their change of tack from gossip to wholly negative comment on what in some respects are quite decent numbers.

No comment from him/her for example on:

Turnover increased 29% to £42.7m (2005: £33.2m);
•Operating Profit before goodwill amortisation, exceptional items,
interest and tax increased 20% to £6.6m (2005: £5.5m);
•Profit before tax £3.7m (2005: £1.4m);
•Basic earnings per share increased by 89% to 5.3p (2005: 2.8p);

All of which is pretty positive.

A bit of balance from agreeable might have given their overall and fairly made negative points a bit more credibility from more experienced posters on this board.

There are a fair number of companies (TRX I think is/was one) with similar notes to their accounts these days, however the increase in debt from 30 million to 43 million (for a short time) was indeed of alarm and surely weakens their hand when it comes to making further acquisitions. I don't see why adjusted eps was not quoted either.

I don't think the media comments are particularly significant but then you know my view on that already. At very worst slap on wrist seems likeliest and I note they have not been interviewed over six months on from when supposed raids were first mentioned, which suggests to me its all very low priority.

It is quite probably after all this time merely one of those many dead investigations they have left 'open' incase anything new surfaces one day. There's a very good chance we won't even hear of it again and that chapter is closed.

Broker upgrades would not surprise me, these and once banking facilities are secured (I'd be astonished if a decently profitable company had the plug pulled in this day and age) there is scope to move back to 300p, but until then I think caution is the wisest strategy.

[egoi] 10/1/2007 08:34

Results look solid enough and I perfectly understand why some would see them as a buying opportunity after the recent fallback. It's no surprise to see the initial mark-up (I had mistakenly quoted the adjusted eps from interims last year, oddly not quoted this year):

•Turnover increased 29% to £42.7m (2005: £33.2m);
•Operating Profit before goodwill amortisation, exceptional items,
interest and tax increased 20% to £6.6m (2005: £5.5m);
•Profit before tax £3.7m (2005: £1.4m);
•Basic earnings per share increased by 89% to 5.3p (2005: 2.8p);
•Proposed interim dividend of 1.5p per share (2005: 1.5p);
•Cash inflow from operating activities £5.0m (2005: £4.1m);
•Bank interest cover 4.9 times (2005: 5.3 times);
•Non-audit businesses of Rouse and Sharles Group, acquired within the
reporting period, have integrated well;
•Further recruitment of high calibre personnel particularly within
Business Recovery, Tax and Financial Management units;
•Progressive roll-out of MyDebtExit, launched in October 2006, commencing
January 2007

Reluctantly decided to let them go however; this has nothing to do with some recent media comment, which the company says is inaccurate, precisely as I suspected, despite a load of fluff from the usual vultures who magically appear at such moments.

But my reason to sell is entirely different, it is because they exceeded (only briefly it should be said, so it looks as though it reached over 43 million) their banking agreements in October, something not foreseen by any of us regulars on here, and the company is now negotiating a new arrangement.

We should have been told imho.

I expect the agreement to be confirmed, (they are profitable), which will give them a higher lending level and enable further acquisitions, but while that uncertainty remains it is safer to be on the sidelines, however the auditor note is stark, though fairly bog-standard for very acquisitive companies with debtpiles:

'Emphasis of matter - Going Concern

In forming our conclusion, which is not modified, we have considered the
adequacy of the disclosures made in Note 1 to the financial information
concerning the Company's negotiations to raise new finance and the consequential
implication for the Company's ability to continue as a going concern. The
validity of the going concern basis depends on adequate finance being made
available. The financial statements do not include any adjustments that would
result from a failure to secure sufficient funds through the financing
negotiations.'

SP, interested to hear your take?

[egoi] 09/1/2007 20:51

I'd settle for 10.3p delightedly!

What irritates me SP, and I am speaking in general, not necessarily in this instance, is posters who suddenly turn up on a thread (it happens a lot on this website for many companies as you know yourself) and start scaremongering along the lines of 'if the company say something then there must be a problem, if they say nothing they must be hiding something.'
All this stuff is about a tiny percentage of VTS business anyway and much is out of date.

You can't help asking what their motive for posting might be, (it usually turns out they don't hold shares, are waiting to buy on a hoped for drop, or are short) but it certainly is rarely constructive imho.

Also i note the posters who do it have rarely ever had the guts to offer any threads of their own.

[spaceparallax] 09/1/2007 17:15

On the EPS, bearing in mind the positive TSs, I would expect nearer 10.3p.

Interesting to see what materialises in terms of results and any comments on recent events.

[egoi] 09/1/2007 16:21

I'm not dismissing it, merely saying that what we have heard so far has been of negligible import.
If something new did emerge tomorrow then i would review my holding but until there is substantive evidence to the contrary VTS looks oversold and the results could bring a welcome rebound.
9p interim eps would be excellent.

[spaceparallax] 09/1/2007 14:46

SP certainly creeping up, which is good.

Egoi,

We share a belief in the Company's ability to perform - where we differ is on the matter of the IR and its significance. I admire your loyalty to VTS, but would suggest that to dismiss the IR investigation is not wise. True, it may hopefully turn out to be nothing - on the other hand, if there is substance to it, the share price will IMHO dive as the Market re-evaluates the associated risk.

I sincerely hope that you're right!

[egoi] 09/1/2007 14:13

Interesting afternoon - will the shorts run for cover or take the dangerous risk of being cleaned by the likely good results and outlook tomorrow? -:)

[egoi] 09/1/2007 10:16

Yep been saying it for a while I would like to see VTS snap up Tenon. (Mind you given the mess tenon was in a year or so ago it is hardly surprising Tenon are doing a bit better now!).

As I say the bigger picture is what matters rather than vague comments regarding a tiny percentage of the business. Tomorrow will be very illuminating and if the company feels there is nothing to comment on that can only be good.

Interim eps was 8p or so last year. I am confident that can be matched or maybe even topped.

[davebowler] 09/1/2007 10:01

Tenon news looks good.

[egoi] 09/1/2007 09:39

Thank you for your comment.
I have held these shares on and off since I spotted them not long after flotation. I have no assocaition with Vantis except as a shareholder.

I expect no comment as what I have read so far in ' accusations' has hitherto been weak to say the very least.
As I said though if there is a surprise I shall consider my position, as I do after every newsflow on every company I have shares in.

More important is the bigger picture, the results and the outlook.

Shares up again today.

[agreeable] 09/1/2007 09:27

egoi
could you confirm you are independent from the company, your repeated listings shriek of management supporting its position
to dec lare i am neither short nor long, i sold and do not short, i look forward to your own frank declaration

[egoi] 08/1/2007 18:37

I am long. Care to declare your position so we understand precisely the motive for your posting? You see, I am beginning to smell your fear that you are wrong.
Thank you.

Despite your heavy breathing, your posturing and innuendo so far has provided not a shred of proof of any wrongdoing - some of the things I have seen in the last twenty five years, believe me, this stuff is laughably flimsy - and much of the info you refer to is way out of date and imho based on flatulence ('reported' on iii in July!).

I agree with you on one thing, I hope receiveables are strong, a sure sign of a company looking after its shareholders.

If there were to be something in the statement that is unexpected then sure I would consider my holding. I may be many things but Canute I am not.