Visual Defence Share Discussion Threads

[adam] 17/9/2008 15:06

The reality is times are hard, and cash is leaving the company all be it slowly. CEO has controlling shareholding and given the credit-crunch and likelihood of it lasting a few years, he might be tempted by a bid if it was well pitched. He would not want to run it into the ground and try and sell when it is too late. Flip side is he might be looking back and wondering if 40p possible again?

With 70m shares, 7p = £5m / $9m
Say 2008 revenue $25m USD
So, stripping out cash and valuing business at 2x revenue would make a bid at 20p a possibility and still valuing it cheaply. That is surely tempting in these difficult times?

[par12] 17/9/2008 14:28

What I did not see in the results was any mention of the MASSIVE African Contract, Did I miss it ?

That one did's to be understood

[rivaldo] 17/9/2008 14:19

Not sure about that adam, just a few bargain hunters maybe?

What did you think of the results?

VDI now has a £6.7m m/cap, against £10.4m net tangible assets, including a cash/securities pile of £5.6m. Looks like the cash reduction from the year end was mainly due to paying off creditors (plus the trading loss of course).

Gross margins were up nicely, although sales were down - I'd guess these are pretty lumpy, though I'd like to know how much the Ivory Coast mega contract is now contributing.

With the reductions in costs I'm hopeful that H2 will look pretty reasonable given that VDI appear to still be winning large contracts.

So overall I'm happy to hold since the present m/cap would seem to be far too small for the asset base and the potential for the company.

[adam] 17/9/2008 13:16

hmmm... news leaking - a bid?
Must be at a fair price given the CEO hold such a large stake.

[stevemarkus] 10/9/2008 08:46

I think it's worth holding these for the time being - things will improve eventually regarding liquidity. It's pretty obvious that with a small cap, illiquid company such as VDI, anyone selling outside periods of high activity will be hammered as the MMs will not want to hold stock on their books. My reading of the last RNS was that contracts were delayed, not cancelled, and I'm comfortable with the backing of the NAV. Happy to hold for the moment.

Cheers,
Steve.

[carlos panda] 09/9/2008 19:37

There are good stocks on AIM - but they are certainly in a small minority. All in all a very bad 15 months but hey-ho, onwards & upwards (eventually)!

[carlos panda] 09/9/2008 17:53

PAR12 - more than likely!

ps: I post the reason for my sales in illiquid stocks like VDI to try allay any investor fears that "someone out there knows something bad"! Not the case here at all as explained previously.

[par12] 09/9/2008 17:51

Well for us holders we hope you called BOTTOM

[carlos panda] 09/9/2008 15:34

I have to admit that it was me that bailed out earlier today (45,700 @5.5p). Yes - it was a shocking price (75% loss over the last year + which should teach me to observe my stop loss rules without making exceptions, even in exceptional markets...).

FWIW the (pathetic) proceeds together with other rather better sales made today will be used to top-up my much larger holdings in DMG, GTE, GNG, GIP, HAIK, KYS, RCG & VEL.

However I shall be keeping an eye on VDI - perhaps returning prior to the 2009 interims.

Good luck all.

AIM - Almost Invariably Mis-Priced?

[rivaldo] 09/9/2008 15:19

Nicely put Carlos, good to have a sensible post here worth responding to for a change.

Obviously VDI's H1 results were disappointing, but the current share price makes VDI a bargain imo at a £4.4m m/cap given tangible NAV at well over twice that figure and prospects going forward. The illiquidity/lack of interest affecting both AIM and this stock in particular exacerbates price falls on any selling at all until good news comes along or until there's a little buying interest from those with a longer investing timeframe than a couple of months.

So does that mean you've slashed and burned here or is this one of those with "the greatest potential"?!!

[carlos panda] 09/9/2008 15:02

IMO the problem is not VDI (although the delay to orders is unfortunate yet understandable), rather it is AIM. With AXX down over 32% during the last 12 months (compared to only 12% on ASX) almost all AIM stocks have proved a disaster (many having fallen 50, 60, 70+ %). As someone who holds an 'adventurous' (read 'risky' and 'heavily in the red' (: ) portfolio I have decided to slash & burn most of my losses and concentrate the proceeds into those companies with the greatest potential.

AIM - 2 steps backward, 1 step sideways...

[par12] 09/9/2008 10:41

Is this the end of another AIM company now the MM's will offer me 4.5p for my 100k

[rivaldo] 10/8/2008 19:45

Obviously H1 was disappointing. After last H2's operating profit we'd all have hoped for a continuation and/or improvement, but the global economy seems to have put paid to that (I note IND is suffering similarly).

Nevertheless:

- VDI has a m/cap of just £5.4m at 7.75p
- it has £5.3m of cash and another £4m of trade debtors
- tangible NAV was around £11.5m at 31/12/07, so should still be well over £10m
- the cash and debtor balances are expected to be unchanged at the year end
- annual revenues should be £11m

And the closure of the Israeli office in favour of the appointment of distributors is a good sign that VDI are well aware their advantageous cash and asset position should be maintained by reducing overheads.

As adam says, happy to file this away for potentially still excellent upside. I wonder if the massive airport contract has either meant costs upfront or has distracted VDI slightly from ongoing business?

[par12] 08/8/2008 08:03

This could get mess; 7p is fair value but will it go as low as 1p

BAD

[par12] 07/8/2008 18:24

Yep but it maybe canceled and thats the issue; it was just a plug never a deal

[hugepants] 07/8/2008 10:25

Im unimpressed. It will be interesting to discover how the mega-airport contract has affected the results. It was meant to have "significant impact on revenues and profits" if I remember correctly.

[adam] 07/8/2008 09:36

70m shares @ 10p = £7m
so trading at cash and business in for free.
The issue is will it get stolen by the CEO Barry Tal who i think owns a controlling stake at a fire-sale price?
and with any up turn at least a year away it will be one for the sock-draw now for me.
i might buy some more after year end if position has not deteriorated further.
at least business is stable. people must now be thinking of Vigilant - another Israeli tech in the same sector - that burnt all the cash away and then got sold for bubkis.

[par12] 07/8/2008 09:05

7p seems fair value level no point selling for 8p

[par12] 07/8/2008 08:45

Another dead AIM company

[someuwin] 07/8/2008 07:39

Profits warning...

"For the remainder of 2008 the Company will be impacted by decisions by three key customers to delay the delivery and implementation of projects and solutions from 2008 to 2009. These delays will impact the full year results for 2008 and as a result the Company expects full year (to December 31, 2008) revenue to $22 million CAD, with Operating Earnings below the Board's previous expectations."

[hotfinance14] 07/8/2008 07:09

Visual Defence Inc

('Visual Defence' or the 'Company')




Trading Update - Six Months to June 30th, 2008




RICHMOND HILL, ONTARIO - August 7, 2008 - Visual Defence, LSE:VDI, today announces an update on trading for the first six months of 2008.




The Company continued to execute its strategy of growth in key markets for enterprise size advanced security solutions in Europe, North America, Africa and the Middle East. Of note during the first six months of 2008 the Company secured significant contracts with the Norwegian State Railway ($1.5M CAD), Societe de transport de Montreal ($0.9M CAD) and Euromaint of Stockholm ($1.9M CAD) further enhancing our reputation as a leading supplier of security solutions to the global Public Transit industry.




Additionally the Company continues to hone its strategy and focus as earlier in 2008 announced the strategic decision to appoint Taldor as its representative in Israel and close its local office.




The Company expects to report revenues for the first Six months of 2008 to June 30 2008 of approximately $9 million CAD, with an operating loss of $2.5 million CAD. The cash position of the Company remains strong at approximately $10.6 million CAD and receivables are expected to be approximately $8 million CAD. Gross margins are expected to improve in the period to 37% of sales.




For the remainder of 2008 the Company will be impacted by decisions by three key customers to delay the delivery and implementation of projects and solutions from 2008 to 2009. These delays will impact the full year results for 2008 and as a result the Company expects full year (to December 31, 2008) revenue to $22 million CAD, with Operating Earnings below the Board's previous expectations. The Board expects, however, that the cash and working capital positions at the year end will be largely unchanged from that as of June 30, 2008.




Barry Tal, CEO for Visual Defence, Inc. said:




'While we are disappointed with the impact the delays that these projects will have on our results for 2008, the projects will be delivered in 2009.




'The Company's continued development of new technologies, including our Door Management System for credential management and IP access control, should present further opportunities for 2009 and beyond.'