Watermark Share Discussion Threads

[simon14] 09/2/2006 17:24

I will add further , dispite rumours that airlines will cut back on catering the opposite is the reality , its just that they will be asking the customers to pay for it on board, no more free meals, just the model WMK applies to their BMI contract. BTW has anyone tried the airfayre food , bloody good , not cheap but who cares, I paid £400 for my air ticket so what if my meal cost me £8.50

[simon14] 09/2/2006 12:46

Maybe so I would expect the only exeptional they might come up with this time is startup of catering contract with BMI , Air Canada and Sri-Lanka (these are hardly exeptionals though) and the bad debt relates to Duo Airways ,a one off.. hopefully. My worry is that WMK may try to be `all things to all men`, not all of their businesses are good ( aero TV )!!! YUK

[tday] 09/2/2006 10:51

One thing worries me slightly. WMK do have a habit of coming out with exceptionals - bad debts etc.

[simon14] 09/2/2006 10:33

May I add ,
I agree with vassily & rivalo , this hysteria over WMK is stupid . WMK`S contract with BMI is one where the passanger pays for food so BMI & WMK benefit , the OCI electric veichles are still running people down in terminal 1 , airlines have not stopped cleaning their planes, people are still reading newspapers on their flights...... shall i go on

[vassily] 05/2/2006 09:30

Rivaldo: Thx. for the insight. No more pillow talk.
WMK may have concerns about earnings in the short-term, but prices for practically everything are on the way up. Inflation is rampant, despite the headline figures. I mean, it is not as if air ticket prices have not risen recently to compensate for the oil price. This will not stop anytime soon. So in the end WMK will also have to raise their prices, which will improve margins once more. And WMK will remain in business, of course, and seek out new customers/contracts in growth areas.
(I am sure it's not that simple, but it's all my mind can come up with.)

V

[rivaldo] 03/2/2006 14:29

Vassily, ignore pillow, he's well known on a number of threads as a figure of fun who changes his mind like the wind and doesn't have much of worth to say. No disrespect pillow! If you do say something worthwhile I'll happily say so - I've just seen you operate before.

It wouldn't surprise me if pillow was actually buying in and trying to talk the stock down at the same time. His presence could actually be a cue for another rise.

[vassily] 03/2/2006 13:04

Pillow:
Why trouble ahead? Explain.

[pillow] 03/2/2006 13:02

taken short position - there may be trouble ahead

[njp] 03/2/2006 10:16

It's a nonsense isn't it, rivaldo. An essential industry - what alternatives are there? - and a business model and management that can save hard-pressed airline companies money. Should play WMK's way, one would've thought. Guess we're just ahead of the crowd. It'll be re-rated when people wake up to the earnings achieved.

[vassily] 03/2/2006 09:15

I think you are right. Why all the gloom for WMK? Oil prices have risen not just on the back of crisis after crisis, but much more importantly because certain economies have deliberately inflated their economies to ward off a consumer recession etc post-2000 tech bubble. Prices always catch up with the money supply available. This is something not often discussed in the mainstream media for various reasons.
Other news. BA has just announced passenger numbers are up. With India and other markets growing, WMK has a lot of opportunities and potential for growth.

Edit:
Here is a recent article that offer the recent money printing as one reason why oil price rises have gone up.


V

[rivaldo] 03/2/2006 09:00

That's a laugh - the Express have today peddled the same line as the IC about WMK being under pressure re airline oil costs etc, so a few have panic sold.

I prefer to follow the thinking of AXA and Strategic Equity who've been stocking up on the shares and now have almost 20% between them, having undoubtedly talked to the company first. If the company confirms otherwise then fair enough, but the outlook from the interims only 3 months ago could also hardly be more encouraging:

"Current trading and future outlook

• More people than ever are flying, and the industry is vital to the
global economy.
• New airline business models are meeting consumer expectations for lower
fares.
• Watermark is working with its airline clients to turn the vision of a
simplified business into a reality.
• Encouraging start to second half, which gives us comfort for the full
year to 31 December 2005.

In summary therefore we remain extremely positive about the long term
opportunities to grow our business in an industry where our low cost business
model, and our total cabin management programme allows airline clients to
continue to reduce their own cost base on a sustainable basis - whilst at the
same time allowing our company to expand profitably in the future as it has in
the past."

[rivaldo] 31/1/2006 09:55

Interesting that the rise to 140 was on higher volumes, with Strategic Equity and AXA increasing their stakes, whilst the drip back to the current price has been on much lower volumes, i.e more due to lack of activity and news than anything else.

WMK remains cheap imo, with the two most recent forecasts averaging 12.25p EPS for 2005 and 13.25p EPS for 2006 - i.e a current year P/E of only 9.5. Not long till results, which as previously stated will I believe be in line with expectations. If they are, Numis' 224p price target will be something to aim for over the next few months.

[spaceparallax] 26/1/2006 12:32

I expect us to broach the 130p level soon, but anticipate a bounce in the late 120s. The fundamentals certainly confirm good value in here, but a little good news is necessary for rejuvenation.

[rivaldo] 25/1/2006 11:30

CBGB, you may be absolutely right, who knows?! I can't speculate about how Caulcutt is marketing the company as I don't know. But I'm not going to speculate on the basis of "absence" of information, particularly as I have spoken to the company and told you that I'm happy with their response.

Since WMK have told me they don't "currently" intend to do a trading update one can only draw the conclusion that nothing has changed from previous updates and results are broadly in line (unless they're lying/holding back!). I'm happy with that - if you're not then why not give them a call yourself?

[cbgb] 25/1/2006 09:56

Rivaldo Glad it's so simple for you... I'm a bit more sceptical myself.

Trading in-line ok, but so it was last year when they put out the 30.12. trading update
'Looking ahead to 2005, sales trends remain positive, with a major part of the
revenues expected for 2005 already in place. In addition the Company remains in
the running for a number of significant contracts, which give us strong
confidence in our future.'
So why say that then and nothing now? The interims in October stated 'Two single source product ( Encompass) tenders submitted to major airlines.' but this time around they choose not to appraise us shareholders of the situation re these significant contracts? I'm a bit disappointed especially if the mbo idea with Caulcutt unhappy about the lack of interest from the City is true. Not like he's marketing the company very well is it?

[handybe] 24/1/2006 21:05

I bought into WMK in 2003, sold for 60% profit in 2004 and recently bought back at 1.21. I think we're always going to suffer from a low p/e because there are so many perceived negative factors for investors to worry about, even though management surmounts each problem. Even on a low p/e, progress still means profit - and less risk.

[rivaldo] 24/1/2006 15:42

Simple answers imo CBGB.

- the market hates uncertainty. I would also rather have a formal update, but the company has evidently decided that the outlook is unchanged from their last statement so there's no need to say anything more - which under the rules there isn't if trading is in line +/- 10%. So one must assume that trading remains good and the outlook positive. On that basis I'm quite happy with an in-line outlook as I believe WMK is undervalued on fundamentals. When/if this is confirmed to the market I'd therefore expect a re-rating on the lifting of uncertainty.

- re contracts, have a look at the RNS's for WMK over the last 2 years. RNS's for new single contracts? There aren't any. The last was Air Fayre in Feb'04. They don't in general get announced seperately as they're not individually material. Just a fact of life. Hopefully we'll hear about them in the results RNS - though of course you could be right and there aren't any.

I agree about Strategic Equity being a big reason for optimism, but assuming results are on course then that's another reason for confidence rather than the prime one imho.

[cbgb] 24/1/2006 15:29

Rivaldo How can no trading update be good news when the brokers have been spouting about 'significant potential contracts in the pipeline'? If WMK are only going to meet expectations and there's no news of new Airfayre contracts since the Gate Gourmet debacle in the autumn and no big contracts for Encompass why should the P/E change from where it is today? As they've said before high oil prices dent their margins. I'm a long term holder and will probably continue to add as and when for the time being. Seems to me best chance for any appreciation in the share price is with Strategic Equity.

[njp] 24/1/2006 06:56

vassily

I take it you've checked out the most recent - last 100, say - posts on this thread. WMK are strong players in this market, which isn't going to go away despite the threats - oil prices, bird flu, bombs etc - which serve to frighten investors. In fact, in a price conscious industry, they seem to be very well placed to pick up more business. Their 'one stop shop' model is appealing in this context and their management is well regarded.

There've been some good tips and write ups recently - see rivaldo's post 967 for example.

I'd take advantage of the dips if I were you and use them to accumulate. The market has to notice the earnings and growth potential of the company eventually.

Btw, from a chart perspective we look to be due a bounce now as well.

[vassily] 24/1/2006 03:10

Rivaldo:
Oil price rises seem to have a negative effect on the share price. I wonder how this will impact on your outlook for the company and the share price. Perhaps as you indicate, the growth and earnings of the company will in the end overcome fears related to oil issues and related problems such as customers going bust. So far as I know WMK has only had one customer go bust. That was Duo Airways, a small carrier. And WMK do have a lot of customers, which means the risk is well spread out.
What WMK really needs is another large profit-making carrier to sign up to its Encompass system. That might just make the share price move. It would really vindicate Calcutt's plan and vision.
V

[rivaldo] 16/1/2006 18:47

Agreed - these two now have over 20% between them. I suspect they've been talking to the company prior to the year end and reached an obvious conclusion as to trading :o))

[stemis] 16/1/2006 17:41

AXA announce increase in holding by 425,000 shares (0.96%) to 5,495,284 shares (12.75%) between 22 Nov and 16 Jan.

This follows on from buying by Strategic Equity Capital plc to take their interest to 2,935,000 shares (6.82%) disclosed on 19 Dec.

Looks like some big institutional buying. Can only be good news for the shares.

[cbgb] 15/1/2006 13:47

Come Mr. Caulcutt, give us some new. Please?!

[rivaldo] 14/1/2006 15:04

Big article in The Times today about the explosion in airlines in India:



"The monopoly of the state-owned domestic carrier, Indian Airlines, ended in the early 1990s when private airlines were first allowed as part of a new "open skies" policy. But these airlines - Jet Airways and Air Sahara - offered fares that were not so different from those of Indian Airlines.

The real transformation began in 2003 when Gopinath realised that "there were one billion hungry consumers waiting to buy tickets if they were affordable". He launched Air Deccan with a mission to demystify air travel and get the "common man" flying."

Remember Growth Company Investor's Buy tip from October 2005.....


"Watermark continues to win new airline and travel clients globally, especially in India and the Far East. 'There is a swathe of all new carriers coming out of India', enthuses Caulcutt, 'and it has been a huge area of growth for us'."