Xchanging Share Discussion Threads

[dnfa1975] 17/9/2010 06:20

Xchanging PLC (LSE: XCH) is pleased to announce that Ken Lever will be appointed to the Board as Chief Financial Officer (CFO) on 5 October 2010 and will begin the transition phase of his new role immediately. Ken will replace Richard Houghton who announced on 15 July his intention to step down as Director and to leave the Company. Richard will also be stepping down from the Xchanging Board on 5 October.

NEW FD

WILL WE GET THE NEW AUDITOR NOW?

[tsigoloroh] 15/9/2010 06:30

we need a change of auditor and review of the Work in Progress (WIP). That would really put the foxes among the pigeons on this one

[simon gordon] 15/9/2010 06:14

Artemis Small Cap - 31/8/10

"Xchanging, one of our larger holdings, where investors became jittery over the company's accounting policies. We feel that this sell-off was an over-reaction and added to our holding."

[haroldthegreat] 12/9/2010 22:20

connaught director purchased 50k approx ,he was a new director and had not much internal experience of the company.. one of these purchased 2million and the other 500k thats a large difference and a very large amount for a bluff.these directors are familiar with the company.

[dnfa1975] 09/9/2010 06:35

To me looks a totally useless statement today with no financials, intended to prop up the share price?

[dasv] 08/9/2010 14:24

simon - there is little positive in the excerpt on alphaville: I worked for an IT consultancy that went bust because amongst other things customers were late to pay. Xchanging are falling into the trap of not demanding prompt payment probably to keep clients sweet.

I have a friend who is a barrister: he is owed payment from solicitors from 2-3 years back. The reason he can't hassle them to pay is because they won't throw him any new work if he kicks up a stink.

The attrition of staff (churn rate) hints at staff dissatisfaction: this is hardly a buoyant labour market - so why leave? Either Xchanging aren't looking after their staff probably or they are unhappy with the way the company is run, or its prospects.

The only bull case to be made is that the share price has fallen far enough to account for all the issues: i.e. at some point it is good value.

I would still tempted to take out a short if I wasn't taking a trading break. The twins kept me up till 5am this morning...

[simon gordon] 08/9/2010 14:17

Yeah, it could be the XCH anthem:

Toxic Love Shack

[dnfa1975] 07/9/2010 21:10

love that britney music - Toxic

[simon gordon] 07/9/2010 20:43

I've had a look at the HSBC note and it's beyond my level of accounting knowledge. It reads very sludgy and pokes many sticks at XCH, 105p would be c.6x 2011 on their reduced forecast of 15.5p. HSBC say that the accounting of the Enterprise Partnerships makes it difficult to disentangle XCH, with Cambridge adding an extra layer of complexity. The only thing that can add confidence to XCH is a mighty big contract but that's not going to happen until 2011, if then. It is becoming a black box of an investment. At the moment 140p looks the top of the trading range, just got to find out if 113p is support or will the bears take it sub 100p? An interesting story but too toxic for me.

[2magpies] 07/9/2010 15:53

"haroldthegreat - 7 Sep'10 - 12:48 - 271 of 272


the directors would be aware of all these facts, if there was a significant problem would they buy such large amounts of shares as a bluff?"

Chairman of Connaught bought 50,000 shares @ 110p: ................

" RNS Number : 1342P
Connaught PLC
09 July 2010

?
Connaught plc
("Connaught" or the "Company")

Notification of Transactions of Directors, Persons Discharging Managerial
Responsibility or Connected Persons

The Company today announces, in accordance with DR3.1.4R, that on 9 July 2010,
Sir Roy Gardner, Chairman of the Company and a Person Discharging Managerial
Responsibility ("PDMR") acquired 50,000 ordinary shares of 2p each in the
Company ("Ordinary Shares") as set out below. The acquisition was made at a
price of 111.6 pence per Ordinary Share."


Just before the plummet. The rest is history.

You don't know what you don't know.

[rathkum] 07/9/2010 12:40

Sh.t! Just when I added a substantial amount recently. I guess I better get out and take a loss based on above

[haroldthegreat] 07/9/2010 11:48

the directors would be aware of all these facts, if there was a significant problem would they buy such large amounts of shares as a bluff?

[simon gordon] 07/9/2010 11:31

Alphaville - 7/9/10:

Xchanging plc (XCH:LSE): Last: 129.30, down 6.5 (-4.79%), High: 135.50, Low: 127.90, Volume: 248.14k

JC - Why's Xchanging under pressure?

NH - HSBC note

NH - pretty bearish

NH - target price cut to 105p

NH - talking about some stuff

NH - I last heard in connection with Isoft

NH - off-balance sheet liabilities (letter of credit of GBP18m to Allianz

NH - receivables running late. Weak operational performance, which usually increases incentives for potential 'earnings management', may be the main reasons for such close scrutiny of XCH's accounts by investors

NH - anyway

NH - HSBC says the company has plausible explanations for all that

NH - but

NH - is still a seller

NH - Profit growth may disappoint: Contract win momentum has improved recently. However, the value of these deals is small. These factors suggest weaker revenue growth in the medium term. We also remain concerned about margin expansion. At the interims, the company indicated that staff attrition rates were increasing, which is negative for a service company's margins as hiring and training costs increase. We estimate that hiring costs should have helped margins by 100bp during the past two years. This cost will return as the employee churn returns. Our EBIT is 10-11% below consensus estimates for FY2011-12.

NH - Valuation: We believe it is more difficult to quantify cash conversion in multiple-based valuation approaches. Hence, we now adopt APV to value Xchanging from using the 2011e PE multiple previously. We value Xchanging at 105p (from a previous target price of 210p) and downgrade to Underweight (V) from Neutral (V).

JC - What is it with outsourcers and this sort of stuff

JC - Is there any more on this letters of credit thing?

JC - Looks interesting

NH - it does

NH - can't find any more on the letters of credit

NH - but there's some stuff on cash conversion

NH - We remain concerned regarding Xchanging's cash conversion. Factors that limit XCH's cash conversion include (1) future decline in deferred income, (2) provisions and restructuring, and (3) capitalisation of costs. Management tends to focus on pre-exceptional cash conversion from pre-exceptional operating profit, which appears to be good. However, at times of heighted worries regarding accounting, investors are less likely to use such "before bad-stuff" measures (see table on page 6). We choose to focus on cash conversion from EBITDA. We estimate that the cash conversion from EBITDA will remain depressed during 2010-12e. The main reasons are

NH - Working capital: Trade receivables are stable at 20-22% of sales. The quality of these receivables is worrying to us. Although we are not modelling increased impairments as a percentage of gross receivables, receivables overdue remain high. This suggests that an improvement in provisions for impairment of gross trade receivables will be gradual. Deferred income should depress cash conversion, as explained on page 3. We model the deferred income as a percentage of sales returning to (4 year average from FY2005-08) 12% in 2012 from 16% in 2009.

NH - Accrued income trend also suggests more working capital: Accrued income and prepayments as a proportion of sales are increasing i.e. the company paying quicker to its suppliers. In addition, their trade receivable overdue more than a month has increased. So they are paying quicker to their suppliers, but receiving payments later from their customers. In the conference call on 25 August, management suggested that the late payments on trade receivables are 'within limits', without quantifying them. We would probably have worried less if the provisions for impairment were improving as a proportion of gross receivables.

[haroldthegreat] 05/9/2010 11:25

did polly peck directors buy millions of pounds worth? adjusted for inflation?

[haroldthegreat] 05/9/2010 11:24

well i will tuck the recent purchases away along with the ones i purchased at a much higher price. leave them in the dark and hope they reproduce to give a massive profit. will look again in 9 months and see what has been produced.

[dnfa1975] 05/9/2010 11:02

i remember polly peck directors buying.

[haroldthegreat] 05/9/2010 10:44

nobody in their right mind buys 1m worth of shares in a company that has has a bad problem. as i said above. all this buying by directors implies they think the company is sound and their cash will grow. they think its undervalued. if people short the shares will go down short time, when the good news comes out they will get their fingers burnt. in the mean time hang on in there

[dnfa1975] 04/9/2010 17:36

falling like a dead duck out of the sky

bum!

[gordon brown] 04/9/2010 11:04

The magazine 'Shares' published on thursday advised it's readers that after the shares rose on the back of Directors share purchase on the 26th July to short them.
The shares dutifully fell about 3.9 on Friday-However!
Five minutes after the market close they issued an rns saying the same director had purchased a further 235,000 shares.

The Director in question has now laid out close to a million pounds on shares in xchanging in nine days.
This has to be a raging buy.

[somfawa] 03/9/2010 11:34

Shake, rattle and roll more like.

[dnfa1975] 03/9/2010 07:40

rock and roll

[dnfa1975] 02/9/2010 20:37

gonna blow imho to 180 very fast imho, dyor as i knows u do